The Use of Practices As Capabilities - A study of the relation between growth and the use of best practices in manufacturing SMEs in a region of Sweden

• This paper reports an analysis on the use of Best practices among manufacturing firms, in the county of Dalarna in Sweden, with ten and more employees. The study focus on the following question: Can the use of best practices bee seen as a contributing factor in the creation of competitiveness and in that sense contribute to the growth of the firm? Traditionally a common view on strategy has been conceptualized as a situational choice of generic strategies (e.g. Porter) assuming a type of contingency based view of the firm. During the last decade and still dominating is the focus on core competencies or distinctive capabilities assuming a resource based view of the firm (RBV). But where do the capabilities come from? It is generally acknowledged in research that these often intangible or tacit capabilities are developed through experiential learning or learning by practicing. This is the basis of a practice based view of the firm (PBV), often assumed in quality theories and methodologies, as a variant or specification of RBV. It is in PBV assumed, based on research findings, that there are practices that, in combination and when effectively linked together, can be expected to consistently improve operational performance and thus provide firms who adopt them with an advantage over those that do not. Thus good business practices, and the learning and knowledge creation developed through using them, can be thought of as the base or foundation on which distinctive capabilities and hence competitive advantage is built. Research Methodology The basis for the analysis is a dataset (127 firms) that was collected in the beginning of 2001 through a survey (BPPS) among manufacturing sites with 10 and more employees. The survey was sent to all firms (327) meeting the criteria above and the response rate was 40 %. The Business Practices and Performance Model (BPPS) have been developed from a Practice Based View that is operationalized in a survey instrument. It has been used in three large scale empirical investigations in New Zealand during the 1990s and recently in five regions in Sweden. Possible Conclusions The responses from the participating firm in this regional sample indicate that: - Firms that hold a wide strategically focus seems to be more likely to grow. - The likelihood for growth seems to be plosive correlated with operational outcomes - Operational outcomes are correlated with the use of practices Possible Recommendations A recommendation for the firm management might be: As long as a firm´s products or services are interesting on their market will it be a good idea to hold a broad strategic focus and put energy to implement and maintain practices to ensure good operational outcomes that make it possible to meet the pull from the market in a successful way. A recommendation for policymakers and support organizations might be to support the management of growing firms to implement and maintain practices to ensure good operational outcomes.

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