Abstract
Small- and medium-sized enterprises (SMEs) have been playing an important role in the U.S. economy for a long time. The contribution of SMEs to the textile and apparel industry has been intensified in the global economy. Yet, little is known about what motivates SMEs for success. An understanding of motivations for success is critical to SMES' business strategies and performance. This study explored SMEs' motivations for success through the theoretical framework of Maslow's (1943) theory of human motivation. Results of the content analysis of two prominent small business magazines suggested that Maslow's theory provided a reasonable framework, and that textile and apparel SME owners explained filling the niche as physiological needs, financial security as safety needs, building intimate relationship as love needs, recognition and respect as esteem needs, and being good global citizen as self-actualization needs for their success. The study concludes with contributions, implications, limitations, and future research opportunities.
Introduction
Success is a topic of interest for many researchers, entrepreneurs, and business owners. What makes a business successful? How does a business succeed and what drives it to succeed? While there are numerous academic journals, books, and educational videos offering expert advice to business owners and guidelines for success, not all businesses become successful in the same way. Each business has different needs and motivations for success and, thus, it is difficult to condense them into a few bullet points. This is particularly true when small- and medium-size enterprises (SMEs) are involved. SMEs are believed to face greater uncertainty as a result of the external environment than large firms and, thus, they have a greater tendency to take risks and innovate products and services in order to attain success (Garengo, Biazzo, & Bititci, 2005). Dean, Brown, and Bamford (1998, p. 724) have also argued that smaller firms have the advantages of speed, flexibility, and niche-filling capabilities, while large firms have other advantages, such as a “deep pocket” to exercise bargaining power over suppliers and customers.
Despite the different and complex nature of SME operations, previous research has tended to focus on investigating SMEs through theories developed for large corporations' operations, resulting in an incomplete understanding of SMEs (Ha-Brookshire, 2009). Thus, this study was designed to explore what motivates SMEs to be successful in today’s market environment. More specifically, to understand how SME business owners in the textile and apparel industry describe their needs for achieving success, the study used Maslow’s theory of human motivation as a theoretical framework. Although the theory has suffered much criticism and has shortcomings related to the hierarchical order of needs and the lack of evidence for such needs, it is still useful in understanding basic human needs and describing the stages of growth in humans (Hofstede, 1984; Wahba & Bridgewell, 1976). Therefore, the theory was expected to provide a meaningful framework for an exploratory study.
Literature Review
SMEs in the U.S. Textile and Apparel Industry
Currently, the United States Small Business Administration’s Office of Advocacy (U.S. SBA) defines SMEs by either the number of employees or the annual sales. The firm size standards vary from industry to industry, and more detailed information can be found at U.S. SBA (2010). In the textile and apparel industry, each of the three industry categories of manufacturing, wholesaling, and retailing has different firm size requirements for firms to be considered SMEs. First, for textile and apparel manufacturing, the four major sectors are textile mills (North American Industry Classification [NAICS] code 313), textile product mills (NAICS 314), apparel manufacturing (NAICS 315), and leather and allied product manufacturing (NAICS 316). A firm with 500 or fewer employees is considered an SME in the majority of these sectors. Each sector has up to 24 subsectors. For example, 9 of the 12 subsectors in textile mills, 7 of the 8 subsectors in textile product mills, the entire 24 subsectors of apparel manufacturing, and 9 of the 10 subsectors of leather and allied product manufacturing have the same firm size requirement for SMEs. Second, for the textile and apparel wholesaling category (NAICS 4242 and 4243), a firm with 100 or fewer employees is considered an SME. Finally, for textile and apparel clothing and accessory retailing sectors (NAICS 448), a firm with annual sales of U.S. $9 million or less is considered an SME in four of the nine subsectors. The other five subsectors define a firm with annual sales of U.S. $7 million or less as an SME.
Although the firm size of an individual SME may be small, the overall saturation of SMEs in the U.S. economy is great. According to the 2007 Economic Census, 89% of all manufacturing firms (NAICS 31–33) were reported to be SMEs with fewer than 500 employees. Similarly, 79% of all wholesale firms (NACIS 42) had fewer than 100 employees and 27% of all retail firms (NAICS 44-45) recorded annual sales of less than $9 million, classifying them as SMEs (U.S. Census Bureau, 2010).
While SMEs are a critical part of many industries in today’s U.S. economy, they are particularly important to the U.S. textile and apparel industry. In the past, the textile and apparel industry in the United States was dominated by large, manufacturing-based businesses (Dickerson, 1999). However, as the U.S. economy has matured, the industry has fragmented and globalized, with businesses offering nonmanufacturing services that are more likely to require a smaller organizational structure than in the past (Ha-Brookshire & Lu, 2010). That is, the majority of manufacturing jobs have moved overseas for low labor costs, leaving the more value-added functions, such as marketing, product development, advertising, and sourcing to be performed in the United States. Specifically, according to the 2007 Economic Census, 95% of businesses in the textile and apparel industry manufacturing sectors (NAICS 313, 314, 315, and 316) were classified as SMEs, 6% more than the overall manufacturing category (U.S. Census Bureau, 2010).
Challenges in SME Research
Researchers in this area face two particular challenges when trying to fully understand SMEs, particularly their motivations for success. First, the majority of SMEs are privately held and, thus, they are not required to provide detailed financial information to the public. For example, stock valuation is one of the common financial measures used in business success research, yet it would be irrelevant to SME research as most SMEs do not trade stocks publically (Besser, 1999). In addition, many SME owners are unwilling to provide correct information about their financial performance, such as revenue, annual sales, and return on investment, which can cause major issues regarding the reliability of the data collected (Besser, 1999). Even if SMEs report their financial measures, because there is no standard for accounting practices in SMEs, a greater risk of error in the reported data is expected (Dess & Robinson, 1984).
Second, another prominent issue in current research on SMEs is the lack of theories explaining SMEs' success. Rather, much SME research borrows theories developed for large corporations and their success (Dess & Robinson, 1984; Murphy, Trailer, & Hill, 1996; Raymond, 1985). The validity of using theories intended for large corporations in SME research is questioned because economic, social, and personal conditions and environments may affect SMEs and large corporations differently (U.S. SBA, 2007). In this light, Welsh and White (1981) pointed out that “a small business is not a little big business” (p. 18). For this reason, the authors suggested new theories, methodologies, and definitions must be formulated specifically for SMEs. The authors continued that these new approaches must include different measures of success for SMEs because SME owners might have started their businesses for a variety of reasons beyond financial gains. Therefore, judgment about SME owners' motivations for success must consider their personal motivations for success (Besser, 1999).
To address these problems in SEM research, Dess and Robinson (1984) recommended using subjective measures, such as owners' descriptions and feelings, rather than objective measures, such as financial and economic measures, in SME research. The authors showed strong correlations between subjective and objective measures of SMEs, justifying the use of subjective measures in SME research in the absence of objective measures. Similarly, Besser (1999) surveyed 1,008 small business operators in small towns in Iowa, using nonfinancial indicators of business success, including percentage change in total number of employees over a given period of time and plans for the future. These indicators were then compared with the respondents' subjective evaluations on their success. Strong positive correlations were found between the nonfinancial measures and the owner’s subjective responses regarding their business success. While these studies showed subjective measures of SME success can be useful, these measures alone cannot eliminate all the challenges that SME researchers may face. Particularly, when considering the diversity of needs and motivations of each SME owner’s success, a unidimensional measure of success may not be the most effective scale for SME research.
Theoretical Framework for SME Research
To help minimize the gap in our understanding of SME motivations for success, Maslow’s (1943) theory of human motivation was adopted as a theoretical framework in this study. Maslow’s theory of human motivation explains five stages of fundamental human needs and, thus, motivations for certain behavior—successful existence as human beings. These needs are physiology, safety, love, esteem, and self-actualization. Each need is expected to be fulfilled in some respect before a person moves on to the next level in the hierarchy. The hierarchy from level to level is seen as an individual’s fulfillment of potential. Maslow also emphasized that the movement between levels is not rigid but rather fluid. For example, an individual could have 90% of the physiological needs met, 80% of safety needs, and 60% of love needs.
The physiological needs found at the base level of the hierarchy include food, water, sleep, and sex, the most potent of the needs in the hierarchy. Maslow (1954, p. 82) explained, “a person who is lacking food, safety, love, and esteem would probably hunger for food more strongly than for anything else.” Safety needs are described as having physical safety and economic security. While these needs are considered to be less potent than the physiological needs, it is still possible for the individual to become completely involved in fulfilling this set of needs, perhaps seeing the fulfillment of the safety needs as more important even than the physiological needs. Safety needs also include things such as stability, dependency, and the need for structure, order, law, and limits (Maslow, 1970).
Needs for belonging, affection, and love are next in the hierarchy. At this level, the need for affectionate relationships, a sense of place within groups or family, and togetherness among friends becomes the primary concern. Maslow (1943, p. 378) noted “love needs involve both giving and receiving love.” Esteem needs can be divided into two subsets. First, a person desires strength, achievement, and confidence—these are the needs that involve the self. Second, there is the desire for respect, status, recognition, attention, and importance. These needs can be described as being the more social or interactive component of the esteem needs. Finally, self-actualization is what Maslow considers to be the ultimate need and the highest possible stage of human experience. It can be described as self-fulfillment or striving to reach personal potential. Maslow (1970, p. 46) explained this need as “a musician must make music, as artist must paint, a poet must write, if he is to be ultimately at peace with himself. What a man can be, he must be. He must be true to his own nature.”
Applications of Theory of Human Motivation in Business
Because of its explanatory power of human needs, Maslow’s theory has been used to understand how organizational needs can be categorized within the hierarchy of human needs (Tuzzolino & Armandi, 1981). The critical underlying strategy for the use of this theory in business is the understanding that there may be a parallel between individual and organizational needs. In 1981, Tuzzolino and Armandi proposed a new foundation for organizational analysis, specifically focusing on corporate social responsibility. Broken into the five basic stages of Maslow’s hierarchy, the authors displayed criteria for each stage in terms of organizational needs. The authors defined profitability as businesses' physiological needs. Businesses' vertical and horizontal integration and competitive position were considered businesses' safety needs. Love or belonging needs are manifested through being a part of trade associations and trade publications, while esteem needs are achieved through market position, market share, image creation, and price leadership. Finally, businesses' employee relations or community and government relations can be explained as the results of their internal and external self-actualization needs.
Tuzzolino and Armandi’s (1981) application of Maslow’s theory of organizational behavior is particularly helpful for our understanding of SMEs and their motivations for success. Not only have researchers used Maslow’s hierarchy as a framework, but it has also been used by business owners. For example, Chip Conley (2007), the owner of a chain of boutique hotels, argued that he used Maslow’s hierarchy to understand his customers' and employees' varying needs in order to save his business during difficult market times. Conley explained that most companies “hang out” at the bottom of the pyramid (i.e., physiological needs), yet those businesses will start to see that “they have to think about higher-stage needs such as meaning” (Hofman, 2007, pp. 43–44). Despite the potential of Maslow’s theory to explain SMEs and their motivations for success, few attempts have been made to understand textile and apparel SMEs.
Research Questions
Given the importance of SMEs to the U.S. textile and apparel industry, the difficulties that researchers face when assessing their success, and the lack of knowledge about how SME business owners define their needs for success, the study was designed to gain a deep understanding of how SME owners describe their motivations for success in their own words and understand them through the application of Maslow’s (1943) theoretical framework. To achieve this objective, the study proposed the following research questions:
Research question 1: How do U.S. textile and apparel SME owners describe their motivations for success in their own words?
Research question 2: Does Maslow’s theory of human motivation provide a reasonable framework for understanding the motivations of U.S. textile and apparel SMEs' success?
Method
Content Analysis
A content analysis was performed on SME owners' motivations for success as described in their own words, as published in prominent small business magazines. Content analysis was employed as it allows the researcher to collect text data and interpret it for deep perspectives in the data gathered (Neuendorf, 2002). Content analysis is also commonly used in the development of new theories and the initial stage of any research cycle. Thus, the text data from the small business magazines featuring successful SME owners were analyzed. Small business magazines were chosen because they include valuable written information on SMEs beyond their financial or economic performance. These magazines publish articles, case studies, and interviews of a variety of SME owners providing deeper insights into SME success than simple surveys. For this reason, magazines are a common source used for content analysis in the field of textiles and apparel (Jung & Lee, 2009; Kim & Lennon, 2006; Tyner & Ogle, 2007).
Sources and Data Collection
Two major small business magazines were chosen for the study sources. They were Fortune Small Business (FSB) and Entrepreneur. The text data from the 2005 to 2009 issues of each magazine were obtained through the Business Source Premiere database. FSB, owned by American Express, was distributed for free to one million American Express cardholders per issue (Bercovici, 2009). Until FSB was discontinued and changed to CNNMoney.com: Small Business as of November 2009, FSB was considered a leading small business magazine and published 10 times per year (Bercovici, 2009). Article topics ranged from highlighting top small businesses, to assisting small businesses in distress, to listing the top 100 small public companies. The second magazine, Entrepreneur, is published 12 times per year and its circulation for 2009 was over 575,000 per issue (Magazine Publishers of America, 2009). Entrepreneur covers topics such as new startups, top U.S. entrepreneurs, and business strategy. It was expected that Entrepreneur would provide in depth information on small business creation and continued achievement. Although there were other options for the study sources, these two magazines were selected as they address all types of businesses, not just textile and apparel businesses. This broader focus was selected because the success stories of businesses recognized by the entire business community, not just a textile and apparel business community. Therefore, the businesses featured in these magazines were deemed to achieve a greater (or higher-level of) success than businesses featured only in textile- and apparel-related magazines.
Of the 110 issues (50 from FSB and 60 from Entrepreneur), 107 articles featuring textile and apparel SMEs were selected for the study sources. For timely information of SME success, the years of 2005–2009 were chosen. This period included before and through the economic recession that began in the United States in 2008. Table 1 shows the characteristics of the study sources.
Source Descriptions
Data Analysis
Because the objective of the study was to explore SMEs' motivation for success under Maslow’s theory of human motivation, first, each unique message was interpreted using Maslow’s theory and coded accordingly. Coding messages using theory and past research is one of the recommended strategies for content analysis (Neuendorf, 2002). Second, the conceptual ideas from each message discussing motivations for success were grouped into unique themes using Maslow’s five motivational factors. This process involved analysis at multiple levels from the particular details to the general themes (or from the part to the whole) and a holistic interpretation (Thompson, 1997). For example, when SME owners described that their need for success was to establish a new business to respond to a gap that existed in the market, the message was coded as “filling the market niche” and categorized into Maslow’s physiological needs to reflect the SME’s fundamental need to exist. When SME owners stressed their needs to grow their businesses to protect them, those text data were coded as “growth in sales” and this code was categorized into Maslow’s safety needs to accommodate SMEs' need to maintain their business while competing with other businesses in the market. For SME owners that showed that their need for success was to build relationships with their customers, the phrases were coded as “creating intimate relationships with consumers” and categorized into Maslow’s love/belongingness needs. Comments from SME owners who emphasized the importance of recognition in their market and a desire to expand were coded as “respect and recognition” and were categorized under esteem needs. Finally, when SME owners described their motivations for success as to help people in the world, these text data were coded as “strengthening the community” or “good global citizen,” depending on the focus of the beneficiaries. These codes were then categorized as Maslow’s self-actualization need.
When disagreements existed between the researchers on how to code and categorize certain data, further discussion took place between the researchers to negotiate interpretation of the study data. For example, even if the original objective of an SME stemmed from altruism, if the SME owner emphasized a current goal to increase sales, operational expenditure, or product line depth, it was categorized into Maslow’s safety needs rather than self-actualization needs. This was done to separate such SMEs from others which were already conducting self-actualization related activities, such as cash donations and community development activities, beyond promotions to increase sales transactions. In all cases of negotiations, the researchers reached 100% agreement through consistent discussion and negotiations. Once the content analysis was complete, a frequency analysis was performed to show the number of the codes which were placed into each stage of Maslow’s needs. Finally, a conceptual model for SMEs' motivations for success was created based on the Maslow’s theory of human motivation.
Results
As a result of the content analysis, it was found that SME owners in the U.S. textile and apparel industry seemed to have a wide array of motivations for success based on meeting (a) physiological, (b) safety, (c) love or belongingness, (d) esteem, and (e) self-actualization needs.
Physiological Needs for Success
Thirty-six of the 107 (33.6%) SME owners described their needs for success in such a way that they were categorized into the physiological stage. Survival is the main physiological need. The way these SME owners described success was in the following ways. To them, survival depends on the success of (a) filling a market niche, based on (b) sophisticated marketing understanding, and by (c) launching a new product or product line.
Comparable to the fundamental resources to human existence, such as food, water, and shelter, the SME owners described that their businesses exist to fill market niches. For them, without this purpose, their businesses' existence would not be possible or sustainable. Their needs to fill market niches seemed to be drawn from their personal experiences in the market or critical problems that they experienced in their everyday lives. For example, one of the study sources featured in Entrepreneur magazine, Taylor, was an arborist who found it difficult to perform his outdoor duties with the clothing that was available in the market and, thus, decided to create a new company called, Arborwear LLC, which specializes in outdoor work clothing (Torres, 2005). Similarly, Hatfield, a personal trainer, interviewed in the March 2008 issue of Entrepreneur magazine, shared that she had many menopausal women clients who complained to her about fatigue because of sweating through the night. Hatfield suggested that her clients wear their running clothes to sleep in because of the wicking properties in the fabric. Reporting that as her “aha” moment (Hoang, 2008, p. 104), Hatfield created NiteSweatz, a company specializing in sleepwear made from moisture-wicking fabrics. Similarly, after having trouble finding baby clothes for their friend’s children that fit their personal eclectic style, hard-rock enthusiasts, Melchiano and Kissinger, started Infantile, a cotton t-shirt company for infants and toddlers with hard rock themed graphics in order to “create a culture of their own” (Pennington, 2005, p. 24).
While many SME owners were perceptive enough to see a gap in the market, not all seemed to be able to act on such “aha” moments. It seemed that a sophisticated understanding of or a sincere passion for the market played a critical part in SME owners' motivations for success. In reference to the Arborwear LLC and NiteSweatz cases, the owners appeared to have extensive knowledge of a certain market due to their professional careers. This knowledge then appeared to help them identify the unique niche that other people may not have found. However, the owners of Rivalfish, a sports merchandise company, had no previous industry experience before launching their company in 2003, yet they had a sincere passion for sports. Because of the “natural insight” (Lai, 2006, p. 129) into the sports market that these owners possess, Rivalfish seemed to be able to launch its business successfully.
With market understanding and the drive to fill a market niche when the opportunity was given, many SME owners seemed to be focusing on a product or a focused, narrow product line to establish their successful existence in the market. For example, the owners of 20 Degrees North attempted to fill a niche they saw in the athletic footwear industry, by focusing on a unique line of off-road running shoes since 2008 (Overfelt, 2008).
Safety Needs for Success
At the safety stage, 27 of the 107 (25.2%) of SME owners described their motivations for success as seeking (a) financial security in order to (b) grow in operational spending, and (c) achieve product line extension. Just as a human would want to have physical and economic security, financial performance measures seemed to be indicators of SMEs' success at the safety need level. That is because financial security seems to form a foundation for SMEs to grow their spending in areas such as advertising, employee training, new technology, and new space, while also allowing the SME to extend their current brand with new products. For example, owners of Carousel Designs, a baby bedding company, explained that they were motivated to achieve “record sales” and “double the revenues” (Gray, 2009, p. 55) in 2008 by over $1 million. Similarly, the owners of high-end men’s and women’s retailer, Croll Corp, described that they needed to achieve their financial goals, over $5 million in sales in 2005 (Wilson, 2005).
Once financial security has been achieved, growth must occur that does not jeopardize business security. This financial security seemed to make SMEs feel comfortable in increasing their spending on various functions of their business, providing a greater sense of safety. For example, Skerritt of Proper Cloth, a custom tailored men’s dress shirt e-commerce business, identified a need to “scale up advertising fast” (Krentcil, 2009, p. 12) for success, after receiving an influx of business capital to maintain natural growth and development. Likewise, Pecor, the owner of Olive and Bette’s, a New York-based women’s clothing retailer, described the company’s success through an increase in operational spending as a way to secure the company “from the inside out” (Wilson, 2006, p. 30). Through this process, Pecor expressed that she was passionate about providing her employees with extensive training to continue to ensure the success of her company. To her, this type of spending would secure safety not only within the market but also within the company.
While Proper Cloth and Olive and Bette’s were focusing on increasing operational expenses to secure their safety, Rein, the owner of Diapees and Wipees, a diaper bag company out of Texas, described that her success was derived from the need to extend her product line to maintain financial security. She further reported that after achieving nearly $200,000 in sales in 2005, she was able to launch a new line of upscale diaper bags, beyond her original product line that established her company’s existence (Paranal, 2006). This extended product line featured higher quality at higher prices, targeting different consumer segments, and thus offering a greater sense of safety for her business. On the similar note, the owners of Chill Factor Clothing described in the July 2008 issue of Entrepreneur magazine that, for their further success, they would need to extend their original hat product line to broader clothing lines, suggesting their motivations to seek safety and growth in their business (Kilroy, 2008).
Love/Belongingness Needs for Success
At the love/belongingness level, 16 of the 107 (15.0%) SME owners described their motivations for success to (a) have brands that create intimate relationships with consumers and (b) build and maintain consumer loyalty. Maslow (1943) described this stage of the hierarchy as having the need for affectionate relationships, a sense of place within groups, and love. SMEs' motivation for success at the love/belongingness stage was best described in the March 2005 issue of FSB magazine. When featuring Under Armor, an athletic clothing company based in Baltimore, the reporter stated that this company’s motivation for success was “to be in the game” (Overfelt, 2005, p. 69). This phrase embodies this stage by portraying a company as a significant part of the lives of consumers, that is, the company has a strong sense of place within the market.
In order “to be in the game,” a consumer-focused branding strategy seemed to be the first step for SMEs to take. These SMEs seemed as if they wanted to create and foster “love affairs” between their brands and consumers, while continuing to build their businesses. For example, a chief executive officer of outdoor clothing company, C.C. Filson, described in the November 2005 issue of FSB magazine, that even if his business grows, he would feel the need to “keep his brand from alienating its core customers” (Bourjaily, 2005, p. 96). While C.C. Filson was focusing on the game of “not to lose,” Zander, of Jimmy Bean’s Wool, a knitting wool manufacturer, introduced instructional knitting videos to their website, in hopes to “engage” (O’Reilly, 2008, p. 33) the consumers. Beyond “engaging,” Antle of Island Co. emphasized that he is determined to create a “real deal” and “authentic” relationships between his company and consumers by promoting his consumers' lifestyle among his employees in order to foster intimate and deep relationships with core consumers (Wilson, 2007, p. 172). Thus, employees of the travel apparel and swimwear company work among palm trees, sand dunes, and sport bikinis in their daily attire.
The relationships with their customers were also deemed very important to create and maintain consumer loyalty. Johnson of Big Feet Pajama Co. described how she built and maintained the loyalty of her customers by keeping a close eye on shipping and providing updates for shipments showing any delay. Johnson stated her motivation for success was to satisfy her customers so that they would be able to say her way of doing business “means a lot to” them (Gray, 2009, p. 15). Having a pool of “dedicated” customers was another indication of a successful business, driving them to work even harder, according to Lambert and White of Autrepeau, a women’s innerwear company (Henning, 2008, p. 116).
Esteem Needs for Success
The study data showed that 17 of the 107 (15.9%) SMEs' motivations for success at the esteem level were to fulfill the needs for (a) brand recognition and respect, and (b) expanding into a new market, though (c) reassessing business strategy. Similar to Maslow’s (1970) assessment of the esteem stage, SMEs' owners used words such as “strength,” “achievement,” “confidence,” “respect,” and “recognition” for their motivations for success.
While the love/belongingness stage was focused on earning consumers love and close relationships, SME owners emphasized earning recognition and respect, beyond simple good relationships, in the marketplace at the esteem level. For example, Birdwell of Damzl, a women’s motorcycle clothing company featured in the FSB’s 2006 issue, stated that what drove her company to be successful was a commitment to make her brand one that people would “recognize and respect” (Whitford, 2006, p. 82). This recognition and respect seemed to be realized in the form of brand licensing. It seems logical in that once an SME gains respect and reputation, other companies take notice and, thus, licensing agreements become a reality. The owners of Float Tech, a boating outerwear company, stated that they expected to “gain a new level of recognition” in the marketplace by focusing on “licensing deals with larger brands and commercial accounts” (Kimes, 2008, p. 72).
These licensing agreements, in turn, help SMEs expand into new markets. Unlike launching a new product line to fulfill physiological needs, which operates on an individual SME level; at the esteem level, such a launch is aimed at a much greater market level. Beyond their core customers, SMEs at the esteem level seemed to have the confidence needed to take on new markets and increase the breadth of their business operations. For example, the owners of Float Tech explained that they needed to expand into a new market, specifically to the military and commercial markets from the consumer retail market by acquiring approval for their products to be used by the U.S. Coast Guard (Field, 2006). Similarly, Adams in the September 2007 issue of FSB sought licensing agreements for her company, Angela Adams, “to be seen” (Tiger, 2007, p. 38) in the greater community of the business beyond her target consumers.
“To be seen” in the market, SME owners seemed to take an introspective look at their companies and reassess past and current business strategies at the esteem level. While other levels of motivations for success have focused on building and growing the company outwardly, at the esteem level, SME owners described that it takes internal reflection to determine a path for the future. Elliott and Talucci of The Sak, a San Francisco based handbag company, were described in the July 2006 issue of Entrepreneur as taking a step back and “refocusing” (p. 89) their business strategies. Talucci explained this process as deciding to “focus on what we should be doing, not what we could be doing” (Poe, 2006, p. 89). For some SME owners, the assessment stayed at the company level, for others, it appeared to begin with personal introspection from the owner/owners. In the February 2008 issue of Entrepreneur, Ecko of Ecko Enterprises, a clothing and accessories wholesaler and retailer, described his company’s reassessment of strategy as “sobering up” and “rather than being deep in the weeds with design, being a muse to my organization” (Cooper, 2008, p. 66) to maintain success.
Self-Actualization Needs for Success
At the self-actualization phase, 11 of the 107 (10.3%) SME owners described their motivations for achieving success as wanting to be “good global citizens” (Ramberg, 2007, p. 36). These motivations seemed to have two different approaches: (a) offering great products that would help consumers feel that they are making positive impact in the world and (b) empowering communities through philanthropic initiatives beyond their products or companies. Maslow (1970) described the level of self-actualization as self-fulfillment, or striving to reach personal potential. He also postulated that individual differences at this level would be more significant than in any other level. Just as self-actualization can mean different things to different people, different SMEs seemed to have different meanings of self-actualization.
Some SME owners reported they feel obligated to help others beyond their companies by creating a charitable division or by providing a product that made consumers feel as if they were helping others. In the June 2005 issue of Entrepreneur, Jacobs, the owner of Life is Good, an optimistic clothing and accessories retailer, reported that in 2002, he opened a charitable division of the company, holding fundraisers to support charities for children. Jacobs described his brand and this philanthropic effort by the statement “Life is Good is the way we feel about the world, and our customers feel that way too” (Moran, 2005, p. 95). Other SMEs, such as Indigenous Designs, a fair trade organic clothing company, allowed their customers to be “good global citizens” by providing garments made by cooperatives in third-world countries (Ramberg, 2007, p. 36). Leonard of Indigenous Designs seemed to understand that “people want to put consumer dollars where it [sic] counts—for their own and a better planet” (Ramberg, 2007, p. 36).
While these accomplishments allowed SMEs to do something beyond their company, many were also able to empower others by reaching this level of self-actualization needs. This empowerment appeared to come in many forms, but most notably, through supporting the communities around the SME. For example, Hooker of Sferra Bros., a luxury bed and table linen company, was able to start a charitable organization that helped local handicapped children participate in sporting events in the community (Sloane, 2005). Similarly, the owners of Sneaker Villa, an urban fashion retailer, claimed that they offer a management training program for store employees who have worked for the company and completed customer service for 1 year. Vowing to “offer more than just a great product,” the owners described that they were motivated to “strive to strengthen the inner-city neighborhoods” where the stores are located (Fitter, 2009, p. 51). Figure 1 illustrates the conceptual model of SMEs' motivations for success interpreted through Maslow’s theory of human motivation.
Comparison on Maslow’s hierarchy of needs to small- and medium-size enterprises (SMEs) hierarchy needs for success.
Conclusions
There is no question of the importance of SMEs to the current U.S. economy. As the U.S. textile and apparel industry has become highly fragmented and globalized in recent decades, SMEs have become the predominant business entities driving the industry. This trend magnifies the importance of our understanding of SMEs and their business operations. By exploring how U.S. SME owners describe their motivations for success in their own words and seeing how these motivations can fit into Maslow’s (1943) theory of human motivation, the study findings helped deepen the understanding of textile and apparel SMEs.
The results from the content analysis of two of the most prominent U.S. SME magazines showed that the way U.S. SME owners describe their motivations for success could be compared to Maslow’s theory. The physiological needs for SMEs' success involved filling the market niche that others may find it difficult to do. SMEs seemed to have a sophisticated understanding of the market and focus on a particular product line to establish their successful existence. The safety needs for SMEs included sustained financial growth to ensure stability and security in the market. Financial security fosters other operational spending, such as training and a product line extension. The love needs seemed to focus on the SMEs' intimate relationship with their consumers. These relationships allow them to be “in the game” and gain customer loyalty leading to their continued success. The esteem needs involved SMEs' desires to earn strong brand recognition and respect within the market. This respect and recognition then enabled them to acquire licensing agreements or expansion into a completely new market through reassessing business strategies for greater success. Finally, the need for self-actualization was described as striving to be a good global citizen as a business entity by offering unique products that would directly help people or through implementing other philanthropic practices to indirectly help people in the world.
The study findings have several important contributions and implications. The research findings helped to close the gap between human behavior and organizational behavior theories. To the researchers' knowledge, this is the first time that Maslow’s (1943) theory of human motivation was used to analyze the motivations of textile and apparel SMEs' success, and the results showed that the way textile and apparel SME owners define their motivations for success can be framed within the context of the hierarchy of human needs. This supports Tuzzolino and Armandi’s (1981) thesis that we could understand SMEs from the human behavioral perspective. The study findings suggested the boundary between personal and organizational lives could be vague for SME owners and, thus, both perspectives may be required when analyzing success. Therefore, SME researchers, particularly in the textile and apparel area, may want to use the study findings as groundwork to recognize and evaluate SMEs' success beyond theories built for large corporations.
Second, the findings showed in-depth information about SMEs' motivations for success that is otherwise difficult to obtain. The in-depth details about textile and apparel SME owners help us understand what it is like to be an SME owner in today’s marketplace and what motivates their everyday work. A mature understanding of these SME owners' motivations for success has several important implications for various stakeholders. First, a close, in-depth understanding of SMEs' motivations for success is critical for government agencies and nonprofit organizations seeking to help SMEs succeed. The understanding of SMEs' motivation for success would provide these agencies with the knowledge that is necessary to offer the right and effective resources and assistance for SMEs' success. For example, for SMEs seeking to meet their esteem needs, training on business licensing and expansion strategies may be effective. SMEs wanting to meet their safety needs could be benefitted if the banks or government agencies could offer special loans or financial assistance programs to open up success product lines. Without knowing SMEs' needs and motivations which vary case by case, one-size-fits-all solutions for SME assistantship programs would not produce effective results.
In addition, by understanding each SME might be at a different level in terms of their motivations for success, textile and apparel educators may want to incorporate marketing and operational strategies for SME operation into their courses. Not all textile and apparel students will be employed by large corporation. Many students want to own and work for SMEs. Thus, students and educators would need to understand what motivates SMEs for their success and what they do to achieve such success. Therefore, if students want to work for SMEs actively engaged in various social causes, they may not want to choose any employment options from SMEs barely meeting their physiological needs. Students with such knowledge then would make an informed choice on the type of company for which they like to work upon graduation.
Finally, for SME owners, the study showed SME owners described their motivations for success in very different ways. Because of the different levels of needs for success, SMEs may implement different marketing, promotional, and branding strategies. Through this knowledge that not all SMEs consider success in the same fashion, SME owners can be aware of the different levels of needs for success and achieve a deeper understanding of not only their own organization but also of their competitors in the marketplace. This knowledge would help SMEs formulate realistic and achievable short-term and long-term goals. Certainly, it would be hard to reach to the esteem level without meeting the physiological need. Realistic business goals may help SME owners feel confident and fulfilled as they achieve those goals.
While this research provides valuable insights into SMEs in the textile and apparel industry, the study is not without its limitations. Maslow’s theory of human motivation has been used extensively as a conceptual model in the literature. However, the theory is not perfect at describing human needs. One of the biggest critics of the theory is Wahba and Bridgewell (1976) who argued there is little or no evidence for the ranking of needs Maslow described. The order in which the hierarchy is arranged has been also criticized as being ethnocentric by Hofstede (1984). According to him, Maslow’s hierarchy neglects to explain the difference between the social and intellectual needs of those who are raised in individualistic societies and those raised in collectivist societies. Hofstede continued that people who are raised in collectivist societies may not put self-actualization as the highest order need. These criticisms are also valid when applying the theory to SMEs' motivations for success. For example, not all businesses take the linear steps of fulfilling physiological, safety, love, esteem, and self-actualization needs. Businesses may skip steps: such as Toms Shoes, a shoe wholesaler and retailer based out of Santa Monica, California, who started their business under the pretence of being a “good global citizen” by giving a pair of shoes to a needy child for every pair of shoes they sold. Then, securing financial safety was the next need to fulfill. Therefore, in this case, the order of needs to be met may not be necessarily consistent with Maslow’s theory of human motivation. Perhaps, in the SME setting, something other than a pyramid model would be more appropriate to represent the circular nature of business and the ability for a company to fulfill their needs and motivations for success without necessarily filling those that come before in the hierarchy. In addition, other theories, such as the sustainable family business model, could be considered for future SME research (Stafford, Duncan, Dane, & Winter, 1999).
Second, expanding the size of potential sources and collecting data over a longer period of time would provide additional and new insights into SMEs motivations for success. Third, gathering additional types of data such as case studies or interviews with some of the companies mentioned would provide a more holistic perspective on how SME owners describe these motivations. The content analysis of this study used the public venue of magazines, which may not be the most reliable source for determining SMEs' motivations for success. Finally, the use of big business theory has been pervasive in the research of SMEs. Perhaps, a better approach to understand SMEs would be to take the approach developed in human behavior literature. More research is needed to determine whether or not Maslow’s theory is the best to use in studying organizational behavior.
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.