Growing a Small Firm in an Industry Dependent on a Constrained Natural Resource

Colman, Pablo (2024) Growing a Small Firm in an Industry Dependent on a Constrained Natural Resource. Doctoral thesis, The University of Buckingham.

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Abstract

The research focuses on the challenge of growing a small firm while the resources needed (e.g., fish) are declining and, hence, heavily regulated. The seafood industry is still growing, and fish as a protein is becoming more popular due to its positive effect on health, representing a growth opportunity. However, small fishing firms are exiting the market, performing erratically or simply stalling, which leads to the central question of this research: How can small firms grow in an industry where the natural resource is in decline? The research explores and evaluates factors shaping small firms' growth in Northern Norway's fishing industry. This research adopts a critical realism paradigm. Unlike previous research on small firm growth, which has been dominated by positivism, this thesis follows a different approach, pivoting around the challenge to grow a small firm and questioning underlying assumptions of existing theories. The philosophy adopted in this research enabled combining the exploratory nature of the question and the explanatory aspects of identifying factors leading to firm growth, applying a mixed method abductive approach. The context of the research is the fishing industry in Northern Norway, and the data include secondary sources collected from two central databases, and qualitative primary data from eight semi-structured interviews and 124 professional trade publication articles. The outcome of this thesis shows apparent differences in firms' performance, all exposed to similar macroeconomics and natural resource constraints, and that growth rates of small and large firms differ. The data also indicate that fish stock variations impact firm growth and that current mechanisms of adjusting the price per kilo of fish based on allocated quotas result in fluctuating and unpredicted revenues year on year, negatively impacting the growth of small firms. The thesis contributes to knowledge with a proposed business model containing four groups of variables sorted based on their impact on firm growth. The first group of variables is location, regulations, and risk management capabilities, predominantly growth inhibitors. The second group is principally growth enablers and includes collaboration & competition, efficiency & reliability, and revenue mechanisms. The third group is business acumen, knowledge, and personal preferences. It plays the function of dials to move the role of the first two groups of variables between inhibitors and enablers in a continuum. Finally, the fourth group includes beyond the status quo and the boat and acts as an accelerator of growth, pushing the overall dominant position of the firm from “as is” to “growth”. The thesis also proposes a mathematical representation of the model. Small firms seeking to grow could adopt this model to adjust their businesses, representing the contribution to the practical management of this research.

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