Owner managers' motivations in starting small enterprises: A case study in the Southern Province, Sri Lanka.

Abstract

Over the years, Small Enterprises have gained wide recognition in Sri Lanka as a major source of employment, income generation, poverty alleviation and regional development. Especially the southern province of Sri Lanka is getting famous for entrepreneurial activities. However, research to date has focused primarily on large enterprises and there are very few studies focusing on enterprises in the southern province of Sri Lanka. Generally failure rates amongst small enterprises are very high compared to medium or large scale enterprises. One critical factor which determines the likelihood of success or failure of the small enterprises is Motives of the owner manager. Therefore, the aim of this research was to explore and identify the motivations of owner managers of southern province in starting enterprises. More specifically, it aims to identify similarities and differences in the motive profiles of 75 male and female owner managers. A questionnaire and interviews were used to study the small enterprise owners in the Southern province. The questionnaire was used to collect general information on the characteristics of owner managers and their businesses, the initial motivations of owner managers for going into business. Mainly Questionnaire was focused on two motivation scales. One motivation scale was to evaluate pull and push influences. Pull motives include: Desire for independence, Desire to exploit an opportunity, Turning a hobby or previous work experience into a business and Financial Influences. 'Push' motives include Redundancy, Unemployment (or threat of), Disagreement with previous employer, and Uncomfortable relations at work. Owner managers' motivations were further analyzed using the motivation scale developed by Scheinberg and Macmillan et al. Owner managers' motivations for starting small enterprises are diverse. This study highlights the main factors, which influence the Sri Lankan southern province Owner managers' decisions on starting small enterprises. On the whole, research indicated that both men and women owner managers start their enterprises primarily due to 'pull' factors. 'Pull' factors like Desire for independence, Financial Influences were found important. There is a lesser degree of influence of 'push' factors such as Disagreement with previous employer, and Uncomfortable relations at work. The needs to contribute to the community, welfare of community were not important reasons to influence the Owner managers' decisions on starting small enterprises.