Discovery behaviour and creation behaviour of Ethiopian entrepreneurs: the implications for the performance of their small tourism firms

2020 ◽  
Vol 27 (6) ◽  
pp. 865-883
Author(s):  
Shiferaw Muleta Eyana ◽  
Enno Masurel ◽  
Leo J. Paas
Keyword(s):  
Firm Performance ◽  
Developing Country ◽  
Small Businesses ◽  
Measurement Scales ◽  
Opportunity Identification ◽  
Size Change ◽  
Content Type ◽  
Subsequent Performance ◽  
Entrepreneurial Behaviour ◽  
Start Up

PurposeThe purpose of this study is to assess the effects of discovery and creation behaviour in opportunity identification on firm performance in a developing country context. By doing so, the study adds new knowledge and insights in researching the entrepreneurial behaviour types at the start-up phase and their eventual effects on firm performance.Design/methodology/approachThe study was conducted amongst Ethiopian tour operators (n = 118), which are formally established small tourism firms. A survey questionnaire, which is the main data gathering tool in this study, was prepared based on a distinction between discovery and creation behaviour with regard to the seven entrepreneurial actions described by Alvarez and Barney (2007). Hence, 14 multiple-item measurement scales were derived to define the entrepreneurial behaviour types. Firm performance was measured using four indicators. A regression analysis was conducted to predict the effect of entrepreneurial behaviour at the start-up phase on firm performance.FindingsThe findings of this study provide consistent support for the hypothesis that tour-operating firms in Ethiopia founded through creation behaviour instead of discovery behaviour are performing better in terms of sales, employment, profit and asset size change.Research limitations/implicationsThe theoretical contribution of this study is two-fold. First, it provides a scale for measuring the extent to which discovery and/or creation opportunity identification played a role in the start-up phase of the business. Second, the study assesses the effects of discovery behaviour and creation behaviour in opportunity identification on firm performance in a developing country context.Originality/valueThe entrepreneurs' behaviour through which they identify and pursue new opportunities may have a considerable effect on the subsequent performance of their newly established firms. It is, therefore, important to understand effects, which result from differences in entrepreneurs' behaviour at the start-up phase, in terms of outcomes such as firm performance among small businesses. Nonetheless, there is little empirical research conducted in this regard, particularly in the context of developing countries. This study contributes to the literature of entrepreneurship by applying entrepreneurial behaviour types, i.e. discovery and creation, as determinants of small firms' performance in a developing country context. Furthermore, it is one of the few studies concentrating on formal instead of informal operations in an African context.

Corporate social responsibility, innovation capability and firm performance: evidence from SME

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dawit Bahta ◽  
Jiang Yun ◽  
Md Rashidul Islam ◽  
Muhammad Ashfaq
Keyword(s):  
Corporate Social Responsibility ◽  
Firm Performance ◽  
Social Responsibility ◽  
Financial Performance ◽  
Developing Country ◽  
Equation Modeling ◽  
Innovation Capability ◽  
Content Type ◽  
Corporate Social

Purpose The purpose of this paper is to examine corporate social responsibility (CSR) and its effect on small and medium enterprises’ (SMEs) innovation capability and financial performance from the perspective of a developing country. It also aims to explore the role of innovation capability as a mediating factor in the linkage between CSR and SMEs’ financial performance. Design/methodology/approach A questionnaire was distributed among managers/owners of the sampled companies. Using a data set of 402 Eritrean firms and partial least squares structural equation modeling, direct and mediating effects were tested. Findings The result reveals that CSR has a positive and significant effect on the financial performance and innovation capability of SEMs. Besides, innovation capability has a positive and significant effect on the business performance of SMEs. The result also supports a partial mediation effect of innovation capability on the association between CSR and firm performance. Practical implications The findings from this research could enhance the awareness of the entrepreneurs, researchers and policymakers on CSR-SMEs’ relationship and help understand the importance of CSR as a crucial driver mechanism for companies to become more innovative and competitive. Originality/value By empirically examining the relationship between CSR, innovation capability and performance in SMEs, this study contributes to the ongoing scholarly discussion on the linkage between CSR and financial performance. Also, to the best of the authors’ knowledge, no other study investigated the mediating role of innovation capability on the link between CSR activities and firms’ financial performance in SMEs from a developing country perspective, making substantial contributions to research in terms of theory, practice and policy.

scholarly journals Managing knowledge through social media

2018 ◽  
Vol 13 (3) ◽  
pp. 303-328 ◽  
Author(s):  
Robert Crammond ◽  
Kingsley Obi Omeihe ◽  
Alan Murray ◽  
Kirstin Ledger
Keyword(s):  
Social Media ◽  
Process Model ◽  
Management Tool ◽  
Content Type ◽  
Media Usage ◽  
Media Technologies ◽  
Entrepreneurial Behaviour ◽  
Start Up ◽  
Research Concept ◽  
Organisational Strategy

Purpose The purpose of this paper is to conceptualise social media usage (SMU) as a contributory, knowledge management (KM) tool towards entrepreneurial behaviour amongst small- and medium-sized enterprises (SMEs). Although an underdeveloped concept in entrepreneurship, the conceptual analysis of KM presents evidence which links SMU as complementary to changing KM conventions. Design/methodology/approach The pertinent KM and SMU literatures of the SME context were reviewed to form an understanding of this context. Employing a mixed-methods approach, a pragmatic, thematic investigation of SMU-enhanced KM was facilitated. Findings Substantial benefits of innovative SMU, as a management tool towards SME entrepreneurialism, were witnessed. SMU enhances the administration of real-time knowledge, encouraging creativity. However, longer-term costs of employing requisite personnel, and anticipated organisational restructuring, present challenges. The paper identifies the potentials of social media technologies in overcoming KM issues. The authors propose a reasoned process model towards entrepreneurial exploitation by acknowledging systematic phases of research, concept, institutionalise, develop, target and assess, referred to as the RCIDTA model. Practical implications The authors argue that KM, through social media, facilitates interactions to execute innovative processes within SMEs ever-changing infrastructures. It also informs nascent entrepreneurs, in considering the benefits of systematic KM, and novel SMU, opportunities. The RCIDTA model for SMEs can be utilised in improving knowledge ecosystems of entrepreneurial SMEs, promoting innovation towards sustained organisation growth. Originality/value This paper embraces the growing approach of SMEs applying SMU. SMU and its cost efficiency support the start-up activity. This paper highlights central issues concerning the exploitation of sector-specific KM, including organisational strategy, structure, brand formation, fiscal and personnel resource allocation and market share.

Top management's communication in economic crisis and the firm's subsequent performance: sentiment analysis approach

2020 ◽  
Vol 25 (2) ◽  
pp. 187-205
Author(s):  
Supavich (Fone) Pengnate ◽  
Derek G. Lehmberg ◽  
Chanchai Tangpong
Keyword(s):  
Firm Performance ◽  
Sentiment Analysis ◽  
Economic Crisis ◽  
Managerial Discretion ◽  
Top Management ◽  
Content Type ◽  
Subsequent Performance ◽  
And Performance ◽  
Near Future ◽  
Management Communications

PurposeIn economic crisis, where tensions create anxiety and test the emotions of the firms' shareholders, communication from top management is very crucial as it provides the reflection of the managers' interpretation of the firms' situation and potential strategies. The goal of this paper is to investigate the relationships between sentiment, as an aspect of emotions extracted from the letters to shareholders, managerial discretion and the firms' subsequent performance and performance trajectory during crisis.Design/methodology/approachA sentiment analysis was conducted to extract the sentiment from the letters to shareholders, which were collected from firms in two countries with different levels of managerial discretion (US vs. Japan). Hypotheses were developed and tested using a series of regression analysis.FindingsThe primary findings indicate that (1) managerial sentiment identified in letters to shareholders can potentially be related to the firm's subsequent performance in the economic crisis, and (2) managerial discretion moderates the relationship between managerial sentiment and subsequent firm performance.Practical implicationsWhen the managerial discretion is high, firms' shareholders can use the sentiment in top management communications to gauge whether the firms' situation would be improving in the near future.Originality/valueThis study expands the current research on sentiment analysis and firm performance to the context of economic crisis by suggesting that managerial sentiment can be substantially provoked as firms are facing with stressful economic conditions. The study also highlights the moderating role of managerial discretion on the firms' subsequent performance.

scholarly journals Entrepreneurs contextualisation of culture a national setting

2020 ◽  
Vol 26 (8) ◽  
pp. 1661-1683
Author(s):  
Rana Zayadin ◽  
Antonella Zucchella ◽  
Nisreen Ameen ◽  
Craig Duckworth
Keyword(s):  
Longitudinal Research ◽  
Economic Value ◽  
Cultural Factors ◽  
Entrepreneurial Activity ◽  
Implicit Assumption ◽  
Opportunity Identification ◽  
Content Type ◽  
Entrepreneurial Behaviour ◽  
Policy Level

PurposeThe purpose of this study is to capture the variation in entrepreneurs' understandings and experiences through which they contextualise cultural factors within a national setting to articulate how they use their knowledge and social capabilities to advance their activity.Design/methodology/approachThis study adopts an interpretivist approach through which culture is investigated at the individual level. Phenomenography is used as a methodology to capture the variation in the entrepreneurs own understanding and experiences of the cultural factors.FindingsThe findings introduce four different understandings and eight experiences to explore how entrepreneurs contextualise culture in their environment. The findings present a change in the role of culture in influencing entrepreneurial social capabilities and confidence; and a change in the local culture from collectivism to individualism. Furthermore, the findings show how entrepreneurs use their knowledge, experience and understanding to achieve socially driven acts to pursue economic value, integration and acceptance.Research limitations/implicationsWe encourage further research in the Middle-East region to examine the model and identify other factors that affect entrepreneurial behaviour, including the important developments with regard to women entrepreneurs. While Jordan has embarked on introducing policy level changes to support entrepreneurship, the findings report that the culture of collectivism is changing. This requires a longitudinal research to capture the change and its implication on entrepreneurial activity in Jordan and its impact on unemployment and economic value.Practical implicationsIn terms of practical contribution, the study introduces a policy level contribution by answering the question presented by the GEM report (2014) pointing out the high entrepreneurial opportunity identification in Jordan, yet the country has the lowest entrepreneurial activity in the region. Although the report pointed out issues in policy and institutional support the role of culture was not addressed. The study recommendation is to celebrate and entrepreneurial activity and introduce entrepreneurial studies at schools to influence a positive change.Social implicationsWe addressed some of the several calls to further investigate and understand the role of culture, how entrepreneurs contextualise it (Foss and Klein, 2012; Garud et al., 2016; Zahra et al., 2014; Welter et al., 2019). Our research provides a fertile ground for further enquiries that pose questions such as “What other factors do entrepreneurs contextualise in their environment?” and “how these factors are contextualised?” The use of phenomenography as an interpretive methodology might therefore assist in revealing further shared understandings of the variation in entrepreneurs' behaviours. Further research on capturing “understanding” presents the complex forms of interactions and mechanism in the cognitive world of the entrepreneurs (Barandiaran et al., 2009; Brannback and Carsrud, 2016).Originality/valueIn this study, phenomenography has enabled new insights into the multiplicity and idiosyncratic role of culture within a national setting and introduces a model of social capability and integration which capture the contextualisation of cultural factors. The study contributes to entrepreneurship literature as follows: first, the implicit assumption in this research is that culture is an active construct that entrepreneurs understand, experience and also influence; second, the variation in entrepreneurs' outcomes is based on their subjective and personal understandings which form the ways of contextualisation. Third, the variation in understanding and experiences captures the different ways entrepreneurs use their social capabilities to achieve integration and economic value.

scholarly journals Business advisory services and risk among start-ups and young companies: a gender perspective

2015 ◽  
Vol 7 (2) ◽  
pp. 168-190 ◽  
Author(s):  
Anna Kremel ◽  
Darush Yazdanfar
Keyword(s):  
Risk Taking ◽  
Statistical Tests ◽  
Gender Perspective ◽  
Content Type ◽  
Advisory Services ◽  
Early Stages ◽  
Entrepreneurial Behaviour ◽  
Start Up ◽  
Key Variables ◽  
Start Ups

Purpose – This study aims to investigate the demand for business advisory services by owners of start-ups and young companies by taking a gender perspective. The study also examines whether risk-taking is more characteristic of masculine than feminine behaviour in this context. Design/methodology/approach – A literature review examines business advisory services and risk aversion from a gender perspective. The empirical data are derived from interviews with owners of more than 2,700 start-ups and young companies in Sweden. A number of key variables compare how the company owners (women and men) view business advisory services as a way to overcome risk and to gain access to information in networks. Several statistical tests are used to analyse these data. Findings – Women owners of start-ups and young companies use more and different business advisory services than men owners. There are differences among the men owners and women owners with regard to the amount of start-up capital, company size and industry sector. Given the risks associated with start-up, business advisory services are important to women in helping them reduce their risk in the start-up and early stages of their companies. Research limitations/implications – Companies in Sweden’s largest city, Stockholm, were not included in the sample. Financial data were not used as variables. Practical implications – Policymakers should address women owners’ greater demand for business advisory services in their companies’ early stages. Originality/value – This study’s originality is its gender perspective on the demand for business advisory services by start-ups and young companies and its challenge to previous findings about entrepreneurial behaviour and risk-taking.

Lender evaluations of start-up business prospects

2015 ◽  
Vol 41 (1) ◽  
pp. 102-120 ◽  
Author(s):  
Marika Miettinen ◽  
Mervi Niskanen
Keyword(s):  
Firm Performance ◽  
Financial Institution ◽  
Study Data ◽  
Policy Makers ◽  
Content Type ◽  
Start Up ◽  
Original Contribution ◽  
Finnish Firms ◽  
Practical Implications

Purpose – The purpose of this paper is to investigate lender evaluations of start-up success in a sample of Finnish firms that are customers of a state-owned financial institution. The database allows the authors to examine how qualitative information, based on the personal history, firm-specific characteristics, subjective credit-analyst evaluations of business prospects, and market position impact firm performance. Design/methodology/approach – The data for this study was collected in 2003 and 2005 from the database of Finnvera, a state-owned financial institution. The authors employed logistic regression in the analyses, using t-test analyses to describe the sample before developing the different models. Findings – The results suggest that the lenders’ evaluations of the business prospects at the start are suitable predictors of good performance. However, the determinants of the actual firm performance (at t5) and business prospects (at t0) are, to some extent, different. The results confirm previous findings indicating that humans display fallibility because they have a tendency to overestimate less relevant cues and, conversely, underestimate the more relevant ones. Research limitations/implications – The study data includes only the customers of a state-owned financial institution; therefore, the results cannot be generalized across other financiers. Another constraint relates to the pre-selection bias, since this data excludes information on loan applicants who were rejected, which was not recorded in the lender’s files. Practical implications – The findings of this study provide lenders (especially state-owned financiers), policy makers, and entrepreneurs with clearer guidance regarding the important aspects of a firm’s period of establishment. For lenders, this may provide a step toward improving the quality of judgments. Originality/value – This paper is one of the few that sheds light on lender evaluations using non-accounting variables in order to examine their ability to predict firm performance, not failure, and to compare it with lenders’ evaluation. Another original contribution is that the data consists of the customers of a state-owned financial institution.

scholarly journals Is a bit more experience bad? The role of entrepreneurial experience on investment rate

2019 ◽  
Vol 25 (6) ◽  
pp. 1166-1187 ◽  
Author(s):  
Bach Nguyen
Keyword(s):  
Small Businesses ◽  
Content Type ◽  
Investment Projects ◽  
Entrepreneurial Experience ◽  
Start Up ◽  
Novice Entrepreneurs ◽  
New Perspective ◽  
General Method Of Moments ◽  
General Method

Purpose This study investigates the influence of entrepreneurial experience on small business investment. The purpose of this paper is to examine whether entrepreneurs with more prior start-up experience are better able to identify business opportunities and successfully transform these opportunities into investment projects. Design/methodology/approach The empirical setting in this study is Vietnam. The authors employ a panel data of small businesses (mostly households) from 2005 to 2013, and use a fixed effect method to estimate the regression coefficients. The results are also re-checked using the general method of moments and matching technique. Findings Empirically, it is found that entrepreneurial experience is an important determinant of investment decisions. Specifically, entrepreneurs with one start-up experience make more investments than novice entrepreneurs. However, entrepreneurs with more than one start-up experience do not make more investments than entrepreneurs with one start-up experience. Research limitations/implications This is country-specific research. Further study may employ data from multi-countries to re-test the validity of the hypotheses. Originality/value This study provides a new perspective for analysing the role of entrepreneurial experience on entrepreneurial investments. It shows that prior start-up experience may turn out to be a liability to entrepreneurs since it restricts their ability to identify new opportunities.

Corporate-level strategy and firm performance: evidence from China

2019 ◽  
Vol 14 (1) ◽  
pp. 1-14
Author(s):  
Boya Li ◽  
Shou Chen
Keyword(s):  
Firm Performance ◽  
Strategic Change ◽  
Content Type ◽  
Listed Firms ◽  
Subsequent Performance ◽  
Strategic Changes ◽  
And Performance ◽  
One Year ◽  
Reported Data ◽  
Corporate Level

Purpose The research interest in this paper is primarily in the question of how important changes in corporate-level strategy affect firm performance. This paper aims to explore the relationship between strategic change and performance, illustrate the frequency patterns of major strategic changes and assess the multi-period performance implications of major strategic changes. Design/methodology/approach This paper defines strategic change by combining contingency theory and resource-based view. The panel data from 1973 listed firms of China’s A-share market that reported data between the years 2004 and 2015 are selected as the sample to test various relationships and effects between performance and strategic change. Findings This paper empirically shows that change in strategies benefits subsequent firm performance, specifically resources re-allocation among existing businesses will result better performance, and successful firms exhibit less strategic change than those performing poorly. It also demonstrates that, in China, the effects of a major strategic change on subsequent performance peaks after one year, but starts to decline thereafter. Originality/value This paper explores whether changes, especially important changes, in corporate-level strategy influence subsequent firm performance, and illustrates how frequently a listed firm in China makes decisions about corporate-level strategy. It contributes empirically to the literature by providing one of the first empirical evidence on assessing the effects of important changes in corporate-level strategy on performance.

Cognitive consequences of business shut down. The case of Ugandan repeat entrepreneurs

2014 ◽  
Vol 20 (3) ◽  
pp. 263-277 ◽  
Author(s):  
Arthur Sserwanga ◽  
Gerrit Rooks
Keyword(s):  
Attribution Theory ◽  
Business Performance ◽  
Business Failure ◽  
Business Success ◽  
Past Performance ◽  
Content Type ◽  
Practical Applications ◽  
Subsequent Performance ◽  
Start Up ◽  
The Relationship

Purpose – The purpose of this paper is to focus on the cognitive and motivational consequences of a business failure, and their relation with subsequent start up success. The paper hypothesizes that if previous business failure was attributed to an internal and stable cause, subsequent business would be less successful compared to where an entrepreneur attributed business failure to an internal and unstable cause. Design/methodology/approach – The authors reviewed the literature on attribution theory in an achievement context and derived a hypothesis about the relation between causal thinking and subsequent business success. A survey amongst entrepreneurs in Uganda was carried out to yield insights on how attributions to past performance influence subsequent business performance. Findings – Entrepreneurs who attributed previous business failure to an internal, stable cause were found to be less successful in subsequent business start up. When repeat entrepreneurs attribute previous shut down to a lack of ability, they are less successful in a subsequent business start up. However, attributing the failure to a lack of effort, does not affect subsequent business success. Originality/value – The study reaffirms the importance of attributional thinking in entrepreneurship and provides empirical evidence on the relationship between the way entrepreneurs think about their previous performance and subsequent performance. Attributional thinking influences subsequent business actions and outcomes, which offers important practical applications. For instance training to change attributions of entrepreneurs may be used to influence their eventual performance.

Sign in / Sign up

Export Citation Format

Share Document