The Small Size as a ‘Genetic Predisposition to Survive: The Strategy of the ‘Firth Capitalism

Strategic paradigms include an assumption: growth ambition feeds a firm’s strategy. This paper’s inductive analysis of the Italian electronics firm Majestic provides a complementary firm view, according to which some firms are not predisposed to increase their size. Other business histories help to demonstrate that Majestic is not an isolated case. Furthermore, the comparison of Majestic and other firms shows that there are different cognitions generating a small size. Managers aim to: (1) occupy declining segments that larger companies are no longer interested in, (2) work in markets with many players that do not hold distinctive capabilities, (3) develop distinctive capabilities for niches, or (4) adopt a non-profit business model. These models explain why size development is not the only direction taken by firms. Moreover, they represent interesting business formula for managers who cannot develop their firm size to survive within an environment populated by bigger organizations.