Enterprises and Business Associations: A Research into the Role of Business Associations in Enterprise Development with a Focus on the Uganda Small Scale Industries Association
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Enterprises, especially enterprises in developing countries, face a multitude of constraints on their development. To overcome these constraints some enterprises become member of a business association. A business association is a group of enterprises which cooperate with each other. Besides business associations offer their members business development services. In this thesis is focused on the Uganda Small Scale Industries Association (USSIA) in Uganda, with the objective to gain insight into how USSIA contributes to the development of its members. The research is concentrating on three aspects: appreciation of the USSIA services, solution of problems and growth of the USSIA member enterprises. It is assumed that the USSIA services via different ways will have positive effects on these aspects. In Uganda the main constraints on enterprise development are inflation, exchange rate and poor electricity. USSIA is an industrial business association with member enterprises active in the industrial sector. USSIA offers its members five main services: training, information gathering & dissemination, improving market access, building linkages among industrialists and policy advocacy. All services are found important and are used at least sometimes by the majority of the respondents. Younger and smaller enterprises attach more value to the services compared with older and larger enterprises. The majority of the respondents find that some services need to be improved. A big majority of respondents in all districts and sectors have confirmed that the product quality and market access of their enterprise have been improved ever since their enterprise is USSIA member. Problems which have much negative impact on USSIA member enterprises appear to be cost of inputs, corruption, competition and inflation. USSIA seems to contribute to more employment within its member enterprises, as most enterprises have got more employees ever since they have joined USSIA. Negative correlations seem to exist between distance to input market and costumers on the one hand, and turnover on the other hand. Further, enterprises which work together with other enterprises appear to have a higher average turnover compared with enterprises which never work together with other enterprises. Overall it has appeared that USSIA has a large positive impact on its members. This supports the importance of business associations mentioned in much development literature. However, the outcomes of the statistical tests give a less clear positive image, what can be explained by the fact that the number of respondents is small and that the respondents did want to deliver a good image of USSIA. The USSIA members are advised to cooperate with other enterprises, also financially, and to look for more nearby input markets and customers. USSIA is advised to inform the government about their member's problems, to give information about cheaper inputs and ways of production to members who need it and to stimulate cooperation among members. The Ugandan government is recommended to give business associations like USSIA more support and to take into account the problems of inflation, energy and corruption.