EFFECT OF ENTREPRENEURIAL ORIENTATION ON THE PERFORMANCE OF SMALL AND MEDIUM SIZE ORGANIZATIONS IN NAIROBI CITY COUNTY, KENYA

Peter Waithaka Kariuki, Dr. Anne-Marie Wairimu Mungai

Abstract


In Kenya, small and medium-sized enterprises (SMEs) generate 80% of new jobs, form a new middle class, and stimulate the demand for new goods and services. However, the performance of these firms has deteriorated over decades and recently during the COVID-19 pandemic, they were the most affected. Kenya National Bureau of Statistics (2016) reported the closure of 2.2 million SMEs in the five years ending in 2016 leading to increased focus on the reasons SMEs are not able to adapt to market conditions. The general objective of the study is to assess the effect of entrepreneurial orientation on the performance of small and medium size organizations in Nairobi city county, Kenya. Specifically, the study sought to find out the effect of Risk-taking ability on the Performance of Small and Medium Size Organizations in Nairobi city county, Kenya and to explore the influence of competitive aggressiveness on the Performance of Small and Medium Size Organizations in Nairobi city county, Kenya. This study adopted a descriptive research design. In this study the unit of analysis was Small and Medium Size Organizations in Nairobi City County while the unit of observation was 100 SME owners/managers. Since the population is infinite, purposive sampling of 100 SMEs were used. This research used a questionnaire to collect primary data. Ten questionnaires were piloted that represented 10% of the target population. The pilot group was selected from Kiambu County because they share similar characteristics with its neighbor, Nairobi County. The study collected quantitative data which was analysed using descriptive and inferential statistics using the Statistical Package for Social Sciences (SPSS) version 24. Multivariate linear regression was used to determine the relationship between the dependent and independent variables. The study results were presented through use of tables and figures. The study concludes that t risk taking ability has a significant effect on performance of small and medium size organizations in Nairobi city county, Kenya. The study also concludes that competitive aggressiveness has a significant effect on performance of small and medium size organizations in Nairobi city county, Kenya. From the findings, this study recommends that SME managers should give priority to risk taking ability and competitive aggressiveness.

Key words: risk-taking ability, competitive aggressiveness, Performance

Full Text:

PDF

References


Adefulu, A.D, Asikhia, O.U & Aroyeun, T.F.(2019 Effect of pro-activeness on growth of selected small and medium scale enterprises in Ogun State Nigeria: Role of Ambidextrous and Dynamic Capabilities of SMEs in Manufacturing Sector Journal of Business and Management, 20 (12), 14-21.

Aigboje, P.O (2018). Competitive Aggressiveness and Organizational Profitability of Hotels in Port Harcourt, Nigeria. International Journal of Social Sciences and Management Research 4 (5), 10-15.

Akomea-Bonsu, D., & Sampong, F. (2016). The impact of Information and Communication Technologies (ICT) on Small and Medium Scale Enterprises (SMEs) in the Kumasi Metropolis, Ghana, West Africa. European Journal of Business and Management, 4(20), 152-158.

Alasadi, R., & Al Sabbagh, H. (2015). The role of training in small business performance. International Journal of Information, Business and Management, 7(1), 293.

Alese, J., & Alimi, O. Y. (2016). Relevance of Strategic Management Tools in the Development of the Nigerian Small and Medium Enterprises. European Journal of Humanities and Social Sciences, 1(2), 35–40

Bature, S.W, Rosli, N.A & Saad, S (2018). Academy of Strategic Management Journal, 17 (5)

Bhattacherjee, A. (2012). Social Science Research: Principles, Methods, and Practices. New York: Free Press.

Bii J., Akuku C, Geoffrey, K & Onyango R. (2023). Effect of Competitive Aggressiveness On Performance of Star Rated Hotels in North Rift Region, Kenya. International Journal of Business and Management Review, 11(8), 1-16.

Bromiley, P. (2017). Testing a Causal Model of Corporate Risk Taking and Performance. Academy of management journal 34 (1), 15-20

Bryman, A. & Cramer, D. (2012). Quantitative Data Analysis with SPSS Release 8 for Windows. New York: Routledge.

Cronbach, L. J. (2011). Test Validation. In R. L. Thorndike (Ed).Educational Measurement (2nd Ed.) Washington, DC: American Council on Education.

Crowther, D. & Lancaster, G. (2018). Research Methods: A Concise Introduction to Research in Management and Business Consultancy. New York: Butterworth-Heinemann.

Fryczynska, M. (2020). Organizational Networks and Networking Attribute.

Gathoni, B. M., Gichunge, E., & Mutegi, D. (2021). Entrepreneurial attributes and Growth of Micro-Small Enterprises in Kiambu County, Kenya. Journal of Entrepreneurship, 1(20), 1-13.

Grant, R. (2002). Contemporary Strategy Analysis, (4 Ed). Blackwell Publishers

Human, H., & Naudé, P. (2016). Exploring the relationship between network attributes, network capability, and firm performance: A resource based perspective in an emerging economy.

Kaberia, S. K., & Muathe, S. (2021). Effect of Covid-19 pandemic on performance of women owned micro, small and medium Enterprises in Kenya. Int'l J. Soc. Sci. Stud., 9, 7.

Kosa, A., Mohammad, I., & Ajibie, D. (2018). Entrepreneurial orientation and venture performance in Ethiopia: the moderating role of business sector and enterprise location. Journal of Global Entrepreneurship Research, 8(1), 1-17.

Kothari, C. R. (2012). Research methodology: Methods and techniques. New Delhi: New Age International (P) Limited Publishers.

Kothari, C. R. (2014). Research methodology: Methods and techniques. New Age International

Kowo, S.A, Akinbola, O.A, & Akinrinola, O.O. (2021). The Impact of Process Innovation on Organizational Performance.

Lamidi, Y.O.A, Kutigi, Y.S, Ahmed, U.M & Mohammed, A. (2015). The Correlation between Risk Management and Organizational Performance: An Empirical Investigation using Panel Data. Research Journal of Finance and Accounting 6 (16), 15-20.

Munir, M, Jajja M.S.S, Chatha, K.A & Farooq, S (2020) Supply chain risk management and operational performance: The enabling role of supply chain integration. International Journal Of Production Economics, 227, 28-39.

Muthoni, C. S. (2015). Influence of capacity building on financial performance and growth of women owned small and medium enterprises in Gikomba market; Nairobi County, Kenya.

Muthoni, C. S. (2016). Influence of capacity building on financial performance and growth of women owned small and medium enterprises in Gikomba market; Nairobi County, Kenya.

Mwangi, S. M., & Namusonge, M. J. (2015). Influence of innovation on small and medium enterprise (SME) growth. International journal for innovation education and research, 2(5), 123-139.

Nakhaima, F. K. (2016). Factors that affect financial performance of small and medium enterprises in Kenya.

Ntakobajira, N. (2018). Factors affecting the performance of small and micro enterprises (SMEs) traders at city park hawkers market in Nairobi County, Kenya.

Nyariki, R. N. (2018). Strategic Management Practices As a Competitive Tool in Enhancing Performance of Small and Medium Enterprises in Kenya. Interdisciplinary Journal of Contemporary Research in Business, 1(2), 65–70.

OECD (2017a), Small, Medium, Strong. Trends in SME Performance and Business Conditions, OECD Publishing, Paris.

Sahu, P.K. (2013). Research methodology: a guide for researchers in agricultural science, social science and other related fields. New Delhi: Tata McGraw Hill.

Saxena, C., Arora, R. & Thakur, P. (2022). Exploring the link between Innovativeness and Organizational Performance. Journal of management review, 30(1), 68-89.

Sekaran, U., & Bougie, R., (2010). Research methods for business: A skill building approach (5th ed.). Chichester, West Sussex:

Sembiring, R. (2016). Impact of Human Resources’ Knowledge and Skills on SMEs’ in Medan City, Indonesia. International Journal of Management, Economics and Social Sciences, 5(3), 95-104.

Sidek, S., & Mohamad, M. R. (2016). Managerial attributes and small business growth: empirical evidence from microfinance participants. International Journal of management studies, 21(1), 39-59.

Singpurwalla, D. (2013). A handbook of Statistics: An overview of statistics. New York: Free Press.

Stambaugh, J., Lumpkin, G.T., Mitchell, R., Brigham, K. B., & Cogliser, C. (2020). Competitive aggressiveness, community banking, and performance. Journal of Strategy and Management, 13(2), 221-240.

Stojanović, S & Stanković, M (2021) The Impact Of Innovation On Business Performance. Knowledge - International Journal, 45 (1), 10-15.

Tanesab, J. P., & Park, J. J. (2020). Impact of Organizational Innovation on Work Performance: The Mediating Effect of Work Resources in Public-Sector Organizations. International Journal of Business, Humanities and Technology, 10 (3), 21-33.

Tehseen, Z., & Hassan, Z. H. (2018). Impact of network attributes on firm’s performances among chinese and indian entrepreneurs: a multigroup analysis. International Journal of Entrepreneurship, 22(2), 1-14.

Tyoapine, H., Teddy, T. T., James, A. T., & Ringim, K. J. (2016). Entrepreneurial mindset and the success of small and medium enterprises (SMEs) in Nigeria. Mkar Journal of Media and Culture, 1(3), 1-22.

Wales, W. J., Covin, J. G., & Monsen, E. (2020). Entrepreneurial orientation: The necessity of a multilevel conceptualization. Strategic Entrepreneurship Journal, 14(4), 639-660.

Wales, W. J., Kraus, S., Filser, M., Stöckmann, C., & Covin, J. G. (2021). The status quo of research on entrepreneurial orientation: Conversational landmarks and theoretical scaffolding. Journal of Business Research, 128, 564-577.

Wambugu, A.W, Gichira, R, Wanjau, K.N & Mung’atu, J (2015). The Relationship Between Proactiveness And Performance Of Small And Medium Agro Processing Enterprises In Kenya. International Journal of Commerce, Economics & Management, 3 (12), 10-15.

Watuka, J. (2020). Influence of Strategic Management Practices on the Growth of Commercial Banks in Kenya. Interdisciplinary Journal of Contemporary Research in Business, 2(3), 65–70.

Weinzimmer, L, Candace A.E, Michel, E.J, McDowell, W.C. & Mahto, R.V. (2023). The differential impact of strategic aggressiveness on firm performance: The role of firm size. Journal of Business Research, Elsevier, 158(C).


Refbacks

  • There are currently no refbacks.