CHAPTER ONE: INTRODUCTION
INTRODUCTION
The dynamics of changing demographics and consumer purchasing patterns, coupled with ever stronger competition, are putting increased pressure on the small business enterprises. This has impacted a lot on the small business firms who have to devise new mechanisms of survival and develop distinct competencies that will ensure for their survival. Basically, small to medium-sized firms suffer from limited information, finance, management time and experience and are vulnerable to environmental changes (Buckley, 1989). The scale of operations is also low which means that such firms do not benefit from the economies of scale which limits their operations and generally inhibits their growth and ability to develop and dominate the markets. Large firms on the other hand often exist because competitive factors within industries make the use of economies of scale in productions which are necessary for survival. The small firm sector is also very turbulent, with fluctuations in profits and sales being more imminent than larger firms’, mainly because they are more likely to depend on single products or customers (Storey et al., 1987; Cambridge small Business Research Centre, 1992)
The evaluation of growth in small firms has been carried out in several ways. It can be seen as intention to grow or potential to grow. It may also be growth in competitiveness, effectiveness, turnover, profit, personnel, partners and networks, knowledge or innovativeness (Greiner 1972, Churchill and Lewis1983). An initial review of literature on small firms reveals that many of them fail early in their lifecycles, presumably due to the many impediments and obstacles that they are unable to overcome. There is also the less than satisfactory growth rates observed among firms that survive the initial inception stage. For example, Cressey and Story (1995) found out fewer than 20 % of small and medium sized firms (SMEs) survive longer than 6 years after...