PROCEDIMIENTO ANALÍTICO

The original contributions of this study were provided by new insights into the first and early employment decisions and the later experiences of the owner-managers. A central and fundamental contribution to knowledge of small firm employment behaviour emerged as a result of the examination of the very first employment decision.

6.3.1 The First and Early Employment Decisions

It appeared that, rather than being a single decision linked to the employers’ strategic vision for their businesses, the first employments were bound up in a multi-faceted set of actions that were strongly reactive to circumstances. These employment decisions were driven by an array of competing factors, including the owner-manager’s need to:

- free up time to concentrate on developing new business activity;

- to introduce sustainable administrative support;

187 The precise route to employment was contextually different in each case but commonly depended upon the occurrence of the opportunity to employ. When the opportunity arose, the owner-managers were faced with difficult and complex choices, the outcomes of which were to become employers or to continue with the appropriation of social capital as an alternative.

In some cases, the decisions were forced by the need to continue the business as a viable entity. Two of the owner-managers had previously been employed as first line managers in businesses that the existing owner-managers wished to sell. The choice for the respondents here was stark, in that they either became owner-managers, inheriting existing employees, or they chose to seek other avenues of work. If they bought the businesses from the previous owner, there was no realistic option not to employ, as the business, as it was then constituted, could not continue without employees. Here, the confidence that they had developed as first line managers supported their belief that they could be effective employers. This may again be linked to an enhanced self-efficacy, which bolstered their confidence and helped them to a decision.

In other cases, the first employees emerged from the immediate ties to social capital on which the owner-managers were then relying. Their advice networks included individuals who were recommended by fellow business owners or there existed potential employees who had already developed a relationship with the owner-manager. Thus, to recruit them as full time employees was not a difficult decision to make. In order for this to happen, however, there had to be a degree of motivation. This was provided by the long term stronger motivators to employment, identified in the conceptual model. These factors, including a long term need for administrative support, which itself fed changing beliefs about the value and trustworthiness of employees, meant that employment became a viable option, in spite of the cost.

This perceptual change did not, however, occur at a significant single moment but more from a process of effectual adjustment that emerged from frustrating experiences caused by the limitations of social capital. It can be seen that the first employment decision in this instance is dependent on the owner-manager’s personal ambition for the development of their business. If growth and development of the business is their objective then it is likely that the point at which the limitations of social capital are recognised will be reached sooner than if the owner- manager simply wishes to pursue a lifestyle business that enables them to make a basic living. Here, this study has demonstrated the highly personal and contextually specific nature of the decision making process in micro firms. Even where an employment decision is made, this will be loaded with reluctance and caution, given the high cost and associated risks of employment.

188 6.3.2 The Emergence of a Trusting Relationship with a First Line Manager

This study has contributed to a deeper understanding of the relationship between the owner- manager (OM) and the first line manager (FLM). This drew on the work of Chell and Tracey (2005) who examine the complex interaction between the two and posit that the owner- manager is the main, though not singular beneficiary of a strong OM-FLM relationship. This was supported in this study by evidence of a mutual learning process and the time saving that the introduction of an FLM afforded the owner-manager.

The findings here also provided a broader perspective on the early formation of the OM-FLM relationship and associated this with the owner-manager’s ability to place a significant degree of trust in the new FLM. The appointment of an FLM depended on the owner-manager’s willingness to accept a degree of risk in trusting employees and giving them responsibilities within the business. It has already been noted that the willingness to trust became more likely as the owner-manager gained experience of employment. One of the consequences of this extension of trust was the discovery of an individual singularly appropriate to the FLM role. This entailed undertaking such activities as assuming responsibility for administrative tasks, for example, payroll and financial planning but also accepting a direct responsibility for other employees. The FLM proved to be competent and professional and had skills, qualifications and knowledge that were not commonly found in the small firm labour market.

Given their earlier experiences of employment, the owner-managers were able to recognise the rarity and value of this employee and as a result, the FLM became a trusted advisor and confidant to the owner-manager. It was noted that this employee gained increasing influence and importance, as a consequence of both the gradually developing trusting relationship with the owner-manager and the skill and competence that they were able to consistently demonstrate.

This successful relationship enhanced the owner-managers’ self-belief about themselves as employers, confirming that they had adopted the right approach to employment. It also allowed for the greater formalisation of employment practices, which led to a maturing appreciation of the value of employees. While it was not argued that this employment decision acted as a catalyst for rapid employment growth, it did provide a degree of employment stability and clarification of role responsibilities within the business. These responsibilities were established