Factors Affecting Family Business Growth in Tanzania

Abstract

The growth and sustainability of family businesses play a pivotal role in the economic landscape of Tanzania, particularly in regions like Moshi Municipality. Understanding the multifaceted factors that influence their success is crucial for fostering a conducive environment for these enterprises to thrive. Specifically, the study examined the social- economic factors affecting family business growth in Tanzania, evaluated the role of Family dynamics and planning for the future in the growth of family business and examined the role of innovation and technology in facilitating family business growth in Moshi Municipality. The study employed cross sectional survey design; a stratified random sampling technique adopted. This method is significant in avoiding bias and each individual had an equal chance to be included in the study. 174 family business owners included in the study of which were found freely in the study area. Regression model was adopted to conclude and reach a valid result due to the linearity nature of the independent variables to dependent variables. The study found the impact of socio-cultural and economic factors on the success of family businesses in Moshi Municipality, Tanzania. While access to capital may not be the primary driver of profitability and market share, business regulation and market conditions emerge as pivotal influencers. The supportive role of favourable regulatory environments highlights the significance of conducive policy frameworks. Additionally, the sensitivity of market share to market conditions underscores the need for adaptable strategies. The study also illuminates the critical role of innovation, technology, and familial dynamics in shaping family business growth. Effective planning for the future improves essential for seamless generational transitions, while innovation and technology integration are imperative for competitiveness. These findings offer vital insights for family businesses in Moshi, advocating for tailored strategies informed by local market dynamics. To support family businesses in v Moshi Municipality, Tanzania, several recommendations are crucial. Firstly, enhancing access to capital through initiatives like government grants and low-interest loans is vital. Secondly, creating business friendly regulatory environments is imperative for success. Additionally, prioritising adaptability, investing in research and development, and fostering healthy Family dynamics are essential. Embracing innovation, continuous training, and engaging in networking opportunities further contribute to sustainable growth and competitiveness.