Resource organization and firm performance: How entrepreneurial orientation and management accounting influence the profitability of growing and non-growing SMEs

Abstract

Purpose

The purpose of this paper is to examine how entrepreneurial orientation (EO) and the use of management accounting practices (MAPs) in decision making affects the profitability of small- and medium-sized enterprises (SMEs), and also to analyze the extent to which EO and the use of MAPs affects profitability differently in growing and non-growing SMEs.

Design/methodology/approach

The paper employs an empirical investigation which is based on a sample of 153 Swedish manufacturing SMEs. The data are analyzed by two- and three-way interaction regressions.

Findings

EO and MAPs have a positive effect on profitability in non-growing SMEs, but the combined effect of EO and MAPs has no additional effect. However, for growing SMEs, high usage of MAPs in decision making is a prerequisite for EO to influence profitability.

Originality/value

This study is the first to use the resource-based view to examine the relationship between two dimensions of resource organization and SME profitability. EO is used as a proxy for how resources are organized in order to identify opportunities, and MAPs are used as a proxy for how efficiently resources are organized.

Citation

Andersén, J. and Samuelsson, J. (2016), "Resource organization and firm performance: How entrepreneurial orientation and management accounting influence the profitability of growing and non-growing SMEs", International Journal of Entrepreneurial Behavior & Research, Vol. 22 No. 4, pp. 466-484. https://doi.org/10.1108/IJEBR-11-2015-0250