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Introduction
Small and medium enterprises (SMEs) play a very important role in the economies of both developed and developing countries, representing well over 90 per cent of all manufacturing enterprises in the world. This role, however, depends on the financial performance of each enterprise, especially in relation to job creation, technological advancement, and revenue generation ([25] Neck, 1987). Financial performance, in turn, depends on numerous factors that are both internal and external to the enterprise. Among them, the abilities and other personality characteristics of those who manage the enterprise are universally regarded as one of the most powerful set of factors having either positive or negative impact on its financial performance and ultimate success. Accordingly, many studies have examined how different personality characteristics of owner/managers in SMEs affect the financial performance of their enterprises ([19] Ibrahim and Goodwin, 1986; [3] Beam and Thomas, 1989; [20] Kotey and Meredith, 1997). However, although the mentality of owner/managers is an important aspect of their personality characteristics no prior study has made any attempt to examine its possible impact on the financial performance of their businesses. Moreover, even the studies that focused on the relationship between personality characteristics and financial performance have confined their investigations to a single period of time. Nevertheless, the literature shows that usually financial performance of enterprises varies dramatically during different stages of growth ([29] Penrose, 1963). Similarly, the impact of personality characteristics or mentality styles of owner/managers on financial performance of their enterprises may also vary from stage to stage depending on the nature of those factors. Therefore, this study attempts to examine whether there exists a relationship between the mentality of owner/managers and the financial performance of their enterprises and, if so, whether it varies between different growth stages of an enterprise. The study is based on a questionnaire survey conducted on a sample of manufacturing SMEs in Sri Lanka.
In attempting to examine the above relationship, this study concentrates on two distinctive mentality styles of owner/managers: entrepreneurial mentality and administrative mentality. Since no similar research has been reported in the past this study takes its own independent approach and presents its analysis and findings as a novel addition to the small business literature. Moreover, the findings of this study can be useful...