Table of Content
Chapter 2 – Theoretical Framework and Literature Review
Social exchange theory (SET) is valued as being one of the oldest theories of social behavior (Lambe et al., 2001). The basic assumption of SET is that individuals enter into relationship with each other based on doing so that they will be rewarded (Blau, 1960). Holman describes “any interaction between individuals is an exchange of resources” (Homans 1958, p. 597) (Blau, 1960).
Cost and reward are the most common words used when talking about SET. Emerson explains that the fundamental difference from other concepts when it comes to reward is “reinforcement” (Emerson, 1976). That the more an exchange is socially rewarded, the more it is reinforced. I like to think of it as being popular in high school, what the popular kid does, others follow and do the same thing, which reinforces the behavior. Emerson describes the word cost as “troublesome” (Emerson, 1976 p. 349) as it related to time and effort as “painful or boring” work. (p.349). An appropriate observation for me based on exploring what could be keeping coaches from working with small business owners and small business owners hiring coaches.
The theory relevant to the study proposes a framework for exploring the nature of the relationship between ICF credentialled coaches and small business owners and specifically aims to examine links related to “social status, influence, social networks, trust, affect, and emotion.” (Cook & Rice, 2006). The costs in terms of status, reputation and training for coaches might be too high and the rewards might be too low.
For small business owners the resources exchanged may include the actual coaching service along with intangible social amenities such as status and friendship (Lambe et al., 2001). The ICF would be considered a social network, which provides a community for coaches to learn, grow and connect including International Conferences as one example. Earning ICF credentials can improve a coach’s status and reputation in any coaching niche.
The ICF core competences, updated in 2019 include “emphasis on ethical behavior and confidentiality” (ICF, 2020) behaviors may positively impact the social exchange between coaches and small business clients and could be a deciding factor for a client in procuring coaching service. Other core competencies that may support a positive social exchange between coach and small business owner include the practice of creating a space that allows the client to share freely in a safe, supportive environment with a coach who is sensitive to their experiences, values, and beliefs (ICF, 2020).
Together SET is an ideal lens to view the research question. It is critical to highlight the importance of small business in terms of contribution to global economic sustainability and to develop strategies to better connect ICF coaches with the small business market. The interpretive paradigm would be employed. The interpretive approach is concerned with meaning and “seeks to understand an organizational member’s meaning of a situation” (Swanson, 2005, p. 19).
To contextualize the study on small business coaching by ICF credentialed coaches, it is helpful to understand the elements, interconnections and purpose of the systems involved (Meadows, 2008). The understanding of these relationships can be developed by exploring the related literature through the lens of the theoretical framework. Specifically, the importance put on small business by stakeholders, the personal and financial needs along with challenges faced by small business owners and support sought through coaching and other helping methods. Exploring professional credentials for coaches, counsellors and even business bank managers may provide insight into perceived value.
There are several options to gain understanding of social exchange in coaching through the lens of similar business environments, including leadership coaching, executive coaching, and managerial coaching. Some options may include exploring research on the success and failure of small business, to identify any specific needs of the small business owner and looking for trends related to other helping professions, including mentors, advisors, and consultants.
The Importance of Small Business
Because small businesses are important contributors to the economy and can play a vital role in creating jobs, driving innovation, and supporting local communities (Antonio, 2020), then researching methods to provide greater support is more than just fair, it is essential. Significant research is available on themes related to small business (Caldwell, 2017) (Afful-Dadzie & Afful-Dadzie, 2016) (Burns, 2016) (Zambrano Farias et al., 2021). For this study, I focused on the current and future needs of small business owners to explore coaching as one way to get them the help they need to be successful.
Characteristics of a Small Business Owner
The impact of the COVID-19 pandemic and small business failure are two predominant themes found when searching small business literature. Small business owners often start their business out of necessity and are great at performing the work of the business but have low business management skills (Gerber, 1995) making them more vulnerable to crisis than a larger organization (Sawang, 2023). Entrepreneurs also tend to be higher in achievement motivation, have a risk-taking propensity and a preference for innovation”(Stewart et al., 1999). Small business owners have a preference for autonomy and the need for independent decision-making (Lechner & Gudmundsson, 2014) which may contribute to them not seeking support from a coach.
I found the literature review and global trends presented in “Explanatory Factors of Business Failure” to be particularly informative (Zambrano Farias et al., 2021). The study of 588 research articles from journals, institutions and countries sheds light on the various factors that contribute to business failure, highlighting the significance of supporting small business owners.
By examining this research, it is possible to gain greater insight into the vulnerabilities and needs of a small business owner and align those needs with the stated competencies of a credentialed coach. Zambrano specifically states that “the study of business failure is more topical than ever” (Zambrano et al., 2021).
In 2015, the United Nations Member States shared the 2030 Agenda for Sustainable Development which is “a blueprint for peace and prosperity for people and the planet, now and into the future” (United Nations, 2015) highlighting the importance of supporting small business.
Small Business Coaching, Consulting and Mentoring
Coaching is a practice that is utilized in a variety of fields, such as business, sports, and personal development (Terblanche et al., 2022) and has shown to be effective. However, the focus of coaching studies in the small business field has largely been on large corporations, resulting in an absence of literature addressing the needs of small businesses (Tsai & Barr, 2021).
Literature on executive and leadership coaching was specifically reviewed to develop an understanding of the impact of coaching in general including a “Systemic Review of Executive Coaching Outcomes” (Athanasopoulou & Dopson, 2018), Coaching as a Developmental Intervention in Organisations: A Systematic Review of Its Effectiveness and the Mechanisms Underlying It” (Grover & Furnham, 2016) and “The Grand Challenge for Research on the Future of Coaching” (Boyatzis et al., 2022).
Small business owners seeking support may consider consulting, counseling, human resource management, training, psychology, therapy, teaching, and/or advising (Koopman, 2013) providing an abundance of comparative options to compare to coaching. An evaluation of research related to other helping professionals helps identify the differences and similarities between coaching, mentoring, consulting (Couteret, 2012).
While there is a growing body of literature on coaching (Haan, 2021), there are few studies that specifically examined the impact of coaching on small businesses. However, a notable study in this area, Small Business Coaching: The effect of business coaching and Mentoring on small-to-medium enterprise performance and growth, investigates the influence of coaching and mentoring on the performance and growth of small-to-medium enterprises (Compton, 2012) was an exception.
Professional Credentials associated with Small Business Support
Credentialing, a crucial yet complex process, represents professional competence through various means including national bodies providing registrations and certifications, governmental agencies issuing licenses or registrations, and private institutes granting certifications for specialized practices (Potash, 2022 ). The three largest global coaching credentialling bodies are the ICF, the European Mentoring and Coaching Council (EMCC), and the Association for Coaching (Passmore, 2021) each providing non-degree coach market credentials. The ICF attracts coaches seeking to associate themselves with a professional standard of practice with widely known and respected credentials and has a globally recognized, independent credentialing program for coach practitioners (Passmore & Sinclair, 2020).
Looking for parallel professional credentials related to supporting business, I found certifications in project management, such as the Project Management Professional (PMP) designation (Giammalvo, 2013) which demonstrates proficiency in planning, executing, and overseeing projects to achieve business objectives, credentials in counseling, such as a Master’s degree in Counseling (Lalande, 2004) and other academic certifications in business analysis, leadership development, or organizational development, all of which can contribute to supporting business owners. Non-academic credentials include a wide range of awards including certificates, certifications, and micro credentials, yet “despite their rising popularity, the environment in which these credentials are developed and awarded is a bit like the wild west.” (Van Noy et al., 2019, p. 1).
This chapter has provided a foundation for the research to follow, including the theoretical framework of social exchange theory, a literature review of coaching for small businesses and the importance of supporting growth, and support for the research. Additionally, personal context for the study has been shared, highlighting the value of exploring coaching for small business owners. Overall, this chapter sets the stage for a deeper exploration of the factors that impact the coaching relationship between ICF coaches and small business owners and seeks to inspire coaches to engage in this vital market.