Impact of achievement competencies on business performance: A study on small scale enterprises in the Vavuniya district

Abstract

Small and medium enterprises play a vital role in the economies of both developed and developing countries, representing well over 90 % of all manufacturing enterprises in the world (Wijewardana & Cooray,1996).Furthermore, cottage and small scale industries play an important role in economic development through the creation of employment opportunities, .the mobilization of domestic savings, poverty alleviation, income distribution, regional development, training of workers and entrepreneurs and contribution to the export earnings (Central Bank of Sri Lanka,1998). Having understood the positive impact of the development and economic growth of SMEs , successive Governments in Sri Lanka have taken various steps to develop this vital sector (Gamage, 2000). However, various researchers have shown that in Sri Lanka 68% of the small businesses fail within the first 2-5 years of operation. In the United States of America the rate of failure is as high as 80% (Mendis et al, 1999). Why do such a large number of small firms fail each year? E is important to identify the causes of failure and success factors as well as what characteristics of business operators are needed for the business success. Success of the organizational performance and development are in the hands of the business operators. Therefore, the business operators should have reasonable knowledge, skills and capacity to achieve the predetermined target. This study attempt to answer the basic question how significantly do the business operators' achievement competencies influence their business performance?. Therefore the main objective of this study is to evaluate the impact of business operators' achievement competencies on their business performance. Based on the objective of the study the following hypothesis is formulated HI: Achievement competencies have a positive significant relationship with business performance.