Competitive advantage and entrepreneurial power

Abstract

PurposeTo show that the inability to adapt to a series of crises caused by business development is one of the principal causes of failure for all organisations and that one of the primary components in small business success must be the managerial competence of the principal actors, inevitably the owner‐manager.Design/methodology/approachThis paper examines the divergence between the prescribed and assumed models of entrepreneurial behaviour provided by contemporary management theorists and the real, observed and reported behaviour of small business practitioners and owner‐managers. It reports on case study examples and highlights the dichotomy between expected and actual behaviour in typical management situations.FindingsThe paper suggests that the almost egotistical attitude displayed by many entrepreneurs, constitutes an abuse of the trust and the power placed in the hands of small business owner‐managers and that in extreme instances, the abuse of entrepreneurial power may lead directly to the failure of the small firm.Originality/valueMany surveys of small business failure and sub‐optimal performance often suggest situational and operational causes and explanations. This paper offers a different perspective for future research because the cause may be seen to lie with the apparently non‐rational behaviour of the entrepreneur or owner‐manager who does not adhere to the “rules” and expectations of classical management theory.

Women entrepreneurship in South Africa: Understanding the role of competencies in business success

“…Also, most SMMEs do not have financial statements and accurate records; business success is consequently measured by self-reporting and perceptions (Ahmad et al 2010). This view is also held by other researchers, such as Beaver and Jennings (2005), who argue in favor of using non-financial indicators in measuring business success, because, according to them…”

Asian Social Science, Vo. 5, No. 9, September, 2009. All in one PDF file.

“…Others have also found evidence that 'non-rational' behaviours of the business owners or entrepreneurs themselves in managing the business contribute to entrepreneurial failure (Beaver & Jennings, 2005). Some have argued that if entrepreneurs are able to equip themselves with relevant abilities and skills, the negative impact of external factors on businesses could be minimised (Wasilczuk, 2000).…”

“…Prior research indicates that two significant reasons for most SME failures are: (1) the lack of entrepreneurial competencies among the main founder-owners (Kiggundu, 2002); and (2) the lack of abilities and skills of those who hold key positions (Longenecker, Simonetti, & Sharkey, 1999). This results in poor actions taken (or not taken) by the firm resulting from 'non-rational' behaviour of the founder-owner(s) in managing the business (Beaver & Jennings, 2005), which is the focus of this study. More crucially, although the data shows that there are significant inter-country differences in SME failure rates (e.g.…”

A power perspective on knowledge transfer in internal succession of small family businesses

“…As a result small businesses are likely to underestimate the strategic relevance of knowledge (Beaver and Jennings, 2005). Small businesses are organized in simple, flat, and less complex structures with a high level of functional integration.…”

“…Small businesses are organized in simple, flat, and less complex structures with a high level of functional integration. Being less strategic, small businesses are generally operations oriented, governed by informal rules and procedures, less formalized and standardized in their work, and their organizational structures are likely to be organic and loosely structured (Beaver and Jennings, 2005;Spence, 1999). While being less strategic might lead into being less oriented to transfer knowledge purposefully, the connectedness of staff in small businesses has shown to lead to more informal learning and flexibility in knowledge transfer (Salavou, Baltas, and Lioukas, 2004;Wickert and Herschel, 2001).…”