In this study initial firm performance was shown to vary significantly with a number of variables. However the significance levels and coefficients of variables changed across the three industries studied. The non-experience variables will be discussed in a subsequent paper. The experience variables thirteen in all are discussed below.
Management experience in similar industry was positively and significantly related to firm performance in the manufacturing sector. In the retail and wholesale sectors the relationship was not significant. However, twenty four entrepreneurs from all three sectors had some managerial experience. It seems that since manufacturing was a more complex operation than retail or wholesale, therefore, management experience was more important for better initial performance. Similar industry was also important because technical aspects of light engineering manufacturing could best be handled through repetition of similar tasks (Trow, 1970; Ellis, H, 1965).
Management experience in dissimilar industry was positively and significantly related to performance in the wholesale sector and not significantly related in retail and manufacturing sectors. Twenty two entrepreneurs from all sectors had dissimilar industry management experiences. Retail sector was not related to management experience in either similar or dissimilar industry due to smaller and simpler operations that required few management skills.
However, entrepreneurial experience and previous start up experiences were significantly and positively related to firm performance in the retail sector. Entrepreneurial experiences in similar industry and previous start up experiences were also important to firm performance in the wholesale sector. These factor were not significant in the manufacturing sector where the complexity of operations increased the importance of management experience.
Family experience was significant in the wholesale sector and family advise was significant in the retail sector illustrating the spin off tendencies and strong family systems in the two sector. Both the factors did not play a significant role in the manufacturing sector because new entrepreneurs entered the arena instead of through family spin-offs.
Management experiences of partners played a significant role in the manufacturing sector because the manufacturing operations required in-depth management knowledge and experience as compared to the retail and wholesale sectors. For the same reason, education and management courses were positively and significantly related to the performance of firms in the manufacturing sector. Education was negatively related to the performance in the retail sector emphasizing the importance of entrepreneurial and previous start up experiences to knowledge acquired in class rooms.
It was evident from the results that industry structure and environment created firm dynamics that required different kinds of experiences. In the retail sector, entrepreneurial experience and family influence were important variables. Most retail business were being run by family members because lack of control systems resulted in large pilferage losses if non-family members were hired. In the wholesale sector while family and entrepreneurial business were still important, management experience in dissimilar industry also became important because larger operations included coordination with suppliers and buyers in far-flung areas requiring management skills. In the manufacturing sector, there was a definite jump in the complexity and volume of operations. Management experience of the entrepreneur and the partners emerged as important factors along with education.
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