factors that can affect small business

Chapter 1
THE PROBLEM AND ITS SETTING
Introduction
As a third world country, the Philippines faces a great many social, moral, political and economic challenges. These challenges pertain to the small business which effects to the economic well – being of the nation. The local government in embarking its thrust on several programs to address the problems and the Department of Trade and Industry as one of the lead agencies in dealing with the challenges and factors affecting small businesses in General Santos City, thus the development on how to manage properly the growing enterprise would lead to the development on a new level of management practices. Small businesses contribute largely to the economy and being the prime mover of the Philippine economy. They are the nation’s weapon through job generation, equitable distribution of income and dispersal of economic activities in the country. General Santos City is considered as among the fastest growing cites in and dubbed as the “most competitive mid – sized city” in the country. However a lot of challenges were being faced by the Industry of General Santos City but the industry is doing some strategies to address and solve the current challenges that the industry is facing. Entrepreneurial orientation refers to determining organizational culture focusing on enhancement of wealth through innovation and exploitation of opportunities, which includes the entrepreneurial characteristics of risk taking, innovativeness and pro-activeness and three of eleven entrepreneurial dimensions of strategy discussed by Miller and Friesen (2008). An entrepreneurial firm is one that engages in product-market innovation, beating competitors to the punch. The city is currently experiencing a period of economic growth with an optimistic outlook. Although it might expect more development to accompany economic growth, various economic, political, and socio-cultural conditions in the city still present challenges to national development, to be explored in subsequent essays.(Florence, 2006). With the issues and opportunities stipulated above, the researcher is motivated to investigate the profile, present entrepreneurial challenges and entrepreneurial management orientation in relation to the growth of small businesses in the local setting.
Statement of the Problem The general purpose of this study is to determine the factors affecting small business in General Santos City. Specifically, the study answered the following question:
1. What is the profile of business in General Santos City in terms of:
1.1 Form of organization;
1.2 Nature of business;
1.3 Employment size;
1.4 Number of years in operation; and
1.5 Capitalization?
2. What are the present challenges of small business in General Santos City in terms of:
2.1 Management and Organization;
2.2 Marketing;
2.3 Production/operation;
2.4 Financial; and
2.5 Socio-economic?
3. What is the extent of Entrepreneurial Management Orientation in General Santos City in the areas of:
3.1 Innovativeness;
3.2 Pro-activeness;
3.3 Risk-taking
Scope and Limitation The purpose of the study is to identify the economic factors and its impact of the small business in the medium sized enterprises in General Santos City. A major implication for the findings is that these findings will able to give better understanding for entrepreneurs and business owners in addressing the factors which will significantly affect the business success in General Santos City. The study of the factors affecting business success of SMEs is critical in understanding the business continuity and growth hence help supporting economics development within the country. The results of this study can also be used as reference for anyone who is interested to start their own business which will provide insights into decision making in starting a business and also for any companies which are interested to continue to sustain and grow. We examine the interplay between small businesses. We examine the interplay between small businesses and the economy. We also look at the economic principles and events and how they might impact small businesses.
Significance of the Study The result of this research study categorically benefited from many individuals by providing information on the results of the resources that affects business in General Santos City.
To Local Entrepreneur of General Santos City will benefit from this study in which they may gather information and facts concerning putting up business in our society. And eventually develops new concepts and strategies that encourage them to overcome problems/challenges in business.
To Students which this study contributes learning for them to be able have a better understanding and applied it in their future plans and also it provides insights into decision making in putting up business.
To Future Researcher the proposed research study will benefits and helps the future researcher as their guide. The study can also open in development of this study and may use as their reference material for their related literature.
To Academe for them to be able use this finding as materials for classroom discussions more effective and well explained to students.

Definition of Terms Below are the terms that are defined operationally for better understanding.
Financial refers to the money matters, especially where large sums are involved.
Management and organization refers to the organizing and controlling of the affairs of a business or a sector of a business. Managers and employers consider collectively, especially the directors and executives of a business or organization. These refer to the top management.
Marketing refers to the selling of products or services, the business activity of presenting products or services in such a way as to make them desirable.
Production/Operation refers to the act of making something carry out its function, or controlling or managing the way it works.
Socio-economic refers to the study of the relationship between economics and social life. Socio economists focus on the social impact of some sort of economic change. Such change might include a closing business, market manipulation, the signing of international trade treaties, new natural gas regulation, etc. such social effects can be wide-ranging in size, anywhere from local effects on a small community to change to an entire society.
Pro-activeness refers to an entrepreneur’s opportunity – seeking, forward-looking perspective involving introducing new products or services ahead of the competition and acting in anticipation of future demand to create change and shape the environment.
Risk Taking refers to entrepreneur’s tendency to take a bold action such as venturing into unknown new market, committing a large portion of resources to ventures with uncertain outcomes, and/or borrowing heavily.
Innovativeness refers to an entrepreneur strong commitment to creating and introducing new products, services, or technological processes to the market.

Chapter 2
Related literature and Studies This Chapter presents the conceptual framework of the study which determine the relationship of economic factors which can affect the small business in General Santos City.
Conceptual Framework Despite the financial slump experienced everywhere, the wheels of our local economy continue to turn as our development spirals upwards, new business continue to open, and fresh investments pour in providing more employment and livelihood opportunities for the Generals, and in turn resulting to an increased capability to provide for the families necessities, especially education. Because of the growing industry competition and market demands, our entrepreneurs become more skilled, more ingenious, more creative and more determined. Small business is often regarded as entrepreneurship driven. The booming economic activity in General Santos City, its competitive development such as infrastructure, the presence of malls, traffic light, newly constructed commercial buildings and more than 12,000 plus registered businesses are some that create dynamic communities in the city. Hence, the city was identified as the area of great advancement and these are all due to Small businesses investments. Small businesses are vital for economic growth and development in both industrialized and developing countries, by playing a key role in creating new jobs. Financing is necessary to help them set up and expand their operations, develop new products, and invest in new staff or production facilities. Many small business start out as an idea from one or two people, who invest their own money and probably turn to family and friends for financial help in return for a share in the business.

Figure 1. Conceptual Framework Chart The conceptual framework as shown in figure 1 is composed of three components. The first component is the businesses that encountered and experiencing some factors that can affect and give impact in various areas it can also often closely associated with the firm’s overall success and survival. This makes the second component includes the present challenges encountered by the business as to management & organization, marketing, production/operation, financial, and socio – economic. These challenges encountered create an impact to the industry that affects their operation at some point. Thus, makes the third component as composed of entrepreneurial orientation of small businesses as to innovativeness, pro – activeness, and Risk – Taking to seeks opportunity and take a bold action such as venturing into unknown market and committing resources to introduce new products or services ahead.
Related Literature Small Business is very important segments in the society. (Kao & Liang, 2001) defined small business as one that is owned independently (that is, it is not a subsidiary of a larger firm) and managed by its entrepreneur/owner with little or no delegation of decision-making to employees.
Management and Organization Management is the process of designing and maintaining an environment in which individuals, working together in a group, efficiently accomplish selected aims. In management, planning, organizing, staffing, leading, and controlling are the managerial functions which apply to any kind of organization. But there are now updated managerial functions which have evolved out of classical functions. These make things happen; meeting the competition; organizing people, project and process; and leading. Making things involve planning. Planning is choosing a goal and developing a method to achieve that goal. Planning is the one of the best ways to improve organizational and individual performance. It encourage people to work harder, to work hard for extended periods, to engage in behavior directly related to goal accomplishment and to think of better ways to do their jobs. But most important, companies that have plans have larger profits and faster growth than companies that don’t have plans. However, planning also has three potential pitfalls. Companies that are overly committed to their plans may be slow to adopt changes in their environment. Planning is based on assumptions about the future, and when those assumptions are wrong, plans are likely to fail. Finally, planning can fail when planners are detached from the implementation plans. (Williams, 2008) Without proper planning, there will be difficulty for an organization to organize its people, activities, responsibilities, etc. For an organizational role to exist and be meaningful to people, it must incorporate verifiable objectives, which, as indicated as a major part of planning; a clear idea of major activities or duties involved; and an understood discretion or authority so that person filling the role knows what he or she can do to accomplish goal. lack of planning or poor planning can hurt organization’s performance. For example, clothing retailer Marry-Go-Round, a once-ubiquitous presence in malls across America, slid into bankruptcy and ultimately disappeared as a result of poor planning. Top manager’s lack of vision in perceiving market direction and growth, and the failure to prepare for management succession helped to kill a 1500-store, billion dollars nationwide. (Daft, 2005)
The next function is managing the competition. The cliché that the world is getting smaller is dramatically true for today’s organization. With rapid advances in technology and communications, the time it takes to exert influences around the world from the even the most remote locations has been reduced from years to only seconds. Business is becoming a unified global field as trade barriers fall. Communications becomes faster and cheaper, and consumer testes in everything from clothing to cellular phones converge. The mind – set of the leaders is to expect the unexpected and be prepared for the constant change. The challenge for managers and organizations in most countries is not just to cope with change but also to embrace the organizational forms and patterns are just emerging. (Daft, 2000)
Understanding an organization’s strengths and weaknesses, its customers, and competitors, its structures and systems, and how it operates in its environment is a critical precursor to change. This early evaluation should give managers a more systematic view of problems and opportunities and thus a more sophisticated understanding of demands and constraints.
Adopting and program that has worked successfully at another company without first analysing the specific needs of one’ own company is like borrowing someone else’s medicine without first determining whether they have the same illness.
Managers should examine both the internal and external pressures that are driving the change as well as the forces of resistance that are likely to obstruct it.
That is, what are the major reasons for change or conditions that necessitate it, and what are the major barriers. (Cohen, 2000)
Change is sometimes difficult to manage. With change, employee’s behavior and work environment is affected. That is why organizing is very important in management and considered also as one of the management functions.
Organizing people, projects and processes include managing individuals and diverse workforce, managing teams, managing human resources systems, and managing service and manufacturing operations. Diversity exists in organizations when there is a demographic, cultural and personal difference among the people and the customers. Because of diversity and differences, working environment is greatly affected. Deep level diversity represents differences that can be learned only through extended interaction with others. Examples of deep-level diversity include personality differences, attitudes, beliefs and values. This could be a challenge on the management in building a team with different personalities. In many industries, teams are growing in importance because they help organizations respond to specific problems and challenges. That’s why it is very important to understand the characteristics of work teams to be an effective part of an organization.
In human resource planning, it uses organizational goals and strategies to determine what needs to be done to attract, develop, and keep qualified workforce. This is also linked to staffing which is defined as filling, and keeping filled, positions in the organization structure. This is done by identifying work-force requirements, inventorying the people available, and recruiting, selecting, placing, promoting, appraising, planning the careers of, compensating, and training or otherwise developing both candidates and current jobholders so they can accomplish their tasks effectively and efficiently. When there is a right staff in a certain task then company objective could be easily achieved. (Williams, 2008)
Great products and services are generated through great employees. Effective organizations seek out and employ effective people. These employees are the ones who understand how their jobs fit into the overall scheme of providing products and services to customers. Their knowledge, skills, and efforts are invaluable to the firm because successful organizations evolve on a daily basis in many small ways. (Summers, 2001)
According to a study conducted by Karen Shelton of University of Wisconsin-Stout that most reason of a high turn-over rate of employees are unsatisfied with their job or work. It is very important that company must have effective employees in order to stay financially solvent and competitive. In order to maintain this valuable commodity, organizations must be aware of employee satisfaction and retention. Organizations must have employees who are able to quickly adopt to an ever-changing world market. Companies need to invest in on going employee development in order to both keep employees and be successful. (Shelton, 2001) Why are employees unsatisfied? This could be that they are not motivated by their superiors who manage or lead them. Leading as one of the managerial functions is defined as the process of influencing people so that they will contribute to organization and group goals. However, in some organizations superiors may set good example to its subordinates. Failure to “walk your talk” contributes to an attitude problem of an employee to the company. Ego, ignorance and disparities between word and actions are antagonistic to effective leadership. Further, they are triggers likely to set off rounds of employee resentment and sabotage.
Tolerating cold also is a factor in an attitude problem. Laziness and lack of motivation on the part of boss and employees lead to average performance. Strong motivation and exceptional performance follow high-esteem. It is the manager’s responsibility to make positive requirements to his/her employees that may surpass even their own notions of how capable they are. The “Lack of Discipline by example” by the superior would also lead to be followed by his subordinated that wouldn’t be healthy for the company. In this age of those organizations, cross-functional teams, and multiple reporting relationships, discipline is instilled more by example than flat. The boss who arrives late and leaves early, or accepts less than accurate work from himself or others has no cause to complain when the work of his/her unit is below standard.
A significant component of human resources is the quality of leadership. Leadership has been described as process of social influence which one person can enlist support of others in the accomplishment of task. How leaders interact with their people is crucial to creating effective work environment for employees. Effective leaders have a relationship with their employees. Their employees trust them because they provide clear direction and establish clear expectations and priorities. Employees, regardless of their type of job, come to work with certain self- perceptions and needs. Most employees desire a feeling of achievement, and most want to take pride in their work. (Summer, 2001)
Marketing
The process of performing market research, selling products and/or services to customers and promoting those products or services by advertising to further enhance sales is what we called as marketing. It generates strategy that underlines sales techniques, business communication, and business developments. It is an integrated process through which companies build strong customers relationships and created value of their customers and for themselves.
Marketing can either be domestic marketing or international marketing. The only difference between the definition of domestic marketing and international marketing is that in the latter case, marketing activities take place in more than one country. The uniqueness of foreign marketing comes from the range of unfamiliar problems and the variety of strategies necessary to cope with different level of uncertainty. (Graham, 2009)
Competition, legal constraints, government controls, weather, fickle customer, and any number of uncontrollable elements can and frequently do, affect the profitable outcome of good and marketing plans. Generally speaking, the marketer cannot control or influence these uncontrollable elements, but instead must adapt to a manner of consistent with a successful outcome. If there is an uncontrollable element there is also a controllable element. What makes marketing interesting is the challenge of molding the controllable elements of marketing decisions (product, price, promotion, distribution and research) within the framework of uncontrollable elements of marketplace (competition, politics, laws, consumer behavior, level of technology and so forth) in such a way that marketing objectives achieved.
Consumers make the business alive. It is best to fully understand what the customer wants and needs. This will be needed to fully meet their expectations. Consumers see the price, the quality of the product, the distribution process of the product and the benefit that they will be able to get. This is the reason why small businesses industry gives what their customer wants. Safety is very important to consumer. Because of this, there are regulating bodies that exist to monitor the quality of the products. There are standards being set by regulators and consumers to companies to ensure that products are of good value. Small and medium sized industry businesses all over the word increasingly have to consider the production of good quality products as essential to their survival. Consumers and buyers are becoming more aware of the importance of safe, high quality products. Large companies that can afford advertising space on the radio, television or in the press emphasize the quality of their goods. This quality image is given by starting for example “our foods are made only from high quality ingredients.” They also project a quality image through packaging etc. Producers who sell intermediate products, such as dried fruits, to a secondary processor will find that the buyer expects the foods to meet an agreed standard. In the case of exporters, these standards are becoming stricter. A food companies, including the smallest manufacturers, have a responsibility to provide consumers with safe, wholesome foods. Safety is not an option but is an essential part of planning, preparation and production of foods. Any lack of consideration of safety can result in a serious threat to public health. This is recognized by the law in many countries, enforcement staffs are not always sufficiently resourced to be fully effective, but this situation is changing as consumers become more concerned about food safety. Any important management method to ensure the safety of foods is the Hazard Analysis Critical Control Point (HACCP) system. This is based on quality control, microbiology and risk management. It has been adopted throughout the world, although some countries have tailored the approached to the needs of their particular food sectors. Many small producers may consider that the development of HACCP systems is not feasible or appropriate to their current needs. However larger manufacturers and producer groups who export to industrialized countries are increasingly finding that HACCP is not a matter of choice but is demanded by the importing company.
Webster dictionary states quality as something that a customer is willing to pay. Consumers are willing to pay a price for as long as they get what they require. The price however of product varies depending on the price also of its raw materials. As a small businesses industry caters global markets as their customers experience economic crisis is it will definitely have an effect in the operation of their business. Although, USA market had decline orders there are still other markets that the Industry caters. The mall businesses industry is on its way in looking for more other market. In marketing there is what we call promotion to develop the product and increase brand awareness. Promotional activities done by an industry to introduce the product in the market would definitely affect the demand of the consumers. This is done in advertising, sales promotion, etc. Most of the companies find it hard to focus on promotional activities for involving in promotional activities entail large investments. As there is an increase in competition and as we move on to globalization there is a need to have a good supply chain management. According to supply Chain Resource Cooperative the rate of change in markets, products, and technology is increasing, leading to situations where managers must make decisions on shorter notice, with less information and with higher penalty costs. New competitors are entering into markets that have traditionally been dominated by “domestic” firms. At the same time, customers are demanding quicker delivery, state-of-the-art technology, and product and services better-suited to their individual needs. In some industries, product life cycles are shrinking from years to a matter of two to three months. Despite the imposing challenges of today’s competitive environment, some organizations are thriving. These firms have embraced the changes facing today’s markets, and have put a renewed emphasis in improving their operations and in particular, supply chain performance. To survive, many firms today find that they must increase market share on a global basis and be on “the ground floor” of rapid global economic expansion. Simultaneously, these firms must be vigorously defending their domestic market share from a host of “world class” international competitors. To meet this challenge, managers are seeking to find ways to rapidly expand their global presence. They must position inventories so products are available when customers (regardless of location) want them, in the right quantity, and for the right price. This level of performance is a constant challenge to organizations, and can only occur when all parties in a supply chain are “on the same wavelength.
Production/ Operations Production is the creation of goods and services. It is the process and methods employed to transform tangible inputs (raw materials, semi-finished goods) and intangible inputs (ideas, knowledge) into goods or services. It is an operation management that creates value in the forming of goods and services and by transforming inputs and outputs. Activities creating goods and services take place in all organizations. (Heizer et al, 2006)
There are factors that affect the production of a product. Supply or raw materials, quality of the raw materials and costs are just some of the issues being encountered in producing a product.
Financial
Expenses could be of problem in the daily operation of the company. On financial aspect expenses are always there, a cash outflow is always present. In manufacturing company, inventory is usually divided into three basic categories: raw materials used in the product; work in progress, which reflects partially finished product; and finished goods, which are ready for sale. (Block et al, 2005). This was already finished products but since the demand declines, the Industry stores it to its warehouse until such time that orders will come. Sales people offer product to the customer just to earn a sale. They sometimes do some decisions that might harm the future profit of the company. As discussed by the Industrial performance Group, Inc. declining profit margins are a major concern for most businesses. Price discounting is the primary cause of profit margin erosion. Most salespeople lack the ability to effectively respond when customer demand lower pricing. As a result, they rely on discounting to get sales. Offering price discounts and throwing in a few extras to get sale can quickly into a bad habit that greatly reduces your profit margin. In addition, the shrinking of profit margins, price discounting creates a false perception in the customer’s mind about what the product is worth. Salesperson develop the discounting habit when they don’t know how to respond downward price pressure. There are negative impact on revenue and costs if company would freeze hiring. Obviously, not expanding staff or keeping open positions vacant can save payroll dollars in the short term. However, such savings may actually present a false reality because freezes have many other unintended consequences that companies often fail to account for lost revenue, customer impact and on limit growth.
Socio-economic
Organizations clearly interact with society and have an impact, not just on employees and customers, but also on the wider community. Many members of society argue that managers must consider the impact of their decisions and actions on society as a whole and must assume responsibility for their activities. They argue that managers should take steps to protect and improve the welfare of society. In short, managers must evaluate their decisions and actions, not just from the perspective of organizational effectiveness, but also from the perspective of social welfare. (Business Wise, 2007)
When business interacts with society, a shared interest and interdependence develops stakeholders. Stakeholders are all the people and groups affected by an organization’s decision, policies, and operations. The number of stakeholders and the variety draw of their interests can be quite large; thus, a company’s decisions can become very complex. Government and stakeholder create condition ns that can influence a company to stay in or withdraw form a particular market; still, the decision is ultimately the company’s to make. However, business cannot act without regard to its stakeholder’s interest. In addition, profit and economic considerations, for example, the company must be considering its customer, suppliers, employees, owners, and creditors. Simply stated, good managerial decisions are made by paying attention to the effects of those decisions- pro and con- on the people’s interests. Conflicting consideration such as these is a part of any manager’s job. There are examples of companies disregarding their stakeholder’s wishes, either out of the belief that a stakeholder is wrong or out of arrogance reflected in the attitude that a customer, employee or regulator doesn’t matter. Such attitudes often prove costly to the company involved. For example, builders know they cannot locate a plant in a community that strongly objects. The only way to build a power plant or incinerator, for example, is to work with a community, to respond to concerns, and invest in creating and maintaining a relationship of trust. Today, many stakeholders have the ability to stick quills into business. But, as the Malden Mills (textile manufacturer located in Massachusetts) suggest that stakeholders relationship is also vital part of the company’s assets. Companies need comprehensive approaches that take into account the needs of a larger and more diverse group of stockholders. Business cannot be done in a social and good management planning must take into account stakeholders’ consideration. One of the most important social challenges to business is to strike a balance between industrial production and nature’s limit. Industrial production, mining and farming are bound to produce waste and pollution is a price of society pays for rising populations, urbanization, and more goods and services. All industrial societies whether the United States, Japan, Germany, Russia or South Korea-create a disproportionate (relative to population) share of the world’s pollution and waste. The emerging nations of the third world, with their rapid growth rates and limited pollution controls, also contribute to global ecological problems as their economies become more industrialized. Ecological impact extends far beyond national boundaries. Stratospheric ozone depletion potentially threatens health and agriculture on a worldwide basis. Environmental protection, involving pollution, waste minimization, and natural resources conservation, has become a high priority for developing nations as well as the advanced industrialized nations. International agreements have been created to address the most pressing issues, such as ozone depletion, biodiversity, and global warming. But government and industry leaders recognize that this is just the beginning of what must be done to achieve a sustainable balance between economic activities. This requires the use of resources, and global environmental protection, which requires the preservation of resources. Business leader at every level of business activity from corporate headquarters to the local retail outlet are being challenged by the need to integrate ecological thinking into their decision making (Post et. al, 2002)
Entrepreneurial Orientation The entrepreneurship does not start with the creative concept for a new product, service or process. It begins with an opportunity, which can be defined as a favorable set of circumstances creating a need or an opening for a new business concept or approach. Two of the methods firms can use to enhance their competitive position through:
Innovativeness
To innovate successfully, firms must break out of the patterns that have shaped their thinking. For example, Tim Warren, director of research and technical services at the oil giant Royal Dutch/Shell, was sure that Shell’s employees had vast reserves of innovative talent that had not been tapped; investing in new technology, R&D, and continuous improvement- for successful innovation, firms must seek advantages from the latest technologies.
Innovativeness is concerned with supporting and encouraging new ideas, experimentation and creativity likely to result in new products, services or processes (Fitzroy and Hubert, 2007). The indicators used to assess innovativeness comprised the level of involvement in R&D, the extent of innovation and qualifications of the workforce.
Firms were asked to indicate their level for involvement in R&D. For a small number of firms (13) R&D was their primary activity. In total, almost 60 % claimed to be highly involved in R&D, although a quarter undertook of R&D.
The 2005 survey on the effects of entrepreneurial orientation, asked the nature of innovations as between product/service, process and logistics or delivery of service. Some firms recorded innovative activity across a broad spectrum whereas others recorded innovations only in respect of product or service. The diversity or extent of innovative activity was considered an important indicator of innovativeness (Daft, 2005)
Pro – activeness
The concept of pro – activeness refers to a firm’s efforts to seize new opportunities. Firms can use to act proactively: (1) introducing new products or technological capabilities ahead of the competition- maintaining a high level of pro-activeness is central to the corporate culture of some major corporations. (2) Continuously seeking out new product or service offerings- firms that provide new resources or sources of supply can benefit from a proactive posture.
Pro-activeness is concerned with ‘first mover’ and other actions aimed at seeking to secure and protect market share and with a forward-looking perspective reflected in actions taken in anticipation of future demand (Lumpkin Dess, 2005 ). The indicators of pro-activeness used here comprised collaboration; incidence and extent, innovations, (in particular the incidence of ‘novel’ innovations); activities designed to protect intellectual property and market structure. Information was sought about formal or in formal collaboration or alliances with other organizations during the 2 years prior to the 2005 study and the purpose of collaboration had relationship with atleast one of the following, ‘firms in the same line of business’ ‘customers’ and ‘suppliers’. The majority (more than two thirds) reporting collaborative partnerships gave more than one purpose. However, regardless of the type of organization collaborated with the purpose of collaboration was dominated by market-related issues. Of 74 CEOs giving reasons for collaboration 62 mentioned either ‘to expand the range of products/services’ and/or ‘to provide access to new markets’. Half of the remaining CEO’s gave ‘meeting current customer/client needs’ as the purpose of collaboration. Given that market-related issues dominated reasons for collaboration, firms were assessed for pro-activeness in terms of the diversity of organizations with which they had collaborated. In common with other studies of small businesses (Kitson and Wilkinson. 2006), the majority of firms (60%) could be classified as operation in “niche markets”: confronting 5 or fewer serious competitors. Although striving to establish dominance in a niche market may demonstrate pro-activeness, account also needs to be taken of the extent to which that market is dominated by one or two customers, on which the firm is highly dependent. Few firms (13%) were dependent on a single customer for more than 50% of turnover. It can be suggested that the ideal “niche market” sought is where customers dependence is relatively low and serious rivals few. Such situations were considered to have a “positive” niche market effect. The reverse situation relatively high customer dependence combined with higher numbers of serious rivals was considered to have a ‘negative’ effect and intermediate situation a ‘neutral’ effect. On the basis of the above indicators the firms were ‘scored’ in terms of their level of pro-activeness.
RISK TAKING Risk taking refers to an entrepreneurs tendency to take a bold action such as venturing into unknown new market, committing a large portion of resources to ventures with uncertain outcomes, and/or borrowing heavily, firms can use the following two methods to reinforce their competitive position through risk taking:
(1)Researching and assessing risk factors to minimize uncertainty although all new business endeavors are inherently risky, firms that do their homework can usually reduce their risk; (2) using techniques that have worked in other domains-risky methods that other firms have applied successfully may be used to advance corporate ventures.(ferreire,2008).
Measuring the extent to which individuals differ in their willingness to take risk is contentious. Early work in small business research tended to be focused on various psychological characteristics such as locus of control and tolerance of ambiguity. CEO’s subjective evaluation of their approaches towards risk is also fraught with difficulty since what one person regards as a ‘calculated’ approach another may regard as ‘aversion’. Others have suggested that the differentiating factor is the way risks are calculated (Norton and Moore, 2004). This study focused on behavior, which might willingness to invest with uncertain returns: level of spending on R&D and investment in training as indicated by level of off-job training for full-time employees. Just over half of the firms undertaking R&D spent an average of less than 10% of turnover on R&D in the 2 years prior to the 2005 study but a quarter recorded levels of more than 10% of turnover. Few firms (28) had sought venture capital and those that had were evenly divided in terms of success. Seeking venture funding was regarded as indicative of a willingness to take risks.
The impact of involvement in technology sectors was evident from the incidence and extent of training undertaken. Many studies of small firms suggest that they do not train. However like other recent studies (Barnett and storey, 2004) the incidence of training in the firms in this study was high. Almost two thirds provided some off-job training for full-time employees and in a quarter, over 20% of full-time employees were given such training. As with employment growth and qualification of the workforce, relative training performance was assessed in respect of employment size.
RELATED STUDIES The study conducted by Poutziouos, Michaela and Soufani reports the findings of an empirical investigation on the economic factors affecting small businesses in General Santos City. The study involved interviews in SME’s postal survey with responses from further companies, and entrepreneurship of small businesses. The findings show that although short-term entrepreneurship practices improve as companies grow there is scope for the owner- managers of small businesses to strengthen their trade credit management in order to reduce costs and enhance business performance. Moreover, they have to consider more financial options. This report has documented the key findings of many organizations responding global forces by re-engineering business process and shifting to horizontal organizations structures with self- directed teams. Some are adopting structural innovations such as the network, to focus their core competencies while outside specialists handle other activities. In addition to these structural changes, today’s organizations face the need for dramatic strategic and structural change, and for rapid innovations in technology and products. (Daft 1998). The report looked t how economic factors affects small businesses in General Santos City, and how these business manage their organizations. In the study of Berry & Sweeting (2002) stated that deficiencies in Economic Factors have been repeatedly cited as a root cause of business failure. (Najak and Greenfield 1994) two arguments are advanced for such deficiencies in SMEs; that new entrepreneurship is not relevant and that SME managers are unable to make up use of business. Here, it is argued that Business ideas are relevant to SME’s but that a process of innovations combining both knowledge to overcome a barrier of belief and an external shock are necessary in order for innovation to take place. These ideas were explored through a survey to SMEs from both service and manufacturing business in General Santos City. It was observed that the use of organizational techniques is negatively related to growth in turnover. However, the use of organizational techniques that were related to the product market was found to be positively related to growth in turnover and that owner/mangers belief in the importance of organization in business decisions was strong related growth very negatively related to size. The second theme of the research was the significance of the role of external advisors. Prima facie it was suggested that external advisors may be key agents of change, but the study revealed that their perceived value was relatively low. The findings of this survey suggest that when entrepreneurship is perceived to be relevant then it use does support business growth but innovation in accounting in SME requires further research. In a study of measuring organizational performance by Wood & Walmsley (2004); it reports on the analysis methods used during a recent multinational experiment that was aimed exploring concepts for a new planning process within a condition of nations. In February 2004 over 400 participants from other countries took part in the multinational experiment conducted in a distributed collaborative environment. These participants formed a virtual coalition headquarters in order to plan an appropriate response to a crisis situation. These new planning process required “whole-of-government”’ approach encompassing government departments, coordination of coalition partners, government agencies, non-government organizations and other international application of appropriate organizational structures and process together with supporting information system and technologies The challenge of this study and researcher was to design and develop valid and robust measures of organizational performance. They found out that changes to the way the constructs were operational are required in order to take account of the practical complexities of measuring performance. In another study on organizational performance by Mcmillan, Diedrich and Entin (2005), immersive “virtual” simulations offer an opportunity to gain insight and experience in new, innovative, organizational structures. Assessing the performance of these new organizations represents a considerable challenge due to the myriad of complex interrelated factors that may contribute to the outcomes observed in the simulation. Theories and models, often in the form of “constructive” simulations of organizational performance, can guide the development of empirical performance measures by linking detailed behaviors to overall outcomes for organizations. Constructive simulations can be used to create meaningful test conditions for immersive performance measurement , to identify those aspects of performance that are most critical to measure, and to predict the effects of organizational structures on performance. Considerable challenge, however. This chapter provides examples of the use of the theories and constructive simulations to structure empirical data collecting of organizational performance, and discusses the lessons learned from these efforts. The focus is on organizational structures for military command and control, including innovative structures associated with the new and rapidly evolving concept of “network-centric warfare” The study of Berry and Rodriguez (2001) reviewed the experience of small and medium enterprises in recent years in the Philippines. It notes that while Philippines economic growth picked up in the early 1990s/, the share of its small and medium enterprises (SMEs) in manufacturing employment and value added stayed roughly constant. However, the overall stability masks some dynamism across firm sizes and sectors. Thus, very small firms (with less than 10 workers) had higher than average rates of growth of total factor productivity during 1988-94c while larger firm (of between 50and 200 workers) experienced a decline in productivity. Toward the end of decade, the Philippines were affected by the economic factors but less seriously than some other Asians countries. Small firms do not seem to have been worse hit than larger firms. The Philippines has shown slow growth for decades, despite some recent recovery efforts. The evidence indicates that the SME sector was emerging from the deep economic crisis of the 1980s and experiencing the first positive effects of the economy wide reforms implemented in the late 1980’s and early 1990;s. By the mid- 1990’s Philippine SMEs appeared to have recovered from long period of decline, but their performance, by itself, does not seem to have been vigorous enough to boost the Philippine economy after the 1997-98 crisis. Large firms and large foreign ownership have rationally characterized the Philippine manufacturing sector. During a period of deep market reforms in the 1990s; the country open up to more FDI. Trade and economic reforms help to improve the growth scenario without providing a period of high growth. During the current crisis the modern sector manufacturing dominated the recovery by exporting high-end items and helped to buffer other negative impacts on Philippine manufacturing while creating a new, but small, breed of SMEs: small or medium foreign-owned enterprises. The study presented in a forum of International Development Studies on September 2005, attempted to analyze the ways of government’s bureaucratic system in the service delivery of SME sector affects the day-to- day operations of small enterprises, along with other related issues such as the central- local government relations, decentralization, partnership and networking approach, and the demand- supply driven public services. It looked at the experience of the Philippine government’s policies and programs aim at SME’s growth. Dubbed as the national SME Development Agenda. The agenda incorporate a comprehensive and integrated approach to SME development, under the national government’s direction. Apparently, the agenda are centrally planned. Designed and implemented. At the lowest level of the government hierarchy, the local government units are entirely left only the monitor and coordinate the implementation of central government actions. Hence, the role and accountability of local stockholders are of well defined (especially the local government’s). Citing Zamboanga City, the economic center of western Mindanao region, the local government is lacking ownership involvement, and commitment to this national initiative. Despite this national government-led support scheme. SMEs are continually facing some problems and pressures pertaining to their business operations. Analysis on the effect of national government’s a support scheme at the firm level is presented, with some implications toward the end. The study of Tamangan, Jocef and Habito (2004) discussed the role of SMEs in economic development has been well recognized. SMEs have been regarded as an important contributor to employment generation and wealth creation in developing economy. Ironically, however, SMEs have been discriminated against considering a raft of issues, In almost all countries, there is either a separate policy statement for SME (or for micro or cottage industries) or a general industrial policy statement with some potions of relating to SMEs. Philippines SME development policies that have been set in place may have been in light of major Philippine industrial development policies. Historically, the common thread that binds Philippine industrial policies has been the emphasis on policies regarding expansion of exports, increases in foreign investments, development of the private sector, and enhancement of domestic linkages. Moreover, there might have been industrial policies that may have been undermined SME development because inherent scale biases. Inroads regarding SME development have been realized in the economy thus far, but Philippines SMEs can still derive some lessons from the Japanese experience, particularly Japanese practices regarding subcontracting and clustering. There is also a need to realize that it is now insufficient to address commonplace themes and roadblocks experienced by Philippine SMEs identified through historical experiences, Nowadays, it is inescapable to acknowledge the concerns regarding SMEs will have to be considered and addressed in light of globalization, which is most easily comprehended in terms of international trade. Bilateral trade cooperation is mutually beneficial. One way for Japan to encourage Philippine SME development, as part of bilateral trade cooperation, is to identify and to open some Japanese markets to Philippine SME exports. Hence, sector (or even sub-sector) identification in general, and product identification in particular, is a necessary first step to this end. The study of Salazar (1984) which was conducted among the 230 SMEs located in Region III, IV, NCR and VII in which the SMEs are located. The result of the study presented the economic factors practices adopted by the SMEs on cash forecasting, cash maintenance, sourcing of funds, allocation of borrowed funds and control measures for daily operations. A study of Stan, Landry and Evans (2004) on boundary spanners’ satisfaction with organizational support services: An internal communications perspective, offered insights into how internal communication by both managers and service providers impact a boundary spanners’ satisfaction with support services. The study used path analysis or structural equation modelling as a statistical tool. Results indicated that service provider and manager communications are largely complementary and that satisfaction with service outcomes, rather than service quality, appears to have an enduring impact upon a boundary spanners’ overall job satisfaction. Small and medium enterprises have long been building blocks of the Philippine economy comprising more than a majority of the total businesses operating in the country. Despite the numbers given and their contributions, many problems beseech the sector. One is in the aspect of the Economic Factors. Areas such as accounting systems, financing, working capital management and capital budgeting are some of the basic concerns of an SMEs which if not given the necessary attention could have an impact on the performance of the enterprise as a whole. The organizational performances of these enterprises are also dependent on these Economic Factors practices such as their competitive advantage, profitability, productivity, sustainability and innovation.

Chapter 3
Research Methodology This chapter presents the research design and methodology use to conduct the study. It includes the locale of the study, respondents of the study, sampling design, andthe data gathering procedure and statistical treatment or analysis of data.
Research Design Descriptive type of research is use in this study. The data were gathered, analyzed and interpreted. Recommendations were given base on the findings of the study. Descriptive method is use in the conduct of this study. It described the profile, problems, the common challenges of small business. Datawere gathered from the respondents using the self-made questionnaires. Data gathered will be analyzed using percentage and weighted mean statistical tools.
Locale of the Study General Santos City is mainly an agri-industrial based area where most of business players are Small and Medium Enterprises. This micro businesses are perceived as the primary source of employment and income in the city. Thus, they are also the identified area for advancement. An Executive Order which created the General Santos City- Small Medium Enterprises Development. This is in response to the national agenda for the development of Small Businesses in the Philippines Government. (www.yamangensan.com)

Respondents of the Study
The respondents of the study were the Managers, Supervisors and the key personnel of the Small Business in General Santos City. The Identified respondents were considered in the study considering that their position involved in their major activities and decision-making in the operations. They are also exposed in the different reports that describe the performance of the company.
Sampling Design
The study utilized random sampling with proportional representation from each of the different types of business activities such as food industry, leather goods, IT services, organic and natural products, wearable, etc. The study used a sample of 20 respondents with proportional distribution for each category.
Research Instruments
The researcher developed a self-made questionnaire composed of three parts. The first part consisted of data on the profile of Small Businesses of General Santos City (respondents). The second part contained of questionnaire designed to determine the industry’s challenges. Challenges encountered by the establishment as to Management and Organization; Marketing; Production Operation; Financial and Socio-Economic. This are designed to know the existence of the challenges in the company.The third part consisted of questions related to existing practices and their effects to the Small Businesses in General Santos City in the areas of competitive advantage, profitability, sustainability and productivity.

Interpretation of the Data In interpreting the data, the following scale were used:
Box 1 presents the interpretation of ratings for present challenges encountered by the small business in General Santos City.
Box 1
Rating Interpreting for the Present Challenges Encountered by the Company
Qualitative Description
Quantitative Description
Interpretation
4.21 – 5.00
Very Highly Existing
Stated Challenges is 76 – 100% experienced by the company
3.41 – 4.20
Highly Existing
Stated Challenges in 51 – 75% experience in the company
2.61 – 3.40
Existing
Stated Challenges in 26 – 50% experienced in the company
1.81 – 2.60
Moderately Existing
Stated Challenges is 1 – 25% experienced by the company
1.00 – 1.80
Not Existing
Stated Challenges is not experience by the Company

Where:
Current Challenges Encountered Very Highly Existing - The Challenges presented is extremely experienced by the company. Highly Existing – The challenge presented is very much sand experienced by the company. Existing – The challenge presented exists and experienced by the company.
Moderately Existing - The challenge presented is quietly existing and experienced by the company.
Not Existing - The challenge presented not existing and experienced by the company. Box 2 presents the effects of entrepreneurial and management of small businesses in terms of Innovativeness, Pro-activeness, and Risk Taking is measure and interpret using the following rating scale.
Box 2
Small business Growth in General Santos City
Rating
Numerical Value
Description
5
4.21 – 5.00
Very Highly Practiced
4
3.41 – 4.20
Highly Practiced
3
2.61 – 3.40
Moderately Practiced
2
1.81 – 2.60
Seldom Practiced
1
1.00 – 1.80
Not Practiced

Where: Very Highly Practiced (5) –Theentrepreneurial management and entrepreneurial orientation to the growth of enterprise are extensively practiced and functioning excellently. Highly Practiced (4) – The entrepreneurial management and entrepreneurial orientation to the growth of enterprise are functioning well. Moderately Practices (3) – The entrepreneurial management and entrepreneurial orientation to the growth of enterprise are Moderately practiced functioning well. Seldom Practiced (2) – The entrepreneurial management and entrepreneurial orientation to the growth of enterprise are partially practiced and functioning in limited extent. Not Practiced (1) – The entrepreneurial management and entrepreneurial orientation to the growth of enterprise are not practiced.

Data Gathering Procedure
A personal interview is made to the personnel and agencies in formulation of the survey questionnaires. Questionnaires were then personally distributed to the correspondents of some small business in General Santos City. This enables the researchers to personally communicate with the personnel of businesses in General Santos City. The respondents were given time to completely answer the questionnaire. The data were gathered from the respondents and these were treated interpreted with the analysis of the data.
Statistical Treatment of Data Frequency – is use to determine the profile of small business in General Santos City. Percentage – is use to present the profile of small business in General Santos City Rank – is use to determine the level of theimplications of the challenge to the small business in General Santos City. Mean –is use to determine the level of the entrepreneurial management practices of Small Businesses in General Santos City.

CHAPTER 4
PRESENTATION OF DATA, ANALYSIS, AND INTERPRETATION This chapter contains the presentation, analysis, and interpretation of the data obtained from the survey questionnaire.
Profile of Business Nature of business are food industry, leather goods, IT services, organic & natural products, wearable, and others that categories into embroidery, digital business, beauty products, t-shirt printing and cell phone accessories.
TABLE 1
Nature of Business in General Santos City
N= 20

NATURE OF BUSINESS
N
Percentage
Food Industry
5
25%
Leather Goods
1
5%
IT Services
1
5%
Organic & Natural
3
15%
Wearable
4
20%
Cell phone Accessories
1
5%
Embroidery
2
10%
Digital Life
1
5%
Beauty Products
1
5%
T-Shirt Printing
1
5%
Total
20
100%

Out of 20 respondents 25% of small businesses engaged into food industry, 20% wearable, 15% Organic material, 10% in embroidery, and 5% for the leather goods, IT services, digital life business, T-shirt printing, cell phone accessories, and beauty products. Table 2
Employment Size
N=20

Employment Size
Frequency
Percentage
3 -7 persons
10
50%
8 – 12 persons
2
10%
Others: 1-2
7
35%
34 persons
1
5%
Total
20
100%

Most of the respondents employ between 3 – 7 persons at 50%. Seems most of the respondents are single proprietorship, they usually required family members to work for the business at lower cost and only employ contractual employees. Table 3
Number of Years
N=20

Years
Frequency
Percentage
Less than 5 years
10
50% 6 – 10 years
8
40%
16 – 20 years
1
5%
50 years
1
5%
Total
20
100%

Table 3 shows the number of years the small businesses of General Santos City has existed. It shows that many small businesses have a great number existed in short years while only one industry had been in the market for long production quality.
Table 4
Market Size/Capital
N=20

Amount
Frequency
Percentage
Less than ₱2,000,000.00
11
55%
₱2,000,000.00
3
15%
₱ 5,000,000.00
6
30%
Total
20
100%

Table 4 shows the estimated market size/capital of small businesses in General Santos City. The result shows that 55% of small businesses had a capital of less than ₱2,000,000.00. And only 15% who has a capital of ₱2,000,000.00 and 30% that has ₱5,000,000.00 as their capital.
Table 5
Form of Organization
N=20

Form of Organization
Frequency
Percentage
Sole Proprietorship
11
55%
Partnership
5
25%
Corporation
4
20%
Total
20
100%

Table 5 shows of the 20 respondent’s majority are sole partnership which has 11 respondents followed by partnership which has 5 respondents and the firms that engage in corporation have 4 respondents. Most of the businesses in General Santos City are family own with the patriarch or the matriarch leading the business which is why the single proprietorship style is common in General Santos City.
Small Business Challenges The common challenges usually encountered by the small business in General

Santos City
Table 6.A
Management and Organization
N=20

Challenges
Weighted Mean
Interpretation
Rank
1. There is difficult in planning to organize people, activity, and responsibility.

2.5

Moderately Existing

2
2. There is difficulty in implanting what is planned by the top management.

3

Existing

1
3. There is difficult in putting the right staff/personnel or workforce in an area.

2

Moderately Existing

3
4. The management has challenge in leading its employees.

1.5

Not Existing

5
5. There is difficulty in imposing the rules and regulation set by the management.

1.75

Not Existing

4
Average Weighted Mean
2.15
Moderately Existing

This table shows that one of the challenges of a business is difficulty in implanting what is planned by the top management. This is due to budget constraints that’s why it’s not fully implemented and some management just failed to properly implement what is planned. Failure of some management to properly implement what is planned linked to behavioural attitude of the management in the implementation of what is planned on their subordinate. Respondents emphasized that there are times that there is difficulty in putting a right staff on a certain job because some jobs requires technical skills.
Table 7.B
Marketing
N=20

Challenges
Weighted Mean

Interpretation
Rank
1. The price of raw materials is increasing.

1.25

Not Existing

2
2. There is low demand from export market.

1.75

Not Existing

1
3. The presence of other competitors affects the market.

1.75

Not Existing

1
4. There is poor supply chain management.

1.25

Not Existing

2
5. The buying capacity of consumer is decreasing.

2

Moderately Existing

3
Average Weighted Mean
1.6
Not Existing

Table 12 represents the list of the possible challenges that small business has encountered in the marketing aspect. It shows that one challenges in terms of marketing the buying capacity of consumers is decreasing, with regards this intensifies competitions among other firms to fully penetrate their market. Rivalry among firms refers to all actions taken by firms in the industry to improve their positions and gain advantage over each other.
Table 8.C
Financial
N=20

Challenges
Weighted Mean
Interpretation
Rank
1. There is an increase in production cost.

2.25

Moderately Existing

1
2. There is an increase in inventory cost.

1.25

Not Existing

4
3. There is an increase in miscellaneous expense.

1.5

Not existing

3
4. There is a decline in sales.
1.75
Not Existing
2
Average Weighted Mean
1.69
Not Existing

Table 8 represents the list of challenges that exist in the financial aspect of small businesses. Increase in production cost with weighted mean of 2.25 it shows that market was affected due to financial crisis small businesses experienced. The increase in production cost is linked to the challenge existing in the market and production wherein there is low supply of goods that increased the price of the product used in the production to increase.
Table 9.D
Socio- Economic
N=20

Challenges
Weighted Mean

Interpretation
Rank
1. There is an environmental society complaint.

1.75

Not existing

2
2. There is no local organization support.
1.5
Not Existing
3
3. There is local government intervention.
2
Moderately Existing
1
4. There is a waste management challenge.

1.5
Not Existing

3
Average Weighted Mean
1.69
Not Existing

Table 9 shows the possible challenges that are encountered in a socio-economic aspect of the small businesses in General Santos City. The over-all rating in socio-economic is not existing with a weighted mean of 1.69. The challenge of local government intervention with a weighted mean of 2 that is being rank as the number 1 as moderately existing. The challenge in environmental society complaint, waste management challenge, and no local organization support are interpreted as not existing with weighted mean of 1.75, 1.5 and 1.5 respectively. Respondents said that they are being monitored by other bodies, checking on their operations that might have an effect on the environment. These are also some of the concerns by the society that might affect their health and living.

Entrepreneurial Orientation of Small Businesses

Table 10.A
Innovativeness
N=20

Indicator
Weighted Mean
Interpretation
1. Break out of the pattern that have shaped entrepreneurs thinking.

2.25

Seldom Practiced
2. Seeks advantages from the latest technologies.

1.5

Not Practiced
3. Supports and encourage new ideas, experimentation and creativity likely to result in new products, services or processes.

1.5

Not Practiced
4. Adopts presents trends in business.

1.5

Not Practiced
Average Weighted Mean
1.69
Not Practiced

In terms of innovativeness the indicator break out of the pattern that have shaped entrepreneurs thinking got the highest mean of 2.25 as seldom practiced. This is due to the reason that entrepreneurs are always on guard of the latest opportunities where they could make money out of it but breaking of pattern doesn’t come as priority. The indicator seeks advantages from the latest technologies, supports and encourage new ideas, experimentation and creativity likely to result in new products, services or processes, adopts presents trends in business has the lowest mean of 1.5 which is not practiced. Innovativeness is concerned with supporting and encouraging new ideas, experimentation and creatively likely to result in new products, services or processes.

Table 11.B
Pro-activeness
N=20

Indicator

Weighted Mean

Interpretation
1. Continually seeks out for new products or services offerings

1.75

Not Practiced
2. Actions are aimed at seeking to secure and to protect market share with a forward looking perspective reflected in actions taken in anticipation of future demand.

2.25

Seldom Practiced
3. Considers collaboration, incidence and extent.

1.75

Not Practiced
4. Designs activities to protect intellectual property and market structure.

2.25

Seldom Practiced
5. Taking initiatives by anticipation and pursuing new opportunities and by participating in emerging markets.

1.75

Not Practiced
Average Weighted Mean
1.95
Seldom Practiced

Table 11 show the extent of entrepreneurial orientation practices of small businesses on Proactiveness with an average weighted mean of 1.95 as interpreted seldom practiced. Entrepreneurs are always looking out for new opportunities to venture into or improve their existing products. Proactiveness is concerned with first mover and other action aimed in seeking to secure and protect market share and with a forward-looking perspective reflected in actions taken in anticipation of future demand.

Table 12.C
Risk-Taking
N=20

Indicator
Weighted Mean

Interpretation
1. Researching and assessing risk factors to minimize uncertainty.

2.25

Seldom Practiced
2. Using techniques that have worked in other domain.

2.25
Seldom Practiced
3. Have willingness to take risks such as seeking venture and to invest with uncertain returns.

2

Seldom Practiced
4. Incurring debt or making large resource commitment by seizing opportunities in the market place in the interest of high return.

2.25

Seldom Practiced
Average Weighted Mean
2.19
Seldom Practiced

Most risk takers in the locality has to see a proof before they take a plunge into unknown territory which is why the indicator on using technique that worked got the highest mean. Only few dare to go into unknown territory with uncertainty on how it will come out. Plunging into unknown territory can cost money, time and opportunity. Early work in small business research tended to be focused on various psychological characteristics such as locus of control and tolerance of ambiguity.

CHAPTER V
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS In this chapter, the researcher presented the findings of the study, conclusions and recommendations based on the result of data gathered.
SUMMARY
This study aimed to know the different factors that affects small businesses in the City of General Santos to sustain the economic improvement within the city and to contribute to the “fund of knowledge” of Businessmen. The researcher distributes a self-made questionnaire to 20 respondents of the study-the Managers, Supervisors and the key personnel of the Small Business in General Santos City. Descriptive method is use to conduct the study to gather data, analyze and interpret the results. The researcher developed a self-made questionnaire composed of three parts about the Profile of Business, to determine the challenges and the indicator of management practices they used for operation, and utilized Random Sampling with proportional representation from each of the Findings.
Summary of Findings The following are the findings of the study on the Factor Affecting Small Businesses in Gensan considering the following: the Profile of Small Business in General Santos City, to determine the challenges and the indicator of management practices.

1. The Profile of Small Business in General Santos City in terms of: industry, market, size, employee size, years of existence, form of organization nature and nature of business. Results shows that the Profile of the Small Business in General Santos City are 25% of small businesses engaged into food industry, 20% wearable, 15% Organic material, 10% in embroidery, and 5% for the leather goods, IT services, digital life business, T-shirt printing, cell phone accessories, and beauty products. the Capital size results 55% of small businesses had a capital of less than ₱2,000,000.00., and only 15% who has a capital of ₱2,000,000.00 and 30% that has ₱5,000,000.00 as their capital. Most of the respondents employ between 3 – 7 persons at 50% and many small businesses have a great number existed in short years while only one industry had been in the market for long production quality. The 20 respondent’s majority are sole partnership which has 11 respondents followed by partnership which has 5 respondents and the firms that engage in corporation have 4 respondents
2. The Challenges of Small Business in General Santos City in terms of: management organization, financial and marketing.
Based on the study the common challenges usually encountered by the small business in General Santos City is difficulty in implanting what is planned by the top management. This is due to budget constraints that’s why it’s not fully implemented and some management just failed to properly implement what is planned. Failure of some management to properly implement what is planned linked to behavioural attitude of the management in the implementation of what is planned on their subordinate. Respondents emphasized that there are times that there is difficulty in putting a right staff on a certain job because some jobs requires technical skills.
The possible challenges that small business has encountered in the marketing aspect. It shows that one challenges in terms of marketing the buying capacity of consumers is decreasing, with regards this intensifies competitions among other firms to fully penetrate their market. Rivalry among firms refers to all actions taken by firms in the industry to improve their positions and gain advantage over each other. Another possible challenges that are encountered in a socio-economic aspect of the small businesses is the local government intervention with a weighted mean of 2 that is being rank as the number 1 as moderately existing, The challenge of local government intervention with a weighted mean of 2 that is being rank as the number 1 as moderately existing. The challenge in environmental society complaint, waste management challenge, and no local organization support are interpreted as not existing with weighted mean of 1.75, 1.5 and 1.5 respectively. List of challenges that exist in the financial aspect of small businesses is increase in production cost with weighted mean of 2.25 it shows that market was affected due to financial crisis small businesses experienced.
3. The Indicator of management entrepreneurial practices in terms of: Innovativeness, Pro-activeness and Risk taking.
The researcher found out that In terms of innovativeness the indicator break out of the pattern that have shaped entrepreneurs thinking got the highest mean of 2.25 as seldom practiced. This is due to the reason that entrepreneurs are always on guard of the latest opportunities where they could make money out of it but breaking of pattern doesn’t come as priority. The indicator seeks advantages from the latest technologies, supports and encourage new ideas, experimentation and creativity likely to result in new products, services or processes, adopts presents trends in business has the lowest mean of 1.5 which is not practiced. The extent of entrepreneurial orientation practices of small businesses on Pro-activeness with an average weighted mean of 1.95 as interpreted seldom practiced. Entrepreneurs are always looking out for new opportunities to venture into or improve their existing products. Most risk takers in the locality has to see a proof before they take a plunge into unknown territory which is why the indicator on using technique that worked got the highest mean.
Conclusion
This research was conducted in General Santos City with the prime intent of critically assessing the factors affecting the Small Business in General Santos City engaged in management & organization, marketing, production/operation, financial, and socio-economic... Specifically, the study attempted to examine the sources of finance or funds available for small businesses, to investigate contextual factors, to assess the internal factors and to recommend possible solution to alleviate the problem of small business. Based on the objectives and findings of the study, the following conclusions are worth drawn. The main sources of startup and expansion finance or funds for most small businesses are personal followed by iqub/idir, family and friends/relatives. The formal financial Institutions have not been able to meet the credit needs of the small business since there is high interest rate and collateral requirement, most small business have been forced to use the informal institutions for credit. But the supply of credit from the informal institutions is often so limited to meet the credit needs of the small business in some cases these problems may be the inability of many operators to meet formal financial institutions. The most important contextual factors identified are financial factors which include high collateral requirement from banks and other lending institutions, shortage of working capital, high interest rate charged by banks and other lending institutions, and too complicated loan application procedures of banks and other lending institutions. The working premises factors include absence of own premises and the rent of house is too high. Marketing factors include inadequacy of market, difficulty of searching new market, lack of demand forecasting, lack of market information and absence of relationship with an organization/association that conduct marketing research infrastructural factors incorporate power interruptions, and lack of sufficient and quick transportation service that hinder the business performance of all sectors. Though, various governmental bodies designed various programs aimed at developing small business sector. Most of the programs were not given the appropriate backing and as such the impact of the programs could not be felt in the performance and competitiveness of small business, this is mainly because of the fact that these programmers or policies are not effectively implemented in line with their intended objectives owing to various reasons. According to the findings, the reason ranges from lack of visible commitment of some governmental bodies to lack of regular integration between the SME operators and the concerned bodies of the government. The main internal factors identified were management factors which include poor of associates in business, lack of strategic business planning, and costly and inaccessible training facilities. Lastly, the major entrepreneurial factors include lack of persistence and courage to take responsibility for ones failure and absence of initiative to assess ones strengths and weakness. In terms of the stated research hypothesis the specific empirical findings emerged from the investigation that there exists significant positive relationship between independent variables and dependent variable. Moreover, the selected independent variables may significantly explain the variations in the dependent variable in study area. Finally, the study has further identified that the different influences in which each of the factors under study have in different categories of the business.
Recommendation:
1. The data gathered by the researchers can be a tool for other researchers that have conducted similar study.
2. The Government should set a program for the Development of Small Businesses within and outside the country.
3. The Government should allocate Budget for the Program of Filipino Scientist to invent more High Technologies for Business World.

Bibliography

Books:

Heizer et al, Jau (2006). An Introduction to Operation Management. Boston: Allyn &
Bacon

Cohen, Allan (2000). The portable MBA in Management. NY: John Wiley & Sons.

Daft, Richard L. (2005). Management. Fort Worth: The Dryden Press.
Summers, Donna (2001). Quality Management. Upper Saddle River, New Jersey:
Pearson

Graham, Cateora (2005). International Marketing. Boston: McGraw – Hill.
Keegan, Warren J. (2006). International Marketing. Englewood Cliffs, New Jersey: Prentice Hall.
Internet website: www.yamangensan.com APPENDIX A

September 21, 2013

Dear Respondent/s:

Good day!

Please be informed that we are conducting a study entitled “Factors Affecting Small Businesses in General Santos City”. The purpose of this study is to determine the relationship of economic factors, which can affect the small business performance in General Santos City.

In line with this, we would like to request you to answer the given questionnaire. Rest assured that any information you give will be kept confidential.

Your participation is of great help for the success of this study.

Thank you very much.

Sincerely yours,

Nhorhaini A. Gaca ____
Maricel D. Fernandez ____
Nerren Gania ____
Gascon, Shienna ____
Enario, Aiza ____
Researchers

Noted:

Mr. Gaudy C. Ortizo
Research Adviser

APPENDIX B
SURVEY QUESTIONNAIRE
General Directions: Please answer the questions completely and correctly. Rest assured that any information you give would be confidential.
Part1. Profile of business: The following items are related to the profile of your business. Please respond to each item by putting check mark (√) to indicate your response for each item.
1. Nature of Business Food Industry _____ Organic & Natural Products _____ Marine Products _____ Wearable _____ Leather Goods _____ Home Furnishing _____ Construction Materials _____ Micro Electronics _____ It Services _____ Motor Parts & Components _____ Others: (Pls. specify) ____________________________
2. Employment Size ( ) 3 – 7 persons ( ) 8 – 12 persons ( ) 13 – 16 persons ( ) 17 – 20 persons Others: (Pls. specify) _________________

3. Number of years in operation

( ) Less than 5 years ( ) 16- 20 years ( ) 6- 10 years ( ) Others: (pls. specify) ( ) 11- 15 years ________________

4. Market size/ Capitalization ( ) ₱ 2,000,000 or less ( ) ₱ 2,000,000 - 5,000,000 ( ) ₱ 5,000,000 and above
5. Form of Organization ( ) Sole Proprietorship ( ) Partnership ( ) Corporation ( ) Cooperative
Part II. Small Business Challenges: The following items are items are the common challenges usually encountered by the small business in General Santos City. Please encircle the number that represents your response on how these challenges are encountered by your business company at present. Use the rating scale provided below.

Rating Scale
Description
Interpretation

5
Very Highly existing
Stated challenges is 76-100% experienced by the company
4
Highly Existing
Stated challenges is 51-75% experienced by the company
3
Existing
Stated challenges is 26-50% experienced by the company
2
Moderately Existing
Stated challenges is 1-25% experienced by the company
1
Not Existing
Stated challenges is not experienced by the company

A. Management and Organization.
1. There is difficult in planning to organize people, activity, and responsibility.

1

2

3

4

5
2. There is difficulty in implanting what is planned by the top Management

1

2

3

4

5
3. There is difficult in putting the right staff/personnel or workforce in an area.

1

2

3

4

5
4. The management has challenge in leading its employees.

1

2

3

4

5
5. There is difficulty in imposing the rules and regulations set by the management.

1

2

3

4

5

B. Marketing
1. The price of raw material is increasing.
1
2
3
4
5
2. There is low demand from export market.
1
2
3
4
5
3. The presence of other competitors affects the market.

1

2

3

4

5
4. There is poor supply chain management

1

2

3

4

5
5. The buying capacity of consumer is decreasing.

1

2

3

4

5

C. Financial

1. There is an increase in production cost.

1

2

3

4

5
2. There is an increase in inventory cost.

1

2

3

4

5
3. There is an increase in miscellaneous expense.

1

2

3

4

5
4. There is a decline in sales.
1
2
3
4
5

D. Socio- Economic

1. There is an environmental society complaint.
1
2
3
4
5
2. There is no local organization support.
1
2
3
4
5
3. There is local government intervention.
1
2
3
4
5
4. There is a waste management challenge.
1
2
3
4
5

Part III. Entrepreneurial Orientation of Small Businesses: The following variables are indicators that determine the entrepreneurial management practices of Small Businesses in General Santos City. Please indicate your perception by encircling the appropriate number as shown in the scale below.

5
Very Highly Practiced
The Entrepreneurial Orientation are extensively practiced and are functioning excellently
4
Highly Practiced
The Entrepreneurial Orientation are highly practiced and are functioning well.
3
Moderately Practiced
The Entrepreneurial Orientations are moderately practiced and functioning well.
2
Seldom Practiced The entrepreneurial Orientations are seldom practiced and functioning in limited extent.
1
Not Practiced
The Entrepreneurial Orientations are not practiced.

A. Innovativeness

1. Break out of the pattern that have shaped entrepreneurs thinking
5
4
3
2
1
2. Seeks advantages from the latest technologies
5
4
3
2
1
3. Supports and encourage new ideas, experimentation and creativity likely to result in new products, services or processes.

5

4

3

2

1
4. Adopts presents trends in business
5
4
3
2
1

B. Pro-activeness

1. Continually seeks out for new products or services offerings.
5
4
3
2
1
2. Actions are aimed at seeking to secure and to protect market share with a forward looking perspective reflected in actions taken in anticipation of future demand

5

4

3

2

1
3. Considers collaboration, incidence and extent
5
4
3
2
1
4. Designs activities to protect intellectual property and market structure
5
4
3
2
1
5. Taking initiatives by anticipation and pursuing new opportunities and by participating in emerging markets
5
4
3
2
1

C. Risk Taking

1. Researching and assessing risk factors to minimize uncertainty
1
2
3
4
5
2. Using techniques that have worked in other domain.
1
2
3
4
5
3. Have willingness to take risks such as seeking venture and to invest with uncertain returns.

1

2

3

4

5
4. Incurring debt or making large resource commitment by seizing opportunities in the market place in the interest of high return.

1

2

3

4

5

Bibliography: Books: Heizer et al, Jau (2006) Bacon Cohen, Allan (2000) Daft, Richard L. (2005). Management. Fort Worth: The Dryden Press. Summers, Donna (2001). Quality Management. Upper Saddle River, New Jersey: Pearson Graham, Cateora (2005). International Marketing. Boston: McGraw – Hill. Keegan, Warren J APPENDIX A September 21, 2013