The relationship between the manager and growth in small firms

2009 ◽  
Vol 16 (4) ◽  
pp. 586-598 ◽  
Author(s):  
Svante Andersson ◽  
Joakim Tell
Keyword(s):  
Small Firm ◽  
Small Firms ◽  
Firm Growth ◽  
Policy Implications ◽  
Special Focus ◽  
Managerial Behavior ◽  
Content Type ◽  
Top Manager ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this paper is to improve the understanding of the relationship between the manager and growth in small firms, through a review of earlier research.Design/methodology/approachA review of articles published during the last 25 years is carried out in order to answer the question: How does the top manager influence growth in small firms?FindingsThree key relationships are identified: between growth and, respectively, managerial traits and characteristics, managerial intentions, and managerial behavior or roles. The diverse findings in the literature are contradictory and give a paradoxical picture of the impact of the manager. A deeper analysis of the results from the review, supplemented with leadership theory, yields a better understanding of small‐firm growth with a special focus on the behavior of the manager.Research limitations/implicationsThis paper problematizes the complexity in managing small‐firm growth, and can be further empirically validated by using multiple methods including qualitative ones such as observational studies.Practical ImplicationsThe findings have a bearing on education and policy implications. If a behavior can be identified that promotes small firms' growth, education and policy implications can be developed in line with these results.Originality/valueIn small firms there seems to be a general consensus that managers do influence the performance of small firms, but so far there has not been a systematic review of earlier empirical research, that is done in this paper. From this review, a more complete picture of how managers influence growth in small firms is presented.

scholarly journals The impact of effectuation on small firm buying decisions

IMP Journal ◽  
2018 ◽  
Vol 12 (3) ◽  
pp. 444-459 ◽  
Author(s):  
Phillip McGowan
Keyword(s):  
Small Firm ◽  
Small Firms ◽  
Personal Selling ◽  
Business Networks ◽  
Content Type ◽  
Research Findings ◽  
Entrepreneurial Decision ◽  
Interaction Approach ◽  
The Impact ◽  
Relationship Decisions

Purpose The purpose of this paper is to consider the effect of effectuation logic on the buying intentions of small firm owner-managers. Design/methodology/approach Literature relating to organisational buying, marketing and personal selling and entrepreneurial decision making was synthesised. Findings This paper presents a conceptual model based on propositions relating to how effectuation logic may explain the predilection of small firm owner-managers to select trusted suppliers from within personal and business networks, and to engage on flexible terms. It suggests that supplier relationship decisions made using effectuation logic may enable wider choice of suppliers than the formal processes of large firms. Research limitations/implications The findings were developed from a narrative review of literature and are yet to be empirically tested. Originality/value By synthesising research findings on small firm buyer behaviour, the IMP interaction approach and effectuation, it has been possible to develop a predictive model representing buyer–seller relationships in the context of small firms which suggests that owner-managers select suppliers in line with the principles of effectuation means and effectuation affordable loss.

Currency risk impact on the financial performance of multilateral banks

2015 ◽  
Vol 13 (1) ◽  
pp. 91-118
Author(s):  
Philip Kamau ◽  
Eno L. Inanga ◽  
Kami Rwegasira
Keyword(s):  
Financial Performance ◽  
Design Methodology ◽  
Regression Coefficient ◽  
Policy Implications ◽  
Stock Exchanges ◽  
Currency Risk ◽  
Content Type ◽  
Regulatory Status ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the impact of currency risks on the financial performance of multilateral banks (MBs). Financial performance is measured here by after-tax accounting profitability or losses. Design/methodology/approach – Quantitative hypothesis regarding the impact of currency risks on the financial performance of MBs was tested by a two-tailed t test for significance of the b regression coefficient. Findings – A regression analysis was done on the total currency risk and financial performance of MBs after taking into account currency risk over eight years. The analysis of variance of the regression of the b coefficient led to non-rejection of the null hypothesis of no association, F(1, 6) = 0.77, p > 0.05. The results of the two-tailed t test on the b regression coefficient suggest that the relationship between currency risk and financial performance is statistically insignificant. Therefore, it was concluded that there is no significant impact of currency risk on the financial performance of MBs. Research limitations/implications – The results of the study can be generalized only for MBs given their peculiar characteristics as wholesale banks, which are owned mainly by governments and are generally not listed on stock exchanges. Originality/value – The study is of value to those interested in the multilateral banking industry. To the authors’ knowledge it is the first study providing empirical evidence on currency risk impact on MBs financial performance. The study finds that the currency risk impact on the financial performance of MBs is insignificant. The results are also useful to managers of MBs in terms of benchmarking their effectiveness in managing currency risk compared to their peers and learn from better performers. It has also policy implications in terms of justifying the current self-regulatory status, shareholder monitoring and governance of MBs as they are not significantly impacted by currency risk as it appears to be effectively managed.

Aspiration, foreignness liability and market potential

2018 ◽  
Vol 35 (6) ◽  
pp. 1009-1032
Author(s):  
Lee Li ◽  
Gongming Qian ◽  
Zhengming Qian ◽  
Irene R.R. Lu
Keyword(s):  
Performance Feedback ◽  
Small Firms ◽  
Theory Of The Firm ◽  
Market Potential ◽  
Content Type ◽  
Country Market ◽  
International Behavior ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

PurposeUsing behavioral theory of the firm, the purpose of this paper is to examine how a small firm’s performance relative to historical and social aspirations is related to its international entrepreneurial orientation (IEO). This study also explores two environmental factors, liability of foreignness (LoF) and host-country market potential (HMP), as the moderators for the relationship of performance and IEO.Design/methodology/approachThis study uses survey for data collection from Canadian small firms and employs regression models for data analysis.FindingsThe results show that small firms demonstrate stronger IEO when their performance is below aspirations, but their IEO diminishes when their performance exceeds aspirations. The authors also found that a small firm’s LoF does not moderate the impact of its performance feedback on IEO. However, the authors found HMP plays a moderating role when a small firm’s performance is below aspirations.Originality/valueThis study investigates the relationship of IEO to aspiration and found that this relationship is moderated by HMP. The study advances our knowledge on small firms’ international behavior.

Measuring the intellectual capital of Italian listed companies

2017 ◽  
Vol 18 (4) ◽  
pp. 710-732 ◽  
Author(s):  
William Forte ◽  
Jon Tucker ◽  
Gaetano Matonti ◽  
Giuseppe Nicolò
Keyword(s):  
Intellectual Capital ◽  
Firm Growth ◽  
Stock Exchange ◽  
Market Value ◽  
Investment Strategy ◽  
Sources Of Information ◽  
Content Type ◽  
Italian Context ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between intellectual capital (IC), measured in terms of the market to book (MTB) ratio, and potential key determinants of IC value such as intangible assets (IA) and a range of other factors. Design/methodology/approach The study is conducted for a sample of 140 Italian corporations over the period 2009-2013. Applying a holistic market-based approach, the relationship between IC value and selected determinants from the extant literature is tested. Five hypotheses are tested using a pooled OLS regression model, while controlling for time. ROE is employed as a useful firm profitability indicator from the perspective of an equity investor. Moreover, four robustness tests are undertaken. Findings The results show that IA, profitability, leverage, industry type, auditor type, and family ownership positively affect IC value, whereas SIZE and AGE negatively affect IC value. Moreover, the findings of the robustness tests suggest that all firms, and not just knowledge-intensive business service industry firms, manage knowledge. Research limitations/implications The validity of the findings is limited to the Italian context, as the study focuses on a sample of companies listed on the Milan Stock Exchange, all of which prepare their individual financial statements according to IFRS. Further limitations are related to the use of market value in the short term, as it is influenced by market volatility. The study may allow academic researchers to investigate the impact of other non-accounting sources of information on market value within a multidisciplinary perspective. Practical implications This paper also has implications for managers and practitioners. The findings suggest that managers should not take for granted that firm growth (an increase in SIZE) alone will lead to an increase in IC value, in the absence of a consistent IC-oriented investment strategy. Managers should also avoid smoothing their IC investment as the company grows, in order to maintain a stable MTB ratio. Further, standard setters should seek to explore better means of disclosing non-accounting information relating to IC value. Originality/value This paper contributes to the IC literature as it is the first study which applies the market capitalization approach to analyze IC value determinants in the Italian context, within the framework of IFRS. The findings reveal some interesting relationships between the MTB ratio and recognized intangible investments, which are found to be insignificant in previous studies, confirming that, through the holistic effect, the MTB ratio may be a good proxy for IC.

Industrial Research and Firm Size, Survival, and Growth in American Manufacturing, 1921–1946: An Assessment

1983 ◽  
Vol 43 (4) ◽  
pp. 953-980 ◽  
Author(s):  
David C. Mowery
Keyword(s):  
Firm Size ◽  
Small Firms ◽  
Firm Growth ◽  
Industrial Research ◽  
Large Firms ◽  
Research Activity ◽  
Growth And Survival ◽  
Survival And Growth ◽  
The Impact ◽  
The Relationship

The literature on the development of American industrial research suggests that during the twentieth century large firms “dominated” industrial research, and reaped the majority of the benefits from such activity. This paper utilizes new data to analyze both the relationship between firm size and research employment and the impact of research activity on firm growth and survival during 1921–1946. The results suggest that large firms were no more research-intensive than were small firms during the 1921–1946 period. Research activity significantly enhanced the probability of firms' survival among the ranks of the 200 largest manufacturing firms during 1921–1946. Research employment also improved the growth performance of both large and small firms during 1933–1946.

The relationship between growth and volatility in small firms

2014 ◽  
Vol 52 (8) ◽  
pp. 1516-1532 ◽  
Author(s):  
Ana Maria Moreno ◽  
Jose A. Zarrias ◽  
Jose L. Barbero
Keyword(s):  
Small Firm ◽  
Entrepreneurial Orientation ◽  
Design Methodology ◽  
Small Firms ◽  
Quantitative Information ◽  
Similar Nature ◽  
Firm Level ◽  
Content Type ◽  
The Relationship ◽  
Environmental Hostility

Purpose – The purpose of this paper is to investigate the effect of predictors of growth (entrepreneurial orientation (EO) and environmental hostility) and growth itself on small-firm volatility. The objective is to find out: first, whether growth and volatility possess a similar nature; second, what are the predictors of small-firm volatility. Design/methodology/approach – Questionnaire data were collected from CEOs of 433 Spanish small firms (<500 employees) who provided qualitative as well as quantitative information. Findings – The authors find that some of the predictors on growth can also be used to predict firm volatility. Specifically, the authors find that firm volatility is influenced by EO and environmental hostility. Growth also influences firm volatility. The authors also find a strong interaction effect of growth and firm size on firm volatility. The authors conclude that although growth and firm volatility are related concepts, they are different. Originality/value – Growth has concentrated small-firm research during the last 20 years. However, during the last few years, the environment has become very dynamic and small firms need research helping them to deal with such dynamism. There are few studies on firm-level volatility. The research helps understand more the determinants of small-firm volatility.

Digitalization and strategic flexibility – a recipe for business growth

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marko Juhani Matalamäki ◽  
Sanna Joensuu-Salo
Keyword(s):  
Firm Growth ◽  
New Technology ◽  
Strategic Flexibility ◽  
Growth Strategies ◽  
Business Growth ◽  
Content Type ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications ◽  
Insight Into

PurposeThis paper examines how digitalization can affect three aspects of firm growth. The specific objectives are as follows: (1) to increase understanding of how digitalization affects pre-factors for growth, (2) to examine how digitalization transforms the growth process, especially growth strategies and (3) to examine how digitalization is apparent in the outcome of growth.Design/methodology/approachWe explore six Finnish growth companies in order to understand the relationship between digitalization and growth. We used qualitative data collection and the Digimat measurement test for analyzing patterns, themes and best practices to generate a deeper understanding of the impact of digital technologies on business growth and growth strategies in these companies.FindingsWe propose that business growth includes three aspects of growth: pre-factors of growth, growth as a process and growth as an outcome. Digitalization may affect all of these aspects and strategic flexibility can affect business growth. Digitalization and strategic flexibility are intertwined; strategic flexibility enables the application of new technology, and digitalization enables flexibility.Practical implicationsBuilding on the results of the case studies, this research identifies relationships between digitalization, business growth and strategic flexibility.Originality/valueThis paper contributes to the growing literature on digitalization, providing new insight into its relation to business growth.

The impact of post-trade transparency on price efficiency and price discovery

2019 ◽  
Vol 45 (8) ◽  
pp. 1062-1075
Author(s):  
Chiou-Fa Lin ◽  
Cheng-Huei Chiao ◽  
Bin Wang
Keyword(s):  
Private Information ◽  
Stock Prices ◽  
Small Firms ◽  
Price Discovery ◽  
Positive Impact ◽  
Large Body ◽  
Policy Implications ◽  
Price Efficiency ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of post-trade transparency on price efficiency and price discovery. Design/methodology/approach The authors use an exogeneous change in market transparency in the Taiwan Stock Exchange that mandates the disclosure of unexecuted orders of the five best bid and ask prices after each trade, and conduct an event study analysis. Findings After the change, price efficiency enhances for both large and small firms, although the impact on stock prices is greater when the firm is larger. The authors also find that post-change trading reveals more private information for large firms but more public information for small firms. The findings support the view that transparency has a positive impact on market quality. Originality/value The paper adds to a large body of literature investigating the relationship between transparency and market behavior, especially the ongoing debate about whether trading transparency positively affects price dynamics. The findings also have important policy implications for the regulators.

The impact of market orientation on small firm performance: a configurational approach

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sanjay Chaudhary ◽  
Deepak Sangroya ◽  
Elisa Arrigo ◽  
Giuseppe Cappiello
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Small Firm ◽  
Small Firms ◽  
Emerging Economy ◽  
Competitive Environment ◽  
Strategic Flexibility ◽  
Competition Intensity ◽  
Content Type ◽  
The Impact

PurposeIn this study, the authors examine the influence of market orientation on small firms' performance. The authors theorize that the association between market orientation and small firm performance provides an incomplete picture in a competitive environment. The application of configuration approach which involves simultaneous consideration of market orientation, strategic flexibility and competition intensity is crucial to examine driver of firm performance.Design/methodology/approachThe sample of the research study consists of 272 small firms from an emerging economy, India. Ordinary least squares regression has been used to investigate the hypothesized relationships.FindingsThe authors noted that the three-way interaction between market orientation, strategic flexibility and competition intensity elucidates variance in small firm performance over and above a contingency model and a direct relationship.Research limitations/implicationsThe findings contribute to the existing literature by exhibiting the effect of market orientation on firm performance. The configuration model suggests that small firms can outperform competitors in a lower competitive environment if they have high market orientation and high strategic flexibility investment. To leverage market opportunities and achieve better firm performance, small firms’ owners should analyze the usefulness of current capabilities in a changing competitive environment concurrently and align market orientation to those conditions.Originality/valueThe strategic management and marketing literature suggests that relationship between market orientation and performance is ambiguous. The findings offer insights to managers regarding the appropriate use of strategic flexibility in leveraging the benefits of market orientation in a highly competitive environment. Furthermore, by collecting data from the context of an emerging economy, India, the authors attempt to strengthen the applicability of market orientation in different contexts.

The capital constraint paradox in micro and small family and nonfamily firms

2016 ◽  
Vol 5 (1) ◽  
pp. 38-62 ◽  
Author(s):  
Anders Bornhäll ◽  
Dan Johansson ◽  
Johanna Palmberg
Keyword(s):  
Small Firms ◽  
Firm Growth ◽  
Family Firms ◽  
Equity Capital ◽  
Special Focus ◽  
Firm Level ◽  
Content Type ◽  
Section Data ◽  
External Capital ◽  
And Control

Purpose – The purpose of this paper is to investigate the importance of the entrepreneur’s quest for independence and control over the firm for governance and financing strategies with a special focus on family firms and how they differ from nonfamily firms. Design/methodology/approach – The analysis is based on 1,000 telephone interviews with Swedish micro and small firms. The survey data are matched with firm-level data from the Bureau van Dijks database ORBIS. Findings – The analysis shows that independence is a prime motive for enterprises, statistically significantly more so for family owners. Family owners are more prone to use either their own savings or loans from family and are more reluctant to resort to external equity capital. Our results indicate a potential “capital constraint paradox”; there might be an abundance of external capital while firm growth is simultaneously constrained by a lack of internal funds. Research limitations/implications – The main limitation is that the study is based on cross-section data. Future studies could thus be based on longitudinal data. Practical implications – The authors argue that policy makers must recognize independence and control aversion as strong norms that guide entrepreneurial action and that micro- and small-firm growth would profit more from lower personal and corporate income taxes compared to policy schemes intended to increase the supply of external capital. Originality/value – The paper offers new insights regarding the value of independence and how it affects strategic decisions within the firm.

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