Principal Topic

Research evidence shows that some of those who start business because of economic necessity do evolve into serious entrepreneurs, desiring and seeking substantial growth. This research sought to explain the process through which this evolution occurs in a developing country context.

Method

In-depth case studies of five Tanzanian owner-managers were conducted, using the constant comparative method and a replication strategy.

Results and Implications

The results suggest that when the “economic necessity” enterprise is established, the owner is uncommitted to neither the business nor the entrepreneurial career. Before growth-motivation and pro-active search for growth is acquired, he/she must first acquire commitment to a business and the career. Initially, little or no attention is paid to the needs and the future of the business. If the activity enables the owner to stabilize his personal life, interest and commitment to the business starts building up. Attention is then refocused to stabilizing the business. Stabilization of the business heralds commitment to the entrepreneurial career. Only then may the owner-manager acquire growth motivation and pro-active search for growth. The critical catalysts in becoming committed to the business and the career are a favorable external environment, positive performance and firm specific competencies. Availability of alternative source of income have the opposite effect. Later in the process of evolution, challenges to the survival or performance of the business forces one to adopt pro-active strategies. The framework points to the need to take account of the dynamic nature of entrepreneurial behavior and for differentiated goals and forms of policy depending on the stage reached. The framework can be invaluable in credit rating as well as in sensitizing owner-managers to the evolutionary process.

CONTACT: Donath R. Olomi, Entrepreneurship Center, Univ. of Dar es Salaam, P.O. Box 35046 Dar es Salaam, Tanzania; (T) 22-2410765; (F) 22-2410510; olomi@fcm.udsm.ac.tz