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CHAPTER ONE INTRODUCTION 1.1 Background of the Study

Entrepreneurial orientation is linked to the ability of Small and Medium scale Enterprises in this sense to evaluate and exploit openings (Messersmith and Wales, 2013) as well as renew these opportunities or openings to make it more advanced. The advancement value of entrepreneurship orientation is seen as a uninterrupted affiliation, connection, and association which stands out in the singularity of increasingly or progressively competitive and tempestuous, turbulent, and stormy business environment (Messersmith and Wales, 2013), as such; a strong entrepreneurship orientation in terms of innovativeness and pro-activeness is synonymous or identical with investigations into the progressively essential area of SMEs going global.

Medium Scale Enterprises like other forms of businesses face turbulent situations from the external environment; for such business to thrive it must show its fundamental quality to respond proactively and creatively to a substantial change that disrupts the anticipated design of events through entrepreneurial orientation. Without such fundamental quality it may not be able to survive a prolonged period of degenerating conduct. In essence, the overall resilience of the organization is paramount if it intends to survive. Organizational Resilience has been defined by Kerr (2017) as the “the ability of an organization to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and prosper.”

A resilient organization is said to be one that not merely survives over the long term, but also flourishes – passing the test of time (Kerr, 2017). A resilient organization is one that is able to maintain a positive adjustment in the face of a thought- provoking, challenging and puzzling condition as a result of entrepreneurial orientation. When firms are showing the capability to absorb strain and still function as intended; or a capability to spring back from problematic and turbulent events; or both – such firms are seen to be resolute in the strong resilient orientation it has.

Small and medium enterprise (SMEs) plays a pivotal role in the economic growth and development of emerging, developing and developed economies of the world. The development of the small and medium scale enterprise sector is one approach that could help the government to attain the object of promoting entrepreneurship as a vehicle for driving rapid industrialization and help solving the problem of unemployment and overall economic growth. Before the small business operators could achieve this, entrepreneurial orientation plays important role for the achievement. The contribution of the SMEs sector to the Nigeria economy shows that it is a strategic engine for economic growth and development.

Small business plays a key role in creating jobs, contributing to tax, export and import revenue, facilitating the distribution of goods as well as contributing to human resources development. SMEs are the cradle of innovations and entrepreneurship (Agyapong, 2010). In addition SMEs are very important in the fight against poverty. They also employ poor and low income workers and are sometimes the only sources of employment in the rural area, the major obstacles threatening the performance of small and medium scale enterprise in Nigeria are obsolete technology, multiple taxation access to the market, poor support (Business Development Service), inconsistency in government policies poor infrastructure and access to finance (SMEDAN, 2013). However, in an effort to sustain these entrepreneurial orientation…

African development bank group (2013) opined that the business environment in Nigeria is be defiled by market failures and this has led to the under provision of financing for the mall and medium created as the agency solely responsibility for the promotion and development of this sector. In addition, the National Enterprise Development Program (NEDEP) was implemented. Others were the creation of the MSME, national and state councils youth enterprise with innovation   in Nigeria (YOUWIN), the revised nation small and medium scale enterprise policy and other funding assess of the Central Bank of Nigeria and other Development Banks (SMEDAN, 2013).

In order to achieve these, firms develop supporting mechanisms like structure, culture and people. The dimensions of EM include strategic orientation, commitment to opportunity and resources, control of resources, management structure, reward philosophy, growth orientation and Entrepreneurial Orientation (EO) and firm performance has become the main subject of interest in past literatures which is concerned with the performance (Lumpkin and Dess, 1996). In developing countries like Nigeria, most of the researchers on entrepreneurship are based on small firms or individual entrepreneurship (Miller and Breton miller, 2011).

1.2 Statement of the Problem

Small and Medium Scale Enterprises in Nigeria face enormous pressures as the nation integrate more into the world economy. Influence impacting as both external and internal factors can be found in the business environment, such as globalization, technological innovation and demographic and social change, as well as the level environment, deployed, innovation ability, financial support and entrepreneurship. In Nigeria entrepreneurial venture have a low survival rate as entrepreneurs started business but are unable to turn them into sustainable business.

Also most new small and medium scale enterprise in Nigeria do not move from the first stage of existence to other stages such as survival success, take off and resources maturity (Fatok, 2012). All over the world as well as in Nigeria in particular, several characteristics, factors and problems stated above have been identified to be key determinants for small and medium scale enterprises performance and macroeconomic consequences of such problems include poverty, unemployment, increase in inflation and other macroeconomic challenges and low performance (Prijadi, 2017), therefore, it is necessary to establish and understanding of key entrepreneurial orientation and business practices that can help in the understanding and promotion of small and medium scale enterprise for better performance.

Ideally, innovation is the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity for a different business or in different services. It is capable of being presented as a enterprise sector which is crucial to employment and economic diversification and this underlined the necessary for provision of financial assistance to SMEs through reputable local banks.

An entrepreneurial Oriented (EO) firm for the purpose of this study is defined as a firm that involutes in technological innovation (innovativeness), undertakes risky venture (risk taking) and pursue opportunities proactively (pro-activeness). On the other hand, entrepreneurial management (EM) assumes that entrepreneurial firms are driven and motivated by the opportunity, size it regardless of the resources they have and if necessary prefer to rent these resources (Guulruh and Sinem 2009).

The birth, growth and sustainability of small and medium scale enterprises are critical to the attainment of economic growth and development of countries despite this, the truth is that the activities of SMEs are defiled by problems such as access to finance, poor infrastructure, inconsistency in government politics, poor support business development, service, and access to the market multiple taxation and obsolete technology leading to high failure rate. The slow growth of small and medium scale enterprises in Nigeria cannot just be attributed to the  problem already stated only but to mainly inadequate, given the scenarios painted above, there have been many effort in the last twelve years to boost the small and medium scale enterprises sector of the Nigeria economy

First the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has discipline, capable of being learned, capable of being practiced. Entrepreneur need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation, they need to know and to apply the principles of successful innovation. Many reviews  and assessments of the entrepreneurship research field have concluded that the development of a cumulative body of knowledge has been limited and slow because there is lack of agreement on many key issues regarding what constitute entrepreneurship because researchers fail to build upon each other result (Davidson and Wikland, 2001) because measurement of key variable are typically weak. It is in this light that this study investigates the performance of Small and Medium Scale the Enterprises through entrepreneurial orientation.

1.3       Objective of the Study

The main objective of this study was to examine the performance of Small and Medium Scale the Enterprises through entrepreneurial orientation. The specific objectives of the study were:

  1. To examine the effect of risk taking capacity of an entrepreneur on the performance of SMEs.
  2. To examine the effect of the pro-activeness of an entrepreneur on the performance of SMEs.
  3. To examine the effect of competitive aggressiveness of an entrepreneur on the performance of SMEs.
  4. To examine the effect of innovativeness of an entrepreneur on the performance of SMEs.

1.4       Research Questions

  1. What are the effects of risk-taking capacity of an entrepreneur on the performers of SMEs?
  2. What are the effects of the pro-activeness of an entrepreneur on the performance of SMEs?
  3. What are the effects of competitive aggressiveness of an entrepreneur on the performance of SMEs?
  4. What are the effects of innovativeness of an entrepreneur on the performance of SMEs?


Title Page        –           –           –           –           –           –           –           –           i

Approval Page            –           –           –           –           –           –           –           –           ii

Certification    –           –           –           –           –           –           –           –           iii

Dedication      –           –           –           –           –           –           –           –           iv

Acknowledgements –  –           –           –           –           –           –           –           v

Abstract –        –           –           –           –           –           –           –           –           vi

List of Tables  –           –           –           –           –           –           –                       vii

Table of Contents       –           –           –           –           –           –           –           viii



1.1       Background to the Study       –           –           –           –           –           1

1.2       Statement of the Problem       –           –           –           –           –           2

1.3       Objective of the Study           –           –           –           –           –           4

1.4       Research Questions     –           –           –           –           –           –           5

1.5       Statement of Hypotheses        –           –           –           –           –           5

1.6       Significance of the Study       –           –           –           –           –           6

1.7       Scope of the Study     –           –           –           –           –           –           7

1.8       Limitation of the Study          –           –           –           –           –           7

1.9       Organization of the Study      –           –           –           –           –           8

1.10     Definition of Terms    –           –           –           –           –           –           8




2.1       Conceptual Framework           –           –           –           –           –           10

2.1.1    Meaning and Concept of Small and Medium

Scale Business             –           –           –           –           –           –           10

2.1.2    Reason of Entrepreneurial Orientation           –           –           –           12

2.1.3    Problems Facing Small and Medium Scale Enterprise           –           15

2.1.4    Contributions of Small and Medium Scale Enterprise

to the Growth of the Economy of Nigeria     –           –           –           17

2.1.5    Factors that Influences Entrepreneurship       –           –           –           21

2.1.6    Innovativeness            –           –           –           –           –           –           –           21

2.1.7    Proactiveness  –           –           –           –           –           –           –           22

2.1.8    Risk Taking     –           –           –           –           –           –           –           23

2.2       Theoretical Framework           –           –           –           –           –           26

2.2.1    Spender Theory           –           –           –           –           –           –           26

2.2.2    Adesine Emmanuel Balogun Theory  –           –           –           –           27

2.3       Empirical Framework  –           –           –           –           –           –           27

2.3.1    Dike (2008) the Individual Impact of Entrepreneurial Orientation    -27




3.1       Research Design         –           –           –           –           –           –           29

3.2       Population of the Study          –           –           –           –           –           29

3.3       Sample and Sampling Techniques      –           –           –           –           30

3.4       Instrumentation           –           –           –           –           –           –           31

3.5       Plan for Data Analysis            –           –           –           –           –           31

3.6       Problems of Data Collection   –           –           –           –           –           33



4.1.      Analysis of Research Questions         –           –           –           –           34

4.1.1    Analysis of Research Questions One  –           –           –           –           34

4.1.2    Analysis of Research Questions Two –           –           –           –           35

4.1.3    Analysis of Research Questions Three-          –           –           –           36

4.1.4    Analysis of Research Questions Four –           –           –           –           37

4.2       Test of Hypotheses     –           –           –           –           –           –           38

4.2.1    Test of Hypothesis One          –           –           –           –           –           38

4.2.2    Test of Hypothesis Two          –           –           –           –           –           40

4.2.3    Test of Hypothesis Three        –           –           –           –           –           41

4.2.4    Test of Hypothesis Four         –           –           –           –           –           45

4.3       Discussion of Findings           –           –           –           –           –           47




5.1       Summary of Findings –           –           –           –           –           –           49

5.2       Conclusion      –           –           –           –           –           –           –           50

5.3       Recommendations      –           –           –           –           –           –           50


Appendix 1

Appendix 11


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