MANAGING LEVERS OF ORGANIZATION DESIGN TO ENHANCE SMES’ LONGEVITY: An Agenda for Further Research

SME success is often primarily linked to the personal traits of entrepreneurs and vice versa. In terms of SME failure, most of the literature, research and popular press, seems focused on individual factors, such as those related to the owner/entrepreneur’s profile and behavior, or contextual factors like those associated with relationships between the firm and its own stakeholders, especially on the competitive and financial systems arenas. That said, some scholars have emphasized the relevance of organizational design for SME longevity, though there seems to be little inter-relating of the two sides. This paper examines the relationships between owner/entrepreneur attributes and organization design and infrastructure in an attempt to gain a clearer understand of SME longevity and failure. It examines critical issues in appropriateness and comprehensiveness of organizational design, control and decision-making flexibility and risk perception. It concludes that these linkages are not well understood and may lead to unhelpful misdiagnoses of small business failure. It consequently suggests a research agenda based on a structural analysis and modeling using the system dynamics approach.