Entrepreneurial orientation and financial performance of Nigerian SMEs : the moderating role of environment

Mohammed Sanusi, Magaji (2014) Entrepreneurial orientation and financial performance of Nigerian SMEs : the moderating role of environment. PhD thesis, Universiti Malaysia Sarawak.

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Abstract

The growth and survival rate of small and medium-sized enterprises (SMEs) in Nigeria has been one of the major concerns of the policy makers, practitioners and scholars. The strategy and entrepreneurship literature suggests that an entrepreneurial orientation (EO) improves firm performance, but empirical results are mixed. In this study, we investigate how EO dimensions; innovativeness, proactiveness, risk-taking and competitive aggressiveness), affect financial performance of SMEs in Nigeria. In doing so, the study examines the moderating impact of key environmental characteristics; dynamism and hostility on these relationships. The sample used was SMEs in Kano State-Nigeria, with the following characteristics; (a) having at least 10 employees and a maximum of 300 workers, (b) small and medium-sized enterprises, (c) standing alone, not a subsidiary or branch companies (d) and based in Kano State Nigeria. The respondents were the owner/managers of SMEs in the study area. A total of 352 owner/managers participated in the research. Data collected were analyzed, utilizing multiple regressions and hierarchical multiple regression analysis implemented in SPSS version 17, statistical program .Our findings indicate, that hypotheses 1-4 are supported, while hypotheses 5-11 are partially supported except for that regarding the moderating impact of environmental dynamism on the proactive- performance relationship, which was not found to be significant. These findings demonstrate that EO dimensions alone are not a significant determinant of financial performance for SMEs in Nigeria; it is being influenced by environmental dynamism and hostility. The implications of these findings for both researchers and managers are also discussed. The study contributes to the expanding field of EO research and provides additional insight into the strategic behavior of firms in a variety of environmental contexts.

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