Entrepreneurial Characteristics,Strategic Choice and Small Business Performance

Notions of entrepreneurship are central to accepted explanations of small business performance. The majority of studies exploring the growth implications of different entrepreneurial characteristics tend, however, to be partial or lack any formal structural framework. This leads to uncertainty concerning the mechanisms by which different entrepreneurial characteristics influence firm performance and the size of any effect.This paper develops a structural model of the relationships between entrepreneurial characteristics, firms' strategic choices and performance. The determinants of firms' strategic choices are then subjected to extensive empirical analysis. The results suggest a marked difference between the determinants of strategic initiatives related to management and control and those related to products, markets or managerial systems. Firms' propensity to make management and control initiatives depends almost exclusively on the characteristics of the entrepreneur. Firms' propensity to undertake initiatives related to new products, markets or management systems depends partially on the background of the entrepreneur but also reflects the firm's strategic targets, its market position and the likely operating environment.