PurposeIn order to better understand how heuristics are used in practice, the authors explore what type of heuristics is used in the managerial domain of financial advisors to small and medium-sized enterprises (SMEs) and what influences the shaping of these heuristics. In doing so, the authors detect possible fast-and-frugal heuristics in day-to-day decision-making of independent financial advisers who help owners of SMEs to acquire capital (e.g. loans, factoring, leasing and equity).Design/methodology/approachThe authors inductively assessed the work of financial advisers of SMEs. Based on group discussions, the authors drew up a semi-structured interview-protocol with descriptive questions about how financial advisers come to a deal for their clients. The interviews of 19 professionals were analysed by relating them to the theory of fast-and-frugal heuristics.FindingsWithin their decision-making, advisers estimate the likelihood of acceptance by a few financial providers they know well in their personal network with a strong bias towards traditional banking products, although there are a large number of alternatives on the Dutch market. “Less is more” seems to be a relevant principle when defined as satisficing. Heuristics help advisers to deal with behavioural and economic limitations. Also, the authors have found that client interaction, previous working experience and the company the adviser is working for influences the shaping of the simple rules the adviser is using.Research limitations/implicationsThe study shows how difficult it is to understand the ecological rationality of a certain group of professionals and to understand the “less is more” principle. Financial advisers to SMEs use cognitive shortcuts and simple rules to advise SME-owners, based on previous experiences, but it is difficult to determine whether that leads to the same or even better solutions for them and their clients than using probability theory and financial optimisation models. Within heuristics, satisficing seems to be a dominant mechanism. Here, heuristics help advisers in recognising possibilities by searching for similarities between a current financing case and previous experiences. The data suggests that if “less is more” is defined as satisficing for one or more stakeholders involved, the principle dominates the decision making of financial advisers of SME's.Practical implicationsThe authors suggest the relevance of a behavioural approach to finance by assessing the day-to-day decisions of financial advisers of SMEs. Also, the authors suggest that financial advisers are guided by previous experiences, and they do not fully assess a wide range of options in their work but need shortcuts to fulfil the needs of their clients.Originality/valueThe study comes close to day-to-day decision-making in finance by assessing how professionals make decisions. The authors try to understand types of heuristics in relation with “ecological rationality” and the less is more principle. The authors assess financial advisers of SME-companies, a group that has gotten little research attention until now. The influence of client interaction and of the company the adviser is working for is remarkable in the shaping of the advisers' simple rules.
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According to various authors access to financing is one of the main limitations constraining further growth for small- and medium sized enterprises (SMEs). Hence, academics and policymakers showed great interest in the topic of access to financing for SMEs. Various researchers argued the competitive advantage of large traditional banks in SME lending over smaller institutions. These institutions with more market power may charge higher financing costs and apply stricter credit policies for SME clients further affecting credit availability. In the past decade, SME financiers have entered the market as a response to the market domination of these large institutions. These new parties must gain trust as they operate in a market that is not regulated. Where traditional banks must comply with strict banking regulations, developing uniform regulations for the alternative financing sector remains a challenge. This paper examines the current challenges and solutions from a sociological and institutional perspective in developing standards for SMEs in the alternative financing sector. Our study contributes to the SME finance literature as it is the first empirical study that explicitly examines the regulatory gap in SME financing through interaction with policymakers, SME entrepreneurs, traditional banks as well as SME financiers themselves. Note: this is a confidential paper, part of a Phd-program and awaiting publication (as per August 2024)
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This paper analyzes connectivity and efficiency of a SME network across two industries. These characteristics are likely to be different for networks of various industries. The concept of 'small worlds' is used to judge overall network efficiency. The actual network can be classified as one in which a small world is present. Visualization of the results shows a single core group in the network. It was found that non-profit as well as science actors were overrepresented in the core of the field.
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In line with European sustainability goals, small and medium sized enterprises (SMEs) in the Dutch automotive aftermarket face the challenge of maintaining competitiveness while transitioning to circular business models. These models, supported by EU policies such as the Circular Economy Action Plan and the European Green Deal, drive innovation in product lifecycle management, recycling, and sustainability. However, as SMEs adapt to these changes, they must also navigate the growing competition from imported Chinese electric vehicles (EVs), which bring both opportunities and risks. Logistics plays a critical role in this transition, as optimizing supply chains, enhancing resource efficiency, and minimizing waste are essential for achieving circularity. Will the Chinese car manufacturers move their value chain to Europe? Or will they further localize in aftersales businesses? Either scenario would affect a chain of SMEs in automotive aftermarket. Focusing on the auto parts SMEs in the Brainport region, this research examines how SMEs can stay competitive by leveraging logistics strategies to support circular practices, and navigate the challenges posed by the influx of Chinese EVs while remaining resilient and adaptable in the automotive aftermarket value chain. Together with our consortium partners, we help the regional SMEs in the automotive aftermarket with: 1. Mapping out logistical challenges and objectives, 2. Risk mitigation and demand planning, 3. Strategic supply chain development. Involving Fontys International Business graduation projects on data analysis, this project combines quantitative and qualitative insights to examine the transition of automotive aftermarket to an EV-dominated future. The SMEs in our consortium network are drive to adapt to the evolving landscape by investing in new measures. Through scenario assessment, we help them with scenario strategies in circular transition. For a broader impact, this project brings SMEs, branch and public organizations together and presents shared responsibilities in creating a resilient supply chain.
Social enterprises (SEs) can play an important role in addressing societal problems. SEs are businesses whose primary objective is to generate social impact (e.g. well-being, social wealth and cohesion, and ecology) through a market-based model. SEs achieve this through a hybrid business model, trading-off financial and social value creation objectives. SEs typically face higher costs, for example because of ethical sourcing principles and/or production processes centering around the needs of workers who are vulnerable or hard-to-employ. This results in SEs’ struggling to scale-up due to their relatively costly operating model. Traditional management techniques are not always appropriate, as they do not take into account the tensions between financial and social value creation objectives of SEs. Our project examines how continuous improvement, and in particular the philosophy and tools of Lean can be harnessed to improve SEs competitiveness. Lean organizations share many values with SEs, such as respect for people, suggesting a good fit between the values and principles of Lean and those of SEs. The consortium for this project is a cooperation between the research groups Improving Business and New Marketing of the Center of Expertise Well-Being Economy and New Entrepreneurship and the minor Continuous Improvement of AVANS Hogeschool, and the SME companies Elliz in Company and Ons Label. The project consists of two phases, an exploratory phase during which the question “in what ways can the philosophy and tools of Lean be used by Social Enterprises?” will be addressed. Interviews and focus groups will be conducted with multiple SEs (not only partners). Participant observation will be conducted by the students of the minor Continuous Improvement at the partner SEs. During the second phase, the implementation of the identified principles and tools will be operationalized through a roadmap. Action research will be conducted in cooperation with the partner SEs.
Client: European Commission (DG-Enterprise), subcontracted through Comunitá Montana Associazione dei Comuni Trasimeno-Medio Tevere SLOW TOUR (Sustainable Lake Oriented Walking Tourism) is a project funded by the European Commission's DG Enterprise and Industry within the Programme Competiveness and Innovation Framework (CIP) under the call “Knowledge Networks for the competitiveness and sustainability of European tourism”.SLOW TOUR's goal is to make tourism on and around European lakes more sustainable and competitive. To achieve this, best-practices, certifications and networks in lake tourism were gathered and analysed within a coherent framework, leading to a “Manual of Excellence of Lake tourism in Europe” as its main product. CSTT's contribution was mainly focused on a Sustainability Impact Assessment of a number of European lake destinations, and the development of indicators and benchmarks for sustainable tourism products in lake areas.For SLOW TOUR, the NHTV Centre for Sustainable Tourism and Transport was subcontracted through Comunitá Montana Associazione dei Comuni Trasimeno - Medio Tevere (Italy). The other parties are Global Nature FUND, representing the Living Lakes network, and the University of Perugia. The project ran from June 2010 to November 2011.
