Factors influencing small firm performance can be classified under the three major headings of organisational development, functional management skills, and sectoral economics (Chaston & Mangles 2002). Furthermore, definitions of what constitutes “performance” will differ with perspective. For example, policy-makers may equate it to quantitative measures like return on investment or number of employees. Alternatively, owner-managers may assign qualitative measures, such as, defining performance against lifestyle benefits achieved. It would appear that the performance profile of small firms is a complex matter and multi-dimensional in scope and character (Scase & Goffee 1984). It embraces a convergence of: owner-manager motivations, goals and capabilities; internal organisational factors; region specific resources and infrastructure; and external relationships (Mitra & Matlay 2000; Storey 1994; Shaw & Conway 2000). Thus, it is argued in this chapter that the constituent elements of which small firm performance is composed represent an intricate weaving of the internal and external, subjective and objective, and conventional economic rationality alongside what some might term as irrationality. As argued by Hill et al. (2002), this acknowledges that small firms have their own particular characteristics. They affect the way they operate and largely determine their internal preoccupations and concerns, which will not be immune to the external environment. Consequently, studies that polarise into the small firm owner-manager as the primary agent in an economic process on one hand, and objective structures influencing factors of production or service on the other provide only partial, “one piece of a jigsaw” type of knowledge. For as Gorton (2000: 277) proposes: “the formation and performance of small firms is inevitably embedded within the founder’s social world, not just in terms of objective structures but also subjective configurations such as family background.” This emphasises the importance of synthesising

“agent” and “structure” into a duality of social relations (Southern 1999) in order to more fully comprehend what are the constituent elements of small firm performance, and how they combine to create the complete tableau as constructed by owner-managers in their respective social worlds.