The focus of this study is to examine the factors that lead to growth in
small firms in a Least Developed Country (LDC). The research is
based on the manufacturing sector in Ghana. The main objectives of
the research are to identify the key variables that lead to small firms'
growth and to ascertain the critical barriers that impede growth.
A research model which is developed out of an initial exploratory
research and existing literature focuses on how the characteristics of
the owner/manager, the characteristics of the firm and the business
strategy variables interact to affect growth in employment. In addition
factors that are perceived to have constrained the growth of the small
firms during the study period are ascertained and discussed.
To properly test the hypotheses developed a face to face interview
survey involving 122 owner/managers of small manufacturing firms is
conducted. This resulted in a range of variables that allowed for the
construction of a comprehensive multivariate model of small firm
growth.
A resulting regression model provides about 68 percent of the
explanation for the growth of the small firms sampled. It also indicates
that the owner/manager characteristics variables offer the most
powerful explanation to small firm growth. We find that the
owner/manager's growth aspiration is the most influential factor in
achieving growth. The other owner/manager characteristics variables
that have positive influence on growth are level of education, prior
industry experience and entrepreneurial family background.
Owner/managers with local experience and/or with other business
interests are less likely to achieve faster growth. Foreign
owned/managed firms grow faster.
Younger and smaller firms appear to grow faster. While firms with
multiple ownerships tend to grow at a slower rate than firms owned and
managed by one person.
Business planning, marketing and export have positive and significant
impacts on growth. Other business strategies such as innovations and
staff training also have direct relationships with growth but not
significant.
Some of the main constraining factors to growth are cost of borrowing,
lack of access to credit, high cost of inputs, lack of trust within the
business community, high bureaucracy, late payments and lack of
efficient support system. While the external environment plays
important role in small firm growth and development, the behaviours,
response and strategies pursued by individual owner/manager are
significant factors that determine the rate at which a firm will grow. / Ghana Leasing Company Limited
| Identifer | oai:union.ndltd.org:BRADFORD/oai:bradscholars.brad.ac.uk:10454/4407 |
| Date | January 2007 |
| Creators | Owusu, Kwame |
| Contributors | Hogarth-Scott, Sandra |
| Publisher | University of Bradford, School of Management |
| Source Sets | Bradford Scholars |
| Language | English |
| Detected Language | English |
| Type | doctoral, Thesis, DBA |
| Rights | © 2007 Owusu, K. This work is licensed under a Creative Commons Attribution-Non-Commercial-Share-Alike License (http://creativecommons.org/licenses/by-nc-nd/2.0/uk) |
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