Additional topics emerging during data collection / analysis process

As discussed in Section 2.2 above, the adaptive grounded theory methodology adopted for this research allows for new topics to be introduced to the data collection process as previously unanticipated sensitising concepts emerge during the initial constant comparison analysis process.

In this study, two new concepts emerged: business owner’s attitude to symbol group membership, and specific generational issues.

Symbol group membership

As highlighted earlier, small independent retail businesses are often at a competitive disadvantage due to issues of economy of scale, access to product ranges and lack of business expertise. One way in which these aspects can be overcome, or at least minimised, is symbol group membership. There are a number of such groups offering a range of services to independent small retailers, however the relevance and implications of symbol group membership are illustrated by the example of the Londis group (the symbol group encountered during this study) and the largest grouping, the SPAR retail network.

Such organisations of independent store owners gives “not only the benefit of volume deals, but access to essential marketing, store development, technology and retail expertise to help them drive footfall and turnover” (Londis, 2003). Goods, including quality and good value own-brand products exclusive to Londis stores, are delivered via distribution centres and leading suppliers. Marketing materials combine with bulk buy offers and special promotions vary with individual store locations and trading style.

Similarly, SPAR offer promotions, local and national advertising, own brand products and distribution networks. As with the Londis group, membership is conditional on the proposed or existing store having growth potential and membership fees are charged according to the size and type of store. Financial packages and credit terms, merchandising, refurbishment and store development are among the benefits offered to members (SPAR, 2003).

Whilst symbol group membership offers assistance in some aspects of competitive disadvantage, at the same time it prevents individual business owners from adapting pro-actively to local situations as both these and other symbol groups, there is the requirement for individual stores to conform to the group image, layout, shop-fitting and promotions (Londis, 2003; SPAR, 2003). This may impact on the perception of freedom and independence identified previously in this literature review as one reason for self-employment.

Generational issues

As suggested in the family business literature reviewed above, generational issues emerged during the data collection and analysis process as an important factor affecting business development. This section develops the sensitising concepts guiding the evolving interview schedule by considering the family business research conducted by Fox, Nilakant and Hamilton (1996) and Morris, Williams and Nel (1996); and, in accordance with the adaptive grounded theory methodology, more recent developments in the academic understanding of this topic are presented in the Second Stage Literature Review (Chapter 6).

Research indicates that only one third of family owned and dominated businesses survive into the second generation of family ownership and that less than one sixth then pass to the third generation. For such succession to be a success, there is a need to plan the process consisting of three broad stages. Firstly, the preparation of heirs through education, training, work experience other than in the family business, motivation to join the enterprise. Secondly, the development of relationships among family members through commitment, loyalty, shared values and traditions. Finally, the utilisation of planning and control activities such as succession planning, the use of business advisors and wider family involvement in decision making.

Following such a process will enable family members to fill specific roles during the transition of responsibility from one generation to the next, with the current head of the family organisation shaping the role of the next generation member (Morris, Williams and Nel, 1996).

It is suggested that such a planned transition while the original, or older generation, business owner is still actively involved in the enterprise should then disrupt business, family customers and suppliers as little as possible – the key being for the retiring leader to be willing and able to stand back once the process is complete. In addition, it is important to note the pivotal role of motivation to be in business, family loyalty, and shared values and traditions in the continued involvement of family members in the business activity of previous generations. While there are

suggestions that there are strong cultural and religious influences on family structure and both business and social behaviour within South Asian communities, individual motivation and internal barriers to business development are influenced by a wider range of factors (Fox, Nilakant and Hamilton, 1996).

3.8 Summary of sensitising topics

Essentially, this study aims to shed light upon the Edinburgh South Asian convenience store owners’ personal interpretation of the range of internal factors impacting upon approaches to business activity.

In accordance with the adaptive grounded theory methodology adopted in this study, extant theory developed from sensitising concepts drives both the empirical data collection stage of the research process and the resultant theory generation phase. Initial key issues and questions for the fieldwork stage of this study emerge from a summary of the above review of previous empirical research into small and micro businesses, the small, independent retail sector, and ethnic minority business activity. These topics then combine to form the fieldwork schedule, the base for data collection interviews and initial analysis coding.

Small businesses

Although there is no simple definition of small and micro enterprises, the key features of SMEs that distinguish them from larger enterprises are that these businesses enjoy a relatively small share of their market, adopt informal management styles and organisational structures, and maintain independence from larger organisations.

Small and micro enterprises play a vital part in the Scottish and UK economy. These potential economic benefits constitute the more obvious argument for intervention in the SME sector, as high failure rates will result not only in reduced income generation but also in the need for increased expenditure on unemployment and associated benefits. There are also associated wider social benefits to be gained by reducing obstacles and barriers to the start up and development of such enterprises.

For such initiatives to be both effective and an efficient use of public money there is a need to understand the nature and characteristics of SMEs and the features that set them apart from larger organisations.

It is also important to focus on the nature, motivation and background of the individual small and micro business owner-managers so that business assistance can then be designed to be perceived as needed, appropriate and accessible to the various industrial sectors, and targeted and focused where the greatest benefit can be accrued.

These factors are particularly relevant where both localised economic and social benefits stem from a strong independent, locally owned convenience store sector, providing the principle economic activity of the inner city ethnic minority community.

Internal and external business influences

The external factors affecting the potential for success of small independent convenience stores are broadly similar to those affecting all micro enterprises. Economic and social change and business costs will impact upon all retailers in a particular business sector in a specific location.

The differing levels of business success depend on the cultural and creative ability of the individual owner-manager to adapt to these changes. This will depend on the previous experience, skills and education, motivation for self-employment, the influence of role models, and family, cultural or religious values of the individual concerned.

The high proportion of South Asian owned micro retail enterprises and convenience stores in the UK in general, and Edinburgh in particular, indicates the importance of understanding the nature of South Asian business and the background and social structures of the communities in which such enterprises develop.

Centrality and characteristics of micro-business owner

Small and micro enterprises differ from larger organisations in that there is often no formal management structure and financial constraints limit the opportunities for development.

While offering more flexible, informal working conditions such businesses often offer little opportunity for formal training due to a lack of awareness of the need for ongoing staff and management development.

Small firms are typically owned and managed by members of the same family and remain in family ownership for a number of generations. The success or failure of the enterprise is highly dependent on the skills, resources, personal values and perceptions of opportunities or business barriers of the owner-manager.

The reasons for entering self-employment are seen to be a combination of a number of factors related to the prior experience, background, education and motivation of the owner-manager.

The role models and formal and informal networks of contacts available to the individual will influence this decision, as will the characteristics and values of the entrepreneur.

Such individuals appear to have a high need for achievement, are moderate risk- takers and have a need to be in control of the environment in which they operate. Business success equates with personal success, and similarly business failure implies personal failure.

Their personal values will be developed through cultural and life factors relating to the religious and social background of family and community role models.

These factors will be strongly influenced by the ethnic background of the individuals and families concerned.

Ethnic minority businesses

The ethnic minority population in the UK grew rapidly in the second half of the twentieth century. Immigration direct from the Indian sub-continent and indirectly via Africa, and from other former Commonwealth nations has resulted in Scotland becoming a multi-racial nation.

For many minority communities in the UK retail self-employment has been seen as the only alternative to low paid, low status employment. Many of these businesses have been concentrated in inner city areas and in the retail and service sectors. Business opportunities have been developed by utilising family and community

networks to provide labour, financial and market resources. Barriers to such opportunities focus on lack of knowledge of business practice, limited access to support and finance, language difficulties and discrimination.

The motivation to enter self-employment is seen as a result of predisposing ethnic group characteristics. Social structures within ethnic minority communities provide both resources identified above and individual support networks and role models. Shared religious and cultural values improve the ability of entrepreneurs to identify markets and appropriate strategies for enterprise development within co-ethnic niches.

Changing demographics and business environments have placed increased pressure on ethnic minority businesses, resulting in a need to develop wider markets or to diversify into new product areas. Typically, strategies adopted are to act as middleman minorities offering ethnic products to wider markets or breaking out to offer similar products as those of majority community businesses. This can be seen as a challenge to second and third generation entrepreneurs, or as a motivation for these better educated, increasingly westernised young people to seek different career options.

As ethnic minority communities become increasingly socially and economically embedded in the mainstream communities, business strategies become increasingly similar to same sector mainstream owned enterprises.

Although the South Asian community in Scotland is much smaller than that in other regions in the UK, small and micro business activity within the community faces similar barriers to success and development as their counterparts in England.

In both Glasgow and Edinburgh there is an awareness of the changing opportunity structures open to ethnic minority enterprises that are related to wider, external factors. In addition, there are indications from studies of the Glasgow ethnic minority community that group characteristics are also changing in line with other larger, more mature communities.

Symbol group membership

Membership of a symbol group offers distinct advantages to individual convenience store owners, including economies of scale, marketing, promotions and brand image.

However, individual small retailers may perceive these benefits to be outweighed by some measure of loss of control and independence stemming from the conformity to established business practice required by such organisations.

Generational issues

Over time, both ethnic minority communities and family owned businesses grow and develop to include more than one generation. The pattern of business behaviour as control changes from the first to the second or third generation remains highly dependent on the motivation, skills and influence of cultural values and traditions – the internal factors affecting the original decision for self-employment and business development.

3.9 Development of interview schedule

From the preceding review of literature associated with the identified sensitising concepts of this study, it would appear that there is no one, easily identifiable set of barriers to small and micro convenience store development. The approach adopted in a particular enterprise will be dependent on the individual business owner and their background, experience, motivation, culture and traditions, ethnic business strategies, and individual perceptions of external influences on the business environment.

In order to investigate the range of internal barriers to South Asian owned convenience stores in Edinburgh – the focus of this study – the interview schedule used for data collection and initial analysis purposes it is necessary to combine this range of factors. This theoretical model is illustrated in Figure 3.3.

External factors Internal factors

- political, legal, technological, - motivation for self-employment social and economic climate - influence of family, community - public and private sector policy and cultural traditions

Individual

Trading environment small minority Trading approach community

small business strategy

Opportunity structures Group characteristics

- market conditions - predisposing factors

- access to ownership - resource mobilisation

Figure 3.3: Factors influencing small minority community small business strategies

Following this understanding of the range and interaction of factors influencing the internal barriers to business development questions guiding research need to include the following: motivation for entering and remaining in self-employment; education level and prior business experience; family and community role models; access to financial and human resources; cultural, religious and traditional influences; perceived opportunity structures; perceived group characteristics. These broad questions provide the base for topics to include in the interview schedule presented in Figure 3.4.