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There is growing evidence that capital structure and firm strategy are linked but most studies to date have focused on large, publicly quoted firms, with little attention given to small and medium-sized enterprises (SMEs). A major proposition of the study is that both strategic and financial factors are necessary to explain chosen debt levels. The empirical question adopted for this work, given the best financial model of capital structure, is - does strategy provide any additional explanatory power? Hence strategy and financial variables are seen as complementary rather than competing determinants of capital structure. There appears to be strong evidence supporting the proposition that competitive strategy affects the capital structure of SMEs, but there is little evidence of any impact from corporate strategic factors. The study also supports the notion that there is a 'pecking order' in SME financing and that variability in profits results in 'distress' borrowing. This study provides important empirical evidence to support work on the capital structure puzzle and the funding problems of SMEs. Copyright Blackwell Publishers Ltd 1998.

A new measure of women's relationships, the Relational Health Indices (RHI), comprises three scales that assess growthfostering connections with peers, mentors, and communities. The RHI was developed using the Relational Model (Jordan, Kaplan, Miller, Stiver, Surrey, 1991;Miller & Stiver, 1997), a theory of women's psychological development. The 37-item measure assesses three conceptual dimensions of growth-fostering relationships: engagement, authenticity, and empowerment/zest. This study examined the psychometric properties of the RHI with a group of 450 students at a women's liberal arts college, providing evidence for the reliability, validity, and utility of the new measure. The factor analyses confirmed a three-subscale structure: engagement, authenticity, empowerment/zest. The RHI's components generally demonstrate good overall internal consistency. Furthermore, associations between RHI scales and convergent validation scales were significant and in the direction hypothesized. Correlations with adjustment scales varied across the RHI components. The RHI has potential for enriching our understanding of important, subtle qualities and complex dynamics of both dyadic and group relationships, especially among women. The instrument is available for use by researchers interested in continuing the scale and theory development.

Relational-cultural theory offers an alternative to traditional theories of psychological development. Whereas traditional theories view mature functioning as characterized by movement from dependence to independence, relational-cultural theory suggests that maturity involves growth toward connection and relationship throughout the life span. After contrasting these two theoretical perspectives, the author describes a therapeutic approach based on the relational-cultural model, which involves mutual empathy and working with shame. A case example illustrates this approach. The author suggests that the relational-cultural model has applications at both the personal and societal levels.

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