Academic journal article Journal of Small Business Management

Growth Plans of Small Businesses in Turkey: Individual and Environmental Influences

Academic journal article Journal of Small Business Management

Growth Plans of Small Businesses in Turkey: Individual and Environmental Influences

Article excerpt

The intensity of small-business owners and the environmental difficulties they encountered were investigated as predictors of growth intentions in Turkey. Data were collected from 526 small businesses in 14 major cities using the Entrepreneurial Profile Questionnaire. Factor analysis showed environmental difficulties and growth intentions to be multifactor constructs, while intensity emerged as a single factor. A canonical correlation analysis found owner intensity to be significantly related to the three growth plan factors of technology improvement, resource aggregation, and market expansion. Among the difficulty factors, only lack of know-how and financing problems showed a significant relation to growth plans. Financing difficulties hindered technological improvement and resource aggregation, while know-how negatively affected market expansion. Other difficulty factors such as entry barriers, family-business role conflict, and ethnic prejudice were not among the predictors of growth plans. The article draws out the implications of these findings for government policy and for future research.


Recent decades have witnessed the rebirth of emphasis placed on the role of small businesses and entrepreneurs in the world economy. Drucker (1985) pointed out that for a hundred years, being progressive and modern meant looking to government for social change. Drucker noted that that period has ended, and preaching the gospel of the 1930s or the 1960s is considered more reactionary than progressive today. According to Light and Rosenstein (1995), the classical view that entrepreneurship and small business were marginal changed in the 1980s, as their profitability and employment rose. They pointed out that the economies-of-scale usually associated with bureaucracy were questioned during this time, and the innovative strength of small firms was increasingly acknowledged. These trends gained strength not only in the United States and Europe, but even more so in the emerging economies of the Far East. In Europe, small businesses employ 60 percent of the workforce (Wintermantel 1999). This figure rises to about three-fourths of the workforce in Japan, Korea, and Taiwan (Lee 1998; Lin 1998; Dana 1998). Indeed, much of the economic boom in East Asia has been attributed to small, family-operated firms.

Economic development models for other developing countries have been affected by the changes occurring in the West and by East Asian successes. However, for countries embedded in century-old, etatist models of development, this shift in emphasis constitutes a major political and cultural change that is not likely to take place overnight. Zahra and Georges' (2002) call for more studies of entrepreneurship outside the United States applies perhaps more so for such countries. The present study was conducted in Turkey, a country that is experiencing the pains of a similar change in philosophy. Its etatist model of development, which started after the Great Depression, is leaving its place to a model that relies on private initiative. However, attitudes toward private business and the profit motive are slow to change. These attitudes are likely to influence entrepreneurial activity as much as government policy and incentives.

The literature on entrepreneurship has acknowledged the influence of the entrepreneur, that is, his/her motives and traits, as well as the environment in which his/her firm operates. For example, Tropman and Morningstar (1989) proposed four key elements, the first two of which dealt with the characteristics and competencies of the entrepreneur and the last two with the specific and the general environment of the firm. Van de Ven (1993) argued that whereas the infrastructure facilitates and constrains entrepreneurial activity, entrepreneurs shape and change the infrastructure.

In studying small businesses in Turkey, the present study similarly took into account entrepreneurial intensity as well as environmental constraints and difficulties. …

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