Determinants of Business Climate Perceptions in Small and Medium-Sized Enterprises: Does Managerial Ownership Matter?

John E. Gamble, Melanie P. Lorenz, David L. Turnipseed, K. Mark Weaver

Abstract


This study examines the relationships between entrepreneurial orientation (EO), firm performance, and perceptions of business climate perceptions (BCP) in small- and medium-sized enterprises.  Analysis of the relationships also involves assessing to what extent agency affects may cause differences in BCP by owner managers and non-owner managers.  The samples for this study were 461 owner managers and 281 non-owner managers of businesses employing less than 250 people in “hurricane-affected” parishes in central Louisiana. The sample firms were selected (every 10th firm) from licensed businesses and the data collected by a telephone survey conducted by the LSU Office of Institutional Research. This survey was sponsored by Shell Oil Company.

Full sample results found a positive association between BCP and overall performance, while favorable BCP was negatively associated with sales growth and risk taking.  The results of the study found similar associations between EO, firm performance, and BCP in both owner managed companies and non-owner managed firms, although risk aversion and overall performance were more strongly associated with favorable BCP in the non-owner manager sub-sample and revenue stability had a stronger relationship with BCP in the owner manager sub-sample.  The results of the study found that managers who had pursued less risky strategies had more favorable views of the business climate during challenging economic conditions.  Also, the similar attitudes of non-owner managers and owner managers concerning the business climate suggest that the interests of non-owner managers and owners are relatively well aligned in this sample of externally controlled SMEs.


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 University of Houston-Clear Lake