Rethinking governance in small businesses: is configurational perspective the way forward?

What the paper says

Purpose This “practitioner article” argues on the importance of the configurational governance perspective and related studies for small businesses. The article intends to provide constructive and literary criticism of the extant literature on why the impact of the current approaches on governance tends to produce inconsistent results on firm outcomes. Thus, the article paves the way for a more considered configurational governance perspective under the auspices of agency theory. Design/methodology/approach The current perspective article results from a concise and focused literature review. It also draws essential insights from the corporate governance of small businesses. This is a practitioner article, written as a viewpoint supported by Emerald, that “Covers any paper where content is dependent on the author's opinion and interpretation. This includes journalistic and magazine style pieces”. Findings The current perspective article argues that great expectations from small businesses to adopt and implement all the universally accepted governance structures, such as for larger corporations, may lead to “governance myopia”. Building on the concept of configurational perspective, the article argues that small businesses need a pragmatic shift in thinking to adopt a more considered approach to governance, which is the configurational perspective and should be implemented as follows: not attempting to implement all governance structures, but to identify the subset that suffices and is well within the compliance of regulations, without however, missing on the mandated ones. The article proposes that a “tailored and viable governance” approach, which is outcome-focused, is advisable to address “governance myopia” that may result from attempts by small businesses to adopt too much governance. Originality/value The study provides fresh future research perspectives on the governance of small businesses, in line with the configurational perspective. The article also provides a pictorial representation supported by an illustration of the configurational approach for small businesses.