Review of Related Literature

The importance of entrepreneurship in the development of the country had been

undeniably significant. Private sector development and entrepreneurship development are
essential ingredients for achieving the Millennium Development Goal of reducing
poverty. While sound macroeconomic policies and providing market access are crucial,
emerging markets need to nurture and develop entrepreneurs able to take advantage of
opportunities created by globalization. History shows that economic progress has been
significantly advanced by pragmatic people who are entrepreneurial and innovative, able
to exploit opportunities and willing to take risks. The great bulk of local enterprises are
micro-businesses, making up to 91.9%, with small and medium enterprises comprising
only 7.8% of the total entrepreneurs. Large enterprises account for merely 0.33% of total
enterprises.
The neighborhood sari-sari (variety or general) store is part and parcel of daily
life for the average Filipino. Any essential household good that might be missing from
ones pantry from basic food items like coffee and margarine, to other necessities like
mosquito coils, soap, and matches is most conveniently purchased from the sari-sari
store nearby at affordablyportioned quantities, sometimes even on credit. Apart from the
most affluent communities, the sari-sari store is a constant feature of residential
neighborhoods in the Philippines both in rural and urban areas, proliferating even in the
poorest squatter communities.
Studies reveal that business success is contributed to the management practices,
entrepreneurial competencies and personal characteristics of business owners while study
of Parilla (2009), emphasized the link of management practices, entrepreneurial

competencies and business success, however, there is still a limited literature to prove on
the comparison of management practices of microbusiness owners and small business
owners. It is in this context that this study was conceptualized and it elicited information
on the differences and similarities of management practices of microbusiness and small
business owners. This study benefited the businesses owners as this provided them
information on the management practices for them to have benchmark.

More recently, a study by Coke (2002) on microfinance group lending finds that
35 percent of women borrowers in the Western Visayas region choose to invest in a sarisari store, even though group members are typically neighbors. Market research studies
by AC Nielsen report that the number of sari-sari stores nationwide grew by an estimated
88 percent between 1997 and 2000 (Bethge, 2003), 14 percent in 2002 (Bonnin, 2004:
80), 13 percent in 2003 (Capistrano, 2005), and 7 percent in 2004 (Amojelar, 2006).
These studies confirm the observation that the sari-sari store has remained popular as a
micro-enterprise, resulting in a growing flow of new entrants despite the oversaturation
that already seems to exist. The most recent study is by Bonnin (2004), who conducted a
qualitative survey of 30 women sari-sari store owners in 3 Metro Manila communities
experiencing insecure housing
Studies reveal that business success is contributed to the management practices,
entrepreneurial competencies and personal characteristics of business owners while study
of Parilla (2009), emphasized the link of management practices, entrepreneurial
competencies and business success, however, there is still a limited literature to prove on
the comparison of management practices of microbusiness owners and small business

owners. It is in this context that this study was conceptualized and it elicited information
on the differences and similarities of management practices of microbusiness and small
business owners. This study benefited the businesses owners as this provided them
information on the management practices for them to have benchmark.
As for Ben Hamadi et al. (2014), they tried to determine to what extent the profile
influence on the adoption of budgetary innovations in SME. They highlighted three
profiles of Tunisian leaders, the young managers who adopt more budgetary innovation
than the accomplished adults whereas the experimented patriarches do not adopt it. So the
profile of the Tunisian actor influences the management accounting system of the SME.
Davila (2005) found that the age of the entrepreneur is relevant to explain the
management accounting system. Solle and Roubey (2003) explain that the emergence of
management tools is intimately linked to social relations. Moisdon (1997) declares that to
rationalize the choice of management tools is a reductive vision and depends largely on
subjective appreciations. Walley et al. (1994) note that the factors which relate to the
characteristics of the actors have a significant influence on the adoption of modern
systems of costing.
Ngongang (2007) found that both behavioral contingency factors of experience
and age of the manager had no significant effect on accountants practice. Similarly, in
Tunisian context Lassoued and Abdelmoula (2006) conclude that the age of the leader has
no influence on the use of accounting data. They also show that the experience of the
manager did not significantly influence the use of accounting data, but the leader training
level is significantly related to the degree of use of accounting data without determining

clearly the direction of the relationship. However, the profile of the manager determines
the use of tools and accounting practices of the Tunisian SMIs.
Age is a variable for which empirical results differ across studies. Research
frequently predicts the relationship between age and strictness of ethical judgments to be
positive (Chiu, 2003; Peterson et al., 2001; Vitell, Singh and Paolillo, 2003). That is,
people tend to be more ethical as they grow older. However, some empirical studies find
that younger people render stricter ethical judgments than older people (Ede et al., 2000;
Vitell et al., 2007). Other studies report no significant relationship between age and
ethical judgments (e.g., Barnett and Valentine, 2004; Schepers, 2003). Despite these
inconsistencies, the theoretical consensus appears to support that age improves one's
ability to apply relevant ethical standards, which produces more disapproving views of
ethical lapses. H2. As age increases, ethical judgments become stricter.
Another influential biographic variable that might have bearing on job satisfaction
is marital status of the employees. However, there are not enough studies to draw any
conclusion about the effect of marital status on job satisfaction but the limited research
conducted on this area consistently indicates that married employees are more satisfied
with their jobs than are their unmarried coworkers (Austrom et. al. 1988; Federico et. al.
1976; Garrison and Muchinsky 1977; Watson 1981). The reason may be marriage
imposes increased responsibilities that may make a steady job more valuable and
important. And job satisfaction is required to have a steady job. Many, in such cases,
strive to coup up or adjust them with the facets they are dissatisfied with.
Globalization and international trade requires countries and their economies to
compete

with

each

other.

Economically

successful

countries

will

hold competitive and comparative advantages over other economies, though a single
country rarely specializes in a particular industry. This means that the country's economy
will be made of various industries that will have different advantages and disadvantages
in the global marketplace. The education and training of a country's workers is a major
factor in determining just how well the country's economy will do.
The study of the economics of training and education involves an analysis of the
economy as a whole, of employers and of workers. Two major concepts that influence the
wage rate are training and education. In general, well-trained workers tend to be more
productive and earn more money than workers with poorer training.
Kohlberg (1981) theorizes that people who better understand complex and
nuanced issues will display more sophisticated levels of moral reasoning. Grounded in
this view, researchers frequently hypothesize positive relationships between education
and ethical judgment. Empirically, the evidence does not appear to support this view.
Many studies fail to find a link between education and ethical judgments (Swaidan et al.,
2003), while others report negative relationships (Chiu, 2003). Although these empirical
results might seem contrary to Kohlberg's theory, they may actually support it. Higher
levels of education might encourage people to more fully consider alternate perspectives
or extenuating circumstances rather than judging complex ethical issues in narrow
absolute terms. If so, a negative relationship between education and strictness of ethical
judgments could be explained under Kohlberg.
Investigating the relation between firm age and performance would seem to be
relevant for both theory and practice. An answer would tell us whether firms are able to

put in place the proper incentives and find the ways to constantly renew themselves, a
feat that living organisms are unable to accomplish. If performance declines as firms
grow older, it could explain why most of them are eventually taken over (Loderer,
Neusser, and Waelchli,2009).
Many small businesses started as a hobby or side business use cash basis
accounting. This accounting method records and recognizes transactions when cash
changes hands. It provides entrepreneurs with a simple method for maintaining
accounting information. As companies grow and expand, they may need to change to the
accrual accounting method. Accrual accounting is the most widely used method in
business; it records and recognizes transactions as they occur, regardless of cash changing
hands. (Vitez, 2013)