International Journal of Business and Social Science Vol. 2 No. 19 [Special Issue - October 2011] 11 A “Bully” in its Own China Shop: Risk Factors for Abusive Supervision in Small Firms Patricia A. Meglich University of Nebraska Omaha 6708 Pine Street; Marketing and Management Department 303R, Omaha, NE 68182, USA Dale T. Eesley University of Nebraska Omaha 6708 Pine Street; Marketing and Management Department 303X, Omaha, NE 68182, USA. Abstract Scholarly interest in the phenomenon of abusive supervision has grown in recent years. While the prevailing literature considers abusive supervision as it occurs in corporate settings, the abuse of employees in small business firms is virtually unexplored. Yet because of the nature of such firms, the probability of abuse is much higher. We present the rationale for myriad factors that we propose will explain the increased likelihood of abuse in small firms. We discuss why structural factors and personal characteristics of owner-founders are potential antecedents to abusive supervision in small owner-founded firms. Keywords: Abusive supervision, entrepreneur, small business 1. Introduction Dickens vividly portrays the abusive supervisor in his classic tale, A Christmas Carol. Ebenezer Scrooge exemplifies the overly demanding, boorish, impossible-to-please business owner as he routinely belittles and abuses his overworked and underpaid clerk, Bob Cratchit. Anyone that has read the story or seen the stage play or film can immediately sympathize with poor Cratchit, whose employment options are limited and who perseveres despite the shabby way he is treated by his boss. Many changes have occurred in the 150 years since Dickens described the difficult working conditions of Victorian England, yet it is ironic that it is the owner- operated small firm, much like Scrooge & Marley, that has least been touched by the evolving norms and labor laws that protect the modern worker. One reason for this is that the efficacy of these workplace regulations and societal expectations to reign in abusive treatment of employees is contingent on the applicability of the laws to specific contexts and an environment that fosters accountability. For example, many legal requirements, such as the Family & Medical Leave Act, apply to firms with 50 or more employees, while EEOC rules regulate firms with as few as fifteen. Larger firms also tend to have a greater number of stakeholders, such as boards of directors or shareholders, who look unfavorably on unethical behavior. Though not perfect, large firms have many incentives and mechanisms to identify and remove individuals who exhibit unacceptable behavior: witness the dismissals of Hewlett Packard’s Mark Hurd, Wellpoint’s CFO David Colby or infamous bosses like Leona Helmsley. Unlike these well -known examples, small businesses run by owner-founders are exempt from many regulations and are held accountable, like Scrooge, to nothing more than the ghosts of their own conscience. Traditionally, the study of entrepreneurship has adopted a normative and positivistic approach that has focused largely on its intrinsic and extrinsic benefits (Shepherd & Haynie, 2009). Yet it is well known that entrepreneurs often tend to be poor managers (Miner, 2000), and the “dark side” of entrepreneurship has been largely overlooked (Kets de Vries, 1985; Strenger & Burak, 2005). In this paper, we propose that lax governance constraints and the distinct personal attributes of owner-founders that characterize many small businesses may permit a level of abusive behavior that is an undocumented and understudied characteristic of small business management. The paper begins with a review of the abusive supervision literature. We then examine how the informal and often unstructured organizational form of small business may permit a higher likelihood of abusive supervision. Next, we examine how the personal characteristics, motivations, and social environment of the owner-founder may contribute to an increased propensity to exhibit abusive behaviors towards employees. Finally, we discuss the importance of these propositions and the need for further research.