High performance: ownership and decision‐making in SMEs

Abstract

Purpose

To date there is a dearth of research on strategic decision‐making in manufacturing small and medium sized firms. This research paper focuses on the key drivers of decision‐making and organisational performance: ownership, decision‐making (type and level) and employee deployment. These drivers are defined and operationalised.

Design/methodology/approach

The validity of the constructs used and their relevance was tested through the qualitative phase of the research – in‐depth interviews with chief executives and employer representative bodies. The survey instrument was also pilot tested.

Findings

The findings indicate that the sample can be divided into performance leaders and laggards. Over 75 per cent of the leaders are independently owned and over 66 per cent of the laggards are subsidiary firms. Accordingly, ownership is a key factor in overall performance. This is confirmed by the degree of profitability of both classifications.

Practical implications

The practical implications of the study are outlined in the paper. Chief executives are encouraged to focus on the aspects of ownership, decision making, and employee deployment that are associated with enhanced performance.

Originality/value

This study focuses on decision making and employee deployment according to ownership and overall performance – factors hitherto under researched in SMEs.

Citation

O'Regan, N., Sims, M. and Ghobadian, A. (2005), "High performance: ownership and decision‐making in SMEs", Management Decision, Vol. 43 No. 3, pp. 382-396. https://doi.org/10.1108/00251740510589760