A remedy for the liability of smallness? How digital work platforms augment the smallest enterprises

Michael Gusenbauer (), Sarah Könitzer and Marius Kitowski
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Michael Gusenbauer: Johannes Kepler University Linz
Sarah Könitzer: University of Innsbruck
Marius Kitowski: University of Innsbruck

Review of Managerial Science, 2025, vol. 19, issue 9, No 7, 2867-2898

Abstract: Abstract We investigate how digital work platforms (DWPs) such as Upwork and Fiverr are pivotal for small and micro enterprises (SAMEs) in tackling their resource and capability constraints, also called liability of smallness. By conducting qualitative interviews with executives from SAMEs in Austria and Germany, we reveal that these enterprises leverage such platforms primarily for resource access and cost optimization. DWPs lower the entry barrier to outsourcing by acting as a trust-building catalyst and by reducing the invisible work associated with outsourcing. With outsourcing more readily available, SAMEs can build strategic flexibility to better scale their business activities and more readily seize business opportunities. With this research, we contribute to the discourse on digital entrepreneurship, outsourcing, and small business management, underscoring the role of digital platforms in enhancing the competitiveness and survival of SAMEs. Our findings also allow for best practice recommendations to help SAMEs overcome the hurdles associated with outsourcing engagements.

Keywords: Small and micro enterprises; Liability of smallness; Outsourcing; Digital work platforms; Freelancers (search for similar items in EconPapers)
JEL-codes: L24 L26 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11846-025-00834-9

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