Decision-making in small businesses
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Decision-making ¡n small businesses Is there scope for OR when an in formal approach is all managers have time for?
Kit Harbottle
The companies and interviewees
Is OR relevant in the small business sector? There are hardly any small business applications reported in the OR literature or at conferences. Yet small businesses would appear a very suitable field for the use of well-
Company A Description
established models for stock control, distribution,
Family firm, 11 years old in this form, but
long pedigree.
production planning, and so on. There is often a single decision-maker; business systems are relatively simple; and the data is on-site and not complex. This article looks at how managers in selected small businesses make operational and strategic decisions. The focus is
Three largish show-
rooms. 51 employees. lnte,viewee
Managing director, male 4üish: Economics graduate with other retail experience.
on areas in which traditional OR models might be applicable. The possible future role of OR in this sector is discussed.
Company B
This article is based on a pilot study of five small
Description
businesses ¡n the West of England which took place in the summer of 1987. Face-to-face interviews were carried out with the managers in each business. These generally lasted for an hour, and covered the following points:
Wholefood caterer selling to shops, homes and markets Partnership with no other employees. Three years old. Based in kitchen converted from barn.
Interviewee
interviewee's background and responsibilities;
Company C
goals of the company;
objectives and policy in making decisions on (as
Description
appropriate) stock control, use of resources, product mix, demand forecasting, distribution and production planning;
Partners, both female: one mid-20s with catering experience; one under 40, exhousewife.
Manufacturer of own-design children's clothes
Rapid growth from hobby. Now three full-time staff, and 12 outworkers on piece rate. Workshop in barn at owner's home.
information routinely collected, and how it is used;
!nteiviewee
Designer/Manager, female 30ish: Psychology graduate with social work
recent major decisions - how arrived at and
experience.
evaluated;
changes anticipated or desired.
The Table opposite gives a brief profile of the businesses and interviewees.
Furniture retailer
Company D
Manufacturer of luxury confectionery
Description
Planned new venture, in small unit on industrial estate. Three full-time staff, with two more to be recruited.
lnteiviewee
Husband and wife partnership 50ish: husband with management experience
The businesses were
selected from among those where a personal contact was available. Sole traders, professions and high-street
retailers were not included, as it was thought that their operations might follow established practice rather than conscious decision-making. All except company E were independent companies. Company E was part of a group
in construction industry.
Company E
of timber companies, but had a good deal of
Descri
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