AN EMPIRICAL INVESTIGATION OF THE ORGANISATION LIFE CYCLE MODEL FOR SMALL BUSINESS DEVELOPMENT AND SURVIVAL IN THE SOUTH PACIFIC

Abstract

Four general stages appear to be common in the organisational life-cycle of small businesses in Papua New Guinea (PNG): Formation, Early Growth, Later Growth and Maturity. Owner/managers confront different set of problems as the life-cycle of their businesses progressed inevitably shifting their operational and management priorities, degree of involvement in running the business, and the scope of management. External environmental problems appear predominant over the life-cycle particularly in the formation and survival stages. Internal problems predominate the late growth and maturity stages. Planning emerged as the biggest problem of small businesses in PNG. At the formation stages, developing a viable business plan for the sourcing of funds and establishing a direction for the business was the major planning problem. Marketing planning problems were more prevalent in the growth stages, and financial planning problems appeared at both the formation and maturity stages. Other problems, such as poor customer contact and weak and fragmented market, spanned the life cycle stages. The organisational life-cycle concept was shown to be adaptable across cultures but problems at different stages of the organisational life-cycle differed across cultures and level of economic development of nations.