Commitment-based persistence in the face of venture decline: towards a renewed approach to small business orientation

Abstract

ABSTRACT The development of a nation or a region depends on saving existing businesses as much as on creating new ones. Small business orientation theories suggest that small business owners’ long-term commitment may contribute to the robustness of their venture. Our study further investigates the relationship between small business owners’ affective, continuance and normative commitment and intention to persist with an underperforming venture. Based on a sample of 298 small business owners from Reunion Island, our results first confirm a negative effect of venture decline on small business owners’ intention to persist with their venture. Second, they show a positive effect of affective and continuance commitment on venture persistence. Finally, our main finding is that venture performance positively moderates the effect of normative commitment, with the latter only becoming significant when venture performance declines. This research renews small business orientation theory by suggesting that robustness is not always straightforward and sometimes means persisting in the face of decline, and by arguing that these adverse circumstances put small business owners to the test and fully reveal the strength of their commitment.