Financial Biases and Organizational Resilience in Micro and Small Enterprises: Implications for Sustainable Management

Micro and small enterprises (MSEs) often operate with limited financial slack, making the quality of financial judgment potentially important for their ability to withstand disruption. This study examines whether a composite of financial decision-making biases is associated with organizational resilience among formal MSEs in Ancash, Peru. Survey data from 384 owners, managers, and administrators were analyzed using PLS-SEM. The formative financial-bias composite was strongly and negatively associated with organizational resilience (β = −0.615, p < 0.001), accounting for 37.8% of its variance. Consistent negative associations were also observed for anticipation, coping, and adaptation. Complementary predictive and specification-sensitivity analyses were consistent with the main finding. The study contributes by connecting behavioral finance with organizational resilience and by identifying biased financial judgment as a behavioral factor associated with MSE resilience. For managers and MSE-support programs, the findings suggest that access to financial resources may need to be complemented by attention to decision quality. Because the study is cross-sectional and based on a non-probability sample of formal MSEs in Ancash, the findings do not establish causality or population-level representativeness and should not be generalized to informal enterprises, medium-sized or larger firms, other Peruvian regions, Latin America, or emerging economies without further replication. Sustainability performance was not directly measured.