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Abstract
The aim of the research was to test empirically the relationships among personal values of owner/managers, the strategies they adopt in operating their businesses, and the performance of their businesses. The research fills gaps in empirical research on strategy and strategic management in small firms. Unlike in existing research, a holistic approach to strategy is adopted. Data for the research were obtained from a mail survey of small furniture manufacturers. The sample was divided into clusters using Ward's minimum variance method.
Differences among the clusters with respect to personal values, strategies, and performance were examined by, multivariate analyses of variance using deviation contrasts. It was found that certain profiles of personal values correspond with certain strategic orientations. In conformity with previous research, an association between business strategy and enterprise performance was confirmed. Recommendations are made in the areas of government policy delivery, and financial and management assistance to small firms.
In many countries, the small enterprise sector is a major source of employment, revenue generation, innovation, and technological advancement. In some industries, small enterprises are more effective at servicing customers than large firms. The importance of the small enterprise sector to economic development cannot be overemphasized. In Australia, as in many countries, the level of economic dependence on small and medium enterprises has increased in recent years as a result of increasing layoffs in the public sector and the shedding of employees by large firms. This has led the government to place emphasis on enterprise assistance programs and policies. However, the effectiveness of these policies and programs are dependent on a thorough understanding of owner/managers and how they operate. Of particular importance are owner/ managers' personality characteristics.
The literature in this area suggests that owner/managers' personalities, in particular their values and goals, are indistinguishable from the goals of their businesses (O'Farrell and Hitchins 1988; Bamberger 1983). It is also suggested that owner/managers' personal values influence the strategies they adopt in operating their businesses and, ultimately, the performance of their businesses (Thompson and Strickland 1986). However, these propositions lack empirical support. Existing research tends to be qualitative, based on a few case studies. These studies examine a number of functional activities without assessing their coherence as a strategy. There is also a tendency...