| dc.description.abstract | While it is generally accepted that firms' performance is a function of factors external as
well as factors internal to them, many studies have tended to focus on the former so that
little is known about the effects of the latter. This study was intended to establish the
effects of strategies and firm-level institutions on the performance of small-scale garment
manufacturing firms in Tanzania. Performance in this study was viewed not as
employments, sales volumes or other conventional and easy-to-get indicators, but rather
as financial performance indicators, namely, value added per employee (VAE) and value
added per unit of capital (VAC).
The study adopted a case study-survey research design to facilitate understanding and
measurement of variables. Ten cases of small-scale garment manufacturing enterprises in
Dar es Salaam and Morogoro generated in-depth information about strategies and firm level
institutions in small apparel firms, and showed how they relate to performance. The
cases paved the way for a survey study involving 125 respondents to provide for more
general conclusions.
The indicative information from the cases showed that small apparel firms operate under
defined market and production strategies. Strategic markets range from conventional and
inward looking markets to rather contemporary and outward looking markets. Similarly,
production strategies range from conventional sewing and finishing technologies to
advanced sewing and finishing technologies. Firm-level institutions showed that firms
behave differently in employment, remuneration, working capital acquisition, promotion
and advertisement, and networking, which lead to differences in performance.
Despite some theoretical and research limitations, the quantitative findings showed that
although small-scale businesses performance is a complex process that is neither linearly
continuous nor dependent on a limited number of factors, strategies and firm-level
institutions (which do not easily find their way to economic equations) have profound
effects on small apparel firms' performance. Firms that pursue different market and
production strategies perform significantly differently. Those that pursue conventional
strategies showed lower than average performance while those that pursue seemingly
contemporary strategies showed higher than average performance. By Multivariate
Analysis of Variance (MANOVA), propositions concerning market and production
strategies were accepted, meaning that there are significant mean performance
differences between firms that pursue different market strategies and different sewing
technologies, just as there are such differences between firms that pur~ue different market
strategies and use different finishing technologies. Of the twelve firm-level institutions
variables studied, nine resulted in significant mean performance differences between
firms that practice them differently, while three showed no differences. Further, it was
found that matching the firm-level institutions with the market and production strategies a
firm pursues contributes significantly to firm performance.
The study makes four major recommendations. Firstly, it calls for policy makers and
development partners to areas that need intervention in small apparel firms to promote
the growth of the sector. Secondly, it contends that further research could be done to
determine the best way financing organisations should handle small business
entrepreneurs in Tanzania who are just emerging from a different lending culture.
Thirdly, more research is necessary to determine the extent to which small apparel firms,
particularly those in tie and dye, batik utilise the African Growth Opportunity Act
(AGOA). Lastly, a comparative study on how small apparel firms network in other
African countries could help to improve networking among small apparel firms in
Tanzania.
Finally, the study concludes that just as national economic performance and large firm's
performance are a function of both resource endowment and institutions, the same is also
the case with small firm performance. Further, just as moving from conventional and less
performing strategies to contemporary and more paying strategies is entrepreneurial,
adopting firm-level institutions that lead to better performance is also entrepreneurial. | en |
