Small Business Management Development for a Newly Deregulated Economy: The Case of New Zealand

By Linowes, Richard G.; Dixon, Bruce R. | Journal of Small Business Management, October 1992 | Go to article overview
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Small Business Management Development for a Newly Deregulated Economy: The Case of New Zealand


Linowes, Richard G., Dixon, Bruce R., Journal of Small Business Management


The rapid economic changes initiated a few years ago by the government in New Zealand were launched with great fanfare and optimism. New initiatives were taken with the hope that a new approach to managing the economic affairs of the country would generate a new level of prosperity, and, at the very least, eliminate some of the unproductive channelling of assets that had become endemic. As Roger Douglas--perhaps the chief spokesman for the new agenda--declared:

The present Labor government has gone back to fundamentals. It has taken a new look at (its traditional) goals...and come to the conclusion that, if we really want to achieve equity and equal opportunity, we have to take a different route--one that works for the world of the 1980s and 1990s. (Douglas 1987, 9).

That different route entailed one of the most significant economic turnabouts taken in the recent history of the Western world--tariffs were eliminated, the currency was allowed to float, state-owned departments and organizations were split up and corporatized. Time and again the government made moves that departed greatly from tradition (The Economist 1988a, 1989).

Though economic initiatives may clear the way in principle for a more open, more free-market economy, from the point of view of small business, the game has clearly changed. Conducting business today and in the future is, and will continue to be, a more complex undertaking than it was just a few years ago.

Though policymakers might argue that such changes were essential medicine for the lagging economy, not all individuals and enterprises view these initiatives in the same light. Offsetting the expected positive features, the country has seen a substantial increase in unemployment and the failure of many businesses unable to compete in a less protected marketplace (Fuerbringer 1991). And though others may argue that small business needs assistance to survive the challenges ahead, supportive government assistance to date has not been forthcoming. This article explores how small businesses in New Zealand regard the new economic climate and their perceived need for management development. Study findings shed light on the profound educational tasks inherent in economic policy change.

The Importance of Small Business

By most definitions, New Zealand would be regarded as a nation of small businesses (Bollard 1988). As of February 1989, 82 percent of businesses employed less than five people, and 98 percent had less than fifty (NZ Business Patterns 1989). |The U.S. pattern is similar: in 1985, 83 percent of businesses employed less than 20 people and 93 percent had less than 100 (The Economist 1988b).~

Small business entrepreneurs are generally very poorly trained in running a business (Bollard 1988). They often have experienced trade or craft training, but very rarely any formal management education. Frequently their management skills have been acquired simply by observing others in the workplace. In spite of this lack of management training, though, many small business entrepreneurs have been quite successful. Many in the past have supported both their families and their often sports-oriented lifestyle without undue concerns over the future of their enterprises (Bollard 1988). When failure did occur, poor management was often a reason, perhaps the major reason, for the failure (Meredith 1988). So, to reduce the odds of such failures in the future, and to prevent their traumatic impacts on families and surrounding communities, more attention must be focused on ensuring that entrepreneurs acquire all the managerial skills required to steer their businesses in the new economic climate.

The Research Sample

Data were collected from a variety of New Zealand small businesses via a two-page questionnaire administered during management workshops offered by the University of Waikato during the latter part of 1989. The workshops were conducted in cities throughout the northern island of the country.

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