Title: Do relationships facilitate growth in small technology firms?

Authors: Mika Westerlund; Risto Rajala; Seppo Leminen; Diane A. Isabelle

Addresses: Sprott School of Business, Carleton University, 305 Saint Patrick's Building, 1125 Colonel By Drive, Ottawa, ON K1S 5B6, Canada ' Department of Industrial Engineering and Management, School of Science, Aalto University, P.O. Box 15500, 00076 Aalto, Finland ' Laurea University of Applied Sciences, Vanha Maantie 9 02650 Espoo, Finland; School of Business, Aalto University, P.O. Box 21210, FI-00076 Aalto, Finland ' Sprott School of Business, Carleton University, 1708 Dunton Tower, 1125 Colonel By Drive, Ottawa, Ontario, K1S 5B6, Canada

Abstract: Prior literature argues that business relationships provide firms with competitive advantage. However, there is a need for more empirical evidence on whether and how they influence the growth of small technology firms. Through a statistical analysis of 90 small technology firms in Finland, we explore whether the scope and scale of customer relationships and the level of networking with partners can be associated with the financial growth of a firm. The results show that the growth of operating income in small technology firms is linked with their scale of customer relationships; i.e., growth firms employ a broader scale of customer relationships compared to non-growth firms. Hence, we suggest that focusing on deeper relationships with few customers may hamper the firm's financial growth, and entrepreneurs and managers of small technology firms should aim at a broader customer base even in niche markets.

Keywords: small firm; growth; business network; customer relationship; partnership; Finland; scope; scale; technology-based SMEs.

DOI: 10.1504/IJTE.2017.083798

International Journal of Technoentrepreneurship, 2017 Vol.3 No.3, pp.228 - 243

Received: 05 Dec 2016
Accepted: 05 Dec 2016
Published online: 22 Apr 2017 *

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