Italian Medium-sized Enterprises: Entrepreneurial or Managerial? A Typology Approach

The focus of the paper is on the Medium-Sized Enterprises (MSEs) which qualify the Italian capitalism today, called “personal capitalism”. In particular, the entrepreneur’s subjective variables (individual, family and entrepreneurial value, objectives of decision-maker, risk propensity, managerial and financial culture) significantly influence the corporate governance, the growth and development strategies as well as the financial structure of the firms. «Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance» (OECD, 1999). Corporate governance is different between a country and another one, but inside a specific nation corporate governance is dissimilar among companies with different legal structure, among small, medium-sized and large firms, and according to belonging industry sector. «…the “how” aspect of growth is a necessary and fundamental question that needs to be better understood before we can turn our attention to how much a firm grows.» (McKelvie, Wiklund, 2010, pag. 261). «Growth is seen primarily as a result of managerial decision and human will rather than being a response to technological factors» (Coad, 2007). Stenholm (2011) identifies the entrepreneur’s intention as an essential predictor of firm growth (Saemundsson, 2003; Wiklund et al., 1997). In the ’80s and ’90s, some authors doubted the suitability of neo-classical finance to the SMEs and family business sectors because of concentrated ownership and control in the hands of few people (entrepreneurial firms), often members of the same family. According to main authors (Barton, Matthews, 1989; Hutchinson, 1995; Cressy, 1995; Merikas, Bruton, Vozikis, 1993; McMahon, Stanger, 1995; LeCornu, McMahon, Forsaith, Stanger, 1996; Cressy, Olofsson, 1997) the individual preferences of entrepreneurs are the factors that mainly affect corporate finance. Furthermore according to Romano, Tanewski, Smyrnios (2000); to Gallo, Tàpies, Cappuyns (2004) and to Wu, Chua, Chrisman (2007) personal preferences concerning growth, risk, and ownership control are the driving forces behind the “peculiar financial logic” of family business. The objective of this research is to verify the relationship existing among the following variables: owner structure, governance models, growth and development strategies, financial structure and also individual, family and entrepreneurial values. For the empirical research, we employed the AIDA data-base in order to know the structure of the leather industry and to gather information about the variables to investigate. From 100 MSEs extracted, we selected 15 best in class MSEs (firms with ROA larger than 10% in 2008 and/or in 2009 in the first two years of the global economic-financial crisis). Through the data analysis, we identified two types of MSEs with different characteristics: the autonomous entrepreneurial MSEs and the managerial MSEs controlled by Italian or foreign large companies.