Where Everybody Knows Your Name: Extraorganizational Clan-Building as Small Firm Strategy for Home Field Advantage


  • Reginald A. Litz University of Manitoba
  • Alice C. Stewart Ohio State University


Small firms are comparatively resource disadvantaged when it comes to competing against scale-oriented competitors. However, one area where small firms may have a differential advantage is in building and nurturing highly personalized customer relationships. Drawing on extant work in external market, internal hierarchical, and internal clan coordinating mechanisms, we conceptualize an additional coordinating  mechanism  the extraorganizational clan, and hypothesize its relationship to small firm performance. We test our hypothesis, linking extraorganizational clan-building and firm performance, on a sample of over 300 small retail firms. Our findings show that selected aspects of clan-building behaviors have a positive effect on small firm performance. We conclude by reflecting on what our findings suggest for sustainable small firm competitive advantage.


Aldrich, H. & Auster, E. (1990). Even dwarfs started small: Liabilities of age and size and their strategic implications. In B. Staw and L. Cummings (Eds.), The evolution and adaptation of organizations. Greenwich, CT: JAi Press Inc.

Alvesson, M. & Lindkvist, L. (1993). Transaction costs, clans, and corporate cu lture. Journal of Management Stud ies. 30(3), 427-452.

Barnard, C. (1938). The functions of the executive. Cambridge, MA: Harvard University Press.

Barney, J. (1991 ). Firm resources and sustained competitive advantage. Journal of Management. 17(I ), 99-120.

Bender, T. (1978). Community and social change in America. Baltimore: The Johns Hopkins University Press.

Burt, R. S. (1997). The contingent value of social capital. Adm in istrative Science Quarterly, 42, 339-365.

Castrogiovanni, G. J. ( 1 99 1 ). Environmental munificence: A theoretical assessment. Academy Of Management Review. 16(3), 542-565.

Dillman, D. A. (1978). Mail and telephone surveys: The total design method. New York: John Wiley & Sons.

Ehrenfeld, T. (1995). The demise of mom and pop? Inc .. 1 7(1), 46-48.

Freeman, R. E. (1984). Strategic management: A stakeholder a pproach. Boston, Pitman Publ ishing Inc.

Glass, G. & Hopkins, K. (1984). Statistical methods in education and osvchologv.

Englewood Cliffs, NJ: Prentice-Hall, Inc.

Goodwin, C. & Gremler, D. ( 1996). Friendship over the counter. Advances in Services Marketing an d Management. 5, 247-282.

Gouldner, A. ( 1960). The norm of reciprocity: A preliminary statement. American Sociological Review, 25(2), 161-178.

Granovetter, M. (1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology. 91(3), 481 -510.

Guadagnoli, E. & Velicer, W. ( 1988). Relation of sample size to stability of component patterns. Psychological Bulletin. 103, 265-275.

Hirsch, P. ( 1975). Organizational effectiveness and the institutional environment. Administrative Science Quarterly. 20(3), 327-344.

Kaiser, H. (1960). The application of electronic computers to factor analysis. Educational and Psychological Measurement. 20, 141-151.

Kleinbaum, D. G., Kupper,L. & Muller, K. (1988). Applied regression analysis and other multivariable methods. Boston: PWS-KENT Publishing Company.

Mason, J. B., Mayer, M. & Ezell, H. (1988). Retailing (Third Edition). Plano, TX: Business Publications, Inc.

Miller, C. (September 28, 1992). Big chains battle for market share in home improvement. Marketing News. 26(20), I , I 0-11.

Nel, D. & Pitt, L. (l993). Service quality in a retail environment: Closing the gaps. Journal of General Management, 18(3), 37-56.

Ouchi, W. (l980). Markets, bureaucracies, and clans. Administrative Science Quarterly, 25, 129-141.

Parasuraman, A., Zeithaml, V. & Berry, L. (1985). A conceptual model of service quality and its implication for future research. Journal of Marketing, 49, (Fall), 41-50.

Parasuraman, A., Zeithaml, V. & Berry, L. (1988). SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retail ing. 64( I ), 12-40.

Parsons, T. (l960). Structure and process in modem societies. Glencoe, IL: The Free Press. Pedhazur, E. (l982). Multiple regression in behavioral research: Explanation and prediction. New York: Holt, Rinehart, and Winston.

Schnoor, S. ( 1998). Forced smile demeans staff. Winnipeg Free Press. (September 16).

Singh, J. (1986). Performance, slack, and risk-taking in organizational decision making. Academy of Management Journal. 29(3), 562-585.

Stevens, J. (1992). Appl ied multivariate statistics for the social sciences. Hillsdale, NJ: Lawrence Erlbaum Associates, Publishers.

Thompson, J., Smith, H. & Hood, J. (1993). Charitable contributions by small businesses. Journal of Small Business Management. 31, 35-51.

Weber, M. (1964). The theory of social and economic organization. trans. T. Parsons. New York: The Free Press.

Welsh, J. A. & White, J. (1981). A small business is not a little big business. Harvard Business Review, 59(4), 18-32.

Williamson, 0. (l975). Markets and hierarchies: analysis and antitrust im plications. New York: Free Press.

Williamson, 0. (1985). The economic institutions of capitalism. New York: The Free Press. Williamson, 0. & Ouchi, W. (1981). The markets and hierarchies program of research: Origins, implications, prospects. In W. Joyce and A. Van de Ven (eds.) Organizational design. New York: Wiley.







How to Cite

Where Everybody Knows Your Name: Extraorganizational Clan-Building as Small Firm Strategy for Home Field Advantage. (2000). Journal of Small Business Strategy (archive Only), 11(1), 1-13. https://libjournals.mtsu.edu/index.php/jsbs/article/view/436