In this paper it will be argued that the research on survival of small firms in the United Kingdom (UK) road haulage industry by Marchington et al. (2003) while interesting and well-structured is perhaps too restricted. This argument will be developed using a critical analysis of Marchington et al.’s (2003) paper analyzing its concepts, research methodology, main findings and practical implications.
The article studies the issue of labour scarcity within the UK road haulage industry and how it impacts on small firms. Labour scarcity at the time of the study was deemed the industry’s biggest problem. The recruitment and retention processes of lorry drivers from seven family owned road haulage companies were dissected over a period of time.
Marchington et al. executed their study using semi-structured interviews over a two year period. The results from the data collection were used to formulate their argument that “a minimum set of table stakes (HR practices) is necessary for the continued survival of small firms” (2003:5). This represented a modification of the Resource Based View theory (RBV) which the authors used as a framework of analysis. The hypothesis that owner-managers are dependent on informal methods of recruitment supported by a deep comprehension of the industry and the local labour market was used to defend this argument.
The research findings indicated that these small firms possessed an “organisational process advantage” which has been developed in a shrewd and discerning way to allow their continuous existence. In conclusion, the authors recognised that the RBV while useful needs to be extended to include small firm industries which do not form goals of achieving sustained competitive advantages or attaining industrial leadership.
Marchington et al. agreed that the RBV can be a useful framework for analysis in a bid to re-emphasise its relevance in strategic management. The authors agreed to this even after suggesting that the RBV is not straightforwardly applicable in practice because its concepts are not easily measureable. Marchington et al. employed a well-structured, balanced analysis of the RBV highlighting both its strengths and weaknesses to make their argument valid.
The RBV, according to Barney (1991), states that there are four key attributes that a resource must possess in order to yield a sustainable competitive advantage. A resource must be: valuable (worth something), rare or unique, imperfectly mobile (cannot be easily sold or traded) and non-substitutable (is not easily copied). The fifth attribute of a resource being appropriable was added later by Coff (1997) and Kamoche (1996) who believed that profits generated from valuable resources should be appropriated to the company’s shareholders