The Impact of Socio-Cultural Systems on the Growth of Small Family Businesses in Ghana

Abstract

The role of small and medium enterprises in Ghana cannot be overemphasized.  They provide the bulk of income for people in most of the deprived communities in the country. In rural Ghana, SMEs are the main source of employment, contribute to community and national development, and serve as a basis of entrepreneurial development.  Although statistics on the actual contribution of SMEs to GDP is not readily available, it is assume to contribute significantly to national income. To capture the contribution of small businesses to national output, it is often computed as part of private sector contribution to national output.  In Ghana, most of the small businesses operate as family owned venture.  Two important issues motivated the study. First, few empirical works have been done on family businesses as a breeding ground for some larger companies locally.  Second, the studies in small businesses have been limited to the few firms that are registered with the National Board for Small Scale Industries (NBSSI) and sometimes the Registrar of Companies, leaving out the significant contribution of other small size family businesses that are not registered. The study therefore seeks to determine how socio-cultural systems affect most of the non-registered SMEs’ growth, as well as well as assess their role in poverty alleviation. The survey technique is employed. Questionnaires were administered to 200 purposively selected small businesses from a selected town in the northern, middle and southern parts of Ghana. Analysis is done using descriptive and inferential statistics. It was found that family business growth is influenced by socio-cultural factors. The study suggests the integration of cultures that promote business growth into the management of small businesses in Ghana.

Keywords: Socio-Cultural Systems, Growth, Small Family Businesses, Ghana