Survival of Family Oriented Micro and Small Firms: a Study of Retail Stores

Ravindra Hewa Kuruppuge and Ales Gregar
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Ravindra Hewa Kuruppuge: Tomas Bata University in Zlin, Faculty of Management and Economics, Czech Republic
Ales Gregar: Tomas Bata University in Zlin, Faculty of Management and Economics, Czech Republic

from University of Primorska Press

Abstract: Irrespective of the operational scale of businesses, survival of family owned firms (FOFs) in the world are considered to be challenging while family oriented micro and small firms (FOMSFs) have become the real victims of such survival problems. However, in spite of all constraints faced, some of FOMSFs have been able to dominate in most of the economies of the world by providing a considerable contribution to national development for over generations and thereby making the business a success. Accordingly, considering the contradiction in the literature on FOMs and MSFs, the main goal of this study is to understand the survival of FOMSFs in the longer period in Sri Lanka. instrumenting qualitative methodology and using inductive methods, the sample of the study included family oriented micro and small scaled retail stores (small shops which day today sellers of consumer items) located in the Western Province of Sri Lanka. Using the purposive sampling technique, 42 retail stores that existed for at least 20 years were selected as the sample. Forty eight in-depth interviews with the owners of stores based on an interviews guide were conducted and subsequently transcribed, coded and categorised. The coding process of transcriptions ended in four categories, namely obtaining the advantage of the location, obtaining the benefits from the founder legacy, utilising social capital and selling on credit facility to customers. In the light of Resource Based View theory (RBV), detailing of four categories based on individual respondents as the unit of analysis revealed that the location of retail stores has provided wider access to customers enabling the majority to access the shop. The dignity, recognition and financial capability of founder have given an identity to business by the patronage of day today customers in the area. Having a wider community and business network by the owning family has created strong social capital based on activities of the retail store and outside throughout a longer period of time. Similarly, selling goods and services to customers on credit basis has become a tradition and a common feature of almost every business.

Keywords: Firm survival; family business; micro and small firms; retail store; Sri Lanka (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:prp:micp17:305-312

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