Rethinking collapse of micro and small enterprises in Bahir Dar City, North West Ethiopia: a grounded theory approach

Abstract

Micro and small enterprises development is a universally proven strategy against poverty notwithstanding, enterprises’ failure. Using a qualitative design, this study investigated experiences of unsuccessful micro and small enterprise cooperatives at Bahir Dar City Administration, North West Ethiopia. In-depth interview, observation, and field notes were used to collect primary data. The findings revealed that micro and small enterprise cooperatives’ failure involve these phases: pre-formation, formation, operation, pre-collapse, and collapse where some concerns at early stage pass in to the next, accumulate with emerging challenges and result in group deformation. Hence, awareness creation program on group formation in collective owned micro and small enterprises; training on business management strategies which could be in form of expansion, products/market differentiation and formation of alliances; and prompt support of stakeholders to micro and small enterprises are suggested to enhance success stories of micro and small enterprise cooperatives.

Keywords: Micro and small enterprises, collapse, grounded theory, Bahir Dar, Ethiopia