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WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?

Year 2013, Volume: 5 Issue: 2, 21 - 32, 01.12.2013

Abstract

This paper examines perceived Critical Success Factors (CSFs) affecting the success of small firms and their relationship with firm and managerial characteristics. The paper also seeks to investigate the interdependence relationship among the perceived CSFs themselves using data reduction techniques. The study tests the number of CSFs on small firm success using primary data that were collected through a questionnaire survey with 256 business start-ups randomly selected from business register kept at Kosovo Business Registration Agency. Principal component analysis (PCA) with Equamax rotation was used to reduce the data and categorize success factors into groups. The findings identified four groups of perceived CSFs affecting the success of business start-ups: (1) Characteristics of individual, social connections and reputation, (2) Management skills, social support and quality of product, (3) Market support, and (4) political involvement. Findings show that factors that are under control of the entrepreneur are more important compared to external environment owners/managers as well as for policy makers aimed at increasing performance of start-ups. Although the paper is based on Kosovo data the findings are applicable to most start-ups in transitional and challenging environments worldwide

References

  • Audretsch, D. and Thurik, R. (2001) ‘Linking Entrepreneurship to Growth’, Working Paper No. 2001/2, Paris: OECD.
  • Benzing, C., Chu, H. M and Kara, O. (2009) ‘Entrepreneurs in Turkey: A Factor Analysis of Motivations Success Factors and Problems’, Journal of Small Business Management, 47 (1), 58-91.
  • Benzing, C., H. M. Chu, and R. Bove (2005) “The Motivation, Problems, and Perceived Success of Entrepreneurs in Romania,” Journal of the Academy of Business Administration, Vol. 10 (1&2, Spring/Fall), 73–88.
  • Boynton, A.C., and Zmund, R.W (1984) ‘An Assessment of Critical Success Factors’. Sloan Management Review, 24, (4), 17-28.
  • Chourides, P., Longbottom, D. and Murphy, W. (2003) ‘Excellence in Knowledge Management: an Empirical Study to Identify Critical Factors and Performance Measures’, Measuring Business Excellence, 7 (2), 29-45.
  • Chu, H. M., C. Benzing, and C. McGee (2007) ‘Ghanaian and Kenyan Entrepreneurs: A Comparative Analysis of Their Motivations, Success Characteristics, and Problems’, Journal of Developmental Entrepreneurship 12 (3), 295–322.
  • Daily, M. C., McDougall. P. P., Covin. G. J. and Dalton. R. D. (2002) ‘Governance and Strategic Leadership in Entrepreneurial Firms’, Journal of Management, 28 (3), 387–412.
  • Frese, M., Brantjes. A. and Hoorn. R. (2002) ‘Psychological Success Factors of Small Scale Business in Namibia: The roles of Strategy Process, Entrepreneurial Orientation and the Environment’, Journal of Development Entrepreneurship. 7 (3), 259-282.
  • Ghobadian, A., and O’Regan. N. (2006) ‘The Impact of Ownership on Small Firm Behavior and Performance’, International Small Business Journal, 24 (6), 555-586
  • Hashi, I. and Krasniqi, A. B. (2011) ‘Entrepreneurship and SME growth: Evidence from Advanced and Laggard Transition Economies’, International Journal of Entrepreneurial Behavior & Research, 17 (5), 456 – 487.
  • Hoxha, D. and Krasniqi, A. B. (2008) ‘Female Entrepreneurship in Kosova: Does Gender Difference Hypothesis Hold?’, International Journal of Business and Management Science, 1 (1), 49-65.
  • Krasniqi, A. B. (2007) ‘Barriers to Entrepreneurship and SME Growth In Transition: The Case of Kosova’, Journal of Developmental Entrepreneurship, 12 (1), 71-94.
  • Krasniqi, A. B. (2009) ‘Personal, Household and Business Environmental Determinants of Entrepreneurship’, Journal of Small Business and Enterprise Development, 16 (1), 146- 166.
  • Krasniqi, A. B. (2010) ‘Are Small Firms Really Credit Constrained? Empirical Evidence from Kosova’, International Entrepreneurship and Management Journal, 6 (4), 459-479.
  • Krasniqi, A.B. (2012) "Building an Expanded Small Firm Growth Model in a Transitional Economy: Evidence on Fast Growing Firms." Journal of East-West Business, 18 (3), 231- 273.
  • MacMillan, I.C., Zemann, L., and Subbanarasimha, P. N.(1987) ‘Criteria Distinguishing Successful from Unsuccessful Ventures in the Venture Screening Process’, Journal of Business Venturing, 2 (2), 123–137.
  • Nooteboom, B. (1994) ‘Innovation, Learning and Industrial Organisation’, Cambridge Journal of Economics, 23 (2), 127- 150.
  • Pagano, P. and Schivardi, F. (2003) ‘Firm Size Distribution and Growth’, The Scandinavian Journal of Economics, 105 (2), 255-274.
  • Pratt, V. (2001) ‘Sharing Business Skills in Kenya. Washington, DC: Center for International Private Enterprise (http://www.cipe.org (accessed 20 July, 2013).
  • Rockart, J. F. (1979) ‘Chief Executives Define their own Data Needs’, Harvard Business Review, 57 (2), 81-93.
  • Romer, M. P. (1994) ‘The Origins of Endogenous Growth’, The Journal of Economic Perspectives, 8 (1), 3-22.
  • Saraph, J.V., Benson, P.G. and Schroeder, R.G. (1989), “An Instrument for Measuring The Critical Factors of Quality Management”, Decision Sciences, 20 (4), 810-29.
  • Schuh, S. and Triest, K. R. (2000) ‘The Role of Firms in Job creation and Destruction in US Manufacturing’, New England Economic Review, March/April 2000, 29-44.
  • Temtime, T. Z., and Pansiri. J. (2005) ‘Small Business Success/Failure Factors in Developing economies: Some Evidences from Botswana’, American Journal of Applied Sciences, 1 (1), 18-25.
  • Unger, J. M., Rauch. A., Frese. M. and Rosenbuch. N. (2011) ‘Human Capital and Entrepreneurial Success: A Meta-analytical Review’ Journal of Business Venturing, 26 (3), 341-358.
  • Welter, F. and Smallbone. D. (2011) ‘Institutional Perspectives on Entrepreneurial Behavior in Challenging Environment’, Journal of Small Business Management, 49 (1), 107-125.
  • Wennekers, S. and Thurik. R. (1990) ‘Linking Entrepreneurship and Economic Growth’, Small Business Economics, 13 (1), 27-56.
  • Wong, P. K., Yuen. P. H. and Autio. E. (2005) ‘Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data’. Small Business Economics, 24, (3), 335-350.
Year 2013, Volume: 5 Issue: 2, 21 - 32, 01.12.2013

Abstract

References

  • Audretsch, D. and Thurik, R. (2001) ‘Linking Entrepreneurship to Growth’, Working Paper No. 2001/2, Paris: OECD.
  • Benzing, C., Chu, H. M and Kara, O. (2009) ‘Entrepreneurs in Turkey: A Factor Analysis of Motivations Success Factors and Problems’, Journal of Small Business Management, 47 (1), 58-91.
  • Benzing, C., H. M. Chu, and R. Bove (2005) “The Motivation, Problems, and Perceived Success of Entrepreneurs in Romania,” Journal of the Academy of Business Administration, Vol. 10 (1&2, Spring/Fall), 73–88.
  • Boynton, A.C., and Zmund, R.W (1984) ‘An Assessment of Critical Success Factors’. Sloan Management Review, 24, (4), 17-28.
  • Chourides, P., Longbottom, D. and Murphy, W. (2003) ‘Excellence in Knowledge Management: an Empirical Study to Identify Critical Factors and Performance Measures’, Measuring Business Excellence, 7 (2), 29-45.
  • Chu, H. M., C. Benzing, and C. McGee (2007) ‘Ghanaian and Kenyan Entrepreneurs: A Comparative Analysis of Their Motivations, Success Characteristics, and Problems’, Journal of Developmental Entrepreneurship 12 (3), 295–322.
  • Daily, M. C., McDougall. P. P., Covin. G. J. and Dalton. R. D. (2002) ‘Governance and Strategic Leadership in Entrepreneurial Firms’, Journal of Management, 28 (3), 387–412.
  • Frese, M., Brantjes. A. and Hoorn. R. (2002) ‘Psychological Success Factors of Small Scale Business in Namibia: The roles of Strategy Process, Entrepreneurial Orientation and the Environment’, Journal of Development Entrepreneurship. 7 (3), 259-282.
  • Ghobadian, A., and O’Regan. N. (2006) ‘The Impact of Ownership on Small Firm Behavior and Performance’, International Small Business Journal, 24 (6), 555-586
  • Hashi, I. and Krasniqi, A. B. (2011) ‘Entrepreneurship and SME growth: Evidence from Advanced and Laggard Transition Economies’, International Journal of Entrepreneurial Behavior & Research, 17 (5), 456 – 487.
  • Hoxha, D. and Krasniqi, A. B. (2008) ‘Female Entrepreneurship in Kosova: Does Gender Difference Hypothesis Hold?’, International Journal of Business and Management Science, 1 (1), 49-65.
  • Krasniqi, A. B. (2007) ‘Barriers to Entrepreneurship and SME Growth In Transition: The Case of Kosova’, Journal of Developmental Entrepreneurship, 12 (1), 71-94.
  • Krasniqi, A. B. (2009) ‘Personal, Household and Business Environmental Determinants of Entrepreneurship’, Journal of Small Business and Enterprise Development, 16 (1), 146- 166.
  • Krasniqi, A. B. (2010) ‘Are Small Firms Really Credit Constrained? Empirical Evidence from Kosova’, International Entrepreneurship and Management Journal, 6 (4), 459-479.
  • Krasniqi, A.B. (2012) "Building an Expanded Small Firm Growth Model in a Transitional Economy: Evidence on Fast Growing Firms." Journal of East-West Business, 18 (3), 231- 273.
  • MacMillan, I.C., Zemann, L., and Subbanarasimha, P. N.(1987) ‘Criteria Distinguishing Successful from Unsuccessful Ventures in the Venture Screening Process’, Journal of Business Venturing, 2 (2), 123–137.
  • Nooteboom, B. (1994) ‘Innovation, Learning and Industrial Organisation’, Cambridge Journal of Economics, 23 (2), 127- 150.
  • Pagano, P. and Schivardi, F. (2003) ‘Firm Size Distribution and Growth’, The Scandinavian Journal of Economics, 105 (2), 255-274.
  • Pratt, V. (2001) ‘Sharing Business Skills in Kenya. Washington, DC: Center for International Private Enterprise (http://www.cipe.org (accessed 20 July, 2013).
  • Rockart, J. F. (1979) ‘Chief Executives Define their own Data Needs’, Harvard Business Review, 57 (2), 81-93.
  • Romer, M. P. (1994) ‘The Origins of Endogenous Growth’, The Journal of Economic Perspectives, 8 (1), 3-22.
  • Saraph, J.V., Benson, P.G. and Schroeder, R.G. (1989), “An Instrument for Measuring The Critical Factors of Quality Management”, Decision Sciences, 20 (4), 810-29.
  • Schuh, S. and Triest, K. R. (2000) ‘The Role of Firms in Job creation and Destruction in US Manufacturing’, New England Economic Review, March/April 2000, 29-44.
  • Temtime, T. Z., and Pansiri. J. (2005) ‘Small Business Success/Failure Factors in Developing economies: Some Evidences from Botswana’, American Journal of Applied Sciences, 1 (1), 18-25.
  • Unger, J. M., Rauch. A., Frese. M. and Rosenbuch. N. (2011) ‘Human Capital and Entrepreneurial Success: A Meta-analytical Review’ Journal of Business Venturing, 26 (3), 341-358.
  • Welter, F. and Smallbone. D. (2011) ‘Institutional Perspectives on Entrepreneurial Behavior in Challenging Environment’, Journal of Small Business Management, 49 (1), 107-125.
  • Wennekers, S. and Thurik. R. (1990) ‘Linking Entrepreneurship and Economic Growth’, Small Business Economics, 13 (1), 27-56.
  • Wong, P. K., Yuen. P. H. and Autio. E. (2005) ‘Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data’. Small Business Economics, 24, (3), 335-350.
There are 28 citations in total.

Details

Other ID JA37YT97JC
Journal Section Articles
Authors

Besnik A. Krasniqi This is me

Malush Tullumi This is me

Publication Date December 1, 2013
Published in Issue Year 2013 Volume: 5 Issue: 2

Cite

APA Krasniqi, B. A., & Tullumi, M. (2013). WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?. International Journal of Business and Management Studies, 5(2), 21-32.
AMA Krasniqi BA, Tullumi M. WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?. IJBMS. December 2013;5(2):21-32.
Chicago Krasniqi, Besnik A., and Malush Tullumi. “WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?”. International Journal of Business and Management Studies 5, no. 2 (December 2013): 21-32.
EndNote Krasniqi BA, Tullumi M (December 1, 2013) WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?. International Journal of Business and Management Studies 5 2 21–32.
IEEE B. A. Krasniqi and M. Tullumi, “WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?”, IJBMS, vol. 5, no. 2, pp. 21–32, 2013.
ISNAD Krasniqi, Besnik A. - Tullumi, Malush. “WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?”. International Journal of Business and Management Studies 5/2 (December 2013), 21-32.
JAMA Krasniqi BA, Tullumi M. WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?. IJBMS. 2013;5:21–32.
MLA Krasniqi, Besnik A. and Malush Tullumi. “WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?”. International Journal of Business and Management Studies, vol. 5, no. 2, 2013, pp. 21-32.
Vancouver Krasniqi BA, Tullumi M. WHAT PERCEIVED SUCCESS FACTORS ARE IMPORTANT FOR SMALLL BUSINESS OWNERS IN A TRANSITION ECONOMY?. IJBMS. 2013;5(2):21-32.