Managing competence acquisition and financial performance: An empirical study of how small firms use competence acquisition strategies

Past research has neglected how small firms manage competence acquisition. Based on transaction cost literature, this article identifies competence acquisition management strategies and their implications for performance. We explore this issue using survey data from 842 small, knowledge-intensive firms. The results outline four aspects of competence acquisition management: (1) competence absorbers, (2) social acquirers, (3) market acquirers, and (4) nonacquirers. Furthermore, we hypothesized and found that market acquirers score higher in terms of financial performance than firms following the other strategies. The market acquirer strategy proved particularly effective under conditions of high dynamism.