Factors that enhance the growth of small furniture making firms in Nairobi to medium scale.

Abstract

This study surveyed the management issues of the firms making transitions from micro and small-scale level to medium scale in the low-tech furniture makinq sector in Nairobi. Data was collected primarily by a 117 item questionnaire administered by the researcher during face to face interviews witl1 the owner/managers of ]0 firms. Four areas were covered during data collection: entrepreneur personal data, business data, business development, and the present status and future plans. Supported by direct observation an~ literature search, this data was analysed to reveal the entrepreneur personal management approaches that have

ensured their choice and maintenance of a qr6wth orientation. The results show the importance of prior work experience in similar task and business contexts to the entrpreneurs current business. The educational levels of the respondents were higher than for studies focussed at the micro-enterprise level, even through there were no statistically significant relationships with the external business vi1riables of number of workers or revenues. Technical tranining and on-the-job training (OJT) were the most frequent training backgrounds rather than apprenticeship contrary to expectations. Moreover, pre-business leadership exposure was important for business success, while previous start-up, multiple entrepreneurship or parental influence were not. The dominance of a few districts and certain sibling positions among the respondents suggested a trait or role model influence in predisposing respondents to the pursuit of such technical ventures, and acted as remedies for lack of prior business experience or parental influence. The strength of the sector was in production and production management, while the weakest link was interfacing this production orientation with the marketing function. continued growth of the sector, therefore, depends on its ability to improve access to broader and more lucrative markets such as government tenders or organizational buyers, and in-the owners opening to retail outlets at prime sites. However, the attainment of this goal is hindered by resource acquisition barriers. Both start-up funds and finances for growth in product lines

have -come predominantly from entrepreneurs own savings. The limited access to external sources of credit has impacted the cash flow situation of these firms negatively and hindered the realization of their growth potentials. Moreover, while hiring of facilities may be a cost-saving approach during early growth period, it s the acquisition of production equipment that proves to be cost-effective in maintaining growth momentum in the long run, but at the expense of entrepreneurial flexibility 'and responsiveness to opportunity. Yet even such equipment is expensive when imported, and may be unreliable for high precicion work if locally innovated. Further, restricted access to sources of information and technical assistance has left these entrepreneurs with personal networks as the main mode of information gathering and processing. Under the circumstances, it is necessary to intervene through appropriate policy instruments that encourage chi sector access to resources and opportunity, especially to finances, machinety, premises and government and organizational buyers for their products. These products compare quite favourably on any customer quality and value criteria, whether beauty, utility, durability or prestige with any other. Moreover, programming effectiveness, b6th in structuring of technical assistance schemes and their delivery mechanisms or the relevance of mutual assistance schemes, need to be addressed to harness the sectors potentials as a basis for filling the current structural gaps in the industry or for resolving our economic problems - chiefly unemployment and income generation and redistribution.