Management and Micro Firm

Topics: Management, Business, Strategic management Pages: 16 (4412 words) Published: May 11, 2013


Mr Arthur Kearney,
Doctoral student, School of Business, Waterford Institute of Technology, Waterford.

Professor Denis Harrington,
Head of Graduate Business, School of Business, Waterford Institute of Technology, Waterford. Telephone 00 353 51 302427; email

Dr. Felicity Kelliher

Course Leader DBA programme and senior lecturer in management, Waterford Institute of Technology, Waterford.

Tourism track

Postgraduate paper


This paper is the product of ongoing work into managerial capability for innovation in Irish tourism micro firms and aims to achieve academic output as doctoral research. Tourism is a major Irish industry and at the level of the national economy it contributes 2.7 billion euro to G.D.P. from foreign reserve earnings and employs over 180,000 people (Department of Arts, Heritage and Gaeltacht, 2011). At regional and local levels, tourism sustains economic development outside the centres of major population (Failte Ireland, 2012) and is indigenous in nature, counterbalancing the relatively high dependence on foreign direct investment, which characterizes the Irish economy (Tourism renewal implementation group, 2011). However, while these features of the Irish tourism industry are salient, perhaps the feature which gives it greatest contemporary significance, hinges on recent arguments placing the development of the industry at the coalface of economic regeneration (Department of Taoiseach, 2008).


Irish tourism faces multiple and deep competitiveness challenges (Failte Ireland, 2011). Firms face external challenges manifest as relatively high labour costs; high costs of utilities; problems of market access, resulting from Ireland’s limited land connections and currency movements. Internally challenges include limited managerial capability; under developed human resources; limited development of quality management and customer service (Failte Ireland, 2011; Baum, 2007). The impact of the economic recession on the Irish economy has brought many of these competitiveness challenges into sharp relief, in effect rapidly reshaping fundamental characteristics of both internal and external environment’s of tourism firms, and of necessity, posing new and challenging problems for managers of these firms. One means of meeting and overcoming competitiveness challenges is through the generation of innovation which enables firms to address management capability challenges, to identify and utilise new markets, and to build longer term sustainable competitive advantage (Failte Ireland, 2010).


Micro firms are the smallest type of business organisation, by definition employing less than ten people (EU, 2011). Within the Irish tourism industry, micro firms dominate the landscape numbering around 16,500 enterprises, and comprising almost ninety percent of the industry population (Kelliher and Reinl, 2010). Micro firms contribute to economic development through both the narrow measure of G.D.P. contribution, but also indirectly through sustaining families (Wheelock and Baines, 1998); local communities (Phillipson et al. 2004) and through providing a level of dynamic competitiveness, encouraging business activity and stimulating competition (Liberman-Yaconi et al. 2010). Micro firms are unique, possessing characteristics which sharply distinguish them from small, medium sized and large firms and this is summarised at appendix one. At structural level they suffer limited assets, absence of scale economies and small numbers of employees (Liberman-Yaconi et al. 2010) and are contextualised in an environment of harsh competition where the firm has little influence (Kelliher and Reinl, 2009). Structurally there are aspects of the micro firm which enable improving business performance, including low levels of bureaucracy...
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