Abstract:
The Small and Medium Enterprises (SMEs) are considered as an essential component of economic
growth and they are spanned as the largest number of enterprises throughout the country. Although
they are playing an important role in the economic development they are confronted with many
problems such as inadequate access to obtain capital and finance, inadequate industrial infrastructure,
lack of market base information, obsolete technology, lack of modern management skills and lack
of labour training.
In this context, researches have identified number of traditional and non traditional factors which
obstruct the growth of SMEs. As such, networking among SMEs is a considerable reason compared
to other reasons that determine the sustainability of SMEs. Besides, the SMEs in many countries
have not thrived to gain the advantages of economies of scale due to the fact that these business units
operate in isolation. Therefore, they need support and resources from the other firms, institutes,
relatives and friends to overcome their own barriers.
In this setting, most of the researchers have accepted that trust, commitment, selection, intermediary,
information technology and external environment are essential motives that make pressure on the
SME networking. Thus, the objective of this study is to examine the causes which are highly
influence on networking among SMEs in Sri Lanka. This study was carried out based on 100
manufacturing SMEs in Gampaha District selected by employing the purposive non probability
sampling technique.
The findings revealed that the trust and commitment were more considerable than the selection,
intermediary, information technology and external environment for the formation of networking
among SME in Sri Lanka. Thus, it is recommended that government should intertwine to build up
the trust and commitment to form networks among SME owner/managers.
