Comparing Competitiveness of Family and Non-Family Smes in Tanzania

Abstract

This paper aims at examining competitiveness of family firms in comparison with non-family firms assessing the differences in the strategies applied by the two categories of firms.  Using a sample of 341 SMEs, MANOVA was applied to compare competitiveness and the strategies of the firms studied. The findings show that family SMEs are generally more competitive than non-family SMEs in terms of financial indicators. However, in terms of market based-indicators, the difference in competitiveness is insignificant between the two groups of firms. The findings also show that family enterprises have a greater inclination and focus on the longer-term horizon, to implement cost-saving strategies and charging more competitive prices. This supports the view that family enterprises are unique requiring policies that encourage family entrepreneurship and provide the best possible conditions for the growth of family business activities. It shows that even though in the SME sector strategies are difficult to contextualise, the strategic behaviour and actions of the owner-managers are often identifiable.