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PEIJ7,7
180
Empowerment in smallbusinesses
Peter Wyer and Jane Mason
 De Montfort University, Bedford, UK 
 Keywords
 Empowerment, Small firms, Organizational learning, Sustainable development 
 Abstract
The concept of empowerment has received a great deal of attention in recent years. However, the empowerment knowledge base is predominantly large company-oriented with littleevidence of understanding what empowerment means in a small business context. It isinappropriate to treat the small firm as a microcosm of a large organisation. The small businessis qualitatively as well as quantitatively different and this article propounds that it is questionablewhether the concept of empowerment and its various dimensions as portrayed in the literature arereadily transferable to small businesses. It is suggested that empowering management approachesare key features of successful growth-oriented small firms but the current body of empowerment literature fails to encapsulate the idiosyncrasies and informalities of the small business operation,and thus convey understanding of the unique and novel forms of empowerment which facilitatesustainable development. Case study insight is used to support these propositions.
Introduction
The overall aim of this article is to explore the nebulous concept of “empowerment” within the context of small business management and tosuggest that, while much of the academic literature tends to discuss the conceptfrom a variety of informative perspectives and dimensions, in the main suchdiscussion fails to address the distinctive characteristics and idiosyncrasies of the small business.All organisations, large and small, are today struggling to develop in anexternal operating environment which is epitomised by turbulence anduncertainty. Practitioners and academics alike are focusing on the need foreffective utilisation of people as the key resource in maintaining competitiveadvantage in such an uncertain environment. Within this context of effectivepeople management, “empowerment”, often perceived as another buzz-word for“employee involvement or participation” or some variation of “delegation”, hasreceived a great deal of attention, sometimes being proffered as the “elixir” toorganisational success.Within the small business context research shows that owner-managersview people management as one of their most important roles, and yet one of the tasks they find the most difficult (Hankinson
et al
., 1997). While a multitudeof theories, concepts and guiding frames of insight have emerged over the yearsand are embraced within the human resource management knowledge base, itcan be argued that much of this knowledge has relevance to large organisationsand fails to address the distinctive characteristics of the small business. Thispaper commences by portraying the small business as a potential unique
Participation & Empowerment: AnInternational Journal, Vol. 7 No. 7,1999, pp. 180-193. © MCB UniversityPress, 1463-4449
 
Empowermentin smallbusinesses
181
problem type whereby qualitative as well as quantitative differencesdistinguish it from the large company. Such a conceptualisation is utilised todemonstrate the high level complexity of the small firm management task as itstrives to cope with the vagaries of the contemporary operating environment.Attention is drawn to the dangers of viewing the small firm as a microcosm of a large company and to the potentially limited utility of people managementtheories, concepts and approaches which are propounded as applicable withinthe large company context.Having distinguished the small business context and warned of the need forcaution in the uptake of management knowledge bases which may not fullyaddress that context, the concept of “empowerment” is examined as apropounded “mechanism” for the efficient and effective utilisation of the humanresource. It is suggested that while a great deal has been written about“empowerment” in recent years, the concept as developed within the literatureis, in the main, oriented toward large organisations and much of its contentcannot be readily “transferred” to small businesses. It is further suggested,however, that, if considered within the distinct operating contexts of the smallbusiness, “empowering management processes” may indeed be a distinctivefeature of those small businesses which succeed in sustaining ongoingdevelopment, and that such management activity has not yet been encapsulatedin the “empowerment” literature.The article supports these suggestions by drawing on insight derived fromthe authors’ ongoing research into the sustainable strategic development of successful small business within the transitional economy context of Russia,the developing economy context of Malaysia and the developed economycontext of the UK. A case study is utilised to suggest how empoweringmanagement approaches may be key features of effective management ingrowth-oriented small businesses. The base insight from the case is thenintegrated with overall understanding derived from our ongoing research in itstotality to emphasise the potential role of empowerment in the small firm infacilitating the learning about and acting on unknowable open-ended changewhich predominantly impacts on the contemporary business. It is thus astrategic learning perspective to the unfolding of understanding of “empowerment” within small business which is offered as an innovativecontext for enhancing understanding of what empowerment may mean in asmall firm context.The article concludes by suggesting that if we are to understand whatempowerment means within growth-oriented small firms, we must expect tofind that the informalities and idiosyncrasies of such businesses will seesuccessful small businesses “empowering” their workforce throughmanagement approaches not fully reflected in the current “empowerment”literature. This may sometimes be by mechanistic means (such as at the level of steady state production activity where a devolving of responsibility may beapparent at the margins), occasionally be opportunistic or
ad hoc
and at timesmay be viewed as a “natural facilitating” management approach whereby the
 
PEIJ7,7
182
positioning of key workforce provides the potential for their empowerment tounderpin organisational learning from their day-to-day interfaces with keyinformants on the boundaries of the firm’s activities.
The need to recognise the distinctiveness of the small business
Small businesses can not be understood by viewing them as “little bigbusinesses” (Welsh and White, 1984). The depth of understanding of the smallbusiness toward which academics continue to strive will only derive fromrecognition that clear qualitative as well as quantitative differences distinguishthe small firm from the large company (O’Farrel and Hitchens, 1988). For Wyer(1990), small firms face potential unique problem types deriving out of owner-manager and size-related characteristics (Smallbone and Wyer, 1994) whichmay well contradict the commonly perceived high flexibility, fastresponsiveness traits frequently propounded as key sources of competitiveadvantage for the small firm (Chisnall, 1987).Many of the problems faced by small businesses are inevitably centred on theowner-manager. For example, owner-manager related characteristics andconstraints can be demonstrated by focusing on the motivations, values,attitudes and abilities of the owner-manager (Smallbone and Wyer, 1994). Forinstance, the owner-manager may well be reluctant to recruit external expertiseowing to independence and autonomy motivations. Such expertise may beessential for developing small firms to facilitate understanding of externalchange issues pertaining to the organisation (Wyer and Mason, 1998). Thealternative to the external supplementing of the management capability of theowner-manager is for the firm to continue to struggle on within the context of the owner-manager’s own limited capabilities and to confront a possiblereluctance to delegate and allow more autonomy to existing key staff (Ket deVries, 1977).Examples of size-related characteristics and constraints are limitationsrelating to the small business ability to offer career paths or reward packagesequitable with large organisations which can marginalise the small firm inrelation to the labour market and the attracting of quality workforce (Curran,1988). The ability to attract reasonable cost finance to underpin sustainabledevelopment can be restricted by a lack of profit track record and/or a lack of collateral levels demanded by lenders.Moreover, the external operating environment within which large and smallfirms operate is increasingly dynamic and complex (Johnson and Scholes, 1993),and the turbulence and uncertainty under which all businesses function pointsto the need for owner-managers and management teams of growing smallbusinesses to be capable of developing abilities for coping with unpredictable,unknowable, open-ended change (Stacey, 1990). Time and resource constraints,together with the unique problems of the nature discussed above, culminate tomake small business management a highly complex task.Acceptance of the distinctiveness of the small firm and of the uniqueproblems which it potentially faces gives emphasis to the dangers of treating
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