The key concepts of the research need exact definitions and it is also important to specify the scope explicitly. This chapter defines the scope of the study and under the same context introduces the key terms. A more extensive list of the definitions is given in Appendix 1.
This study focuses on the business development success in the SME-context, and is restricted to examining business development projects aiming at improving the performance of the performing company. In this study the definition of a business
development project has been adopted from Salminen (1995), who defines a business development project as a project targeting for more effective business operations, whose goal is better performance from someone’s (interest group’s) point of view. Typical engineering projects and repeated delivery projects have been left outside this study, as both of them are characterised by a high extent of proceduralisation leading to easiness to define the goals and methods for the project implementation (cf. Turner & Cochrane 1993).
There exist several types of projects that can be classified as business development projects (cf. Salminen 1995; Turner & Cochrane 1993). Boddy and Buchanan (1992, 14 and 152) present that project implementation consists of several aspects, including the context, content, process and control. This study concentrates on issues connected to the context, process and control. The technical content is in a minor role. The study focuses on the general features and patterns of the execution of business development projects, not on the special features and special content of an individual project type.
There is no universally accepted definition of project success. The common way of defining the success is to measure whether the goals set for the project are met.
Guimaraes (1997, 199) has defined the project success in three ways: 1) the goals and objectives accomplished by the project, 2) the benefits derived from the project and 3) the impact of the project on the company’s performance. In the present study the definition of project success has been adopted from Guimaraes (1997). Further, in this study project success covers project efficiency and project effectiveness. The efficiency is related to achieving the goals on the schedule within the budget and the effectiveness refers to the ability to create performance improvements and positive perceptions in the performing company and its customers (cf. Salminen 2000; Shenhar et al. 2001).
A project is hardly ever a disaster or failure for all the stakeholders, and the impact of the project may vary along different time perspectives. The project success and the impact of the business development project on the performance have been examined from the very short-term to the very long-term perspective. The relevant time frame for exploring the project success of the very long-term is around 3 – 5 years after the completion of the project (Shenhar et al. 2001, 717). For that reason, one selection criterion for the studied projects was that they were completed several years ago. In this study the project success and the performance
improvements have mainly been examined from the point of view of the performing organisation. The empirical data consists of projects perceived afterwards as successful or as unsuccessful. Due to the central role of the owner-manager in the SMEs, she or he has been regarded as a primary stakeholder and the key person to define the project success or the project failure.
The project success and the project success criteria are two separate items. The success criteria consist of the measures by which the project success or the project failure will be judged. Measuring the success involves an evaluation of the degree to which the objectives have been achieved. In this process, the objectives become the success criteria (de Wit 1988, 168). Cooke-Davies (2002, 185) has defined that the success factors are those inputs to the system that lead directly or indirectly to the success of the project. In the present study the definition of the success factors has been adopted from Cooke-Davies. In the empirical part of the study, some of the success factors were discovered to be the key success factors. The key success factor has had a decisive influence on the project success. The decisive influence was discovered by two means: the informants, the people involved in the project, assessed the influence of the factors as very important for the successful project implementation, and rest of the empirical evidence supports that view.
Performance is the company’s ability to produce the targeted output, satisfying the needs of different interest groups (Laitinen 2003, 366). In the empirical part of this study, the improvements or the impairments of performance caused by the implemented business development project are mainly based on subjective measurement conducted with quasi-perceptual and perceptual measures and utilising the multi-informant system. The perceptual measures are based on subjective instruments of performance, e.g. overall performance (cf. Dess &
Robinson Jr. 1984, 271). The quasi-perceptual measures are measurement instruments in which the content of the measure is defined according to an operational definition, but the measurement units are defined as perceptual (Ketokivi & Schroeder 2004, 251). Objective, operationally defined data of the company’s performance collected from secondary, independent sources are used to complement the findings (cf. Doty & Glick 1998; Venkatraman & Ramanujam 1986).
Further, this study focuses on small and medium sized enterprises what have already established their business. The definition of the SME has been adopted from the European Commission (Official Journal of the European Union 2003). So, the present study focuses on companies that have fewer than 250 employees and whose annual turnover does not exceed 50 million euros, and/or the annual balance sheet total does not exceed 43 million euros. However, the enterprises concerned in the empirical part of this study are much smaller, employing no more than 160 persons. Micro enterprises, with less than 10 employees, have been left outside this study.