ABSTRACT
This chapter organizes existing theories and empirical researches into relationships between entrepreneurial characteristics, emotional intelligence, tacit knowledge, innovation, creativity and firm performance/competitiveness. It argues that taking advantage of employees' creative potential and innovative ideas can become the cornerstone of a small and medium-sized enterprises (SMEs) survival and growth. The chapter argues that in a highly competitive and financially volatile era, SMEs should be pursuing business strategies that would provide to them sustainable competitive advantages and augment their value. The major contribution of this model is the organization of the existing theories and findings in a model around emotional intelligence, tacit knowledge, entrepreneurs and SME performance/competitiveness. It focuses on the central and dominating role that the entrepreneur has on a small business, it highlights the importance of the development of EI of the entrepreneur. The more the entrepreneur improves their emotional intelligence, the more they can excel in stimulating their personnel to identify and seize upon opportunities for creativity and innovation.
