Risk-takers most successful small-scale entrepreneurs

Entrepreneurs who are quick to think along new lines, invest in new technology, and who dare to take risks are more successful than more traditional small-scale business people. This was found in a study carried out among 14 manufacturing companies mainly in the Mälaren Valley in central Sweden.

The focus of the study is on the so-called strategic resources of the companies and the purpose is to develop a model that identifies competitive advantages in small and medium-sized manufacturing companies. A strategic resource is a resource that generates long-term profitability in relation to competitors, such as some unique competence among the staff or well-developed customer relations.

Researcher Jim Andersén at Mälardalen University studied 14 small and medium-sized manufacturing companies. Two of these companies turned very high profits over a continuous period of nearly ten years. What characterized the behavior of these companies? And why haven’t their competitors followed the example of these profitable businesses? These are the central questions, addressed in the doctoral dissertation at the School of Economics at Mälardalen University.

The dissertation shows that what distinguishes the profitable companies, among other things, are the motives and aspirations of the management-­in other words, a more entrepreneurial form of behavior. For example, these company leaders focus on rejuvenation and innovation while other leaders in the same business stress stability and security. Furthermore, leaders of the highly profitable companies have a more dynamic view of both their own resources and those around them. Whereas other company leaders feel governed by the business cycle and by their customers, the more profitable companies are proactive in terms of creativity and making use of their resources.