Factors affecting growth of micro and small family business enterprises : a case of Nairobi Central Business District
Murathe, Fredrick Maina
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The realization of Vision 2030 and industrialization process is dependent on the contribution of family business in terms of mobilization of resources towards investments activities that generates income, wealth and employment in the Nation. The transformation of MSFB to competitive business operations and growth faces fundamental challenges ranging from legal, statutory, market, managerial and operational factors that are detrimental to their success and growth. 200 MSFB operating Under Nairobi County Government located in Koinange, Moi Avenue and Luthuli streets were the target population. 67 Business enterprises were sampled using Yemech (1967) formula and quantitative data collected, coded, sorted and presented in tables and analyzed through descriptive and inferential statistics. The analysis was presented according to the main variables of the study which were; leadership style, succession planning, family conflicts and governance structures. In the analysis both descriptive statistics and inferential statistics were used and the hypotheses tested. Regression analysis was further carried out for the dependent variable against independent variables using SPSS Version 19 and hypotheses test carried out. The finding established that the independent variables had a significant influence on the dependent variable as indicated on the regression model. Leadership was seen as the epitome foundation under which succession planning, management structures were built and developed for the business growth among the MSFB operations. Leadership style affected growth of business to a great extent. Leadership style significantly influenced growth (β =0.591, P=0.002), Succession planning significantly influenced growth (β =0.64, P=0.002), business conflicts significantly influenced growth (β =0.66, P=0.000), Governance structures significantly influenced growth (β =0.57, P=0.004). On effects of succession, the study concluded that it affected growth of the family business to a moderate extent. The study recommended that the management should accord specialized training to employees and facilitate succession planning. Governance structures in terms of recruitment and operational management to be adhered to manage business conflicts. Future studies are recommended on: Factors affecting profitability in family owned business, an assessment of competitive strategies on family businesses and impacts of education on entrepreneurial activities.Objectivity,suspicion and withdrawal of respondents were among others, limiting factors in the study.