| Abstract: | This study found that in spite of increased calls for conversion from defense to commercial-based capabilities to enhance survival and growth opportunities, reduced dependency on Department of Defense (DOD) sales was negatively associated with sales growth for a sample of 90 Ohio-based small to medium-sized defense firms from 1990 to 1993. This implies that rather than converting to commercial production, most smaller defense firms are shrinking along with DOD procurement budgets. This finding is not surprising, since the structural characteristics of the defense industry make DOD-dependent firms' transitioning to commercial business extremely difficult if not impossible. The paper concludes by providing several recommendations for managers and policy makers to help these firms make the transition to a civilian economy. |
