Entrepreneurial Behavior on Growth of Small and Medium Enterprises

Introduction

The growth of the Small and Medium Enterprises are due to the influences of the competition in the domain of the local markets. The actions of the entrepreneurs in the issues of growth and expansion are divided into two opposing views. Many of the entrepreneurs are challenged in the different situations and the others are in the state of anxiety that definitely creates an impact on their businesses.

Background of the Study and Problem Statement

The small and medium sized enterprises clearly played an important role in the economies of their country. The SMEs are considered as one of the four core factors that drive in the economic growth. Therefore, many policy makers and economists set strong foundations of efficient network of the SMEs in their aim for the industrialization. The entrepreneurs and their behavior in managing their respective firms are expected to be resilient in providing the answers against the impact of the global economic uncertainties.

Purpose of the Study

The purpose of the study is divided into two in which both are related and centered in the growth of SME. First is to determine the entrepreneurial behavior in the growth of the SME in the industry. And second is to identify the strategies that can support the continuous growth and development of the SME that can reflect in the behaviors of the entrepreneurs.

Research Questions

The study recognizes the relationship of the entrepreneurial behaviors in the decision making, planning, and the control of the SMEs. As a result, the study provided several questions that can navigate the entire study to meet its objectives.

1. What are the situations wherein the entrepreneur is considered as a successful businessman?
2. What are the undesirable things that an entrepreneur usually faces?
3. What are the strategies that the entrepreneurs implemented in their reaction towards their business problems?

Hypothesis of the Study

The entrepreneurs can freely act according to their own view towards the performance of their businesses. The entrepreneurs continuous to develop their own managerial style and behaviors to accommodate the changes that creates an incredible impact. In addition, the entrepreneurs that are willing to accept the different challenges and willing to take the risks are the same entrepreneur that succeeds in their goals, even for their personal or entrepreneurial objectives.

Literature Review

Through the different undesirable situations, the strategic alliances can be established in the growth of SME. The cooperative behavior of the entrepreneurs is the result of their cultural behavior in making their business profitable. The SME alliance is based strategically through the different forms of information whether positive or negative. In fact, the goals and purposes of the alliance among the entrepreneurs varied in differently but its structure is the agreement to establish a strong relationship between cooperating firms. The relationship founded in the SME plays an important role in the domestic business and even across the international borders. The alliance of the SME and the relationship between the entrepreneurs emphasizes the involvement of the leaders in the overall decision making and creating a strong industry (Weaver, Dickson, and Davies, 1996; Pistrui, 2002). In another deep sense, there are several studies that also recognize the relationship and the behavior of the entrepreneurs among their workers. The effectiveness of the entrepreneurs’ behavior can be assessed in two factors which are - first through the growing number of the employees or the continuous expansion of the business and both are because of the performance of the business throughout the years. In accordance to this fact, the age of the business within the industry, formal educations of the entrepreneurs and experiences, previous applied strategies, and environmental participation of the entrepreneurs are the other significant factors that may appear in the present behavior of the entrepreneur (Khalid, Farooq, and Raza, 2009).

Methodology

The applied method in the study is the comparative case study method. Through the use of the past literatures, the study can identify the information gaps which lies in the context small and medium size business. The past case studies discussed different variables that play essential roles in the decision making or planning strategies of the entrepreneurs.

Conclusion

First, the micro level which is mostly about the personality or characteristics of the entrepreneur is freely discussed. Second is the intermediate level variable which refers to the involvement of the family and other societal dynamics. And lastly, the macro level variable in which associated with the comprehensive environment of the entrepreneurs. All of the three variable participate in the behavior or on how will an entrepreneur acts in different situation.

References:

Khalid, G., Farooq, S., & Raza, S., 2009. Empirical Study of Employment Growth Rate in Small and Medium Enterprises, Journal of Managerial Sciences, Vol. 2, No. 2 [Online] Available at: http://www.qurtuba.edu.pk/jms/default_files/JMS/2_2/09_gulfam_khalid.pdf [Accessed 19 Feb 2010].

Pistrui, D., 2002. Growth Intentions and Expansion Plans of New Entrepreneurs in Transforming Economies: An Investigation into Family Dynamics, Entrepreneurship and Enterprise Development. [Online] Available at: http://www.ecap.uab.es/secretaria/tesi/dp1de1.pdf [Accessed 19 Feb 2010].

Weaver, KM., Dickson, PH., & Davies, L., 1996. Entrepreneurial Orientation, Cooperation Behavior, and Perceived Outcomes among Small to Medium Sized Enterprises: An Exploratory Study of Norwegian Firms. [Online] Available at: http://www.sbaer.uca.edu/research/usasbe/1996/pdf/22.pdf [Accessed 19 Feb 2010].