The Small Business Owner-Manager's Search for External Information

THE SMALL BUSINESS OWNER/MANAGER'S SEARCH FOR EXTERNAL INFORMATION The primary focus of this article is on the small business's search for information from its external environment. Specifically, the research project asked the following questions about the owner/manager's search for information: What sources of information are used to acquire information outside of the firm? Which of the sources provide the most usable and important information? When businesses take specific steps or actions in the marketplace, how long does it take to receive feedback in the form of actual results? If certain sources are important, what media are used to collect information? Do small businesses answer questions about information sources and related matters differently than larger organizations with formal information systems? LITERATURE REVIEW During the past 15 years, various authors in the business literature have commented on the benefits generated within the economy by the very large number of small businesses. The levels of employment, inventory purchases, and sales provided by small businesses constitute the very lifeblood of our national economy. The numbers documenting the importance of small businesses are reported frequently.1 1 U.S. Small Business Administration, The State of Small Business: A Report of the President (Washington, D.C., May 1985); and A. C. Levitt, "In Praise of Small Business,' New York Times Magazine (December 6, 1981), pp. 14-20. Because of the importance of small businesses to the economy, it is essential to document the practices of the owner/manager that can lead to success. For example, the business literature reflects a general acceptance of the idea that successful firms acquire information from the environment and somehow turn that information into business opportunties.2 Indeed, owner /managers of small businesses have enjoyed a special reputation as "gifted readers' of business and economic conditions. They are able to read clues in the business environment and turn those clues into business opportunities.3 It is this special skill and ability that this research project examined. 2 M. J. Bollinger, "Environmental Boundary Spanning and Information Processing Effects on Organizational Performance,' Academy of Management Journal, vol. 27, no. 2 (1984), p. 351. 3 J. F. White, "A Small Business Is Not a Little Big Business,' Harvard Business Review (July/August 1981), pp. 18-23. Nearly twenty years ago, Golde suggested that small business persons often have a unique idea or plan that leads to establishing the initial business activity. However, a lack of formal training in planning, time constraints in collecting information, and a concern for survival often mean the small business owner outlives the initial idea/plan and seldom bothers to update or revise the plan.4 Other authors have used the words unstructured, irregular, and reactive to describe the use of information searches in planning and decision making.5 Yet, the importance of information search is recognized by Jones, who suggests that productivity improvements for small businesses in the 1980s will be found in the organization's informal and short-term-oriented information processes.6 For example,-export entry decisions are directly related to the information acquisition patterns of the firm's manager.7 The benefits of a systematic analysis of internal and external information needs, sources, and usage may pay off in an improved planning and decision-making system that can continue to identify important business opportunities. 4 R. A. Golde, "Practical Planning for Small Business,' Harvard Business Review, vol.42, no.3 (1964), pp. 147-161. 5 R. V. Robinson and W. F. Littlejohn, "Important Contingencies in Small Firm Planning,' Journal of Small Business Management (July 1981), pp. …