The condition of smallness: how what it means to be small deters firms from getting bigger

  • Alistair R. Anderson, Farid Ullah
  • Management Decision, March 2014, Emerald
  • DOI: 10.1108/md-10-2012-0734

What is it about?

The SME literature is dominated by a growth perspective, but most small firms do not grow. We examine some of the reasons for firms staying small.

Why is it important?

Given that most small firms stay small and don't grow, it is odd that the literature seems to focus on growth. In fact growing firms are exceptional. But this not to say that small firms are not important, far from it! The typical firm may not employ many staff, but if we consider the sector as a whole, these small firms make s very significant to contribution to employment, taxes and local development. These were the reasons that prompted Farid and I to look at these data about small firms owners' attitudes and views. Their independence stood them in good stead for coping, but also acts to deter growth. We argue this is a unique feature and worth investigating to get to know more about small firms. Alistair


Distinguished Professor Alistair Anderson
Lancaster University

Small firms and their owners are fascinating. They take on risk and many are entrepreneurial, albeit in a modest fashion. They are often embedded in the community in which they operate and many owners have a strong sense of community responsibility. We know that some struggle with the burdens of bureaucracy and they don't have much time, physically or emotionally for form filling. Yet when I talk to them I hear stories of satisfaction, of pride and of achievement. All this makes me wonder about how good a conceptual fit are theories and theoretical tools that are often intended for large firms. Many I know have a very entrepreneurial orientation; but I don't think I could measure it using our typical academic tool kit. Perhaps it is time to see small firms as something very different from a large firm?

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The following have contributed to this page: Distinguished Professor Alistair Anderson