EMPLOYMENT RELATIONS

Is small beautiful? Critically appraise management styles in small firms

Is Small Beautiful? Critically appraise management styles in small firms

Introduction

Considerable effort has been devoted to identifying the general characteristics of entrepreneur; however, much of this has been conducted from a trait-based rather than from a behavioral perspective. In this study of small firms in the United Kingdom, we explored the relationships among managerial behaviors (based upon a competence model), entrepreneurial style (based on Covin and Slevin's theory), and firm type (in terms of sales growth performance). Principal components analysis of a management competence inventory identified six broad categories of managerial behavior. (Barrett, 2002)Regressing a measure of entrepreneurial style on these six behaviors suggested that managing culture and managing vision are related to an entrepreneurial style, while managing performance is related to a nonentrepreneurial style. (Ram, 2003) Entrepreneurial style-but not managerial behavior-was associated positively with the probability that a firm would be a high-growth type. The results are discussed from the perspective of a model of small firm mana gement that posits separate entrepreneurial, nonentrepreneurial, and generic management behaviors derived from a global competence space.

The issue of what constitutes an entrepreneurial approach to the management of organizations is an important one in delineating and describing the field of small business management/entrepreneurship and its relationship to general management. Such inquiry prompts a number of questions: For example, what kinds of activities does an entrepreneur perform? What roles can be inferred from these activities? What are the distinguishing characteristics of entrepreneurial work? What variability exists among entrepreneurial and managerial jobs? (Gartner 1988). A decade ago Churchill (1992) argued that considerable progress had been made with regard to the similarities and differences in the general characteristics of entrepreneurs and small business owners. These differences, and those between small business owners, entrepreneurs, and managers in large organizations, have been elaborated upon further in recent years (see, for example, Becherer and Maurer 1999; Chell, Haworth, and Brearley 1991; Stewart et al. 1998; Hyr sky 2000). Much of this research has been conducted from a trait-based perspective by examining the innate characteristics of entrepreneurs. While studying traits has achieved some notable successes, what is less clear are the ways in which managers in different kinds of small firms behave in managing their businesses and, furthermore, how this relates to the concept of entrepreneurship and to firm performance. Management competence provides a potentially useful lens through which to frame these and other questions. Such a perspective is apposite given that in parallel with debates about entrepreneurship and small firm performance (see, for example, Cohen and Musson 2000; Du Gay 2000; Kaplan 1987) the issue of management competencies continues to be an area of vigorous debate among scholars, practitioners, and policymakers (see Burgoyne 1989; Burgoyne 1993; Bridge, O'Neill, and Cromie 1998; Gherardi 1999; Gruglis 1997; Holton and Naquin 2000). Entrepreneurship has been linked with firm type (high growth versu s low growth), managerial behaviors have been linked with firm type, and managerial behaviors have been examined through functional ...