The impact of effectuation on the buying decisions of small firms

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Abstract

Purpose – This study considers the effect of effectuation logic on the buying intentions of small firm owner-managers.

Design/methodology/approach – Literature relating to organisational buying, marketing and personal selling and entrepreneurial decision making was synthesised.

Findings – This paper presents a conceptual model based on propositions relating to how effectuation logic may explain the predilection of small firm owner-managers to select trusted suppliers from within personal and business networks, and to engage on flexible terms. It suggests that supplier relationship decisions made using effectuation logic may enable wider choice of suppliers than the formal processes of large firms.

Research limitations/implications – The findings were developed from a narrative review of literature and are yet to be empirically tested.

Originality/value – By synthesising research findings on small firm buyer behaviour, the IMP Interaction approach and effectuation, it has been possible to develop a predictive model representing buyer-seller relationships in the context of small firms which suggests that owner-managers select suppliers in line with the principles of effectuation means and effectuation affordable loss.
Original languageEnglish
Pages (from-to)444-459
Number of pages16
JournalIMP Journal
Volume12
Issue number3
DOIs
Publication statusPublished - 31 Dec 2018

Keywords

  • Effectuation
  • Affordable loss
  • small firms
  • Buyer-supplier relationship
  • Networking

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