Decision-Making Under Complexity. The Case of District SME

Abstract:     
PURPOSE – This study aims at examining the district SMEs decision-making under complexity. The purpose of the paper is to confirm the idea of industrial district as a source of opportunities which fosters consonance and cooperation among district firms and hence supports the decision-making of individual entrepreneurs, in the perspective of value creation and long term survival.

DESIGN/METHODOLOGY/APPROACH – Complexity Theory, Viable System Approach and Informative Variety Model have been used for the analysis of the district firms decision-making process.

FINDINGS – The findings suggest that the different degree of development of a district influences the decision-making of a district firm. Indeed, by comparing the performance of two Italian industrial districts, specialized in the industry of tanning, that is Santa Croce sull’Arno – configurable as complete viable system – and Solofra – definable as embryonic system –, it emerges the lower degree of development of the latter and the less competitiveness of its companies which tend to compete in individual way also within the international markets.

RESEARCH LIMITATIONS/IMPLICATIONS – The discussion stresses a series of research propositions for future researches aimed at improving the understanding of the problem. As for limitation, only two cases in a single sector have been analyzed and there is a lack of concrete outcomes concerning the decision process of district SMEs.

PRACTICAL IMPLICATION – The findings suggested some managerial implications to govern and simplify complex decisions for district SMEs.

ORIGINALITY/VALUE – The paper provides a new methodology to examine the decision-making of district SMEs.

Number of Pages in PDF File: 25

Keywords: Complexity, SME, Industrial District, Viable System Approach

JEL Classification: M10

Accepted Paper Series