Managers Of Small Firms Research Articles

The paradoxical impact of CEOs’ humility and narcissism on absorptive capacity: evidence from small firms

Purpose Because small firms are dependent on external knowledge to overcome various constraints, absorptive capacity (ACAP) is an important capability from a knowledge management perspective. Furthermore, extant research has noted the seemingly contradictory yet potentially complementary interaction of Chief Executive Officer (CEO) traits – humility and narcissism on knowledge management. This study aims to explore the impact of CEO humility and narcissism on ACAP and short-term firm performance. Design/methodology/approach This paper uses a quantitative approach using multisource data from small Indian firms comprising survey responses from 225 CEOs and 216 general managers of small automotive firms. The data were analyzed using partial least squares – structural equation modeling. Findings This paper sheds new light on the process through which small firms build ACAP and the role of CEO leadership traits in this regard. This study finds that in a highly turbulent environment, CEO’s humility and narcissism affect the development of a small firm’s ACAP. This study also discusses important implications for managerial practice and policy making. Originality/value To the best of the authors’ knowledge, this is the first study to empirically examine the impact of the paradoxical leadership traits of narcissism and humility on the short-term performance of small firms, from a knowledge-based perspective through the lens of absorptive capacity.

Determinants of energy conservation behaviour in small hospitality firms: application of the extended value belief norm theory

The study aims to investigate the energy conservation behaviour of owners and managers of small hospitality firms by incorporating social norms into an extended Value-Belief-Norm (VBN) model. In addition, the study examines the mediating effects of causal chain of the VBN model in the context of energy conservation behaviour. The world faces serious environmental challenges such as loss of biodiversity, pollution, depletion of natural resources and global warming. One of the causes of these environmental challenges is the production and consumption of energy by households and firms. The hospitality sector uses a significant amount of energy in its operation leading to negative environmental impacts. Reducing energy use will improve environmental and financial sustainability of hospitality firms. Energy conservation behaviour is one of the significant ways to reduce energy consumption. The study adopts the survey method for data collection and the respondents are conveniently sampled. The Partial Least Square Structural Equation Modelling is used for data analysis. Based on a dataset of 360 respondents, the study finds that the extended VBM model that includes social norms is applicable in explaining the energy conservation behaviour of owners/managers of small hospitality firms. The mediating effects of the causal chain of the VBN model are significant. The theoretical implication is the applicability of an extended VBN model that includes social norms to predict energy conservation behaviour. Recommendations on how to improve energy conservation behaviour include improving the level of awareness of ecological problems caused by energy consumption. The study aims to investigate the energy conservation behaviour of owners and managers of small hospitality firms by incorporating social norms into an extended Value-Belief-Norm (VBN) model. In addition, the study examines the mediating effects of causal chain of the VBN model in the context of energy conservation behaviour. The world faces serious environmental challenges such as loss of biodiversity, pollution, depletion of natural resources and global warming. One of the causes of these environmental challenges is the production and consumption of energy by households and firms. The hospitality sector uses a significant amount of energy in its operation leading to negative environmental impacts. Reducing energy use will improve environmental and financial sustainability of hospitality firms. Energy conservation behaviour is one of the significant ways to reduce energy consumption. The study adopts the survey method for data collection and the respondents are conveniently sampled. The Partial Least Square Structural Equation Modelling is used for data analysis. Based on a dataset of 360 respondents, the study finds that the extended VBM model that includes social norms is applicable in explaining the energy conservation behaviour of owners/managers of small hospitality firms. The mediating effects of the causal chain of the VBN model are significant. The theoretical implication is the applicability of an extended VBN model that includes social norms to predict energy conservation behaviour. Recommendations on how to improve energy conservation behaviour include improving the level of awareness of ecological problems caused by energy consumption.

Audit Risk Management and Audit Effort in Small and Medium Audit Firms

The purpose of this paper is to analyze audit planning decisions of small and medium-sized Spanish audit firms and the resulting impact on audit risk and effort. Prior research examining audit risk overwhelmingly focuses on Big 4 audit firms, and little is known about how audit planning decisions influence audit risk in smaller firms, a significant part of the audit profession. Thus, it is important to examine the planning judgments in small and medium sized audit firms and the link between planning risk assessments and the extent of audit effort put forth to achieve an acceptable level of audit risk. Using audit engagement specific data derived from publicly available databases and survey data, this study investigates the factors assessment of their client’s risk of material misstatement and whether the effort applied in performance of the audit engagement effectively responds to that risk. We find a significant statistical relationship between audit risk and audit effort, which provides empirical evidence that auditors modify the extent of audit effort based on perceived audit risk and brings into debate the work of the small firms. Additional analysis shows that audit effort (i.e., hours) is significantly influenced by the tenure and the timing of the audit engagement (i.e., peak audit season). However, audit engagements with longer tenure do not adjust their audit effort in response related to low management integrity or weak internal controls, which suggests familiarity, that is, auditors may not be as skeptical of management incentives. This paper contributes to debate about audit quality and whether the size of audit firms serves as an observable characteristic associated with higher audit quality. El objetivo de este trabajo es analizar las decisiones de planificación de la auditoría de las pequeñas y medianas firmas de auditoría españolas en relación a la evaluación del riesgo y el esfuerzo de auditoría. Las investigaciones previas se centran casi en exclusiva en las 4 firmas de auditoría grandes y poco se sabe sobre cómo las decisiones de planificación de la auditoría influyen en el riesgo de auditoría en las firmas más pequeñas, una parte muy significativa de la profesión auditora. Por lo tanto, es importante examinar los juicios de planificación en firmas de auditoría pequeñas y medianas y el vínculo entre las evaluaciones de riesgo de planificación y el grado de esfuerzo realizado para lograr un nivel aceptable de riesgo de auditoría. Usando datos derivados de bases de datos disponibles públicamente y datos obtenidos a través de encuestas, este estudio investiga los factores que explican la evaluación del riesgo de error material del cliente y si el esfuerzo aplicado en el desempeño del trabajo de auditoría responde efectivamente a ese riesgo. Encontramos una relación estadística significativa entre el riesgo de auditoría y el esfuerzo de auditoría, lo que proporciona evidencia empírica de que los auditores modifican el alcance del esfuerzo de auditoría en función del riesgo de auditoría percibido y pone en debate el trabajo de las pequeñas empresas. El análisis adicional muestra que el esfuerzo de la auditoría, medido a través de las horas, está significativamente influenciado por la antigüedad del encargo y el momento del trabajo de auditoría (es decir, la temporada alta de auditoría). Sin embargo, los trabajos de auditoría con una antigüedad más larga no ajustan su esfuerzo de auditoría en respuesta a una baja integridad de la administración o controles internos débiles, lo que sugiere familiaridad, esto es, los auditores pueden no ser tan escépticos con respecto a los incentivos de la administración. Este articulo contribuye al debate sobre la calidad de la auditoría y si el tamaño de las firmas de auditoría sirve como una característica observable asociada con una mayor calidad de la auditoría.

Impact of Managerial Entrenchment on Financial Flexibility and Leverage of Small Public Firms: Policy Implications for Global Economic Crisis

This paper examines the impact of managerial entrenchment on financial flexibility, and financial leverage decisions of small public firms compared to medium and large firms. We group firms into market capitalization quartiles where small public firms are within the first, medium firms are between the first and second, and large firms are above the third quartile. Results show that entrenched managers in small firms hold significantly less excess cash than entrenched managers in medium or large firms. Small public firms borrow significantly more money using short-term maturity compared to medium and large size firms, which borrow less money using long-term maturities. Compared to pre-2008 crisis levels, most firms borrowed more money and held more excess cash during and after the global economic crisis, though small firms had limited access to cheap long-term funding compared to medium and large firms. Managers adopted more antitakeover practices after the 2008 global crisis and they became more entrenched. Results have economic and policy implications.

Strategic behavior and dynamic capabilities: studies in micro and small technology-based firms

Purpose: this work aims to contribute to the literature on strategic management in micro and small firms by identifying the main strategic behavior traits in micro and small technology-based firms.Methodology: the research method consisted of two phases: the first phase, quantitative, involved a survey of 104 micro and small technology-based firms, whose results were analyzed using the cluster analysis technique. The second qualitative phase involved five case studies, whose information was obtained through five semi-structured interviews and analyzed using the content analysis technique.Results: the results indicated which micro and small technology-based firms operate in sectors with high levels of dynamism and uncertainty, and their strategic behavior is based on the definition of competitive and innovation strategies, communication of strategic objectives to employees, allocation of organizational resources for innovation, market research and investments in R&D and development of dynamic capabilities for innovation, sensing changes in the external environment, seizing and reconfiguring resources, through strategic partnerships with external agents, especially customers, which can help these companies to adapt to market demands and obtain competitive advantages.Conclusions: the strategic behavior in micro and small technology-based firms is influenced by the definition of competitive and innovation strategies, communication of strategic objectives to employees, allocation of organizational resources for innovation, market research and R&D investments, and development of dynamic capabilities for innovation.

Brand Management Measurement in Mexican Small Firms: Empirical Evidence

Abstract Brand management is a construct that has been recently analyzed and discussed in the marketing literature, where most empirical studies have made an emphasis on big transnational enterprises and only a few studies have focused on the analysis and discussion of brand management in small firms, even when this sector is the biggest one in any country as it represents around 90% of all the enterprises in the planet, they employ around 50% of all the labor force and they are main driving force of development of the economy of countries. That is why the main objective of this empirical research is the analysis and discussion of brand management in small enterprises from a country of emerging economy, as it is the case of Mexico, by using a sample of 300 small firms and applying a structural equations models that can allow more deeply the existing relation among the dimensions of brand management. The results obtained show that the four dimensions of brand management (values, norms, artifacts and behaviors) are closely related among them and they are excellent indicators for the measurement of brand management in small firms. JEL classification numbers: M31. Keywords: Brand management, Brands, measurements, Small firms.

The influence of the propensity of small-firm managers to enroll in training programs on subsequent training outcome

PurposeThis study examines the relationship between small-firm managers' propensity to participate in a growth-oriented training program and their subsequent program outcome in terms of strategic reorientation. From a policy perspective, this relates to the important question of what benefit would come from recruiting managers who are normally not easily recruitable for training programs.Design/methodology/approachA control group design including pre- and post-training surveys is used to assess the effects of a large-scale management training program. Accounting for selection bias, the difference-in-difference method, together with propensity score matching, was applied to assess average program effects. The matching-smoothing method was used to assess heterogeneity in program effects associated with participation propensity.FindingsOverall, program participation associated positively with change in strategic orientations. This effect was especially pronounced for managers with either low or medium to high inclinations for program enrollment, while diminishing in the modest to medium range.Practical implicationsThe findings have important practical implications for selection of target groups and recruitment strategies in relation to small-firm management training programs. From the results, recruitment strategies may effectively include managers with either high or low participation propensities, rather than aiming to “fill up” with managers with moderately low participation propensity.Originality/valueSeveral extant studies have examined average treatment effects from small-firm training programs. Yet there has been a lack of examination of the extent to which participation propensity modifies the effect of training on outcomes. This study brings new knowledge of the direction and magnitude of such heterogeneous training effects.

Role of managerial innovativeness for small Finnish firms' product and market performance

PurposeSuccessful firms are important sources of productivity, employment and economic stability in societies. As the micro-level origins of firm innovations are increasingly attracting attention amongst innovation scholars, the purpose of this study is to investigate the role of managerial innovativeness, i.e. small firm managers' innovative behaviour for firm performance. Specifically, the present study investigates managerial innovativeness as a predictor of small firms' product innovativeness and market performance.Design/methodology/approachThis research model suggests that managerial innovativeness is positively linked to firms' market performance and that product innovativeness partially mediates the relationship between managerial innovativeness and market performance. The model was tested using partial least squares structural equation modelling (PLS-SEM) with a dataset (N = 93) collected from small logistics firms in South-Eastern Finland.FindingsThe findings support the authors' hypotheses and show that managerial innovativeness had a direct effect on firms' product innovativeness and market performance. The authors also found that firms' product innovativeness mediated the relationship between managerial innovativeness and firms' market performance.Originality/valueThis is one of the few studies that shed light on and show that managerial innovativeness is significantly and positively related with small firms' product innovativeness and market performance, whereas earlier research tended to focus on managers' personalities, traits, characteristics or managerial actions, leaving managerial innovativeness unexplored.

Structured mathematical modelling on innovation management in project-oriented small construction firms

The significance of innovation management in triggering and sustaining increase in corporations of distinct size, age or enterprise type, is receiving growing attention, yet scant empirical research have been carried out in project-oriented service firms, in particular small-scaled enterprises. This study aims to identify how innovation management in small construction firms could enable them to pursue innovation and achieve greater business performance. Data collection comprises 157 empirical surveys leading to a conceptual framework modelled using the structural equation modelling approach. The findings show that entrepreneurship and networking have a direct and considerable influence on both technological and non-technological innovation, which consequently improves firm performance.

Formulate Incentive Strategies to Improve the Quality of Construction Site Management in Small and Medium Scale Construction Firms

Formulate Incentive Strategies to Improve the Quality of Construction Site Management in Small and Medium Scale Construction Firms

An Attention-Based View on Environmental Management: The Influence of Entrepreneurial Orientation, Environmental Sustainability Orientation, and Competitive Intensity on Green Product Innovation in Swedish Small Manufacturing Firms

Green product innovation (GPI) is a cornerstone of environmental management. Recent reviews on GPI have shown that research on GPI antecedents has mainly focused on identifying specific factors influencing the use of GPI. However, most studies lack a comprehensive theoretical explanation of the findings. In this study, which is based on a sample of 303 Swedish small manufacturing firms, antecedents to GPI are examined using the attention-based view of the firm. Two attentional perspectives, namely, entrepreneurial orientation and environmental sustainability orientation, were found to positively influence the use of GPI. Moreover, situated attention, in terms of competitive intensity, strengthens the relationship between entrepreneurial orientation and GPI. The study highlights the usefulness of an attention-based view on GPI and environmental management in small firms.

Examining the Effect of Knowledge Management on Performance of Small Firms in Dare es Salaam: A Case Study of Garage Workshops in Temeke District, Dar es Salaam, Tanzania.

Despite knowledge management being an approach used to achieve organisational objectives by making the best use of knowledge, little has been done on identifying the effect of knowledge management in the Tanzanian context. This study was therefore undertaken to assess the impact of knowledge management on the performance of small firms in Tanzania. Three variables, knowledge creation, knowledge sharing, and knowledge utilisation were examined for their impact on the performance of garage workshops. The researcher used a random sampling technique in recruiting the sample size. Questionnaires and interviews were used in obtaining the data. Content analysis, descriptive statistics, and multiple regression analysis were used to analyse study data. The study found that knowledge creation and knowledge utilisation were positively and significantly related to the performance of garage workshops, while knowledge sharing was found to have a positive but insignificant impact on garage workshops performance. Management of small firms was recommended to hire experienced staff to encourage knowledge creation, create an organisational culture that encourages workers interaction, and arrange tasks in a way that workers are encouraged to utilise new knowledge

Logistics Management and Marketing Performance of Small and Medium-Sized Manufacturing Firms

This study explored logistics management and marketing performance of small and medium-sized manufacturing firms. It aimed to assess the influence of order processing, transportation, inventory and warehouse management on the marketing performance of small and medium-sized manufacturing firms. As a cross-sectional study, primary data were obtained from 216 operators and personnel of small and medium-sized manufacturing firms using a structured questionnaire. The research instrument was validated through face and content validity method, while reliability was confirmed through Cronbach’s alpha method. The hypotheses developed for the study were tested using multiple linear regression. Consequently, the study revealed that order processing management, transportation management, inventory management and warehouse management had significant positive influences on the marketing performance of small and medium-sized manufacturing firms. Therefore, the study concluded that logistics management has a significant positive influence on marketing performance in the context of small and medium-sized manufacturing firms. Practical implications and a future research agenda were presented in light of the limitations of this study.

Project risk management in Iranian small construction firms

The objective of this study is to evaluate RM in small projects in Iran using identification of status, barriers, and the impact of RM on project performance. In this study, theoretical foundations and research literature were first developed through library, and then a questionnaire about these variables was designed and distributed among a number of experts in the active construction companies. Data were collected from 40 projects submitted by 25 experts from 5 executive companies. According to the studies, 10 barriers are identified as major obstacles to RM implementation in such projects, prioritized as follows: (1) lack of potential benefits, (2) not economical, (3) lack of time, (4) lack of budget, (5) lack of knowledge, (6) lack of government legislation, (7) lack of manpower, (8) low profit margin, (9) complexity of analytical tools, and (10) competition among SMCs. The findings of this research can provide an in-depth understanding of RM in small projects in Iran and make benefits of RM convincing to the participants of small projects.

Structured Mathematical Modelling on Innovation Management in Project-Oriented Small Construction Firms

Structured Mathematical Modelling on Innovation Management in Project-Oriented Small Construction Firms

The effect of Entrepreneurial Orientation Market Orientation, Marketing Capabilities on Firm Performance of entrepreneurs in the Northeastern region of Thailand

The effect of Entrepreneurial Orientation Market Orientation, Marketing Capabilities on Firm Performance of entrepreneurs in the Northeastern region of Thailand

Total quality management as driver for internationalization: a case study of a small family firm

PurposeThis study investigates the relationship between Total Quality Management (TQM) and internationalization in small family firms, focusing on the role that the dimensions of TQM may have as strategic resources to implement successful internationalization strategies.Design/methodology/approachBuilding on the Resource-Based View (RBV), the study is based on a single case study, and data were gathered through in-depth interviews with the family owner-manager.FindingsFindings show that small family businesses that aim to operate in international markets have to invest constant attention toward TQM by developing strategies able to achieve excellence. More in detail, for small and medium family firms, TQM represents a driver to internationalize. Therefore, family-owned managers sustain that internationalization success depends on the increasing attention exhibited toward the following dimensions of quality, specifically on three main pillars: relationships, professionalization and long-term vision, which appear to be strategic resources in international markets. An interpretive model is proposed with a set of propositions.Research limitations/implicationsScholarly implications are threefold. First, findings contribute to the RBV theory by introducing the long-term vision as a strategic resource able to activate a loop between TQM and internationalization success. Second, results contribute to TQM literature, highlighting that it represents a driver to internationalize, and following a long-term perspective, its enhancement is stimulated by internationalization. Third, findings contribute to family business studies, underlining the relevance done of owners on professionalization as a strategic resource to ensure excellence and obtain success in overseas markets. The main drawback refers to the fact that results stemmed from one single case study. Further studies could deepen the analysis on multiple cases.Practical implicationsThe proposed case study represents a best practice and can stimulate other entrepreneurs and consultants to invest in TQM to thrive internationalization strategies.Originality/valueThe current study, elucidating that TQM is the driver to stimulate family business internationalization, proposes an interpretive model to study TQM and internationalization in small and medium family firms.

Corporate innovativeness and risk management of small firms – evidences from start-ups

The trade-off between innovation benefit and risk control is worthy of investigation and is predictable for high-tech intensive start-ups. The innovation strategy selected by firms and the dynamic processes in innovative activities are rarely explored. This study questions the relationship between a firm's strategies on innovativeness and risk preference, especially for small firms in their initial stages of business. We find that small firms’ risk-averse levels respond differently to innovation investment and skilled labor hiring by adopting a comprehensive start-up dataset from a science park in Beijing, China. This study shows that small firms are more financially constrained in financial decision making and highlights the importance of balancing business expansion and optimization of corporate structures.

Implementing Hoshin Kanri in small manufacturing companies

PurposeThe purpose of the study is to develop knowledge on the implementation of Hoshin Kanri (HK) in small manufacturing companies. Two research questions are addressed: (1) what factors influence the implementation of HK in small manufacturing companies? (2) How do the factors influence the implementation of HK in small manufacturing companies?Design/methodology/approachThe research presented in this paper is based on an extensive literature review and data from the implementation process in five small manufacturing companies. In the literature review, factors influencing the implementation of HK, lean production and total quality management (TQM) in small manufacturing firms are identified. Thereafter, five implementation cases are analyzed. Findings from the cases are then contrasted with the factors identified in the literature and further theorized.FindingsSeven factors were found to either enable or hamper HK implementation in small manufacturing companies. Management involvement was identified as a critical factor. Management involvement can be typologized as collaborative or demanding, and the types of involvement is decisive in implementation processes within the small manufacturing company context.Originality/valueIn this paper, the authors focus on small manufacturing companies as the starting point and relate theoretical and practical results to the implementation processes in this defined target group. Conceptualizing implementation as a learning process, this research contributes to this emerging perspective on small firm development.

Changing Business Model through Cognitive Style:The Moderating Effects of Business Failure Experienc

Despite the widespread concern about the incumbent’s responses to disruptive innovations, we still know little about why managers of small incumbent firms change their business models differently under the same cognitive style. By using survey data from a sample of 180 small incumbent firms, we found intuitive cognitive style did not have a significant relationship with either explorative business model change or exploitative business model change when controlling the condition of business failure experience. However, for those managers who have experienced business failure, the intuitive cognitive style was negatively associated with exploitative changes but positively related to explorative changes. On the contrary, the intuitive cognitive style was positively related to exploitative changes but negatively associated with explorative changes for those without failure experience.