Surviving or thriving: The role of learning for the resilient performance of small firms

Abstract Building on a longitudinal dataset of 245 small firms covering the period of the Global Financial Crisis, this study uses, in combination with fuzzy clustering, the N-State Classification and Ranking Belief Simplex (NCaRBS) technique. This technique, able to deal with ambiguous outcome variables, small datasets, incomplete data and relationships that have the potential to be non-linear, is used to explore the relationship between learning and the resilient performance of small firms. Our findings provide a fine-grained picture of the complex relationships between strategic, cognitive and behavioural learning mechanisms and three resilient performance clusters – sustained performance, stability, and survival – which has implications for theory, as well as practice. By examining learning at the level of the individual owner-manager and also the organisation, we contribute to a better understanding of the role of specific learning mechanisms, a role that is still not well understood.

[1]  Christopher Miller,et al.  Graduate entrepreneurs are different: they access more resources? , 2011 .

[2]  J. Roldán,et al.  From Entrepreneurial Orientation and Learning Orientation to Business Performance: Analysing the Mediating Role of Organizational Learning and the Moderating Effects of Organizational Size , 2014 .

[3]  Fabio Cuzzolin.  Belief Functions: Theory and Applications , 2014, Lecture Notes in Computer Science.

[4]  Ingi Runar Edvardsson,et al.  Knowledge management in SMEs: the case of Icelandic firms , 2006 .

[5]  Shaker A. Zahra,et al.  Emerging Issues in Corporate Entrepreneurship , 2003 .

[6]  Erica Seville,et al.  Developing a Tool to Measure and Compare Organizations’ Resilience , 2013 .

[7]  V. J. Sebastian,et al.  Configuration Approach to Strategic & Entrepreneurial Orientation Construct & Small Firm Growth: Evidence from India , 2017 .

[8]  Roland K. Yeo,et al.  Revisiting the roots of learning organization A synthesis of the learning organization literature , 2005 .

[9]  Tammy L. Madsen,et al.  Microfoundations of Routines and Capabilities: Individuals, Processes, and Structure , 2012 .

[10]  Bryan Hattingh,et al.  The competitive advantage , 2007 .

[11]  Marco Frey,et al.  Organizational learning through disasters: a multi-utility company’s experience , 2018 .

[12]  Teppo Felin,et al.  Entrepreneurs as theorists: on the origins of collective beliefs and novel strategies , 2009 .

[13]  Yuksel Ekinci,et al.  The interface between organizational learning capability , entrepreneurial orientation , 2018 .

[14]  Marko Kohtamäki,et al.  Configurations of entrepreneurial‐ customer‐ and technology orientation , 2011 .

[15]  Antonella Zucchella,et al.  The resilience strategies of SMEs in mature clusters , 2017 .

[16]  D. Mowery,et al.  Strategic alliances and interfirm knowledge transfer , 1996 .

[17]  R. W. Vossen.  Relative Strengths and Weaknesses of Small Firms in Innovation , 1998 .

[18]  S. Rogelberg,et al.  Introduction Understanding and Dealing With Organizational Survey Nonresponse , 2007 .

[19]  Henry Mintzberg.  Patterns in Strategy Formation , 1978, International Studies of Management & Organization.

[20]  Daniel A. Levinthal,et al.  Exploration and Exploitation in Organizational Learning , 2007 .

[21]  Amir Pezeshkan,et al.  Dynamic Capabilities and Organizational Performance: A Meta‐Analytic Evaluation and Extension , 2016 .

[22]  James C. Bezdek,et al.  Pattern Recognition with Fuzzy Objective Function Algorithms , 1981, Advanced Applications in Pattern Recognition.

[23]  David Deakins,et al.  Predicting management development behaviour in New Zealand SMEs , 2011 .

[24]  Aleksey Martynov,et al.  Long-term performance of firms: a review and research agenda , 2016, Journal of Strategy and Management.

[25]  John Kitching,et al.  Small business responses to a major economic downturn: Empirical perspectives from New Zealand and the United Kingdom , 2012 .

[26]  Nerys Fuller-Love,et al.  Management Development in Small Firms , 2006 .

[27]  Erica Seville,et al.  Measuring and Comparing Organisational Resilience in Auckland , 2010 .

[28]  Alan Benson,et al.  The use and impacts of bank support on UK small and medium-sized enterprises , 2014 .

[29]  Malcolm James Beynon,et al.  Organizational Form and Strategic Alignment in a Local Authority: A Preliminary Exploration using Fuzzy Clustering , 2011 .

[30]  D.M. Mount,et al.  An Efficient k-Means Clustering Algorithm: Analysis and Implementation , 2002, IEEE Trans. Pattern Anal. Mach. Intell..

[31]  P. Senge.  THE FIFTH DISCIPLINE , 1997 .

[32]  S. Rogelberg,et al.  Understanding and Dealing With Organizational Survey Nonresponse , 2010 .

[33]  Hermann Frank,et al.  Learning Orientation of SMEs and Its Impact on Firm Performance , 2012 .

[34]  R. Morgan,et al.  Exploitative Learning and Entrepreneurial Orientation Alignment in Emerging Young Firms: Implications for Market and Response Performance , 2007 .

[35]  Václav Kratochvíl,et al.  Belief Functions: Theory and Applications , 2016, Lecture Notes in Computer Science.

[36]  Laura Zapata Cantú,et al.  Generation and transfer of knowledge in IT-related SMEs , 2009, J. Knowl. Manag..

[37]  E. B. Andersen,et al.  Modern factor analysis , 1961 .

[38]  P. Davidsson,et al.  Arriving at the high growth firm , 2003 .

[39]  M. Zollo,et al.  The neuro-scientific foundations of the exploration-exploitation dilemma , 2010 .

[40]  Karl E. Weick,et al.  Managing the unexpected: resilient performance in an age of uncertainty, second edition , 2007 .

[41]  Gregory G. Dess,et al.  Clarifying the Entrepreneurial Orientation Construct and Linking It To Performance , 1996 .

[42]  Gregory G. Dess,et al.  Linking Two Dimensions of Entrepreneurial Orientation to Firm Performance: The Moderating Role of Environment and Industry Life Cycle , 2001 .

[43]  Benson Honig,et al.  The roles of learning orientation and passion for work in the formation of entrepreneurial intention , 2013 .

[44]  Liping Liu.  Special issue on the dempster‐shafer theory of evidence: an introduction , 2003, Int. J. Intell. Syst..

[45]  G. George.  Slack Resources and the Performance of Privately Held Firms , 2005 .

[46]  Isabel Ramos,et al.  The Resilience of a Small Company and the Grounds of Capitalism: Thriving on Non-Knowledgeable Ground , 2016 .

[47]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[48]  H. Keskin.  Market Orientation, Learning Orientation and Innovation Capabilities in SMEs: An extended Model , 2006 .

[49]  Carol S. Dweck,et al.  Motivational processes affecting learning. , 1986 .

[50]  Bridgette Sullivan-Taylor,et al.  Creating resilient SMEs: why one size might not fit all , 2011 .

[51]  Malcolm James Beynon,et al.  SMEs’ export propensity in North Africa: a fuzzy c-means cluster analysis , 2017 .

[52]  Alex Coad,et al.  Growth paths and survival chances: an application of Gambler's Ruin theory , 2013 .

[53]  D. Slevin,et al.  Strategic management of small firms in hostile and benign environments , 1989 .

[54]  Margaret Heffernan,et al.  When the nature of employment matters in the employment relationship: a cluster analysis of psychological contracts and organizational commitment in the non-profit sector , 2012 .

[55]  Yini Lin,et al.  Exploring the role of dynamic capabilities in firm performance under the resource-based view framework , 2014 .

[56]  Erica Seville,et al.  Resilient Organizations : How to Survive, Thrive and Create Opportunities Through Crisis and Change Ed. 1 , 2016 .

[57]  S. López,et al.  Organizational learning as a determining factor in business performance , 2005 .

[58]  D. Vandewalle.  Development and Validation of a Work Domain Goal Orientation Instrument , 1997 .

[59]  G. Lumpkin,et al.  Entrepreneurial Orientation Theory and Research: Reflections on a Needed Construct , 2011 .

[60]  Lisa Dragoni,et al.  Understanding Managerial Development: Integrating Developmental Assignments, Learning Orientation, and Access to Developmental Opportunities in Predicting Managerial Competencies , 2009 .

[61]  Malcolm James Beynon,et al.  A NCaRBS Analysis of SME Intended Innovation: Learning about the Don’t Knows , 2016 .

[62]  H. Torstensson,et al.  Antecedents of organizational resilience in economic crises—an empirical study of Swedish textile and clothing SMEs , 2012 .

[63]  Constance E. Helfat,et al.  Managerial cognitive capabilities and the microfoundations of dynamic capabilities , 2015 .

[64]  Asher Tishler,et al.  How CEOs and TMTs Build Adaptive Capacity in Small Entrepreneurial Firms , 2016 .

[65]  Roderick E. White,et al.  An Organizational Learning Framework : From Intuition to Institution Author ( s ) : , 2007 .

[66]  Yuan Li,et al.  Entrepreneurial Orientation, Organizational Learning, and Performance: Evidence from China , 2009 .

[67]  Eric W. K. Tsang.  Organizational Learning and the Learning Organization: A Dichotomy Between Descriptive and Prescriptive Research , 1997 .

[68]  Paul W. Beamish,et al.  A Resource‐Based Approach to the Study of Export Performance , 2003 .

[69]  Anne Smith,et al.  Improving Survey Response Rates from Chief Executive Officers in Small Firms: The Importance of Social Networks , 2006 .

[70]  Suzanne Wilkinson,et al.  Organisational resilience: Researching the reality of New Zealand organisations. , 2008, Journal of business continuity & emergency planning.

[71]  Roland K. Yeo,et al.  Revisiting the roots of learning organization , 2005 .

[72]  J. Wincent,et al.  Breaking the routines: Entrepreneurial orientation, strategic learning, firm size, and age , 2017 .

[73]  J. MacQueen.  Some methods for classification and analysis of multivariate observations , 1967 .

[74]  Daniel H. Kim.  The Link between individual and organizational learning , 1997 .

[75]  Catherine L. Wang.  Entrepreneurial Orientation, Learning Orientation, and Firm Performance , 2008 .

[76]  P. Chisnall.  Mail and Internet Surveys: The Tailored Design Method , 2007, Journal of Advertising Research.

[77]  David Deakins,et al.  Predicting Management Development and Learning Behaviour in New Zealand SMEs , 2012 .

[78]  James A. Wolff,et al.  Small firm growth as a function of both learning orientation and entrepreneurial orientation , 2015 .

[79]  M. Beynon,et al.  Managerial Networking and Stakeholder Support in Public Service Organizations , 2016, Public Organization Review.

[80]  A. Pettigrew.  Longitudinal Field Research on Change: Theory and Practice , 1990 .

[81]  C. Dweck,et al.  A social-cognitive approach to motivation and personality , 1988 .

[82]  Marjorie A. Lyles,et al.  Handbook of organizational learning and knowledge management , 2006 .

[83]  Banjo Roxas,et al.  Learning, innovation and firm performance: knowledge management in small firms , 2014 .

[84]  George Baltas,et al.  Organisational innovation in SMEs , 2004 .

[85]  David J. Miller,et al.  The Correlates of Entrepreneurship in Three Types of Firms , 1983 .

[86]  James C. Bezdek,et al.  A Convergence Theorem for the Fuzzy ISODATA Clustering Algorithms , 1980, IEEE Transactions on Pattern Analysis and Machine Intelligence.

[87]  N. Venkatraman,et al.  Strategic Orientation of Business Enterprises: The Construct, Dimensionality and Measurement , 2015 .

[88]  Alan Mumford,et al.  Management Development: Strategies for Action , 1991 .

[89]  Giovanni Gavetti,et al.  Cognition and Hierarchy: Rethinking the Microfoundations of Capabilities' Development , 2005, Organ. Sci..

[90]  Jenny Darroch,et al.  Knowledge management, innovation and firm performance , 2005, J. Knowl. Manag..

[91]  Stephen Billett,et al.  Small business pedagogic practices , 2003 .

[92]  Jean-Paul A. Barthès,et al.  Knowledge Management , 1994, Encyclopedia of Database Systems.

[93]  Malcolm J. Beynon,et al.  Evidence-based modelling of hybrid organizational strategies , 2015, Comput. Math. Organ. Theory.

[94]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[95]  Yan Han,et al.  Linking properties of knowledge with innovation performance: the moderate role of absorptive capacity , 2011, J. Knowl. Manag..

[96]  M. Frese,et al.  Human capital and entrepreneurial success: A meta-analytical review , 2011 .

[97]  Pekka Stenholm,et al.  Innovative Behavior as a Moderator of Growth Intentions , 2011 .