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elationships to family members �in the case of a
family business), friends and stakeholders. Entrepreneurs
and representatives of their environment
�business partners as well as local authorities) often
form loosely coupled systems which can at least
partly compensate the asymmetry of information,
power and risk for small firms on their markets.
Small business owners are not necessarily entrepreneurial.
However, entrepreneurship is assumed
to form a decisive factor of success for small firms,
characterised by traits such as the need for
achievement, internal locus of control, risk-taking
propensity and the like.
Most firms are founded as small firms, and
develop later through several phases of a life cycle
such as growth, decline, in-depth innovation of
technology, products, markets and succession, or
close down. Strategic small business management
has to identify the specific characteristics of each
stage of development and the optional paths for
further development. General management
methods require specific adaptations for small
firms. Management styles and tools need to fit
the individual configuration which is made up by
the environment, the personality and knowledge
base of the entrepreneur, the stage of development
of the organisation �taking into account limited
resources) and the level of management techniques
which has already been achieved. Strategic
goals in small firms tend to emerge according to
the characteristics of a particular configuration
rather than being designed following the results of
a SWOT analysis. Operative management in
small firms is based on more direct communication
and less bureaucracy.
Further reading
Landstroem, H., Frank, H. Veciana, J. �ed.) �1997)
Entrepreneurship and Small Business Research in
Europe:An ECSB Survey, Aldershot: Avebury.
Storey, D.J. �1994) Understanding the Small Business
Sector, London: Routledge.
JOSEPH MUGLER, AUSTRIA
smuggling
smuggling 539
Smuggling is the illegal cross-border trade that
occurs through official and unregulated locations.
Tourism's role in smuggling is rarely studied
despite numerous reports of this activity by tourists,
who sometimes falsify the nature, value and use of
what is being traded across official entry or exit
points. For example, European rules permitting the
free movement of goods across frontiers have
enabled tourists to import legally large amounts
of alcohol, ostensibly for personal consumption
but actually to resell in their home countries.
Regardless of its nature and place, this action by
tourists occurs as the result of state regulations that
create an excess of supply or demand in the
market. Therefore, smuggling is as diverse as
economic life and not only includes drugs,
endangered species, prostitutes, babies, precious
metals and antiquities, but also extends to other
valuable goods.
Tourism is often associated with the commoditisation
of the distant past. Antiquities are
souvenirs that embody the experience of that
past. Collecting them is now a booming business
that has grown in response to the escalating value
of priceless artefacts. Poorly guarded museums in
less-developed countries have become easy targets
for those seeking to sell relics to collectors posing
as tourists. International investors touring these
countries have developed sophisticated trade networks
by financing national looters of treasured
artefacts and smuggling them to either Europe or
North America.
Exchange policies in many developing countries
also favour smuggling activities related to the
tourism industry. Increased foreign exchange
receipts from tourism put upward pressures on
the exchange rate. If the national currency is
overvalued, a tourist can gain a margin of profit
by exchanging hard currencies in the parallel
markets dominated by smugglers and speculators.
Under flexible exchange rates, upward
pressures from tourism may translate into increased
imports and reduced legal exports from
non-tourist sectors of the economy. Smuggling