This paper analyzes small firm performance in relation to efficiency and flexibility strategies. Using configuration theory, the authors propose that small firms that pursue efficiency strategies or flexibility strategies outperform those that attempt to pursue both. Additionally, size is used as a configurational attribute to develop competing hypotheses on whether efficiency strategies or flexibility strategies are better suited for small firm performance. In two samples of 200 and 144 privately-held small firms, firms that mixed efficiency and flexibility strategies significantly underperformed. No significant performance differences were found between firms utilizing only efficiency strategies and those utilizing only flexibility strategies.

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This study investigated the relationship between cash conversion cycle and levels of liquidity, invested capital, and performance in small firms over time. In a sample of 879 small U.S. manufacturing firms and 833 small U.S. retail firms, cash conversion cycle was found to be significantly related to all three of these aspects. Firms with more efficient cash conversion cycles were more liquid, required less debt and equity financing, and had higher returns. The results also indicate that small firm owners/managers may be reactive in managing cash conversion cycle. The study highlights the importance of cash conversion cycle as a proactive management tool for small firm owners.RéSUMé. Cette étude examine le lien entre le cycle d'exploitation et les niveaux de liquidité, le capital investi, et le rendement chez les petites entreprises au fil du temps. Les résultats obtenus à partir d'un échantillon de 879 petites entreprises manufacturières américaines et 833 petites entreprises américaines de vente au détail révèlent que le cycle d'exploitation est lié de façon significative à ces trois aspects. Les entreprises avec des cycles d'exploitation plus courts avaient plus de liquidités, nécessitaient moins de financement par emprunt et par actions, et avaient des rendements supérieurs. Les résultats révèlent également que les propriétaires/gestionnaires de petites entreprises ont peut-être une approche réactive à la gestion du cycle d'exploitation. L'étude souligne l'importance du cycle d'exploitation comme outil de gestion proactive pour les propriétaires de petites entreprises.

This case study was written to illustrate how a for-profit company can build sustainable competitive advantages via principled entrepreneurship. The case follows a recent college graduate's journey at a mission-driven coffee importer and asks students to analyze how he developed strategic initiatives that align with the company's core values. The case leaves students with three main perspectives: 1) Pursuit of the common good is not limited to not-for-profit firms; 2) Entrepreneurial firms do not need to sacrifice their core values in order to compete; and 3) Core values should be considered in commonly-used analysis frameworks such as Porter's Five Forces.