Learning in owner-managed small firms: Mediating artefacts and strategic space

Abstract

The authors focus on the way in which owner-managers in smaller firms improve their businesses through the creation of ‘strategic space’. The term ‘strategic space’ refers to the process by which owner-managers are able to access resources, motivation and capability to review existing practices. The starting point is the owner-manager's human capital and their capacity to engage in critical reflection about their business. We highlight three concepts central to the creation of strategic space, first, social capital, which refers to the network relationships that provide access to a wide range of resources and information. Second, absorptive capacity, which describes the way in which organizational members identify, acquire and utilize knowledge from external sources. Third, mediating artefacts, which represent existing knowledge but also facilitate the translation and transformation of understanding within and between communities of practice. This process is essential to the renewal of knowledge and knowing within firms. The contribution this paper makes is to bring together these elements – human and social capital, absorptive capacity and mediating artefacts – to offer a conceptual model that illustrates the mechanism by which owner-managers create strategic space. This model provides a deeper understanding of the evolution of knowledge in smaller organizations.

Keywords:

• organizational learning
• critical reflection
• knowledge acquisition
• social capital
• human capital
• absorptive capacity
• mediating artefacts
• small firms

Notes

1. We acknowledge that there are similarities between this discussion and the concept of dynamic capabilities as related to small firms (Zahra, Sapienza, and Davidsson 2006). However, our focus is on the role of the owner-manager, based on communication and critical reflexivity, in creating the conditions whereby other employees are involved in knowledge acquisition and sharing (Easterby-Smith and Prieto 2008).