Strategizing in the micro firm: A ‘strategy as practice’ framework

Background and context

Over the past 15 years, there has been a growth of research interest in the micro firm. This interest has encompassed the areas of micro firm learning (Reinl et al., 2015), micro firm innovation (Alonso and Bressan, 2014; Verbano et al., 2013), micro firm managerial capability for innovation (Kearney et al., 2014, 2017) and micro firm training (Devins et al., 2005; Kotey and Slade, 2005). Yet few studies have focused on strategizing in the micro firm context. While previous work has supported the notion that firms draw on strategizing activity to enable deeper understanding of how they seek to develop competitive advantage, this research has largely been undertaken in an SME context (Achtenhagen et al., 2013). Also, the focus of research is often on operational management concerns and, while these are significant, the longer term strategic challenges underpinning SME competitive advantage have not been addressed (Ates et al., 2013). In this article, we seek to remedy this gap and posit that strategy research has tended to rely on an abstract approach in which strategizing is studied as a feature of a firm, while ‘strategy as practice’ enables engagement with strategy as a practical and embedded form of human activity (Jarzabkowski, 2004). Recent contributions to the field of entrepreneurship education equally point to a number of gaps in the literature to which the article responds. Specifically, Hagg and Kurczewska (2016) elucidate the limited research into how entrepreneurship education engages with praxis and the challenges posed by engagement for educators. The contribution of this article lies in its helping to understand micro firm strategizing through the lens of praxis in the strategy as practice framework. Thus, educators are presented with a clearer contextual understanding of praxis, which can then be developed in programme design. Both Maritz (2017) and Blenker et al. (2012) highlight the highly contextual nature of entrepreneurship and argue for greater understanding of how context can be integrated into effective entrepreneurship programme design. The lifestyle motivation and embedded nature of micro firm strategizing developed in this article should enable educators to improve entrepreneurship education by designing programmes based on that development.

The research question underlying this contribution is: what is the nature of strategizing in micro firms? Three research objectives guide the article: first, to evaluate the nature of strategizing through a strategy as practice perspective; second, to critically review the established literature on strategizing in the micro firm context; and third, to propose an initial framework of strategizing in the micro firm with a view to identifying fruitful new avenues for further research.

The article takes the form of a critical review of academic literature with the aim of developing a framework to guide thinking about strategy development in the micro firm context. For the purposes of the article, micro firms are defined as those employing less than 10 people (EU, 2017). Tinsley and Lynch (2001) argue that the process of review enables the researcher to synthesize different conceptual frameworks in order to inform new research ideas and questions. A critical literature review can take a number of forms. A systematic review aims at a comprehensive search of academic databases using predetermined categories: it thus enables the linking of parallel themes, the highlighting of major themes and the development of key dimensions (Fitz-Koch et al., 2017). The key dimensions are then amenable to the development of quantitative research. A scoping review explores the literature from the perspective of relevance to the research question, with a certain neglect of the quality of literature searched (Burga and Rezania, 2011). The scoping review, though not as comprehensive as the systematic review, enables a wide coverage of the literature. In addition, through further iterations, the quality of the literature can be improved as the final review is constructed. Dew (2009) sets out the benefits of a review focusing on specifically chosen domains of the literature where the research aim is exploratory in nature and little existing academic research in the field has been conducted. Our approach in this article reflects the work of Dew in choosing literature from a number of domains and then critically reviewing the chosen literature from the perspective of three research questions. Although less comprehensive than the first two approaches, the domain-specific approach enables the researcher to choose a theoretical literature base suitable to the contextual exploration of the research topic (Kelliher and Reinl, 2009).

This article draws on three strands of literature namely: strategizing, ‘strategy as practice’ and the micro firm. Specific emphasis is placed on the importance of context in the micro firm, building on the argument that a critical view is a portal through which the contextual nature of a research field can be better understood (Rod, 2016). The theoretical framework takes an approach based on ‘strategy as practice’, in which analysis of strategizing focuses on managers as the unit of analysis: managers act as ‘living beings whose emotions, motivations and actions shape strategy’ (Jarzabkowski and Spee, 2009: 69). The strategy as practice framework enables a deeper understanding of strategizing in the micro firm context, where owner/manager dominance is a strong and uniquely contextual characteristic of the firm (Kelliher and Reinl, 2009).

The first two sections that follow discuss the nature of strategizing in the context of the large firm and the SME. The third section considers the theoretical framework based on strategy as practice, and the fourth contextualizes the micro firm. The final sections evaluate strategizing in the micro firm context and posit a framework for the process in context. A conclusion reflects on the contribution of the article and contemplates future research trajectories.

Origins and development of strategizing in larger firms

Strategizing research has been undertaken primarily at the level of the larger firm, but the insights gained facilitate this article’s investigation of the nature of micro firm strategizing by providing an initial understanding of the process as it emerges in the literature. Research into the nature of strategizing is necessary as underneath it are time-consuming, energy-expending and costly organizational and human processes (Whittington, 2003). Zabriskie and Huellmantel (2006, cited in Collins et al., 2010: 69), argue that much management research has underestimated the importance of investigating the origins and development of strategizing in the form of ‘a mental blue print of where…managers…want to go and how they will get there’. Critically, it is argued that major theoretical approaches to strategy suffer from the limitation of failing to address the micro activities of day-to-day organizational life and neglect the contextual actions of people who work in organizations (Johnson et al., 2003). Whittington (2003) argues for a greater emphasis on the process as a practice-based lens through which to understand the human drivers of long-term change and planning in the context of the firm. Key people at executive management level are considered to be the primary human drivers, and hence the key agents of strategy making in firms (Hendry et al., 2010). For example, Pettigrew and Pye (2006) contextualize strategizing in the framework of leadership and highlight the importance of taking a political learning approach, in which the leader’s human influence shapes the process in terms of framing how new mental models of strategy emerge through the judicious use of leadership power. Similarly, Liedtka (cited in Collins et al., 2010: 60) highlights the importance of the individual executive in the process, noting ‘it is the individual that thinks strategically and not the organization’.

However, strategizing takes place in a wider context than simply that of the solitary executive (Jarzabkowski et al., 2015). Hendry et al. (2010), from a board-level perspective, contrast an emergence from the firm’s established procedures with strategizing emerging from informal interaction between the firm’s managers. It is then in the context of this complex informal interaction that mental models of individuals and the collective management team are surfaced, critically evaluated and, at times, reinforced. Whittington et al. (2006), reflecting on formal processes, highlight the importance of strategy workshops, the project management of change initiatives and the creation of symbolic artefacts as a communication mechanism for strategic change. By comparison with more informal approaches, such formal approaches help senior management to contemplate creative mechanisms for the emergence of new mental models of the firm. Harrison et al. (2010), evaluating the impact of the network context, contend that strategizing occurs through unplanned interaction with other firms in the form of ongoing adaptation. They highlight the importance of deliberate action as executives actively seek to learn from contact with other firms’ processes, and not simply from other firms’ strategies, which are often contextually embedded to the extent that they are not easily replicable. Whittington et al. (2006) caution against the dismissal of formal mechanisms underpinning strategizing and argue the importance of strategy as a crafted activity, considering the possibility that formal mechanisms can interact with crafted strategy to produce effective organizational outcomes. Essentially, they contextualize the process as a practice-based craft both enabled and constrained by formal mechanisms, and at higher levels manifesting in the form of mental models capable of synthesizing deep learning across multiple domains of organizational activity. For example, Siggelkow and Rivkin (2009) argue that in practice the process is often characterized by counterintuitive behaviour, exemplifying how strategizing can be limited through ‘premature lock-in’, where the strategy becomes stuck in a web of conflicting constraints before managers fully explore its impact.

Jarzabkowski et al. (2007) contend that strategizing takes place at the interstices of practitioners, praxis and practices. Practitioners mould strategy through their identity, their action and their choice of strategic practices, thus reinforcing the human element of the process. Praxis shapes strategy by providing a socially situated context for the emergence of strategy. The socially situated context of praxis is manifest where the actions of practitioners are connected to an institutional framework. Practices of strategy emerge from cognitive, behavioural, motivational and physical practices embedded in a particular firm and industry. In a recent contribution, Jarzabkowski et al. (2015) caution against using approaches that focus on practitioner, praxis or practice in isolation and argue the importance of the holistic perspective gained by contemplating the process through the multifaceted lens of all three components.

Strategy making in the SME context

Despite the preponderance of research on strategizing in the large firm context, research in the SME context highlights the contextual nature of process. Bamiatzi and Kirchmaier (2012) stress the importance of the process in making competitiveness possible, even in very difficult environmental conditions, and as a means of enabling the SME to survive and grow. Challenging perspectives on SME strategizing which emphasize the operationally active role of the executive, they portray the role of the executive as one of reflection on possibilities and future challenges for the firm. The SME context provides opportunities for effective strategizing due to the high level of influence of the executive, whose strategic thinking can be shared and distributed deeply and widely in the organization (Collins et al., 2010). Coyte et al. (2012), in an Australian case study, find that SME strategizing emerges as informal interaction between key managers in the form of intensive dialogue, though such interaction is strongly governed by an overarching management philosophy unique to the firm. Moving beyond the dialogue of informal versus formal, Verreynne et al. (2016) consider three sites for the emergence of strategy: internal participation, external participation and dominance by the executive. Internal participation by the manager, they argue, facilitates strategizing rooted in a deeper leveraging of the internal resources of the SME while simultaneously challenging the manager to understand barriers to strategic enactment rooted in the internal structures of the firm. External participation offers the SME new and distinct perspectives in the form of exposure to new strategic possibilities but also to new mechanisms in the SME context and access to the direct experience of how managers enact in context. The problem of dominance by the SME executive, it is argued, emerges from an unwillingness and/or inability to delegate executive work, resulting in limited use of the opportunities offered to SME strategy making by both forms of participation.

However, Ardley et al. (2016) challenge this view, positing that where the SME executive possesses the capability and motivation to strategize, the powerful influence of the executive can create greater impact than a similar executive in a larger firm. Similarly, the powerful impact of the executive and the limited bureaucratic constraints in context gives SME strategizing a potentially creative and entrepreneurial dimension. For example, O’Dwyer et al. (2009) highlight how SME executives develop innovative marketing strategies more freely and more quickly than in larger firms. The strategizing process in the SME context, however, is also fraught with challenges – notably the dominant influence of the executive, often a legacy of the historical development of the firm (Kuhn and Galloway, 2015) and a need for control and influence in the firm’s strategy (Audretsch et al., 2009). For example, Vedovato (2016) highlights the challenges posed for SME executives in relation to strategic renewal, as powerful inertial forces in the guise of static mental models and legacy motivators raise barriers to more creative and effective strategizing. In contrast to the context of the large firm, the SME context places the executive in a proximate relationship to the market, and the market proximity is manifest both in the form of direct personal relationships with customers (Parry et al., 2012) and in the form of close relationships with customers mediated by new forms of information technology (Galloway, 2007; Simmons et al., 2007). The impact of such relationships is to visualize the process contextually as an activity shaped by both the knowledge creation potential of stakeholder relationships and the personal dynamics inherent in such relationships.

New insights from the strategy as practice perspective

A theoretical framework based on ‘strategy as practice’ offers new perspectives from viewing strategy as ‘a situated, socially accomplished activity’, while ‘strategizing comprises those actions, interactions and negotiations of multiple actors and the situated practices that they draw on in accomplishing that activity’ (Jarzabkowski and Spee, 2009: 2). Strategy as practice is an approach that focuses on the micro activities of the people behind the strategizing, as opposed to taking an organizational perspective (Carter et al., 2008). The purpose of the theoretical framework is to focus and improve the investigation of the research question and research objectives. The research question is: what is the nature of strategizing in the micro firm? Each of the three research objectives (as set out above in the section ‘Background and context’) is supported by the theoretical framework. The first objective seeks to evaluate the nature of micro firm strategizing through the strategy as practice framework. Hence, rather than simply reviewing existing micro firm literature, the framework enables the interpretation of literature through a theoretical lens, offering new insights into the nature of the process in context. New insight is apparent as strategizing is framed as an experiential praxis, the nature of which is often lost through rigid application in existing small business management frameworks. Furthermore, while the existing micro firm literature engages with aspects of the identity of the owner/manager manifest as lifestyle motivation (Lashley and Rowson, 2010), taking account of practitioner aspects of strategy as practice new insight is gained premised on a holistic understanding of the owner/manager in an embedded context. Finally, the ‘practices’ aspect inherent in the strategy as practice framework facilitates a more critical evaluation of the role of owner/manager practices. Existing approaches to understanding the nature of micro firm management practice rely on theoretical bases specific to the aim of dedicated research aims – for example, learning (Devins et al., 2005), management objectives (Greenbank, 2000) and the emergence of innovation (Kearney et al., 2014, 2017). Taking the strategy as practice perspective enables the evaluation of strategizing as comprising practices manifest as ‘shared skills or understandings’ (Schatzki et al., 2001: 12). The strategy as practice framework supports the second research objective in focusing the critical literature review in the micro firm context. The support is not simply in selecting literature but in interpreting the selected literature towards a better understanding of the nature of the process in the micro firm. The final research objective is supported by the theoretical framework.

Whittington (1996: 734) argues that an approach based on strategy as practice offers insight into the ‘unheroic work of ordinary strategic practitioners in their day-to-day routines’, as opposed to research into strategy based on the prescriptive analysis of managerial work. For example, strategy as practice enables a focus not only on strategic planning merely as the institutionalization of a chosen strategy but on strategizing as a form of strategic planning that enhances the strategic imagination and leads to continuously emerging and dynamic strategies (Giraudeau, 2008). Given arguments that the micro firm management context necessitates an approach based on the needs and capabilities of owner/manager practitioners (Kearney et al., 2014), this article uses the theoretical approach of strategy as practice as a means of gaining insight into the research question in context. Existing micro firm studies, for example that by Liberman-Yaconi et al. (2010), assume the centrality of the owner/manager in strategy-making. However, in accordance with the arguments of Johnson et al. (2003), made in criticism of process theories of strategy, centrality does not help to build understanding of whether or not managers make a difference and, if they do, what the nature of that difference might be. Further, given that existing theoretical approaches in the micro firm literature depend heavily on the resource-based view (Kearney et al., 2014; Kelliher and Reinl, 2009) and the dynamic capabilities view (Kearney et al., 2017), the strategy as practice approach offers an opportunity to deepen understanding of the social complexity and causal ambiguity underpinning the resource-based view and opens new perspectives on dynamism within the dynamic capabilities view (Jarzabkowski and Spee, 2009).

Strategy evolution in micro firms

Prior to investigating the nature of strategizing in the micro firm, the wider literature on strategy evolution in the micro firm is examined. The examination serves both to deepen understanding of the micro firm context and to help towards the focus of the research on the narrower area of strategizing. Emerging from the examination are contextual aspects of the process in the micro firm which are then interpreted in the light of the strategy as practice framework. Micro firms differ from larger firms and SMEs in a number of important aspects, rendering necessary the investigation of strategizing in micro firms as a unique context. The degree of owner/manager dominance in the micro firm is much stronger than in larger SMEs, with that individual acting as owner and key resource allocator (Alonso and Bressan, 2014), manager (Liberman-Yaconi et al., 2010), and hence key executive, and as a vital operational employee engaged in day-to-day work in the firm (Kelliher and Reinl, 2009). Furthermore, business philosophy competes with lifestyle motivation as a strategic driver (Ateljevic and Doorne, 2000; Jaouen and Lasch, 2015). Many micro firms’ strategic pathways are influenced by family embeddedness, such that emotional aspects of family life, an emphasis on the preservation of family assets, a long-term philosophy and a meeting of the lifestyle needs of family members, compete with and sometimes take precedence over business objectives (Cruz et al., 2012; Gersick et al., 1997). Micro firm embeddedness encapsulates the local community and stakeholder contexts – for example, embeddedness in supplier and business networks (Kuhn and Galloway, 2015). Phillipson et al. (2004) highlight the importance of local community embeddedness in supporting micro firms, as firms buy from one another and employ local people but are also aided by mutually supporting local employees. Phillipson et al. (2006), in a case study of local business networks in the North of England, describe a dichotomy in the impact of embeddedness on micro firms. They find that a number of micro firms benefit from supportive stakeholder ties which motivate and provide insight into effective strategies. Contrastingly, some firms are hampered by stakeholder ties, with reciprocity implying a limiting of strategy to that which is acceptable to more powerful local firms. The operational requirements of the micro firm, evident in its day-to-day work, meet with its strategic development in the person of the owner/manager (O’Dwyer and Ryan, 2000), making possible a unique melding of the operational and the strategic that is not possible in SMEs or larger firms.

Jay and Schaper (2003) describe a complex interaction between owner/managers and key advisors in the form of lawyers and accountants. They argue that, where a longer term relationship based on trust has been developed, the professional nature of the services offered helps the owner/manager to actuate strategizing through the contemplation of refined mental models of the business environment. Further, they point to how the process can be actuated through the contemplation of the mechanisms through which such mental models might be given business efficacy and executed in very specific micro firm contexts. Critically, many micro firms are unable to see business adviser interaction as other than a form of regulatory compliance with the result that interaction leads to a negligible or even constricting impact on strategizing (Lasagni, 2012). Supplier interaction in the micro firm context can impact on the process by providing firms with levels of mentoring that increase understanding of micro firm strategy in a local context (Phillipson et al., 2004, 2006). However, such mentoring can circumscribe strategizing to that which is acceptable or understandable in the context of local micro firm embeddedness. In contrast, Tu et al. (2014) argue that supplier interaction is a complex process, with strategizing emerging not simply from the limitations of the network that results from the firms’ embeddedness but from interaction in which owner/managers are both sustained and challenged by strategic alternatives. As noted above, O’Dwyer and Ryan (2000) highlight the challenges and opportunities offered by the coming together of the operational and the strategic in the person of the owner/manager. While opportunities are offered based on direct operational experience, there are challenges in actuating a strategic mindset to actively and critically interpret operationally perceived market data and hence to avoid mere operational interaction with market data. On the other hand, Sull (2007) critiques conventional approaches to strategizing in which the formulation and execution of strategy are presented as a linear process, with a stark separation of the two. Overcoming such separation is achieved through an awareness that the process is iterative in nature. Technological change in the micro firm has created both opportunities and challenges to competitiveness and necessitates a reconsideration of the nature of strategizing as the owner/manager’s power over marketing is reduced and marketing processes are outsourced to technology-based intermediaries (Alford and Page, 2015).

Owner/manager influence on micro firm strategizing

The uniqueness of the micro firm context for strategizing derives not simply from organizational and stakeholder contexts but also from the owner/manager’s dominant role. Thus, examination of that role serves to further contextualize the process and paves the way for interpretation in the light of the strategy as practice framework. Decisions as to which forums the firm should participate in are driven by the owner/manager; hence there can be participation or avoidance of participation with regard to stakeholder interaction and other potential sources of information for strategizing (Phillipson et al., 2006). The owner/manager, notably because of their dominant ownership share, brings a sense of personal identity to bear on the strategy of the firm (Down and Reveley, 2004). Furthermore, risk taking in micro firm strategizing does not reflect the shared and often professionally calculated process of the larger firm, but rather an intuitive approach in which heavy responsibility is placed on the owner/manager, with a consequent tendency to risk aversion (Morrison, 2006).

Jaouen and Lasch (2015) posit that micro firm owner/managers are driven by different forms of lifestyle motivation, with strategizing reflecting an underlying lifestyle motivation. Marchant and Mottiar (2011), in a study of tourism entrepreneurs, argue that lifestyle motivation does not necessarily inhibit effective strategizing and suggest that a creative and yet business-sensitive strategy can emerge from a lifestyle motivation centred on a hobby, with the strategy influenced by conversations with other entrepreneurs who share the hobby and have developed it into a successful business.

Kearney et al. (2014) argue that strategizing in the micro firm emerges from the perceptions of the owner/manager, both current and historical, concerning the firm’s internal and external environments. Kearney et al. (2014) and Kelliher and Reinl (2009) argue the benefits of the resource-based view for micro firm strategy as a means of best utilizing the embedded resources, yet critically both these accounts are limited regarding the interpretation of how perceptions influencing the process may need to be changed. Komppula (2014), in contrast, highlights the importance of owner/managers who take a more creative and perhaps more critical approach to strategizing, where strategizing emerges to reflect entrepreneurial motivation and capabilities inherent in an owner/manager.

Both Liberman-Yaconi et al. (2010) and Greenbank (2000) note the radically different nature of strategic management in the micro firm compared to that in larger firms. In essence, the micro firm context implies that owner/managers must strategize using heuristic-based decision-making with substantial reliance on intuition. The source of such heuristics resides to an extent in the owner/manager’s experience and educational background (Kearney et al., 2017). Taking this perspective, the owner/manager possesses industry-specific experience, upon which owner/manager mental models develop with the mental models acting as an interpretive lens simplifying complex environmental information. This simplifying occurs as environmental information is captured and interpreted in the light of industry experience (Hill and Levenhagen, 1995). Although such an approach is rational, and helps to avoid information overload, it is limited: industry experience can result in dated mental models whose interpretation of the information is relevant to a previous industry context.

A proposed framework of strategizing in the micro firm

The framework is outlined in Figure 1. As has been noted, it draws on strategy as practice contributions, according to which strategizing incorporates the three pillars of practitioners, practice and praxis (Jarzabkowski et al., 2015). Reflecting on the micro firm context of the current research, a contextual interpretation of each pillar is undertaken. Practitioners are understood as owner/managers, the dominant influence on the process in the micro firm. They influence strategy through their identity, motivation and associated choices. Practices are understood as the management and ownership practices of the owner/managers, the ‘tools, norms and procedures of strategy work’ (Vaara and Whittington, 2012: 288). Praxis is understood as the enacted aspect of strategizing, manifested as micro activities (Whittington, 2006). The following sections consider micro firm strategizing from the perspective of practitioners, practice and praxis, following Jarzabkowski et al. (2015).

OPEN IN VIEWER

Figure 1.

Proposed framework of strategizing in the micro firm context.

The framework points to how practitioners, practices and praxis are uniquely nuanced in the micro firm. The nature of micro firm strategizing emerges from aspects of practitioners, practices and praxis. Reflecting the powerful role played by the micro firm environment, the framework acknowledges feedback signals from that environment and takes into consideration how such signals have the potential to alter the process.

Jarzabkowski et al. (2007) argue, using the strategy as practice framework, the importance of three aspects of practitioners’ work: identity, action and choice. The owner/manager’s identity is bound up with lifestyle motivation (Ateljevic and Doorne, 2000; Lashley and Rowson, 2010); thus the process is not motivated by investors’ and legal and regulatory concerns, as it is in the larger firm (Goffee, 1996). In the micro firm, it is, rather, a process through which the lifestyle motivation of the owner/manager can be enacted (Lashley and Rowson, 2010). Considering the impact of practitioners using ‘strategy as practice’ theory, Vaara and Whittington (2012) suggest that consideration of the deeper aspects of managerial practitioner identity shows how practitioners’ influence on the process brings more than a mechanical enactment of pre-planned strategies. They argue that strategizing emerges from the fundamental beliefs and motivation of managers, every bit as much as from formal planning mechanisms. Hence, in the micro firm context, looking at managers from a practitioner perspective shows strategizing to constitute a complex combination of the owner/manager’s understandings of the world, taking account of business objectives, lifestyle objectives and even objectives emerging from stakeholder interaction (Phillipson et al., 2006). In contrast, there are accounts in which business objectives alone seem to dominate the process from a practitioner perspective. Komppula (2014), while not ignoring the importance of industry experience, provides evidence of the importance of the entrepreneurial capabilities that underpin the processes of successful micro firms in Finland. Similarly, O’Dwyer and Ryan (2000) argue that the owner/manager’s identity emerges as a ‘businessman’, implying that strategizing is rooted in the owner/manager’s self-understanding as one who must continuously engage with investment opportunities in a competitive environment. Hence the owner/manager practitioner’s identity shapes the process, with strategizing socially constructed, drawing on embedded resources and links to stakeholders (Seidl and Whittington, 2014).

In larger firms, the practitioner’s actions take place in a professionally mediated context (Goffee, 1996), while in the micro firm the owner/manager acts in a more informal context which, while not devoid of professionalism in terms of industry capabilities, often lacks professionalism in terms of formal business and management experience (Lashley and Rowson, 2010). Practitioner action, according to this view, is responsive to a changing market environment because of an embedded proximity (O’Dwyer and Ryan, 2000) but may also be based on naive and potentially under-contemplated responses.

Practitioner choice in the process is challenged by a strand of the micro firm academic literature, in which a determinist approach is taken to strategy formulation, with the micro firm portrayed as a powerless entity in a highly competitive environment (Faherty and Stephens, 2016; Morrison, 2006; Morrison and Conway, 2007). On the other hand, there are arguments that, though choice is limited by the firm’s managerial and organizational capabilities, a judicious use of embedded resources can facilitate proactive choice as an element of strategizing (Kearney et al., 2014; Kelliher and Reinl, 2009). The enactment of choice then becomes an important boundary condition in both limiting and focusing the nature of the process (Siggelkow and Rivkin, 2009).

Practices of strategy emerge from cognitive, behavioural, motivational and physical practices embedded in a particular firm. Simpson (2001) argues for a cognitive approach to strategic framing processes in the context of micro firm innovation. In effect, owner/manager cognition can be seen as a lens through which selective decisions are made in the process. Similarly, Kearney et al. (2014) argue that managerial perceptions are the dominant factor in how owner/managers of hotel micro firms interpret the nature of and the potential inherent in innovation. From a strategy as practice perspective, micro firm strategizing can be understood as rooted in the social practices of the firm (Whittington, 1996), with owner/manager cognition and allied perceptual frameworks shaping accepted practices. Looking outside the firm to the influence of the stakeholder environment, strategizing is altered through the interaction of different mental models in the merging and conflict of different practices (Hendry et al., 2010).

From a behavioural perspective, O’Dwyer and Ryan (2000) portray micro firm owner/managers as performing multiple and often complex roles necessary to the operational and strategic management of their firms. Hence strategizing emerges not simply from an abstract cognitive process but from roles that shape the expected behaviour of owner/managers (Jarzabkowski et al., 2007). From this perspective, the process emerges in a similar manner to that envisaged in the embeddedness view (Phillipson et al., 2006), yet remains a delicately balanced phenomenon shaped by the multiple roles of the owner/manager and how those roles are perceived in the embedded context. Kelliher and Reinl (2009) argue that micro firm motivational practices are captured in a contextually emergent leadership. Jarzabkowski (2004) argues that strategy practice enables the manager to engage in the ongoing creation of social order, with change taking place as managers encourage and drive change through leadership. Considered from this perspective, micro firm leadership is a human strategic capability, emerging as a key practice element of strategizing, and yet one which can itself develop over time, as owner/managers engage with and react to change (Kelliher and Reinl, 2009; Matlay, 1999).

Praxis provides a socially situated context for strategizing, a context which has been discussed in a wide range of academic studies on the micro firm. Examples include stakeholder embeddedness (Lowik et al., 2012; Phillipson et al., 2004, 2006), supplier influence (Williams, 2007) and family embeddedness (Oughton et al., 2003; Wheelock and Baines, 1998). Micro firm strategizing from the praxis perspective, while retaining the fundamental role of the owner/manager, reconsiders the dominance of that role in the light of complex interactions between the owner/manager and aspects of the embedded environment. For example, while the owner/manager engages with praxis in the execution of strategy and understands the nature of strategizing through active engagement in praxis in day-to-day operational work, such praxis is shaped by complex institutional aspects of the individual micro firm and the stakeholder environment (institutional aspects include norms, beliefs and rituals of practice; Fenton and Langley, 2011).

The framework proposes that the process of strategizing emerges from interactions within each of the three key components: practitioners, praxis and practices. Although not investigated in this article, there is also likely to be interaction among the three components. For example, Whittington (2006) argues for the interaction of strategy practices and strategy praxis. Viewed from the strategy as practice theoretical framework, micro firm strategizing is a continuous process, constantly changing as the components change. It is anticipated that improvements in strategizing capability at the level of the micro firm will lead to improved competitiveness, in much the same way as improved strategizing capability is linked with improved competitiveness in the larger firm (Whittington, 2003).

Conclusion

The main contribution of this article emerges from researchers’ recommendations that greater attention should be given to the nature of owner/manager strategizing in the specific context of the micro firm (Danson et al., 2015; Kelliher and Reinl, 2009; Liberman-Yaconi et al., 2010). While existing approaches to micro firm management develop knowledge of management competence (Kelliher and Reinl, 2009), managerial capabilities (Kearney et al., 2014, 2017) and strategic decision-making (Liberman-Yaconi et al., 2010), this article posits a framework of micro firm strategizing.

With the help of the framework, key factors are identified to help our understanding of how these factors impact on micro firm strategizing. Concurring with Lashley and Rowson (2010), we find that the process is impacted by practitioners’ lifestyle motivation. The dominance of the owner/manager as practitioner ensures that he or she is the key filter through which information is received and processed (Komppula, 2014; O’Dwyer and Ryan, 2000). Ultimately, the framework posits that practitioner influence on strategizing emerges from the identity of the manager and builds on work by Vaara and Whittington (2012) in which strategizing is considered to be much more than the contemplation and execution of formally planned information.

We consider that micro firm strategy practices are deeply rooted in the social context of the firm, concurring with Whittington (1996) on larger firms. However, in contrast to larger firms, in the micro firm those practices are greatly dependent on the owner/manger’s cognition (Simpson, 2001) and behaviour. This article provides a further contribution to the work on management competence development by Kelliher and Reinl (2009) and on strategy making by Liberman-Yaconi et al. (2010) through its focus on the process of strategizing. We argue that practices manifested as contextually shared skills and understanding (Schatzki et al., 2001) can be better understood through investigation of the micro firm as a unique context (Kelliher and Reinl, 2009) rather than through the imposition of accepted management practices from other contexts on the micro firm. The institutional nature of strategy praxis as posited by Fenton and Langley (2011) proves influential in the micro firm. However, owner/manager dominance shapes praxis profoundly, and social theories of micro firm learning (Higgins and Aspinall, 2011; Reinl and Kelliher, 2014) support the emergence of a unique micro firm praxis. Finally, while the framework concurs with Liberman-Yaconi et al. (2010) on the impact of the environment on strategic decision-making, we expand on their work by providing a framework of strategizing in context. This contextual framework highlights that it is not simply the owner/manager’s strategic decision-making that is of importance but rather that strategizing is continually enacted through environmental change that shapes not only practitioners but also praxis and practices.

From the perspective of entrepreneurship education, we argue that micro firm strategizing emerges from unique aspects of the owner/manager’s lifestyle motivation, identity and social embeddedness. Therefore, we agree with Blenker et al. (2012: 417) who argue for a ‘personalized pedagogy’ in which entrepreneurship education enables the entrepreneur to understand entrepreneurship as emerging from aspects of the individual owner/manager and embeddedness. This view contrasts with more universalistic approaches to the development of entrepreneurship and challenges business schools to develop improved links to local businesses (Lindh and Thorgren, 2016). We have argued in this article that micro firm strategizing emerges in the praxis of owner/managers. Engagement with praxis creates opportunities and challenges for entrepreneurship education (Hagg and Kurczewska, 2016), and a number of changes to take account of the micro firm context are needed. First, entrepreneurship education founded on the notion of the entrepreneur as practitioner or on what are considered appropriate entrepreneurial practices should be supplemented by an evaluation of the nature of micro firm praxis. Second, inherent in such evaluation is a process of critical experimentation with new social, psychological and economic theory bases appropriate to understanding praxis in context. Third, educators are then challenged to develop appropriate course design and assessment tools.

From the perspective of management practice, the article provides a framework for a greater understanding of micro firm owner/manager strategizing. It is anticipated that owner/managers of micro firms will be able to engage with the framework to develop strategizing capabilities in their own firms and hence improve competitiveness. Moreover, the contextual nature of the framework will support new and more context-specific modes of engagement with micro firm owner/managers on management development programmes and within the higher education sector, where the importance of developing nuanced micro firm modules is increasingly recognized (Higgins and Elliott, 2011; Lynch et al., 2013; Reinl and Kelliher, 2014).

Policymakers are encouraged to consider their potential influence on the competitiveness of micro firms, given the arguments made for the embedded and contextual nature of the strategizing process. We have characterized strategizing in the micro firm as critical to improved competitiveness and we build on previous recommendations for policymaking (Bailey et al., 2011) and academic research (Kearney et al., 2014; Kelliher and Reinl, 2009). Policymakers and executives in larger firms can also gain insight into the nature and potential impact of strategizing in the larger domain by consideration of the proposed framework. This will aid understanding of the organic organizational structures underpinning the process and, given arguments for the benefits of organic structures in larger firm competitiveness, should assist in developing effective large firm strategizing (Achtenhagen et al., 2013; Sharma, 2011).

Future research can build on this article by empirically evaluating the framework proposed. Given the embedded nature of the micro firm, such research might be qualitative, taking the form of a case study and/or in-depth interviews with micro firm owner/managers. Jarzabkowski (2004), arguing for a nuanced perspective on resource-based theory that goes beyond the consideration of just economic resources as the source of competitiveness, suggests that strategizing can be a lens through which resources and resource bundles are re-envisioned. Given arguments for the nuanced strategic use of resources in the micro firm context (Kearney et al., 2014, 2017), future research might investigate micro firm strategizing within the resource-based view as a means of better understanding the nature of competitiveness in the micro firm context.