Academic journal article Australasian Journal of Regional Studies

Effective Exit Planning in Regional Small Businesses-A Borrow from the 'Specialised Clusters' Approach

Academic journal article Australasian Journal of Regional Studies

Effective Exit Planning in Regional Small Businesses-A Borrow from the 'Specialised Clusters' Approach

Article excerpt

1. INTRODUCTION

Small and Medium Enterprises (SMEs) not only create a sizeable chunk of nations' wealth but also account for its preservation if managed and planned prudently and objectively. Their contribution to nations' economic growth and job creation, both at individual country and world level, has been widely recognized (Huggins and Williams, 2011; Schmelter et al., 2010; Gunerergin et al., 2012; Morrison et al., 2003). SMEs' perpetual existence and continuance over time, irrespective of the owners' exit, is crucial for remote regions' long term economic and social sustainability, and hence, an objective allocation of a space on the regional planning agenda on the part of the State government cannot be overemphasized. The opposite is equally true. Neglecting regional SMEs and their exit planning could be tantamount to evading a crucial State responsibility of ensuring remote regions' longterm social and economic sustainability.

As an integral part of SMEs' strategic planning, awareness among SME owners about the significance of exit planning for all stakeholders, including the owners, their heirs and the regions where they operate, could well contribute to the regions' social and economic sustainability, as these SMEs and their perpetual existence and continuation over time, irrespective of the owners exit, contribute to the 'liveability' of these remote regions, which is crucial to their sustainability and prosperity (see Kinnear and Ogden, 2014, p. 48). The firm-exit has attracted widespread attention in the social sciences literature, however, small business owners' exit has remained relatively unexplored (DeTienne and Cardon, 2012). While the literature does shed light on the correlation between an entrepreneur's characteristics and the business's level of success at its instigation (see, e.g., Witt, 2004), a correlation between the owner's characteristics and the business's level of success at the owner's exit time has received little attention so far. Schatzki (2002) argues that social practices get constructed and institutionalized on specific 'sites' with characteristics compatible to their peculiar nature. This study aims to help encapsulate SMEs' exit planning into this framework through the use of 'specialised ... regional clusters' (Peck and McGuinness, 2003, p. 49; see also Bagirov, 2008) in the State regional planning initiatives.

The term 'specialised clusters' is used in a 'broader' sense of the term in the context of this paper where the author argues about creating 'specialised clusters' of all interdependent entities and service providers, government or private (such as government bodies, research and training institutions, financial institutions, business and service providers, etc.), that compete as well as cooperate among themselves and are 'supportive' of ensuring small businesses' efficient and successful functioning and the owners' successful and timely exit from their small business (see European Commission, 2016), and then developing and implementing 'informed' and 'targeted' policies for such geographical clusters. The term also aims to differentiate regional small businesses and their peculiar requirements from their larger city counter parts (see Bagirov, 2008).

Different societal elements, each with a peculiar form and circumstance, interact and give rise to social practices, which eventually get accepted as legitimate and institutionalised at a wider societal level; Schatzki's (2002, p. 59) 'site of the social' theoretical conceptualization provides a base for the assertion: social orders are not self-standing or self-propagating configurations, but that they instead exist and evolve only in some context encompassing them".

'Exit planning' social practice prevalent among businesses, in general, is no different, and as per Schatzki's (2002) theoretical stance, these need to be specifically nurtured, developed and institutionalised for the small regional businesses with peculiar external and internal circumstances different to their larger counterparts. …

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