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Financial Information for Decision Making: An Alternative Small Firm Perspective

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  • Brian Gibson

    (University of Newcastle)

Abstract

Successful decision making in small firms requires the availability of financial information and its deployment in a variety of financial management techniques. This prescriptive dictate and the techniques and practices it advocates have developed from, and are supported by, a framework of assumptions derived from mainstream neoclassical economics. Substantial relaxation of these assumptions is often necessary to provide plausible explanations for many observed practices such as the irregular use of financial information in small firm decision contexts. Rather than seeking to justify these departures within the extant framework, understanding may be better accommodated by adopting a different perspective. Concerned primarily with the role of entrepreneurs in the market process, the Austrian school of economic thought appears well placed to provide an appropriate framework for the study of small firms. Financial information in this alternative framework is likely to have a different, less prescriptive, role in decision making.

Suggested Citation

  • Brian Gibson, 1992. "Financial Information for Decision Making: An Alternative Small Firm Perspective," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 1(3), pages 221-232, Spring.
    • Handle: RePEc:pep:journl:v:1:y:1992:i:3:p:221-232
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    References listed on IDEAS

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    1. Lavoie, Don, 1987. "The accounting of interpretations and the interpretation of accounts: The communicative function of "the language of business"," Accounting, Organizations and Society, Elsevier, vol. 12(6), pages 579-604, October.
    2. March, James G., 1987. "Ambiguity and accounting: The elusive link between information and decision making," Accounting, Organizations and Society, Elsevier, vol. 12(2), pages 153-168, March.
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    Cited by:

    1. Akyuz, Kadri Cemil & Akyuz, Ilker & SerIn, Hasan & Cindik, Hicabi, 2006. "The financing preferences and capital structure of micro, small and medium sized firm owners in forest products industry in Turkey," Forest Policy and Economics, Elsevier, vol. 8(3), pages 301-311, April.
    2. Robert P. Singh & Leyland M. Lucas, 2005. "Not Just Domestic Engineers: An Exploratory Study of Homemaker Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 29(1), pages 79-90, January.
    3. Richard B. Carter & Howard Van Auken, 2007. "Capital Acquisition Attitudes: Gender and Experience," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 12(2), pages 55-74, Fall.
    4. Rodgers, Waymond & Degbey, William Y. & Söderbom, Arne & Leijon, Svante, 2022. "Leveraging international R&D teams of portfolio entrepreneurs and management controllers to innovate: Implications of algorithmic decision-making," Journal of Business Research, Elsevier, vol. 140(C), pages 232-244.

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    More about this item

    Keywords

    Information; Decision-making; Small Firm;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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