Academic journal article Journal of East European Management Studies

Impacts of Entrepreneurs' Stress and Family Members on SMEs' Business Success in Serbian Family-Owned Firms *

Academic journal article Journal of East European Management Studies

Impacts of Entrepreneurs' Stress and Family Members on SMEs' Business Success in Serbian Family-Owned Firms *

Article excerpt

1. Introduction

Today, the concept of entrepreneurship implies the creation and organization of market-oriented business activities whose ultimate goal is to procure financial benefit. The sector of small and medium-sized businesses is classified according to the number of employees: micro enterprises have 9 or fewer employees, small enterprises have 10 to 49 employees and medium enterprises have 50 to 250 employees (Radonjic Petrovic et al. 2010). In Doing Business 2011, the eighth in a series of annual reports published by IFC and the World Bank, Serbian economy ranked 92nd out of 183 economies. The most significant improvement in ranking relates to registering property, which pushed Serbia 59 positions up. In order to found a company, one needs to complete 7 procedures instead of the formerly necessary 11 procedures. The share of SME sector in Serbian economy is 99.8% of the overall number of companies, i.e. the sector provides jobs for 66.7% of the overall number of employees in the country (Radonjic Petrovic et al. 2010). As far as the already founded companies are concerned, the most popular type of company in democratic societies is family-owned business, i.e. the companies whose owners provide employment for at least one member of their family (Motwani et al. 2006). As far as basic parameters on current investments and position of SME sector in Serbia are concerned, the data is much more encouraging than in the previous years, but still remains below EU average. Investments per employee equal EUR 3,400, while EU average amounts to EUR 7,400. In Serbia, investments per company add up to EUR 8,700, while EU average is at EUR 33,400. During 2009, the number of small and medium-sized companies in Serbia (entrepreneurs and micro businesses excluded) equalled 12,343 with a downward trend. More than EUR 318mn was earmarked from Serbian budget for financial and non-financial support to SME sector.

This paper aims to present the circumstances currently surrounding entrepreneurs in Serbian SME sector through theoretical and empirical research, as well as to establish certain psycho-sociological correlations and determinants that influence an SME owner. Stress and the number of family members employed at an SME will be analyzed in detail, since the existing studies on Serbian SME sector do not shed sufficient light on these two factors. Not a single one of these studies focused on stress (caused by high levels of responsibility and/or flexible working hours) and its impact on a firm's business results, or on the number of owner's family members working at the firm and the influence of this fact on the same indicators.

The literature review confirmed that stress has been sufficiently examined and analyzed. Nevertheless, the influence of the number of owner's family members working at an SME, psychological profile of the owner and decision-making processes, offer room for additional analysis.

By putting an SME owner in the center of analysis, it is possible to reach certain conclusions, regarding the areas that have been researched to a smaller or greater extent, using theoretical and empirical approach. This mostly relates to an owner's perception of stress, as a factor that could be additionally analyzed in the context of CEE business environment.

Following the findings gathered from the literature review, based on the experience of numerous authors from relevant journals, the authors of this paper identified a gap that should be researched empirically. The gap includes two factors that can be researched using psycho-sociological considerations and presented with adequate psychometric tests (life event scales, levels of influence etc.).

Methodological approach of this paper offers, along with the identified factors, a theoretical comparison of these factors and their influence on family and nonfamily (other) businesses. In other words, the extent to which a certain factor is relevant or irrelevant in a non-family business, and the negative impact of a factor irrelevant for non-family businesses on a family-owned enterprise. …

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