Motivation of small business managers affects firm growth

Jun 05, 2008

Economic theory often assumes that firm growth is automatic, given the existence of growth opportunities in the marketplace. However, a new study published in Entrepreneurship Theory and Practice reveals that the motivation of small business managers has a long-term effect on the actual future growth of the firm.

Researchers gathered information from two different Swedish samples of small firms. The managing director was asked about employment and sales growth as well as sales and related motivation. The researchers then used regression analysis to investigate the data.

The study found that motivation was a relevant predictor of firm growth. The results provide evidence showing support for the idea that motivations of managers affect important firm outcomes. Managers vary in their motivations to grow firms, and those motivations affect the growth achieved.

Growth motivation is partly affected by previous outcomes but remains relatively stable over time. This is an important result, as motivations have to be stable to be good predictors of behavior. Hence, growth motives are effective predictors of firm growth when they are stable over time.

Source: Wiley

Explore further: Best of Last Week – Evidence of quark-gluon interactions, new portable device hack and why we may never live forever

add to favorites email to friend print save as pdf

Related Stories

Study identifies upside to financial innovations

6 hours ago

Financial innovations can make or break an economy. While the negative impact of financial innovation has been extensively covered, a new study of financial innovations before and during the last financial crisis indicates ...

Recommended for you

Orphaned children can do just as well in institutions

3 hours ago

The removal of institutions or group homes will not lead to better child well-being and could even worsen outcomes for some orphaned and separated children, according to new findings from a three-year study across five low- ...

Bronze Age wine cellar found

3 hours ago

A Bronze Age palace excavation reveals an ancient wine cellar, according to a study published August 27, 2014 in the open-access journal PLOS ONE by Andrew Koh from Brandeis University and colleagues.

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

superhuman
2 / 5 (1) Jun 05, 2008
>This is an important result

Yes this is an extremely important result, and very unexpected! Who could have known that motivation of business managers can affect firm growth!