Abstract:
Managers must tackle a multitude of challenges simultaneously. However, the socio-cultural demands of running a business in the 21st Century have established even higher standards for managerial behavior and firm performance. The strategic management literature is filled with studies of entrepreneurial companies and their efforts to achieve growth and profitability. However, the focus on archetypal traits of entrepreneurship (i.e., risk-taking, innovation, and proactivity) and their idealized outcomes has created a gap in the literature regarding firm efforts to establish long-term commitments, build trusting relationships, and enhance collective welfare – all of which is more important now than ever before. As scholars and practitioners consistently raise expectations for for-profit businesses, exploring strategic behaviors that enable and promote prosocial business practices is imperative. Building on Small Business Orientation (SBO; Runyan & Covin, 2019), I executed four studies involving 944 participants to develop and validate a scale measure for SBO. Results demonstrate that SBO is a unique addition to the management literature and that it is linked to higher social, environmental, and financial performance. Supplementary analyses revealed that SBO is generally a better indicator of these outcomes than neighboring constructs, such as Entrepreneurial Orientation, Sustainability Orientation, or Stakeholder Orientation. SBO is predictive of joining and becoming involved in civic organizations. I defend SBO as a unique indicator of prosocial firm behaviors, both theoretically and empirically, and discuss at length the theoretical and practical implications of embracing an approach to strategic management rooted in idealized small business principles.
