Abstract:
Entrepreneurship literature has identified number of factors that determine the growth or success
of the small firms. Among those factors, Humane Capital has been identified as the most
prominent factor. Especially in small firms owner manager plays the strategic role within the
enterprise (Pennings, Lee, & Van Witteloostuijn, 1998). Gimeno, & et al., (1997). The general
assumption is that human capital of the founder improves small firm’s chances to survive. The
one key factor to achieve higher level of success is investing in human capital. Owner manager’s
capability of running smoothly the business determines the level of success. Human capital
makes the founder more efficient in managing and operating the business. Human capital acts as
a resource and it is created by changes in persons that bring about skills and capabilities that
make them able to act in new ways. Whether the Human Capital possessed by the owner
manager is a strong determinant of the small business success is the main research question
addressed in this research. This study focused on several objectives such as to categorize human
capital attributes meaningfully based on the interrelationships among the human capital
attributes; to reveal the effects of human capital on the business success and determine the strong
human capital attribute which shows a strong impact on the business success; and finally suggest
some recommendations based on the findings of the research. The sample includes 100 small
scale manufacturing enterprises located in Southern Province of Sri Lanka. The Factor Analysis
and Multiple Regression Analysis have been used for data analysis. The research founded that 11.9 percent of variation of the business success makes by human capital. Among the four factors of human capital variables resulted in factor analysis, Training and Education has a significant positive impact on business success. The other three human capital variables have no significant association with business success.
