Financial performance enhancing strategies: Small family firms vs. small non-family firms

  • Raj V. Mahto The University of New Mexico
  • Saurabh Ahluwalia The University of New Mexico
  • Dmitry Khanin Nazarabayev University’s Graduate School of Business
  • Steven T Walsh The University of New Mexico

Abstract

Advancing prior research on the key determinants of firm financial performance, we identify the internal performance-enhancing strategies (i.e., raising employee commitment and investment in employee training) and external performance-enhancing strategies (i.e., boosting the learning orientation and adopting an emphasis on marketing). We argue that these performance-enhancing strategies will be positively associated with sales and profits, for both small family firms and small non-family firms, yet the effect will be stronger for family firms that often lag behind in these management domains. We test our hypotheses on a sample including 36 family firms and 28 non-family firms. While some hypotheses received support (e.g., investment in employee training was positively associated with sales in family firms), other hypotheses did not receive support (e.g., employee commitment was not associated with sales in family firms, and emphasis on marketing was negatively associated with sales in family firms). We discuss the theoretical and practical implications of our study and outline directions for future research on firm financial performance.

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Author Biographies

Raj V. Mahto, The University of New Mexico

Associate Professor

FITE Department

Saurabh Ahluwalia, The University of New Mexico

Dr. Saurabh Ahluwalia is an assistant professor of entrepreneurial finance in Anderson School of Management at the University of New Mexico. He obtained his PhD in finance from the Anderson School of Management at the University of California Los Angeles. His research has been published or forthcoming in Journal of Business Ethics, Technological Forecasting & Social Change, and Journal of Small Business Strategy.

Dmitry Khanin, Nazarabayev University’s Graduate School of Business

Dr. Dmitry Khanin is an associate professor of Management at Nazarabayev University’s Graduate School of Business. He obtained his PhD from the University of Maryland in Strategic Management.  He has published in Academy of Management Journal, Organization Science, Family Business Review, Strategic Entrepreneurship Journal and others.

Steven T Walsh, The University of New Mexico

Dr. Steven T. Walsh is a Distinguished Professor of Technological Entrepreneurship in Anderson School of Management at the University of New Mexico. He is an associate editor of Technological Forecasting & Social Change and Journal of Small Business Management.  Previously, he was an assocaite editor for Technovation. His research has appeared in top technological entrepreneurship journals such as Technovation, Technological Forecasting & Social Change, and others.

Published
2018-11-06
How to Cite
MAHTO, Raj V. et al. Financial performance enhancing strategies: Small family firms vs. small non-family firms. Journal of Small Business Strategy, [S.l.], v. 28, n. 3, p. 18-30, nov. 2018. ISSN 2380-1751. Available at: <https://libjournals.mtsu.edu/index.php/jsbs/article/view/1007>. Date accessed: 13 dec. 2018.
Section
Articles

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