Klaus North · Gregorio Varvakis Editors Competitive Strategies for Small and Medium Enterprises Increasing Crisis Resilience, Agility and Innovation in Turbulent Times Competitive Strategies for Small and Medium Enterprises ThiSisaFMBlankPage Klaus North (cid:129) Gregorio Varvakis Editors Competitive Strategies for Small and Medium Enterprises Increasing Crisis Resilience, Agility and Innovation in Turbulent Times Editors KlausNorth GregorioVarvakis WiesbadenBusinessSchool Dept.ofEngineeringandKnowledgeMgmt. RheinMainUniversityofApplied UniversidadeFederaldeSantaCatarina Sciences Trindade,Florian(cid:1)opolis-SC Darmstadt Brazil Germany ISBN978-3-319-27301-3 ISBN978-3-319-27303-7 (eBook) DOI10.1007/978-3-319-27303-7 LibraryofCongressControlNumber:2015957957 SpringerChamHeidelbergNewYorkDordrechtLondon ©SpringerInternationalPublishingSwitzerland2016 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpartof the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilarmethodologynowknownorhereafterdeveloped. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexempt fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinformationinthis book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained hereinorforanyerrorsoromissionsthatmayhavebeenmade. Printedonacid-freepaper Springer International Publishing AG Switzerland is part of Springer Science+Business Media (www.springer.com) Preface “It is not the strongest of the species that survives, nor the most intelligent that survives.Itistheonethatisthemostadaptabletochange.”Thisquotebyscientist Charles Darwin goes back more than 200 years, yet it is more relevant now than ever.Individualsaswellascompaniesworldwideincreasinglyhavetolearnhowto copewithambiguitiesandafastchangingeconomicandsocialenvironment. Smallandmediumenterprisesarethemostimportantsourcesofjobcreationand local development in increasingly knowledge-based economies. As turbulence in globalizedeconomiesexpands,SMEswillhavetolearntosustaincompetitiveness inthisnewkindofenvironmentbydevelopingtheir“dynamiccapabilities.”Based onthefindingsofa4-yearEuropeanandLatinAmericanresearchproject,thisbook provides a theoretical framework, practical instruments, and case studies of how SMEs in differing economic, social, and cultural contexts can develop crisis resilience, increase agility, innovate, and thus successfully compete in turbulent times. Before the crisis years, around 2008/2009, SMEs in Europe relied on fairly stable economic conditions and long-term relationships; however, they are now faced with stagnating markets and a “roller coaster economy.” In the turbulent economic and social environment of Latin America (including different ethnic characteristics,inflation,rapidlychangingregulations,socialinequality,fastchang- ing economic environments etc.), SMEs have survived by adopting flexible strat- egies of short-term resource exploitation, resulting in low productivity and low degreesofinternationalization. Consequently,SMEswillhavetolearntobecomeandremaincompetitiveinthis new kind of economic environment. “What is a successful management model for SMEs to compete in turbulent environments?” is the overriding research questionaddressedinthisbook. Based onempirical data,case studies,andaction research findings, the authors argue that combining European innovation and organizational learning models with Latin American survival strategies can con- tributetosustaincompetivenessintheseturbulentsettings. v vi Preface These contextual differences provided a unique mutual comparative research and learning opportunity, in which differences and complementarities contributed to the development of a “Dynamic SME” framework supported by tested instru- mentsandmethodologiestosustaincompetitivenessinturbulenttimes. Thisbookhighlightstheneedtodifferentiatebetweenmanagementofbusiness processes in “normal” situations and in “turbulent” situations. It is not just an adaptation of the normal business model for a turbulent environment, it is a different concept which helps managers to develop a cognitive map for this situation. This can only be achieved if there is a better focus on the managers of SMEs.Thispublicationhelpstoopenthe“blackbox”ofSMEs. ThecombinationofasoundtheoreticalframeworkforSMEdevelopmentalong with practical instruments and case studies makes this book a unique read for researchers, SME management courses, SME policy makers, practitioners from SME support institutions, owners/managers of SMEs as well as trainers, consul- tants,andcoaches.Thebookissupportedbyanextensivewebsite(www.dynamic- sme.org)containingfurtherpublicationsandaYouTubechannel“DynamicSME” comprisingvideosoninstrumentsandSMEcases. Theresearchleading tothese resultswouldnothave been possiblewithoutthe funding from the European Union Seventh Framework Programme under grant agreement n(cid:1) PIRSES-GA-2010-268665 (Project “Dynamic SME”). The project strengthened research partnerships through staff exchanges and developed a joint learning and co-development process of five research teams from the following universities: (cid:129) RheinMain University of Applied Sciences, Wiesbaden Business School, Ger- many(Projectcoordinator) (cid:129) UniversidadAut(cid:1)onomadeMadrid,BusinessManagementInstituteIADE,Spain (cid:129) UniversidadedoMinho,DepartmentofManagementandDepartmentofInfor- mationSystems,Portugal (cid:129) Universidade Federal de Santa Catarina, Knowledge Engineering Department (EGC),Brazil (cid:129) Universidad Nacional de Rosario, Industrial Engineering School and Depart- ment(IES&D),Argentina Furthermore, the project led to a research network “Dynamic SME” (http:// www.dynamic-sme.org/es1/red-dynamic-sme) which continues to develop joint research,training,andfurtherSMEsupportactivities. Our thanks go to the researchers who have actively contributed to furthering insightsofwhatconstitutesa“DynamicSME”andtothecooperatingenterprises, whoopenlydiscussedproblemsandpractices.Wearealsogratefultoinstitutional support, in particular by SEBRAE Santa Catarina (Brazil) and Asociaci(cid:1)on de Desarrollo de Rosario (ADERR) and their willingness to experiment with the “Learningtogrow”methodology,yieldingexcellentresults. The many videos produced at the Distance Learning Unit of Universidade Federal de Santa Catarina would not have been possible without the dedicated supportoftheLED/EGC-Team. Preface vii Finally, we thank in particular Christopher Drodge from Wiesbaden Business School for language editing and proofreading of the book chapters and Dorzeli Salete Trzeciak from the EGC Department at Universidade Federal de Santa Catarina for merging individual contributions into one consistent book format as wellascompilingtheglossary. Wiesbaden KlausNorth Florian(cid:1)opolis GregorioVarvakis February2016 ThiSisaFMBlankPage Contents Introduction:WhatIsa“DynamicSME”. . . . . . . . . . . . . . . . . . . . . . . 1 KlausNorthandGregorioVarvakis DynamicCapabilitiesandOrganizationalResilienceinTurbulent Environments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 DiegoJacobKurtzandGregorioVarvakis Case:XENONAutomationTechnology:CuttingEdgeCompetence asCompetitiveStrategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 TobiasReissmannandThomasHardwig CultureforOrganizationalLearninginTurbulentEnvironments. . . . . 45 PeterFriedrichandJaquelineRossato TheInnovationTripleChallenge:ACreativityCheckforSMES. . . . . 77 Maur´ıcioManh~aesandGuillermoAntonioDa´vila IntellectualCapitalasaStrategicModeltoCreateInnovation inNewTechnologyBasedFirms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 EduardoBueno,CarlosMerino,andCeciliaMurcia AnAnalysisofMicroandSmallEnterprisesGrowth:AnApplication oftheManagementExcellenceModel(MEG). . . . . . . . . . . . . . . . . . . . 107 MarcondesdaSilvaC^andidoandJacksonAndre´ daSilva Case:KSTTurbineComponents:“Qualiyspeedservice”asCompetitive Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 HeikoDittmerandThomasHardwig Argentina:AChronicallyVariableSocio-EconomicEnvironment forSMEs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 JuanCarlosHiba ix