3 SMALL FIRMS, BIG SHOCKS
When shock is overwhelming
For small firms, disruptions can be crushing. Their size and relative lack of resources compared to larger firms puts small firms at a natural disadvantage. And it is not just about financial reserves; small firms may not have the scanning capabilities that larger firms have to detect imminent threats before they occur. It might be argued that small firms need to devote their limited resources to the specialized and narrow focus for which they were formed. This narrow attention can make them vulnerable. An example is micro-businesses and sole proprietors in the construction industry being exposed to the effects of extreme weather events (Wedawatta et al., 2010). Small firms are less likely ...
