FACTORS CONTRIBUTING TO THE GROWTH OF SMALL MANUFACTURING FIRMS: PERCEPTIONS OF JAPANESE OWNER/MANAGERS

Abstract

This paper is based on a study of a sample of small manufacturing firms operating in the Kobe region of Japan. On the basis of the perceptions of owner/managers, the study attempts to identify a set of variables that may contribute to the growth of small firms. The results of the study indicate that good customer relations, high quality of products and skilful workers have been identified by respondents as the most important contributors to the growth of these firms. The other highly contributing factors in their order of ranking are efficiency of manager(s), owner’s knowledge and experience, good labour relations, competitive prices of products, systematic planning for the future, and owner’s active participation in management. However, some of the results of this study are attributable, at least partly, to the different nature of Japanese industrial structure and their unique management philosophy. This shows that the degree of effectiveness of the factors contributing to the growth of small manufacturing firms may vary from country to country.