Analysis of growth stages in small firms: A case study of automobile ancillaries in India

Small and medium-size enterprises (SMEs) in India play an important role in generating employment and creating economic wealth. Literature on small and medium-size enterprises suggests that these firms exhibit a different growth orientation than do large firms. This article studies the automobile ancillary firms in a common industrial cluster in India in order to develop a framework for understanding the growth orientation of small firms. Eight factors (internal to the firm) which can distinguish the growth stages of small firms are identified. The study also identifies a growth path specific to the automobile ancillaries in India.