ENTREPRENEURIAL CHARACTERISTICS AND BUSINESS PERFORMANCE IN NIGERIA

ABSTRACT

The study was aimed at assessing the Entrepreneurial characteristics and business performance in Nigeria, a case study of Yenagoa, Bayelsa state. The survey research was used in this study to sample the opinion of respondents. This method involved random selection of respondent who were administered with questionnaires. The target population of the study comprised selected entrepreneurs of selected areas in Yenagoa, Bayelsa state. The questionnaire administered was one hundred and ten (110) copies and one hundred copies retrieved which constitute the sample size. The descriptive and analytical approach was adopted using Chi-square to test and analyze the hypotheses earlier stated. The findings revealed that there is a significant relationship between risk taking and performance of business in Yenagoa, Bayelsa state, there is a significant relationship between innovativeness and performance of business in Yenagoa, Bayelsa state, there is a significant relationship between competitive aggressiveness and performance of business in Yenagoa, Bayelsa state and there is a significant relationship between competency and performance of business in Yenagoa, Bayelsa state. It was therefore concluded from the findings that entrepreneurial characteristics gives the role of business performance, the higher the, risk taking, innovativeness, competitive aggressiveness and competence of business owners will cause the higher business performance, So the entrepreneurial characteristics are mediating influence entrepreneurial characteristics of business performance. It was recommended that Risk taking characteristics of entrepreneur in Yenagoa, Bayelsa state should be well managed and integrated with the objective of increasing performance. Innovation and innovative characteristics should be considered as a culture among the entrepreneurs and training and conferences on small and medium scale should be adopted to increase entrepreneur competencies and competitive strategies.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Entrepreneurship is not an easy vocation, and it does not always guarantee a 100% success. There are several critical factors that must be in place to enable entrepreneurs achieve a measure of success. The kind of economic policies that have been followed in many African countries especially in Nigeria in the two to three decades after political independence have not always been conducive to small scale enterprise in Nigeria. Entrepreneurship research is dynamic, and there is growing attention to entrepreneurship characteristics and values (Audretsch, 2017), and how this contributes to the economy and economic growth and competitiveness (Glancey & McQuaid, 2014). Entrepreneurship can be regarded as an “employment opportunity”, helping people to get self-employed. Entrepreneurship has become a word of the day. Policymakers, economists, academics and even university researchers are talking about it. Seminars, conferences and workshops are being organized every year across the world which emphasise the importance of entrepreneurship to the economy of a country, society as well as individual development (Béchard and Toulouse 2018; Schaper and Volery 2014; Matlay and Westhead 2015). Entrepreneurship is one of the strongest forces shaping the societies of the 21st century, characterized by ongoing globalization and growing complexity (van Praag & Versloot, 2017). Curious individuals are taking the initiative to explore and exploit opportunities for various reasons; for self-fulfilment, profit seeking, support of their families, fulfilment of customers’ needs, or even to contribute to the economies of a nation. This can be in the context of start-ups, small to medium-sized enterprises (SMEs) or large corporations.

The Nigeria economy is characterized by abundant human and other resources. Small and medium scale enterprises account for a large proportion of the total employment growth in many countries. Small and medium scale enterprises produce a significant share of increases in Gross Domestic Product, while the contributions of larger enterprises tend to remain stable (Aliyu, Rogo and Mahmood, 2015). In the case of Nigeria, well-managed and healthy Small and medium scale enterprise constitute significant sources of employment opportunities and wealth creation. While the citizens benefit in terms of employment and income, Government also benefits by generating revenue in form of taxes. This can be a strong factor to social stability (Abdullahi and Burcin, 2017).There is a positive relationship between a country’s overall level of income and the number of Small and medium scale enterprise per 1,000 people. The World Bank’s Doing Business reports indicate that a healthy Small and medium scale enterprise sector corresponds with a reduced level of informal or “black market” activities. Thus, managing Small business sector to reduce the number of informal business is essential in the Nigerian development project (Isaga, 2015). This depends on the ability of the entrepreneurs to manage and grow the business. The performance of any business depends essentially on the vibrancy of the entrepreneur. Entrepreneur characteristics such as ability to innovate, risk taking competency and competitive aggressiveness have great extent to which they affect business performance (Oyeniyi and Adeniji, 2010).Entrepreneurs need specific characteristics to enable them to succeed. An entrepreneur with innovative characteristic and competitive aggressiveness can compete favourably in a dynamic and competitive business environment, while entrepreneurs without these characteristic will not only perform poorly but can be eliminated in the business. Entrepreneurship in today’s world has become a major concept of discussion in developing countries. Entrepreneurship provides avenues for alternatives for failing or malfunctioning state-owned enterprises in developing economies in the world.

Business performance in Nigeria has been viewed in terms of sales growth, competitive advantage, expansion and profitability. Business performance can be viewed from financial perspective and non-financial perspective. According to Reynolds, Bygrave and Autio, (2014), financial perspective is linked to profits, wealth creation, economic growth and sales growth while non-financial perspective is associated with competitive advantage and increased productivity. Therefore, Small and medium scale enterprise performance can be judged based on several different dimensions such as sales growth, capital, increase in employment, increase in production line and others. In the same vein, Small and medium scale enterprise performance is seen from the angle of financial perspective and it is assessed as sale growth and profitability Entrepreneurs who could be grouped as being reactive such as entrepreneurs who react to market signals and in doing so convey and ease the market process formed the first category of entrepreneurs. Entrepreneurs who bring economic development by introducing and innovating ideas, which rearrange the allocation of factors of production, were considered the second category of entrepreneurs. The last category of entrepreneurs are those who in their management efforts, cause improvements of a gradual nature to available products and procedures (Kiggundu, 2014). Despite the economic importance of Small and medium scale enterprise, there is high number of failed and collapsed Small and medium scale enterprises in Nigeria due to low profitability, poor business decision, high cost of production, competition with foreign products and low market share. It is not yet determined if the low profitability and sales are as a result of entrepreneurs’ incapability or inability to take calculated risk, to react sharply to the moves of the competition or to create new and acceptable ideas.

1.2 STATEMENT OF THE PROBLEM

Modern business environment is characterized by intense global competition. Firms face more challenging changes than ever in the way they compete in what is now a global and technology flooded economy, rapid technological changes such as methods, components and techniques with processes to create a product or service. Higher consumers demand in terms of product quality and increase returns from investors in terms of shareholders wealth maximization. These factors have prompted management to search for competitive advantage for corporate survival. Entrepreneurial characteristics are considered as important mechanisms to have more competitive advantage and to survive the global business world (Murad and Rula, 2015). It provides organizations with several strategic advantages such as elimination of costs, differentiation through new products and services development and increase service quality (Oyeniyi and Adeniji, 2010). It is a micro environmental factor that determines business performance.

The mortality rate of businesses in Nigeria is very high. The causative factors of this premature extinction are not always the issue of poor infrastructural development or competition from the big firms but rather poor entrepreneurial characteristics. The success of economic ventures like Small and medium scale enterprises depends largely on the entrepreneurial skills. Small and medium scale enterprise operators must possess the capacity to manage and acquire basic skills of planning, organizing, coordinating, leadership and communication. Creative and innovative abilities are gotten through work experience in other enterprises or through technical and managerial training schemes. However, for Small and medium scale enterprises in Nigeria, high failure rate is usually recorded due to poor managerial and entrepreneurial characteristics necessary for the achievement of results. While the effect on entrepreneurial characteristics on the performance of small and medium scale enterprises has well been documented in literature (Sarwoko et al.,2013; Taylor,2013; Wiklund & Shepherd, 2015).There is limited study in developing countries of Africa like Nigeria and none about businesses in Yenagoa and Bayelsa State, therefore this study examined the relationship between entrepreneurial characteristics and business performance in Nigeria and Bayelsa state in particular.

1.3 OBJECTIVES OF THE STUDY

The main purpose of this study is to examine entrepreneurial characteristics and business performance in Nigeria. The specific objectives are to;

1. Examine the relationship between risk taking and performance of business in Yenagoa, Bayelsa state

2. Study the relationship between innovativeness and performance of business in Yenagoa, Bayelsa state

3. Investigate the relationship between competitive aggressiveness and performance of business in Yenagoa, Bayelsa state

 4. Examine the relationship between competency and performance of business in Yenagoa, Bayelsa state

1.4 RESEARCH QUESTIONS

1. Examine the relationship between risk taking and performance of business in Yenagoa, Bayelsa state

2. Study the relationship between innovativeness and performance of business in Yenagoa, Bayelsa state

3. Investigate the relationship between competitive aggressiveness and performance of business in Yenagoa, Bayelsa state

 4. Examine the relationship between competency and performance of business in Yenagoa, Bayelsa state

1.5 RESEARCH HYPOTHESES

Ho1: There is no significant relationship between risk taking and performance of business in Yenagoa, Bayelsa state.

Ho2: There is no significant relationship between innovativeness and performance of business in Yenagoa, Bayelsa state.

Ho3: There is no significant relationship between competitive aggressiveness and performance of business in Yenagoa, Bayelsa state.

Ho4: There is no significant relationship between competency and performance of business in Yenagoa, Bayelsa state

1.6 SCOPE OF THE STUDY

The study is restricted to Entrepreneurial characteristics and business performance in Nigeria.

1.7 SIGNIFICANCE OF THE STUDY

This study is very important because it is aimed at examining the effects of entrepreneurship characteristics on business performance in Nigeria. The paper will provide some relevant recommendations for policy makers, development agencies, entrepreneurs, and small business managers to help seek better ways to increase business performance to small businesses, and appropriate strategies to improve the small business sector in Nigeria.

Secondly, the study is also vital since it suggest to small businesses certain strategies they can adopt to increase business performance. For owners and managers of micro and small businesses, access to a study like this can aid their understanding of current challenges and reveal the essential factors that promote small business growth and survival and thus enable them to focus on the relevant ones in an attempt to enhance their growth and performance.

It would also prepare ground for interested researcher who might wish to conduct further research in related areas and could contribute to the existing literature.

1.8 ORGANIZATION OF THE STUDY

This research work contains five chapters. The first chapter contains the introduction which provides general information about the study, structure of the research work, objectives, research question, justification and the definition of terms and Chapter 2 presents the literature review which includes theoretical review, conceptual review with the following subtopics: entrepreneurship, entrepreneurial characteristics and measures, business performance and measures, barriers of entrepreneurial development; and empirical review. Chapter 3 describes the research methodology and it presents the research process and data collection procedure. Chapter 4 is “data analysis and result”; the outcomes of the study, element and process of data analysis and results are presented. Chapter 5 summaries the findings, the benefits of the research and recommendations.