^ Coré Capabilities as Predictors of Growth Potential in Small Manufacturing Firms

Although the academic literature provides a number of theories about the management ofgrotuth, none appears to offer a predictive technique for consistently determining the potential of a smaller firm to achieve a growth objective. An alternative approach to these models is one that assumes that growth firms exhibit common characteristics. Four major research projects on small firm performance have been used to evolve a survey tool to research the relationship between performance and organizational capability. The results of discriminant analysis suggest that the probability of achieving growth is increased by avoiding excessive emphasis on single transformation initiatives and that different capabilities must be given priority depending upon the current revenue performance position of the firm. Application of discriminant analysis is described in relation to government agencies using the tool to enhance their small firm sector advisory services. An extensive body of academic literature is concerned with the factors influencing the performance of small firms. Gibbs and Davies (1990) suggested that the majority of this research can be classified under four major headings: entrepreneurial personality, organization development, functional management skills, and sectoral economics. While each of these areas of research have provided useful insight into the successful operation of small firms, each is limited in the ability to provide an accurate predictive model of small firm performance. The research on entrepreneurial personality, by building on McClelland and Winter's (1969) achievement model, seeks to link the personal characteristics Dr. Chaston directs the Plymouth Bu.sine.ss School's po.stgraduate research program at the University of Plymouth in the United Kingdom. His research intere.sts include the provision of support systems to enhance the competitiveness of