Small Business Leaders Research Articles

Leadership in small business environments: from the heroic model to distributed approach

Purpose This study explores the process of interactions experienced by leaders during the evolution of the small firm. Three key propositions are conceptualized into a model with the main aim of supporting leaders of small organizations in understanding better the leadership phenomena. Design/methodology/approach This qualitative research project investigates the dynamics of leadership in small businesses through an inductive and abductive approach, inherent to grounded theory. This enabled the development of propositions directly from data. Field research involved responsive interviews with 12 established small enterprise leaders. Selective and theoretical sampling coupled with ongoing data comparison and analysis were applied to uncover and refine emerging leadership concepts. Findings Intellectual assets of leaders in small firms propel the recognition and sensitivity to the process of organizational evolution which requires a continuous adaptation of the leadership paradigm. Research limitations/implications The researchers’ philosophical stance to construct reality based on the participants own experiences, cannot produce generalized findings on the subject area. Practical implications Enhanced Decision-Making and Strategic Planning: Small business leaders can leverage their academic and industry backgrounds to make more informed and strategic decisions. Facilitating Organizational Change: By understanding the necessity of continuous change, small business leaders can implement frameworks that encourage flexibility and adaptability within their organizations. Adopting Distributed Leadership: Encouraging small business owners to move away from centralized control towards a more distributed leadership model can lead to better organizational outcomes. Originality/value A considerable amount of research has been devoted to leadership in the past decades. There is very little evidence on behavioral patterns of leaders, grounded in data within the context of the Small Firm aimed at the practitioner. This work is contribution towards this shortfall.

Small business leadership, peacebuilding, and citizen perceptions of businesses as peacebuilders: theory and evidence from Colombia

Purpose Businesses are increasingly engaged in actions to support peace in conflict- and violence-affected communities. Yet there is limited knowledge about why business leaders engage in peace or how citizens perceive the importance, efficacy and impacts of business contributions to address conflict and violence. These gaps are particularly acute for small business scholarship. This paper aims to address these. Design/methodology/approach This paper considers how small and medium enterprises (SMEs) view their peace-positive actions and how these are perceived by communities. This paper examines this by using two original primary surveys conducted concurrently in May 2021 in Bogotá and Medellín, Colombia. Question themes included: SMEs operating environments, relationships and networks, experiences of violence, SMEs community contributions and citizen perceptions of businesses as peacebuilding agents. Findings The results show that small business leaders who supported their communities with peace-positive actions saw their businesses perform better and held positive views of the benefits of engagement. Further, citizen perceptions of businesses contributions to peace declined where insecurity increased and improved where businesses – and in particular MSMSEs – engaged more in their communities. Research limitations/implications This paper discusses certain limitations related to the use of a mobile-phone based sampling methodology enumerated during an ongoing pandemic. Originality/value This paper presents an original contribution that examines both SME and citizen perceptions of businesses peace-positive actions. The findings inform notions of SME leadership in fragile contexts, as well as the role of the private sector in conflict spaces more generally. They also suggest a greater focus on understanding the broader perceptions of businesses actions toward peacebuilding within society.

The workplace of the future: the COVID-19 pandemic and working from home in Swiss small businesses

PurposeMicro and small enterprises (MSE) play a critical role in the Swiss economy but had no meaningfully adopted working from home (WFH) policy before the COVID-19 crisis. The timing of the study’s data collection allowed a unique assessment of Swiss MSEs’ adoption of WFH enabled by the adoption of digital technologies due to the first government-mandated COVID-19 lockdown. The study also set out to assess the permanence of any changes in the adoption of WFH by MSEs after initial government COVID-19 restrictions ended.Design/methodology/approachThe study uses a threefold theoretical framework combining social, technical and spatial dimensions. Data were collected via telephone interviews. The utilised sampling frame included 153,000 small businesses with 4–49 employees, and the realised sample for the study was 503 interviews with MSE owners and managing directors (MDs).FindingsThe Swiss government’s COVID-19 crisis lockdown policies accelerated the digital transformation of work by employees in Swiss MSEs by increasing the number of employees WFH. However, the number of MSEs with WFH employees decreased after the first lockdown ended. Small business leadership is an important influence on the persistence of any increases in WFH.Originality/valueThe data collection uniquely captures the effects of externally driven digital transformation of work in small businesses by the adoption of WFH. The findings show that small businesses can rapidly learn new ways of working and support the claim that Swiss MSE MDs play a critical role in the adoption of WFH. They also confirm the importance of digital leadership and culture for realising the potential of WFH in small businesses.

Perceptions and Bias of Small Business Leaders in Employing People with Different Types of Disabilities

PurposeDespite existing employment-related legislation and governmental programs, people with disabilities continue to face significant barriers to competitive employment. These obstacles are partially due to biases among employers regarding the contributions of people with disabilities and perceptions about accommodation costs, which can affect their hiring decisions. Existing research on employment barriers and facilitators often treats people with disabilities homogenously and focuses mainly on large companies. This study helps to fill these gaps by exploring the motivations and challenges small employers face when hiring people with disabilities and how their attitudes and willingness to hire vary based on disability type.MethodsWe surveyed business owners and decision-makers at companies with fewer than 100 employees resulting in a sample of 393 company respondents. Through descriptive analyses, we examined variations in respondents’ willingness to hire and the prevailing attitudes among the company leaders sampled. We explored how employer attitudes can either hinder or support the hiring of people with disabilities. We conducted multivariate analysis to explore the connections among attitudinal barriers, facilitators, and willingness to hire individuals with various disabilities, reflecting disability’s heterogeneous nature.ResultsOur findings reveal that, in terms of hiring people with disabilities, the most important concerns among employers are: inability to discipline, being unfamiliar with how to hire and accommodate, and uncertainty over accommodation costs. These concerns do not differ between employers covered by the Americans with Disabilities Act (ADA) and non-covered employers. However, ADA-coverage may make a difference as ADA-covered employers are more likely to say they would hire an applicant with a disability. We find that for small companies (less than 15 employees), the positive effect of the facilitators (positive perceptions about workers with disabilities) almost completely offsets the negative effect of the barriers. However, for the larger companies, the marginal effect for an additional barrier is significantly more predictive than for an additional facilitator. Among the disabilities we examined, employers are least likely to hire someone with blindness, followed by mental health disabilities, intellectual disabilities, deafness, and physical disabilities, underscoring that employers do not view all types of disabilities as equally desirable at work.ConclusionsUnderstanding small employers’ underlying concerns and effectively addressing those factors is crucial for developing effective intervention strategies to encourage small employers to hire and retain people with different disabilities. Our results suggest greater openness among ADA-covered employers to hiring people with disabilities, but the perceived barriers indicate a need for ongoing information on effective intervention strategies to increase disability hiring among all small employers.

The role of employee engagement towards innovative work behavior mediated by leadership in small businesses

This study aims to examine how employee involvement, leadership, and innovation-related actions are linked in small businesses in Saudi Arabia. As Saudi Arabia works on diversifying its economy and considers innovation essential for growth, this research seeks to identify key factors and processes that promote innovation in companies. A survey was conducted across different small businesses in Saudi Arabia to gather information from employees. Advanced statistical methods, like structural equation modeling (SEM), were used to analyze the data and understand the relationships being studied. The results show a strong, positive link between how engaged employees are and their innovation-related actions in Saudi Arabian small businesses. The study also reveals how crucial leadership is in this process, demonstrating how leaders can either encourage or hinder employees' ability to contribute to innovation. These findings are useful for small business owners and leaders in Saudi Arabia, guiding them on how to foster an environment that supports innovation and improves their competitive edge in the global market. This research is also valuable for policymakers, business leaders, and academics interested in promoting innovation and long-term growth in this vital part of Saudi Arabia's economy.

The manager and the accounting information system in small companies

In very small organizations, the role of the manager in the choice and implementation of tools is predominant. In these entities, resources are scarce and accounting information systems are not very formalized. In this research work, we therefore sought to identify the typical profile of this manager and to understand his propensity to use accounting data. Several recent studies have highlighted the relevance of the concept of organizational bricolage to analyze the practices of small businesses. With this in mind, we have sought to explore the ways in which managers of small businesses use accounting information systems. For this, we opted for the qualitative research method based on semi-structured interviews with managers of small Tunisian companies. To conduct this study, we used a qualitative methodology. 36 companies were selected for study. The cross-site case study was favored because it maximizes generalization bias. Finally, the profile of the manager has an influence on the SIC and induces a type of MSE. The results of our research led to the conclusion that there are three types of small business leaders: survivalists, emerging and structured.

Enhancing TQM’s effect on small business performance: a PLS-SEM exploratory study of TQM applied with a comprehensive strategic approach

PurposeGiven the positive organizational principles associated with total quality management (TQM) – customer focus, continuous improvement, and process management – one would assume TQM's application is universally beneficial across businesses. Generally, research supports that notion. However, given resource limitations and shallow management teams in small businesses, there are multiple challenges in implementing TQM in small and medium-sized enterprises (SMEs). Therefore, small business leaders should benefit from knowledge linking other management practices to TQM’s positive effect on small firm performance, which enhances these leaders' return on TQM investment.Design/methodology/approachThe authors apply partial least squares structural equation modeling (PLS-SEM) to explore TQM’s effect on small business performance and how other management practices enhance that relationship. Specifically, the authors explore how a comprehensive strategic approach (CSA) – a higher-order construct consisting of strategic planning, goal setting, and financial ratio analysis – moderates the relationship between TQM and small business performance. Given the complexity of the authors' model, the application of higher-order constructs, and the exploratory nature of this work, PLS-SEM is well suited for this study.FindingsConsistent with prior research, the authors found that TQM (also a higher-order construct, consisting of seven lower-order constructs) positively impacts small firm performance. In addition, the authors found that CSA positively moderates the relationship between TQM and financial performance.Originality/valueTQM’s effect on small business performance is enhanced when leaders implement a CSA. In other words, when small business leaders strategically plan, set goals, and analyze financial ratios, TQM's positive effect on firm performance is enhanced. This finding provides business leaders insights for how to maximize the TQM investment return.

Small + Safe + Well: lessons learned from a Total Worker Health® randomized intervention to promote organizational change in small business

BackgroundLeadership commitment to worker safety and health is one of the most important factors when organizations develop and implement a Total Worker Health® approach. We aimed to assess the effectiveness of a Total Worker Health (“TWH”) leadership development program that targeted owners and other senior-level leadership positions on changing organizational and worker outcomes from baseline to one-year later.MethodsThe Small + Safe + Well study included small businesses from a variety of industries in the state of Colorado, USA that were participating in Health Links™. We designed a randomized waitlisted control comparison design (RCT) to evaluate the added benefit of a TWH leadership development program. An employer assessment tool was used to assess TWH policies and programs, and an employee health and safety survey was used to assess safety leadership and health leadership practices, safety climate and health climate, safety behaviors and health behaviors, and well-being. We used a linear mixed model framework with random effects for business and employee to assess the impact of intervention on the outcomes of interest.ResultsThirty-six businesses (37% retention) and 250 employees (9% retention) met the RCT study inclusion criteria and were included in the analysis. Businesses improved their TWH policies and programs score from baseline to one-year later, regardless of leadership intervention group assignment. Neither intervention group demonstrated improvements in employee-reported outcomes.ConclusionsThis study sought to address a gap in the literature regarding small business senior leadership development for TWH. Our study demonstrates many of the challenges of conducting studies focused on organizational change in workplaces, specifically in small businesses. When designing TWH intervention studies, researchers should consider how to best engage small business leaders in interventions and implementations early on, as well as methods that are well matched to measuring primary and secondary outcomes longitudinally. Future research is needed to test the feasibility and sustainability of TWH interventions in small business.Trial registrationThe trial was retrospectively registered with ClinicalTrials.gov (ID U19OH011227).

The effect innovation cloning to small business success: entrepreneurial perspective

It is challenging to run a business during the COVID-19 pandemic, because the owners and the small business leaders must be responsible for success. Leaders need to innovate and look for sources of innovation, including practical inventions, such as innovation cloning. In this study, innovation cloning consisting of creativity cloning and implementation cloning is analyzed for its relationship to business success, in the form of owner’s interest and financial performance perspectives. This study aims to reveal the role of innovation cloning, creativity cloning, and implementation cloning in achieving business success based on the owner’s interest and financial performance. The study uses an explanatory survey. The number of samples is 155 entrepreneurs/small business leaders in Bandung City, Indonesia. Snowball sampling is carried out to obtain the data. Data processing uses descriptive statistics and multiple regression with the help of SPSS and Amos 23 software. This study found that creativity cloning and implementation cloning affected the owner’s interest, and implementation cloning affected financial performance. In contrast, creativity cloning does not affect financial performance. Creativity cloning and implementation cloning are correlated with each other. Creativity cloning and implementation cloning are proved to be one unit of cloning innovation. The leader’s expertise in choosing the object to be cloned and adapting it to consumer needs will facilitate company goals. Utilizing innovation, cloning, and modifying it is a practical way for small businesses to succeed. This research needs to be continued to see if there is a continuous pattern in these findings so those findings can be generalized.

Learning from each other: leaders' social representations of career beginners and career beginners' self-assessment

Today's youth face prejudice and stereotyping in the workplace; in times of crisis, such as the COVID-19 pandemic, their prevalence and strength may increase. We conducted a qualitative study of social representations of key exchange partners – leaders and career beginners. In the first phase, we conducted semi-structured interviews to identify the dominant social representations that small business leaders (N = 9) hold about career beginners. In the second phase, we examined how future career beginners (N = 26) responded to five hypothetical work situations based on the leaders' social representations. The social exchange partners shared the narrative that career growth, advancement, and financial incentives are important motivators for career beginners, but contradicted each other in their accounts of career beginners' initiative levels and in their accounts of preferred leadership styles. The findings help to raise awareness of the mutual representations and expectations of different age groups in the work context.

Small Business Leadership and Ethical Attributes That Influence Employee Job Satisfaction

Organizational leadership studies acknowledge that leadership styles positively affect job satisfaction. Currently, there are limited ethical, theoretical studies to investigate the relationship with job satisfaction. Therefore, there is a need for additional ethical leadership theories to explain conditions that may improve on negative organizational phenomena. This study investigated the relationship between the foundational leadership theory and job satisfaction. Foundational leadership is an inward (internal) and outward (employee perceived) examination of ethical decisions based on integrity, assurance, and pragmatism. The findings were based on 330 full-time entry and mid-level employees between ages 18 - 60+ across various industries in the United States. Cronbach’s alpha confirmed that integrity, assurance, and pragmatism is reliable measurement for ethical leadership. Pearson correlation revealed that the foundational leadership attributes of integrity, assurance, and pragmatism significantly correlate with employee job satisfaction. Finally, multiple linear regression results determine that ethical leadership training programs can teach Foundational Leadership to create job satisfaction. However, recurring leadership training should reinforce foundational leadership assurance (FLA) to foster job satisfaction within the leader-member exchange relationship.

The Benefits of Innovation for Small Businesses

The purpose of this qualitative multiple case study was to explore strategic managerial tools small business owners or managers use to sustain growth over time through Schumpeter’s innovation theory. Five small business owners located in North America were interviewed through face-to-face open-ended interview questions. The results from data analysis collected through interview responses indicated that small business owners or managers attested that their businesses were developed when using innovation as a strategic managerial tool. By contrast, small business owners or managers agreed that the lack of using innovation and understanding the reality of the current business context had an adverse impact on business growth. The findings of this study may also provide small business leaders or managers with critical information to ensure success and better understand strategies small businesses need for long-term growth.

The effect of small business leaders' organisational mindfulness and social learning on opportunistic behaviour to survive the COVID-19 pandemic

PurposeThis research aims to test the relationships between organisational mindfulness, social learning and opportunistic behaviour of small business leaders during the COVID-19 pandemic.Design/methodology/approachSemi-structured interviews were conducted with six small business leaders from various sectors to explore and better grasp the unprecedented phenomenon. An online survey on small business owners and managers in Indonesia was then employed as the main study, resulting in 291 valid responses for further analysis. The data were analysed using regression on SmartPLS 3.0 software.FindingsThis research finds that organisational mindfulness and social learning have positive and significant associations with the ability of small business leaders to discover and exploit opportunities. The path analysis suggests that organisational mindfulness plays a pivotal role as it also partially mediates the relationship between social learning and opportunistic behaviour.Originality/valueThis is the first paper to test the relationships between organisational mindfulness, social learning and opportunistic behaviour, particularly in the context of COVID-19 pandemic. This work also contributes by emphasising the critical linkages between internal and external capabilities triggered by small business leaders to survive the pandemic.

Total Worker Health® and Small Business Employee Perceptions of Health Climate, Safety Climate, and Well-Being during COVID-19.

The COVID-19 pandemic created workplace challenges for employee safety and health, especially in small enterprises. We used linear mixed-effects regression to examine changes in health climate, safety climate, and worker well-being, prior to the pandemic and at two timepoints during it. We also examined whether employees at organizations that had received a TWH leadership development intervention prior to COVID-19 would better maintain pre-pandemic perceptions of climates and well-being. The final study cohort consisted of 261 employees from 31 organizations. No differences were observed in mean outcome scores between the leadership intervention groups at any of the survey timepoints. We combined intervention groups to examine the difference across timepoints. Perceptions of health and safety climates remained stable across all timepoints. However, employee well-being scores declined between the pre-pandemic period and subsequent COVID-19 timepoints. These findings suggest that while small organizations continued to be viewed as supporting employees’ health and safety over the course of the pandemic, well-being scores declined, indicating that other factors contributed to decreased well-being. The findings from this study have implications for small business leaders as they navigate the impact of the COVID-19 pandemic on the health, safety, and well-being on their organizations and employees.

Encouraging or expecting flexibility? How small business leaders’ mastery goal orientation influences employee flexibility through different work climate perceptions

The employee flexibility desired in changing and uncertain business environments is amplified in small business settings. How can small business leaders facilitate the employee flexibility needed in this context? In the present study, we proposed that mastery goal-oriented leaders who are concerned with learning and competence development would create a work climate that promoted employee flexibility in their firms. We tested our hypotheses with multi-wave, multi-level data collected from leaders and employees in 141 small accounting firms in Norway. Findings revealed that leaders’ mastery goal orientation (MGO) was positively related to employee flexibility through a work climate that encouraged learning and development (a mastery climate). Yet, we also found that leaders’ MGO was negatively related to employee flexibility through a work climate that emphasized the expectations to be adaptive and flexible (an adaptability climate). Taken together, our study suggests that leaders’ mastery goal orientation may fuel employee flexibility when encouraging flexible-related behavior yet backfire when they signal that the same behavior is expected.

Balanced psychological contracts in the small business: The five factor model at work

A balanced psychological contract is an employer–employee relationship that features an expectation of career advancement in exchange for high performance on work assignments. The major purpose of this study was to establish an extended theoretical framework for this hybrid type of contract and quantitatively examine its nomological network. Specifically, the primary goal was to examine in a multilevel study the relationship between balanced contracts and managerial personality, using the Five Factor Model. A secondary goal was to examine whether the interaction between personality and balanced contracts predicts employees' satisfaction with their work. The sample data were collected from 48 small business leaders and 244 of their employees in Canada. Multilevel analysis showed that managers' conscientiousness and openness to experience were the strongest predictors of balanced contracts. In addition, the interaction between openness to experience and balanced contracts was significantly related to employee job satisfaction. We conclude by discussing potential limitations, possible future research avenues, and practical implications.

Evaluation of a Total Worker Health® leadership program for small business leaders.

Leaders play a critical role in the development and execution of Total Worker Health (TWH). Small businesses, in particular, can benefit from strong leadership support for TWH as the burden of work-related injury, illness and fatality, as well as poor health and well-being is high in this population. In the present study, we conducted a program evaluation of a TWH leadership development program for small business leaders using the RE-AIM framework. The goal of the program was to help change leaders' behaviors around health, safety and well-being practices following the theory of transformational leadership. Two leaders from each business participated in pre-training activities on their own, a 6-hour in-person training, and three months of access to virtual training transfer activities, including coaching and goal tracking. Our results suggest that the TWH leadership development program is effective at improving leaders' self-reported TWH leadership practices and that the in-person training was implemented successfully. However, leaders did not report improvements in their personal health and in fact reported increased levels of work stress after the program. We also observed some challenges when implementing our training transfer strategies. Our study suggests that leaders may benefit from attending TWH leadership trainings alongside other colleagues in their organization to facilitate a shared vision and goals for TWH in their organization. As a next step, it will be important to determine the program's effectiveness in changing business TWH policies and practices, employee perceptions of TWH and leadership, and employee health and safety outcomes.

Strategic adaptation: leadership lessons for small business survival and success

PurposeApproximately half of all new businesses fail within the first five years of operation. This study was undertaken to understand the behavior of small business (SB) leaders, including their decision-making processes and adaptive leadership practices that enable their organizations to survive during periods of general crisis and intense competition.Design/methodology/approachIn order to understand the lived experiences of our research participants, a constructivist grounded theory approach was used. Thirty-two CEOs and leaders from fifteen organizations were interviewed.FindingsIt was determined that successful SB leaders avoid organizational complacency by being continuous learners, who are agile and flexible in determining appropriate management strategies. Additionally, they leverage time management processes, build strong and productive relationship networks and create positive family-oriented workplace cultures to increase their odds of survival.Research limitations/implicationsThis qualitative study was limited to interviews, observations and analysis of organizational archetypes; therefore, the authors can establish a pattern in behavior but cannot make a causality claim.Practical implicationsThe findings provide SB leaders with effective concepts, practices and strategies from members of their peer group, which they can test, refine and implement.Social implicationsThe impact of business failures is often devastating financially and emotionally for the families and employees involved. Learning methods for strategic adaptation that may help avoid business closures could provide a positive societal contribution.Originality/valueThere is little empirical research about how SBs strategically adapt during challenging periods. This study helps fill that gap and provides an understanding of how SB leaders adapt to continuous challenges, create value and remain competitive in difficult business environments.

EFFECTIVE LEADERSHIP IN ONLINE SMALL BUSINESSES: AN EXPLORATORY CASE STUDY

The exploratory case study, with a positive deviance approach, was used to address the problem that online small business leaders lack effective leadership skills and actions. Generally, online small business leaders face challenges separate and unique from traditional ground business leaders and different than big ecommerce business leaders who are turning ground businesses to online global businesses. Specifically, online small business leaders lack effective leadership skills and actions to address the unique challenges of online small businesses, resulting in a 90% first-year failure rate. Ten online small business leaders answered interview questions to explore best practices and processes. Data analysis revealed six themes of online small business leadership qualities but not particular leadership qualities practiced by online small business leaders. The major six qualities of the online small business leaders in this study consisted of having passion and intrinsic motivation for their work, having a heightened awareness of time and time management, maintaining old fashioned face-to-face interactions, historically having someone of positive influence in their lives, being adaptable to change, and having high problem-solving and decision-making skills. Based on these new findings, more exploration of how these online small business leadership qualities could contribute to higher success rates is recommended.

Using simulation to develop business strategy skills of entrepreneurs - Some reflections on a pilot

It is recognized that the value of entrepreneurship education and the recruitment of practising entrepreneurs for such learning programmes can be problematic. This raises an important and challenging issue for universities when they are increasingly being asked to develop the leadership and management capabilities of entrepreneurs. In this account of practice, the authors explore the role for business simulation in the development of existing entrepreneurs’ and small business leaders’ strategic decision-making skills. The article describes and reflects on a pilot business simulation course, considering the challenges in the planning, the engagement of entrepreneurs and the delivery of the programme. It provides insights into the value of introducing this form of learning experience and exposes the significant challenges associated with engaging small business leaders.