The role of i-deals negotiated by small business managers in job satisfaction and firm performance: Do company ethics matter?

Scant studies have examined the chain of positive effects of idiosyncratic deals (i-deals) in organizational behavior. This study contributes to the i-deals literature by inquiring their impact on small business managers (SBMs) attempting to enhance the small firms’ performance. Building on the psychological capital framework, this novel study develops a model of the relationships among i-deals, job satisfaction and small firms’ performance. By using a dyadic sample of SBMs and objective revenue performance from an emerging country (Ecuador), this study provides a unique research environment that we analyze with structural equation modeling to shed additional light on the chain of i-deals’ effects. The findings have significant implications for small business decision making by suggesting that task i-deals mediate the relationship between schedule i-deals and job satisfaction. Further, this study reveals the moderating effect of ethical climate, which strengthens the relationship between task i-deals and job satisfaction.