Entrepreneurial Orientation and Growth of Small and Medium Enterprises
DOI:
https://doi.org/10.53819/81018102t7071Abstract
The role of small and medium enterprises (SMEs) in the economy cannot be understated. This sector contributes to the majority of employment, both in the informal and formal sectors. However, these enterprises face several challenges, ranging from inadequate skills to run their operations, inaccessible credit finance, limited credit terms and conditions, and external environmental factors such as pandemics and global economic recessions, which often hinder their growth. This study, therefore, investigated the effect of entrepreneurial orientation on the growth of SMEs. A corresponding hypothesis was formulated and tested. Data was collected from a sample of 384 SMEs spread across eight sub-economic sectors using a 5-point Likert scale structured questionnaire. Analysis was conducted using multiple regression after testing for diagnostic assumptions. The findings of the study showed that entrepreneurial orientation statistically and significantly affected growth of SMEs with a p=0.0001. Coefficient statistics showed a beta value of 0.492, which meant that entrepreneurial orientation increased the growth of SMEs by up to 49% of the realized changes. The study concluded that SMEs should pursue skills and knowledge, which are requirements for effective and better running of business operations, including accounting, marketing, and financial management for growth.
Keywords: Entrepreneurial Orientation, Growth, Small and medium enterprises
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