The Role of the Entrepreneur in Firm Survival and Development

Small businesses are important contributors to the economic vitality. Nevertheless failure continues to be an important issue affecting small firms especially within their first years (Carter and van Auken 2006, Mayr et al. 2016, Thornhill and Amit 2003). However, it does not necessarily mean that a financial crisis is leading to failure of a firm as lessons learned can translate into competent decision making (Headd 2003). A crisis may offer the chance to restart and restructure a faulty system (Carmeli and Schaubroeck 2008). A certain level of failure can thus be part of a creative self-destruction phenomenon, which forms the basis for innovation and economic development (Timmons and Spinelli 2007). Since SMEs face resource constraints it is more difficult for them to cope with and overcome a crisis (Mayr et al. 2016, Thornhill and Amit 2003). Resources are particularly in SMEs very flexible and entrepreneurial because the companies are structured less formal. Furthermore the operative business is often directly influenced by the entrepreneur (Alvarez and Busenitz 2001, Analoui and Karami 2003). Therefore, the entrepreneur is crucial for organizational development and success (Brüderl et al. 1992), and the quality of human capital is an important driver for firm survival and high performance (Boden and Nucci 2000, Madrid-Guijarro et al. 2011, Schutjens and Wever 2000)