The perceived importance of external ties and the performance of small owner-managed firms

Abstract

The effects of perceived importance of external ties, a dimension of tie strength, on the performance of small owner-managed firms were investigated using data from a survey of the owners of small owner-managed firms in Scotland and New Zealand. Ties rated as highly important were found to promote growth in sales. In contrast, weak-in-importance ties were found to suppress growth in sales. The results support the core competence perspective on the configuration of external ties, suggesting that firms should focus on important external ties that contribute to their core competencies.

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