The Network of Relationships between the Economic Environment and the Entrepreneurial Culture in Small Firms

The cultural evolution processes of small firms arestrongly influenced by the type of relationship they establish with theeconomic environment. A distinction between objective factors external to thefirm (economic environment and network relationships between the firm and themarket) and subjective factors internal to the firm (characteristics of thehuman resource and openness to change) is made. The relevance of differentfactors on the formation of entrepreneurial culture is analyzed through anexplorative approach. The aspects of the relations between the firms and themarket that influence the entrepreneurial culture are: the size of the firm(revenue, number of employees), industry characteristics (territorialconcentration, proximity to the final market), market conditions (marketsserved), and the export process (intensity of exporting and type of channelused). A sample of 104 Italian small firms is analyzed using thirteenvariables.In the sample, a trade-off emerged between tendencies tohomologous behaviors and the spirit of initiative. The findings suggest that three factors influence the entrepreneurialculture and learning process of smaller firms: (1) there is a connectionbetween the characteristics of the industry, where the small firm operates, andthe prevalent entrepreneurial culture in the same industry; (2) a territorialconcentration of small competing firms tends, in the long run, to homogenizeentrepreneurial culture towards one prevalent model; and (3) the exportationprocesses of the firm do not influence culture and learning if they occurthrough indirect exporting. Recommendations are made for new entrepreneurs who can use the implicationsof this study's results when determining the viability of new ventures. Also,for firms in foreign markets, the use of learning opportunities depends on thepresence of forms of export in which the firms is involved. It is suggestedthat further empirical research is necessary to highlight such guidelines anddirect economic policy decisions with more accuracy. (CBS)