This paper explores the role that action learning might play in micro and small enterprise development. It is divided into two parts. The first part focuses upon the distinctive characteristics of smallness and ownership and their implication for management development processes in the owner managed firm. In particular the impact of personal values, ways of doing things and distinctive forms of learning are explored. The argument points to the emotional underpinning of the ways in which the organisation is developed and run. The challenges to action learning are then reviewed. The second part focuses upon the "institutional" factors that stand in the way of effective approaches to owner manager learning and in particular how they impact on the way that knowledge is delivered and pedagogies applied by business education organisations to the small firm. It is argued that the pervasive corporatism of the approach does much to explain why owner managers are reluctant to pay for existing training and education offers. The barriers that confront action learning approaches are examined. Overall it is concluded that action learning is central to effective owner manager learning, that there are distinctive skill challenges for action learning facilitators but that there need to be major changes in institutional norms. (Contains 3 figures, 1 table, and 11 notes.)