Academic journal article Journal of Business and Entrepreneurship

Manufacturing Entrepreneurs: An Exploratory Study of Performance

Academic journal article Journal of Business and Entrepreneurship

Manufacturing Entrepreneurs: An Exploratory Study of Performance

Article excerpt


As America's economy has become service-oriented, concern is being expressed for the state of manufacturing and the right strategy to put America's "smoke-stacks" back to work. Many firms are downsizing their operations, retreating from certain markets and returning to a focus strategy The purpose of this study was to determine the factors, as well as the strategies, that contribute to the success of manufacturing entrepreneurs. The study focused on entrepreneurial manufacturing firms in the Tulsa metropolitan area, and supported the findings of previous research. An interesting finding was that no successful firm used a strategy of differentiation, and all but one successful firm employed a focus strategy.


Manufacturing firms, those with a principal Standard Industrial Classification (SIC) code between 2000 and 3999, are an important segment of the United States' Gross National Product (G.N.P.). In 1988, measured in constant 1982 dollars, manufacturing accounted for twentythree percent of the $4 trillion G.N.P. and employed 19.4 million people (U S. Bureau of the Census, 1991). To put the size of the manufacturing segment of the G.N.P. in perspective, one can consider that it is larger than the individual G.N.P.s of all nations on earth, but two: the United States and Japan (U S. Bureau of the Census, 1991). Why some new manufacturing firms are more successful than others is a question of major concern to these firms' stakeholders and to policy-makers.

The manufacturing industries have suffered substantial job losses and slumping productivity beginning in the early 1970s (Hayes & Wheelwright, 1984; Richetto, 1988). American manufacturers have lost important market share to foreign competitors in a variety of significant industrial segments of the G.N.P. (Dertouzos, Lester & Solow, 1989; Hayes & Wheelwright, 1984; Thurow, 1980). Several industries such as shoes, electronic appliances, textiles, and steel products have suffered more than others. For example, an estimated 500,000 garment manufacturing jobs have been lost in the past 15 years.

The U. S. economy has taken a service orientation in recent years. In 1960, some 16.8 million manufacturing jobs existed along with 33.7 million service positions. Today those figures have changed to 19.4 million and 79.8 million respectively (U. S. Bureau of the Census, 1991). As we have become sensitive to competition from abroad, several changes are being effected in the U. S. educational and manufacturing institutions. Massachusetts Institute of Technology (MIT) and other prestigious universities have recently revised their MBA curriculums to emphasize manufacturing and operations management. With the current low value of the dollar our exports of manufactured goods have increased considerably; therefore, manufacturing as a whole seems to be on a revival course ("Study: U. S. Firms," 1992). Changes in the technical, structural and geographic forms of industrial firms have always been a feature of American industry; however, the pace of the changes has accelerated substantially since the early 1970s (Richetto, 1988).

One measure of the structural change in manufacturing is the shift that is occurring in firm size and employment levels at individual facilities. Small manufacturing firms (those employing less than 100 people) accounted for nineteen percent of manufacturing employment in 1980 and twenty-four percent in 1986. Large firms (those employing 500 or more) dropped from sixty-seven percent to sixty-three percent of total manufacturing employment during the same time period (U. S. Small Business Administration, 1988). One tentative conclusion from these recent changes in manufacturing employment is that people are "migrating" from large firms to small firms in the manufacturing sector. The reasons for this shift in manufacturing employment are not completely known. Perhaps downsizing on the part of the large businesses and the resulting terminations would contribute to such migrations. …

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