Entrepreneurial configurations of small firms

Abstract

Purpose -This article develops contemporary entrepreneurial configurations of small firms and relates them to performance. Adding a process dimension, we extend the more commonly used resource and growth taxonomies in this field of research.Design/methodology/approach -A review of current literature on small firm configurations is followed by a discussion of its dimensions, namely, context (external and internal environment), content (entrepreneurial orientation), and process (strategy-making). These are related to perceived performance, using cluster analysis and ANOVA for a sample of 320 small New Zealand firms.Findings -The results isolate young corporates, young simple, and mature consolidator clusters. Young corporates outperform their counterparts in dynamic environments in how they use formal structures, and their high entrepreneurial orientation and generative strategy-making. Research limitations/implications -This study uses self-reporting measures and a cross-sectional design.Practical implications -Our findings show how young, small firms can enhance their performance practically by aligning the key dimensions of an entrepreneurial configuration. These firms could benefit from early formalization of systems and structures, a high EO, and by using a generative strategy-making approach.Originality/value -Our contribution is threefold. First, we empirically verify the existence of three clusters of small firms and then link these to perceived performance. Second, by basing our small-firm configurations on a CCP framework, we highlight the importance of aligning these dimensions to performance. Third, we find evidence of the role of early formalization to accompany generative strategymaking and EO if small firms want to improve performance outcomes.

Three stages of entrepreneurial orientation: the founder’s role

“…To capture the complexity of EO, there is a continuous need for longitudinal and in-depth studies (Martens et al, 2016). Moreover, several scholars have addressedthe need for contextual sensitivity (de Villiers Scheepers et al, 2014;Martens et al, 2016;Randerson, 2016;Wales et al, 2013).…”

“…As Table I shows, the data were collected on two levels: the industry and the company. The industry level not only helps contextualize the data (de Villiers Scheepers et al, 2014), but also provides a reference point for the EO . Furthermore, the present study used interviews in Swedish business magazines ( 22), annual reports of Swedish mail-order companies (24), press clippings (122) and interviews with key people in the industry (8) to develop a contextual understanding of the company in focus.…”

Beyond the formal/informal enterprise dualism: Explaining the level of (in)formality of entrepreneurs

“…However, entrepreneurs are not either formal or informal. There is a continuum of entrepreneurs and enterprises from wholly formal to wholly informal (de Villiers Scheepers et al, 2014; Williams and Martinez, 2014). Some may be wholly unregistered and not declare any earnings.…”

Determinants of the Level of Informalization of Enterprises: Some Evidence From Accra, Ghana

“…The result is an understanding that entrepreneurs and enterprises operate at different levels of informality. They adhere to some formal rules and regulations but not others, such as registering their enterprise, registering for tax purposes and keeping formal accounts (Andrade et al, 2013;Benjamin and Mbaye, 2014;Bruhn and McKenzie, 2013;Kanbur, 2015;Ram et al, 2002a,b;Steel, 2017;Verreyne et al, 2014;de Villiers Scheepers et al, 2014;Williams, 2006;Williams and Martinez, 2014;. Nevertheless, few studies to date have sought to identify the determinants of the level of informalization of enterprises, with one notable exception being a study of enterprises in Pakistan .…”