Deciphering the relationship between social and financial performance of small business

Abstract

The study aimed to decipher the relationship between social and financial performance of small business in Chandigarh and adjoining areas. The research sought to identify and explore the indicators of social performance, financial performance, competitive advantage and strategic planning that were relevant to small business. Furthermore, an important objective of study was to decipher the nature and strength of the relationship between social and financial performance of small business. Additionally, the study recognized the potential mediating role of competitive advantage and strategic planning in shaping the relationship between social and financial performance in small business. Quantitative descriptive research design was used for the study. Target population of the study was small business owners/managers located in Chandigarh and adjoining areas such as Mohali and Panchkula. Random and snowball sampling techniques were used for the study. Data was collected from 800 final respondents through structured questionnaire. Statistical tools including correlation, regression, exploratory factor analysis (EFA), confirmatory factor analysis (CFA), analysis of variance (ANOVA) and Path model techniques were used. newlineFindings indicated that the small business exhibited a strong commitment to overall social performance with indicators; employee well-being, customer satisfaction, supplier relationships, environmental sustainability and community involvement. Small business under study demonstrated positive financial performance and this could be attributed to indicators such as growth in profits, growth in assets, growth in sales, growth in return on investment, superior inter-firm financial performance, growth in market share, reduction in product cost, ability to pay short term debts without relying on sales. Competitive advantage and strategic planning of these small businesses were found to be notably high. Findings with respect to the mediation analysis revealed that competitive advantage and strategic planning comp