Challenges, Issues & Growth

Orientation of Sri Lankan

Entrepreneurship
As m or.mis ra m emma momma ,

converts the conception into a functional

organization" (Hogan, 1968)

Introduction
The history of entrepreneurial
behavior in Sri Lanka is vivid and
exclusive in many aspects. But, one
could question the responsibility, behavior and potentials of present
entrepreneurship in the context of
globalization and achieving quality
of life improvement goals of our nation. This article is an attempt to
explore some of the performance
and personality characteristics of
growth oriented entrepreneur class in
Sri Lanka with the objective of
evaluation for any one concerned on
entrepreneur behavior and devise
developmental
intervention
to
rectify some miss alignments. The
article is largely based on data
collected for a `GOE study undertaken on behalf of ILO-SlYB
project in Sri Lanka covering a
sample of 100 entrepreneurs from
the Western Province.

Defining who is a Growth

Oriented Entrepreneur (GOE)
Before defining whom a GOE, it is
pertinent to explore how an
"Entrepreneur" has been defined in
the literature. Richard Cantilion (1755),
identified entrepreneur as a selfemployed individual who does not
work for wages. Since then,
number of definitions has been
evolved and some of the widely
used definitions are:

"An entrepreneur is some one who

perceives an opportunity and creates an
organization to pursue it" (Bygrave, 1993)
"An entrepreneur is a major owner and
manager of a business venture not
employed elsewhere" (Brockhaus, 1982)
"An entrepreneur is a one who creates a
new organization" (Vesper, 1990)
An individual who conceives the idea of
business, designs the organization of the
firm, accumulate capital, recruits labour,
establishes relations with suppliers,
customers and the government and

As the above definitions indicate,

there is no
commonly accepted definition for
entrepreneur-

Sarath

Buddhadasa
Executive Director, Business Consultancy Services
(BCS)

ship and, the same applies to Growth

Oriented Entrepreneurs" (GOEs)
too. However, surveying the
literature on entrepreneurship, one
will find two ways of viewing
entrepreneurship, namely macro
and micro, based on their intentions
for being in business. In the case of
macro entrepreneurs, the emphasis
is on "profit and growth" whereas
micro entrepreneurs seem to rely on
"earning an income for survival". The
micro entrepreneurs seem to limit the
growth by themselves, due to
various
reasons
making
the
enterprises stagnant. Further, GOEs
tend to accelerate the growth of their
enterprises in most of the cases
increasing
the
turnover
and
employment threefold in every three
year time period. Hence, macro
entrepreneurs with a high potential and
an implicit commitment for rapid
growth could be identified as GOEs.
Studying the personality character
mask' of GOEs based on studies
undertaken globally, the "GOE has
been profiled as high risk takers with
a high need for achievement,
emphasizing profit and growth while
having high tolerance for ambiguity
in the pursuit of innovations". They, in
recent literature are characterized as
individuals
having
effective
networking ability with a high
"internal locus of control' meaning
that they believe in their intrinsic
ability to influence and control
events occurring in the environment
that have an impact on the growth of
enterprises. At the enterprise level,
they record higher level of growth
rates compared to
prevailing
industry averages.

Characteristics of GOEs in Sri Lanka

Studying the characteristics of GOEs,

one could separate the success
indicators of `GOE enterprises' from
the 'GOE personality characteristics'
which are essentially, the intrinsic
psychological factors the individual
entrepreneurs are supposed to be
having in driving their enterprises
towards anticipated visions. However,
one could argue, that the `GOE
enterprises based success indicators'
are as reflections of the GOE behavior
and hence, it may not be realistic to
identity the two as

separate phenomena. But; separation

of these too while accepting the
existing
correlation
would
be
beneficial in understanding the dynamics of the variables in arriving at
conclusions regarding the enterprise
development process.
Therefore, in this article the main
characteristics of growth oriented
enterprises are identified separately and
analyzed.

GOE: Enterprise based characteristics

Life span and geographical
concentration
The survival rate of Small and Medium
Enterprises (SMEs) is higher in any
given country compared to larger
enterprises. A study undertaken in the
southern Sri Lanka revealed it to be 94%
within
five
years
of
their
commencement. In this study, it was
found that a small portion of GOEs have
successfully survived in the market
for fairly a long time period leaving to
assume that the success rate is about
20% in the context of GOE category.
Majority of the GOEs (67%) have

commenced their enterprises after

1990 and only about 15% of them had
initiated prior to 1980.
A
Common
phenomenon
in
enterprise development is that with
the development process, the
enterprises gradually migrate in to
urban areas owing to better
infrastructure, market expansion,
access to technology & business development services (BDSs). In Sri
Lanka
too
majority
of
the
entrepreneurs (64%) operate in the
urban areas. Though there is
somewhat a sizable amount of
entrepreneurs (36%) operating in
rural areas, most of them are found
to be in close proximity to urban city
centers mainly due to the advantage
of
having
access
to
better
infrastructure.

Nature of businesses and market

coverage
Trading appears to be the most popular
activity (45%) amongst the growth
oriented
entrepreneurs
and
manufacturing is the least popular
(16%) while services sector has
acquired a position close to the
middle (39%). Accordingly, some
GOEs are active in more than one

Economic Review: April/June 2003