Small business research nabs top honor from international journal

Study provides new insights for firms and their owners

A UNC Charlotte small business study was chosen one of the 10 most impactful research papers published in the international Journal of Small Business Management last year. The study offers actionable recommendations and is essential reading for entrepreneurs, policymakers and scholars, say the journal’s editors.

The research offers a new take on why some small businesses fail, suggesting that failures can relate to the owners’ resilience and strategic choices, not just the business models they follow.

Co-authors of the study are all affiliated with the Belk College of Business. They are:

• Franz W. Kellermanns, Addison H. & Gertrude C. Reese Endowed Chair in International Business and Professor of Management, who also holds a joint appointment with the Center for Family Business at the WHU–Otto Beisheim School of Management in Germany and is the Academic Director for the Charlotte Doctorate in Business Administration Program
• Lisa Rolan ’20, who is a clinical assistant professor in the Marketing Department with the Belk College and earned a Doctorate in Business Administration from Charlotte
• Katrice Branner ’20, who earned a Doctorate in Business Administration from Charlotte, previously taught classes in the Business Information Systems and Operations Management Department and is a clinical assistant professor in management science with the University of South Carolina Darla Moore School of Business
• Nicole Gottschalck, assistant professor of economics with WHU – Otto Beisheim School of Management, who was a visiting researcher at the Belk College and has collaborated with Kellermanns and Rolan on other studies.

The team’s research examines how a small business’s entrepreneurial orientation — known as EO and comprising innovativeness, proactivity and risk-taking — influences the resilience of a firm’s owner. The study also considers how this relationship is shaped by the company’s exploration of new opportunities and exploitation of existing ones, characteristics known as ambidexterity.

Understanding how these orientations interact is critical for small businesses, because “the individual resilience of small business owners is of particular relevance to the survival of a firm,” the paper’s authors say. This is even more important during significant times of stress, such as the COVID-19 pandemic, when owners’ resilience was a major factor in business survival.

In the context of small businesses, resilience is the owner’s ability to handle adversity, adapt to unforeseen events and stay committed to business goals, even when facing challenges.

More findings

A firm’s EO serves as a mental framework for the owner and influences the owner’s approach to challenges. The researchers found that a risk-taking orientation is positively related to owner resilience, as the owners think through possible negative outcomes, accept failure as a possibility and grow mental toughness and persistence.

An innovative orientation coupled with an approach that focuses on existing resources, however, decreases resilience. “Adopting an exploitative approach while pursuing an innovative orientation has a negative effect on resilience,” the authors wrote. “Aligning the novelty-seeking innovative dimension with a novelty-pursuing exploratory approach provides a more consistent roadmap for the development of forethought.”

Owners with a proactivity orientation who also adopt an exploitative strategy show greater resilience. “At higher levels of proactivity, high exploitation leads to more resilience, whereas low exploitation decreases resilience as proactivity increases,” the researchers said.

Limitations and future research

As causality can’t be inferred from the data, future longitudinal studies are needed to track how resilience changes over time. The study also used data from business owners; however, resilience is important for other organizational stakeholders as well.

Other possible future studies could look at the impact of different strategic orientations on owner resilience across various business contexts and could include other variables across firms, such as experienced conflict.

Worldwide impact

As the official journal of the International Council for Small Business, the Journal of Small Business Management features research on small business management and entrepreneurship topics and circulates in 60 countries around the world.