The Alternative to Assuming 'Rational' Use of Financial Information within Small Firms
Since emerging as a separate domain, research concerned with financial management in small firms has proceeded on a foundation of assumptions, primarily influenced by economics, which do not appear to be in accord with reality. Two fundamental assumptions are reviewed in this paper and the validity of each is questioned. These are that the small firm owner/manager is a rational economic decision maker and must have access to financial information to properly engage in decision making activities. Alternative interpretations, associated with the purposive action assumptions of the Austrian school of economic thought, are proposed as a more appropriate foundation for the development of theories of small firm financial management.
Volume (Year): 2 (1993)
Issue (Month): 2 (Spring)
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- Kaish, Stanley & Gilad, Benjamin, 1991. "Characteristics of opportunities search of entrepreneurs versus executives: Sources, interests, general alertness," Journal of Business Venturing, Elsevier, vol. 6(1), pages 45-61, January.
- Cheah, Hock-Beng, 1990. "Schumpeterian and Austrian entrepreneurship: Unity within duality," Journal of Business Venturing, Elsevier, vol. 5(6), pages 341-347, November.
- Smith, Ken G. & Gannon, Martin J. & Grimm, Curtis & Mitchell, Terence R., 1988. "Decision making behavior in smaller entrepreneurial and larger professionally managed firms," Journal of Business Venturing, Elsevier, vol. 3(3), pages 223-232.
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