The small firm as a temporary coalition

Abstract

The small firm is frequently cast as a key player in processes of local economic growth. In the literature supporting this view, the nature of the small firm remains largely opaque with little attention being given to real people running real firms. The small firm is treated as atomistic and the ‘business enterprise’ as an object is assumed to coincide with processes of enterprise and the actions of individuals being ‘enterprising’. The paper develops an alternative view of the small firm as a networked temporary coalition. To develop this view, six existing perspectives on small firms are reviewed and the networked temporary coalitions perspective is elaborated through two case studies of manufacturing and service coalitions. A review of existing research suggests that a third of small firms appear to fit this model. The temporary coalition is interpreted as mirroring relationships in the ‘gift economy’ and ‘reciprocal’ modes of exchange.

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