The evolution of business knowledge in SMEs: conceptualizing strategic space

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Abstract
This paper develops a conceptualization of the way in which owner‐managers in SMEs create strategic space. The term is defined as the time, resources, motivation and capabilities needed for owner‐managers to reflect on and review existing practices leading to learning, transformation and higher organizational performance. The empirical data is based on a longitudinal study of 90 SMEs operating in six broad sectors. The analysis uses two statistical tests to examine links between 20 activities within these SMEs and their performance. The results identify strong links between two groups of factors and positive performance claims by owner‐managers. Social attributes include work atmosphere, meetings and socializing. Structural attributes include training, knowledge structure, certification, systems and procedures. Copyright © 2007 John Wiley & Sons, Ltd.