Uncertainty, Entrepreneurial Orientation and the Use of Agreement-Only Alliances: Implications for Small Firm Governance

Abstract

This study proposes that fundamental differences in how owners and managers of small- to medium-sized enterprises view the uncertainty of their environments and their propensities towards risky and proactive behaviour significantly influence their decisions regarding whether to adjust their overall governance in the form of equity-based or agreement-based alliances. The study sets forth tests using a model with data from 686 SMEs in Eastern Australia, Costa Rica and Norway. The results suggest that how managers perceive the uncertainty in their environments and their orientations towards risky and proactive behaviour influence their choice of alliance structures but do so in differing and interesting ways across countries.