Entrepreneurship and Strategic Performance in a Time of Crisis: An Analysis of the Business Behavior of Small and Medium Businesses

Entrepreneurship and Strategic Performance in a Time of Crisis: An Analysis of the Business Behavior of Small and Medium Businesses

Joao Conrado de Amorim Carvalho (Unidade de Ensino Superior Dom Bosco, Brazil) and Carla Roberta Gomes Muniz (FORUM (Centro de Formação, Estudos e Pesquisas), Brazil)
DOI: 10.4018/978-1-5225-7888-8.ch006

Abstract

This chapter researches the behavior and entrepreneurial capacities of entrepreneurs in the modality of small and medium businesses to better understand their development according to the current theoretical interpretations and based on a sectorial analysis of companies of these sizes in the State of Maranhão. The research directs its attention to the factors that influence the entrepreneurial action and the strategic performance, analyzing the business performance in times of crisis. The research method was defined based on the sector analysis, substantiated by the literature review. The results indicate that the size of the company is irrelevant both for taking strategic actions and for rapidity in undertaking growth actions. It is concluded that SMBs achieve greater swiftness in growth actions and undertake joint actions when they have technological capabilities.
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Background

Entrepreneurship: Origin and Concept

The term “entrepreneurship” comes from the English language, represented by the word entrepreneurship, which in turn comes from the French entrepreneur, meaning “one who is between or intermediary”, indicating position, degree, relation, state, quality, skill or ability (Barreto, 1998 apud Uriarte, 2000).

The visionary Richard Cantillan, in the eighteenth century, noting the failure of a French entrepreneur who tried to increase the value of his company's shares above the market value of his assets, realized that the entrepreneur is the person who, even in the face of a crisis, can articulate new ideas and have the courage to take risks. The basis of this theory translates into the entrepreneurial attitude of the individual who continually seeks the evolution of his business (Uriarte, 2000).

The concept of entrepreneurship brings as main theories: the economic theory (known as Schumpeterian) and the behavioral theory. Economic theory has as precursors the first economists to realize the importance of entrepreneurship and the exigibility to understand the role of the entrepreneur and the impact of his action in the economy. Three important authors stand out in this theory: Richard Cantillon, Jean Baptiste Say and Joseph Schumpeter. As a theoretical framework of entrepreneurship, Zarpellon presents Douglas North Institutional Economic Theory. This theory is linked to the two main currents of study of entrepreneurship: economist and behaviorist. For this author, the economist theorists “associated the entrepreneur with innovation” and the behaviorists, emphasized “attitudinal aspects such as creativity and intuition” (Zarpellon, 2010, p.49).

Behavioral theory, in turn, has as one of the first scholars Max Weber, theorist who identified the value system as a fundamental component for the explanation of entrepreneurial behavior. In this understanding, the entrepreneur was seen as a source of formal authority, with the ability to transform what is obsolete into something modern / new. Schumpeter corroborates that “the entrepreneur is the essence of innovation in the world, rendering obsolete the old ways of doing business” (Chiavenato, 2007, p. 5).

Entrepreneurship, therefore, focused on knowledge and economic development of the business and the local market contributes to the better performance of administrative activities, through the promotion of new ideas, thoughts and transformative attitudes, encouraging cost reduction and increased productivity, as well as the longevity of the business.

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