The impact of owner/managers' mentality on financial performance of SMEs in Japan

Abstract

Purpose The purpose of this research is to empirically test the impact of owner/managers' mentality on enterprise performance. Design/methodology/approach A mail questionnaire survey was conducted on a sample of SMEs in Japan. The questionnaire was mailed to the chief executive of each of the 1,523 firms selected for the survey. The total number of usable responses received was 367, giving a response rate of 24.1 per cent. Findings The overall results of the study show that when owner/managers of SMEs are more entrepreneurial minded in the introductory and decline stages of growth, their performance tends to be higher, and the same is true for the growth and maturity stages when they are more administrative minded. Research limitations/implications Since this research was unique in several respects and the survey was confined to only 367 SMEs in a single country it would be useful to replicate it using larger samples under different country settings. Practical implications The research reveals that an enterprise will be better off at the introductory stage if its managers become more entrepreneurial minded through factors such as ambition, enterprising spirit, intuition and innovation. However, as the firm grows managers need to devote more attention to administration. Originality/value It provides far reaching implications for managers for achieving higher performance in different stages of a firm's growth.

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