Universal Journal of Management 4(1): 36-41, 2016 http://www.hrpub.org DOI: 10.13189/ujm.2016.040105 Growth Determinants of Small Medium Enterprises (SMEs) Endi Sarwoko * , Christea Frisdiantara Faculty of Economics and Business, Kanjuruhan University, Indonesia Copyright©2016 by authors, all rights reserved. Authors agree that this article remains permanently open access under the terms of the Creative Commons Attribution License 4.0 International License Abstract Small Medium Enterprises (SMEs) are still an issue that is interesting to study because it is recognized that small businesses have a major role in employment and contribution to the gross domestic product. Previous research shows that the growth of SMEs is determined by the owner/manager characteristics (personal approach), and how the strategy is taken (managerial approach). This study empirically tested the three determinants of growth of small businesses, namely 1) the individual factors 2) organizational factors, and 3) environment factors. The study was conducted in SMEs assisted in the district of Malang, using a sample of 52 owners/managers of SMEs, which are taken by purposive sampling, analysis techniques using Path Analysis. The results showed that individual factors directly affects the growth of the business, as well as an indirect effect through organizational factors. So the individual factors are a determinant of the growth of SMEs, due to individual factors which reflected the business experience and the motivation of the owners/managers will be able to manage the organization becomes more effective so as to compete, and the effects are on the achievement of business growth. Environmental factors provide the greatest impact in achieving the growth of SMEs, it means the ability of owner/managers to produce competitive products, leverage technology, and diversity of products will determine the growth of SMEs. Keywords Business Growth, Individual Factors, Organizational Factors, Environment Factors 1. Introduction Small and medium enterprises (SMEs) have a role that contributed to the gross domestic product and employment, but the fact that the success of SMEs is still low, one indicator is the percentage of small and medium enterprises that have succeeded in penetrating export markets and export potential is still relatively low compared to total existing SMEs. This phenomenon needs to be answered by knowing the factors determining the growth of SMEs. So the results of this study are expected to contribute to the government in the formulating policy on SMEs development in Malang.. Studies on the business performance of small and medium enterprises can be classified into two groups which focus on personal and the organizational aspect. The aspects of personality, such as individual characteristics, demographic, and competencies. While the study of organizational aspects includes the resources of the organization, the company's competence, organizational culture, and structure (Sarwoko, [17]). Growth determinants of small businesses can be classified in many factors: individual, organizational, and environmental (Zhou and Wit, [22]), factor of organizational resources, the competence of the company, organizational culture and structure (Covin & Slevin, [5]), competency of individuals in the entrepreneurial process (Li, [10]), the owners/managers characteristics and strategies (Nimalathasam, [15]; Sarwoko, [17]).SMEs performance is determined by the owner/manager characteristics and entrepreneurial competence (Sarwoko, [17]). Entrepreneurial competence will determine the strategy on the performance of SMEs (Sarwoko, [18]). These findings show the importance of the individual factors as determinants of the growth of SMEs. Although several studies have analyzed the determinants of business growth, but each factor analyzed separately, which only focus on personal factors, organizational factors, as well as strategies (Baum, Locke and Smith, [3]; Covin & Slevin, [5], Delmar et al., [6]). The environment is a factor that also influences the growth of SMEs because growth is uncertain, due to environmental conditions such as competitive conditions and changing market dynamics. Therefore, it is necessary to examine the determinants of SMEs growth are more complex into three dimensions, namely individual, the organization and the environment. 2. Literature Review Previous research has found that the attitude and the ability of owners/manager have an important impact on the growth of small enterprises and will be reflected in the