Success in Hong Kong: Factors Self-Reported by Successful Small Business Owners

Abstract

In Hong Kong, the government recognizes the important contribution small companies make to the colony's economy and has established the Management Development Council which is responsible for designing and providing management training programs for existing and potential small business owners. These programs are aimed at equipping owners with the business skills and management techniques that are crucial for successful performance and growth. With the presupposition that there tend to be common underlying factors that are associated with success (Hills and Narayana 1990), small business research has been undertaken to identify these success factors. However, most of these previous studies were based on the experience of small firms operating either in North America or in European countries. Similar research has never been undertaken in Hong Kong. Whether one can apply these same factors equally well to the behaviors of small businesses in Hong Kong is still open to question. This exploratory study attempts to identify a set of factors accounting for the success of small businesses in Hong Kong. There have been a considerable number of studies ranging from single case studies to comprehensive surveys which explicitly aim to unveil the secret of success of small businesses (see, for example, Bird 1989; Brockhaus and Horwitz 1982; Brockhaus and Horwitz 1986; Gartner 1989; Sandberg 1986; and Vesper 1990). Most of these studies conclude that business success is the result of a web of factors. For instance, Murphy (1986) found that success was attributed to hard work, dedication, and a commitment to service and quality. Larson (1987) showed the positive impact of growth potential, quality, innovation, and operating efficiency on successful performance. Bird's (1989) research disclosed that small firms with successful performance were characterized by innovation and risk-taking behavior and that small businesses started by a team of partners who had advance training were more likely to achieve successful performance. The research carried out by Hills and Narayana (1990) enumerated a total of twenty-three factors identified by entrepreneurs as important to success. These factors, including high quality products and services, a good reputation, appropriate response to customer desires and requests, hard work and devotion to business, high employee devotion and spirit, and good management/employee relations, significantly explain variations in business performance. Duchesneau and Gartner (1990) identified three categories of factors that are thought to influence the likelihood of small business success: entrepreneurial characteristics, start-up behavior, and the firm's strategy. From their findings, factors which appear to make greater contributions to successful performance include: prior start-up business experience, an effort to reduce business risk, long working hours, ability to communicate well, good customer service, a clear and broad business idea, willingness to spend more time in planning, and a flexible, participative, and adaptive organization. When Steiner and Solem (1988) investigated factors crucial for success of small manufacturing firms, they found that relevant managerial background and experience, flexibility in operations, availability of labor, and possession of identifiable competitive advantages are by far the factors significant to determining success. Research Methodology Content analysis was employed to identify common factors pertinent to the successful performance of Hong Kong's small businesses. In the early 1990s, two major local magazines - Capital Magazine and Next Magazine - published a special running feature that reported the business experience of successful entrepreneurs. Capital Magazine is a monthly business magazine and Next is published weekly. Feature reports on the experiences of small companies form the database for this study. Identification of small firms was based on the criteria of Carson and Cromie (1990): (1) capital for the firm was supplied by an individual or a small group; (2) size is relatively small within its industry; (3) the firm was operated by an owner-manager; and (4) the area of operation was mainly local. …

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 209 citations exist upstream.