Small Businesses, Covid-19 and the Regulatory Journey

We report on the findings of a research project, conducted in partnership with the Federation of Small Businesses, that investigated UK small businesses’ experiences of, and responses to, regulations implemented during the Covid-19 pandemic. A key focus of the survey and interview-based research was on how businesses responded to forms of regulatory communication (and guidance) produced in the crisis. Communication in this context denotes how - whether through formal or informal and direct or indirect means - a small firm acquires and processes information about new or amended regulations from relevant regulatory authorities (e.g. Hart and Blackburn, 2005; Kitching, 2016).
Our analysis draws on recent theoretical development on ‘regulatory discovery practices’ (Kitching, 2016) and the ‘identification-interpretation’ dynamic (Mallett et al., 2019) to show how businesses’ responses to communications are contingent on relational dynamics of particular networks and contexts in which the small business is embedded (Edwards et al., 2006), which includes the regulatory environment and how it is communicated. The key implication of this approach is that effects of regulation on smaller businesses are seen as enabling as well as constraining (Kitching and Smallbone, 2010; Kitching, 2016).
Developing this analysis, we draw on the relational pragmatics theorising of Emirbayer (1997; Emirbayer and Mische, 1998) which stresses the dynamic relational transactions of social actors in constituting social reality, not as relations embedded in entities such as social, cognitive, cultural and political structures. To this end we use the term relationally enabled capabilities to describe our findings of small business response. By this we mean that the relational agency brought to bear in responding to identifying and interpreting new and changed regulatory information, which can, depending on the particular relational context of the businesses, enable or constrain outcomes for the business. The implication of the relational approach, since social reality is relational ‘all the way down’ (Emirbayer and Mische, 1998: 974), is that ‘regulation’ for a particular business has a variable ontology and stresses the creative agency of businesses actors in their response to regulatory communication.