Non-predictive decision-making, market-oriented behaviours, and smaller-sized firms’ performance

Abstract

ABSTRACT Owner-managers of smaller-sized businesses often possess limited resources/capabilities affecting their ability to pursue opportunities. Earlier research supports the need to be market-oriented, but such practices can sometimes be time-consuming and expensive. Although owner-managers in the tourism/hospitality industry can estimate broad demand associated with seasonality, they nonetheless face a degree of uncertainty. In fact, they can typically never be sure how many customers will enter their respective businesses on any given day no matter how much they try to anticipate market trends; therefore, predictive decision-making is often ineffective. This study employs a quantitative research design, drawing on data from a survey of 184 smaller-sized firms within the tourism/hospitality industry in New Zealand. The findings contribute to the cross-disciplinary literature positioned at the strategic marketing/entrepreneurship interface. Specifically, unique insights utilising an effectuation lens, illustrate that if managed effectively, decision-makers’ non-predictive effectual logic facilitates market-oriented behaviour, which in turn, enhances firm performance.