Examining the management capability factors that drive a firm's strategic aggressiveness shift

PROBLEM: The purpose of this research was to investigate which executive behavioral and demographic characteristics are triggered to shift by an increased environmental turbulence due to an economic downturn such as the recession of 2008 to 2009 in the case of small businesses in the United States and if the response time of such shift has an effect on firm performance.;METHOD: This study used a descriptive approach of quantitative data collection through a self-reported questionnaire emailed to small business owners and/or executives located in the United States. The population sample for this study was taken from the publicly accessible business directory of the Dynamic Small Business Search (DSBS).;A total of 330 responses were received; only 200 were complete and used for statistical analysis. The 16 hypotheses were measured with sample paired t-tests and correlations. The variables included environmental turbulence, management capability responsiveness, strategic aggressiveness, power, risk propensity, resistance to change, education, industry knowledge, environmental turbulence shift, management capability responsiveness shift, strategic aggressiveness shift, management capability response time, and firm performance.;RESULTS: The t-tests revealed differences in perceived environmental turbulence between the economic boom years of 2005 to 2007 and the recession of 2008 to 2009 as well as differences in the level of strategic aggressiveness and management capability responsiveness. All three hypotheses were significant at p<.05.;The correlations between the variables of power, risk propensity, resistance to change, education, and industry knowledge with shift of management capability responsiveness and with management capability response time revealed a significant relationship (p<.05) between risk propensity and shift of management capability responsiveness, and between resistance to change and management capability response time. The correlations between management capability response time and firm performance were significant (p <.05); however, correlations between shift in management capability and shift in strategic aggressiveness with firm performance were not.