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Title: Trade credit management within small professional firms : practice, agency and structure
Author: Matthews, Catherine S.
Awarding Body: University of Brighton
Current Institution: University of Brighton
Date of Award: 2013
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This research surfaces the complex process of managing trade credit within small professional firms, exploring drivers of idiosyncratic practice within particular contexts. Despite the acknowledged macro-economic significance of trade credit, little is known of its management at firm-level. The well documented susceptibility of small and medium sized enterprises (SMEs) to liquidity problems implies the importance of the management of internal resources for such firms. Small professional firms provided the opportunity to explore trade credit management where the length of the work in progress cycle can be pronounced, and where amounts receivable represent a crucial element. Current research is dominated by deductive approaches that assume a normative paradigm and have identified ‘poor’ financial management practices. Inductive, qualitative research regarding financial management within small firms is scarce, but has shown that insights into informal practice are crucial to understanding the nuances of small firm operations, and that normative practice does not necessarily provide an appropriate benchmark. This dualism has been observed within the SME literature as resulting from the adoption of an objectivist or subjectivist position. Utilising the richness of multiple case studies this research has sought to move beyond the subjective/objective divide, exploring the role of neglected informal processes whilst recognising the existence and influence of social structures. Structuration theory provided a useful lens through which to view reciprocal interactions between practitioners, the firm, and structures within society, and a means of avoiding the dichotomy between subjectivist and objectivist research. Trade credit management was explored within sixteen firms selected to represent four professional areas: accountancy, solicitors, architects and surveyors. Each case represented an account of practice within the context of the firm, and the wider environment. Practice was surfaced through interviews and other documentary sources. Causal maps were used to analyse interview transcripts and other evidence, enabling the display of factors, and relationships between them. These grounded portrayals of practice were aggregated intra-profession to create four diagrams that displayed key areas of firm practice, and the influence of emergent causal axial codes. An inter-profession diagram summarised cross case analysis. Inter profession analysis revealed an overarching narrative framework of organising, meta-level constructs that highlighted the complexity of practitioner decision making and reflected informal and formal dimensions of practice. The role of practitioners as reflexive agents in their interactions with social structures within their environments was highlighted. Responses at different environmental levels reflected practitioner’s interpretations of their structural context, demonstrating idiosyncratic practice alongside shared behaviours. This research contributes to knowledge in the presentation of cross case analysis, framed using structuration theory to consider the nature of agency and structure within the trade credit management practice of small professional firms. Cross case analysis surfaced multi-dimensional features of trade credit management practice and the nature and location of the influence of causal axial codes upon firm practice, summarised in a final cross case network of causation. This research therefore provides new insight for policy makers and small firm advisors in highlighting limitations with normative practice and affirms the need to recognise trade credit management as an integrated aspect of business management that reflects the diverse objectives and motivations of practitioners.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: N000 Business and Management