Small business strategic management practices and performance: A configurational approach

Abstract

Small businesses contribute to society on many fronts: job creation, tax revenues, functional products and services, charitable donations, technological developments, and social contributions to communities. Given these contributions, and small firms’ limited resources, it is important to understand what strategic management practices (SMPs) – activities engaged to develop and implement strategy – positively impact small firm performance. Small business leaders may apply various combinations of SMPs to achieve performance objectives. Here, we apply Fuzzy set Qualitative Comparative Analysis (fsQCA) to explore how various combinations of six different SMPs – entrepreneurial orientation (EO), strategic planning, goal setting, total quality management (TQM), social capital, and small business owners’ analysis of financial ratios – affect performance. From a sample of U.S. printing companies, we found four different configurations of SMPs related to higher small business performance.