Assignment is Literature Review

Research Topic: Small Business Failure

Research Questions: List your RQs again (to refresh my memory). If you changed your RQs from last time, please append your revised Assignment 1 at the end of this assignment.

1. What factors causes the high failure rate of microbusiness?

2. What non-monetary interventions would help to minimize microbusiness failure?

Literature Review Process: Review 10-15 research papers that informs us of our current state of knowledge in your problem area. If you find no prior paper in this area, expand your search terms to extract 10-15 papers in related areas. Describe the process by which you selected papers for review (e.g., which databases were used, what keywords, etc.), how you filtered your search results, actual counts of papers extracted in each search, etc.

I did an abstract search in the ABI/Inform Global database using the keywords “microbusiness” and “failure”. This search resulted in zero articles. Hence, I expanded my search to “small business” and “failure”, and got 77 articles. I manually screened the abstracts of these 77 articles based on their relevance to my research questions to shortlist 12 articles for further review. These 12 articles were Knotts, Jones and Udell (2003), Urban and Naidoo (2012), Atamina and VanZante (2010), Rolleri, Nadan, and Lussier (2016), Yallaprogada and Bhuihan (2010), Perry (2001), Purves, Niblock, and Sloan (2009), Franco and Hasse (2009), Beaver and Graham (2005), Rasheed (2005), Bornstein (2007), and Gerhardt, Hazen, Lewis (2014).

Synthesis: Create tables summarizing what prior literature tells us about your problem area, similar to the tables in Eppler & Mengis’s (2004) information overload paper. Notice how Table 2 presents definitions, Table 3 lists causes (of information overload), Table 4 describes symptoms or effects, and Table 5 shows countermeasures. In each case, they list the issues in the central column, groups them in the left column, and presents references in the right column. I’m expecting similar tables (perhaps smaller, given your 10-15 paper limit).

TABLE 1: Key Concepts

TABLE 2: Factors that Cause Small Business Failure

TABLE 3: Intervention to Minimize Small Business Failure

Analysis (Gaps): What patterns do you see in your literature review? What gaps or opportunities do you see (i.e., what is MISSING from your literature review)? Note that gaps may NOT be explicitly mentioned in the literature; you may use your intuition and experience to identify what is not there. Based on this analysis, do your RQs still seem appropriate? If not, modify the RQs accordingly.

While there is some research on small business failure, there is practically no research on microbusiness failure. Microbusinesses are a unique subset of small businesses with less than 5 employees (some research indicate 9 employees or less), while small businesses may have up to 500 employees. Microbusinesses are often family owned businesses where employees are typically family members, often working without compensation.

The literature review reveals that small businesses have a high failure rate. There seem to some general underlying causes for these failures, as listed in Table 2, though there is also little discussion on which of these factors are the most important. While lack of access to capital is often presumed to be the primary cause of small-business failure, the literature suggests that several non-monetary factors also contribute to small business failure. Most of these non-monetary factors are in the area of management skills and acumen. Most small businesses are also unaware of resources available to them that can help their business succeed and grow. Proper utilization of available resources and addressing non-monetary factors may help mitigate many small business failures.

I found only five articles that addressed potential interventions to minimize small business failure. Most of these interventions targeted managerial skills development and building networks of relationships. Given the importance of interventions and the dearth of research in this area, identifying and testing potential interventions seem like a particularly promising area of work.

Based on the literature review, I find that microbusiness failure is an important yet unaddressed area of research. Following a review of the small business literature, some of the factors that drive small business failure may also apply to microbusinesses, while microbusiness may also have unique factors of their own worth investigation that are not reflected in the small business literature. My research will attempt to (1) extend our understanding of small business failures to understand microbusiness failures, and (2) uncover microbusiness-specific factors that lead to microbusiness failure, and (3) identify intervention mechanisms that can minimize microbusiness failure.