Many smaller firms face resource constraints (Jarillo, 1989), and existing resources must
consequently be used with care, as erroneous decisions will have more serious
complications than would be the case in large businesses (Amelingmeyer and
Amelingmeyer, 2005). For example, small firms have a flat structure and an organic,
free-floating management style that encourages entrepreneurship and innovation. They tend
to be informal, non-bureaucratic and there are few rules. Control tends to be based on the
owner’s personal supervision and formal policies tend to be absent in SMEs (Daft, 2007).