STRATEGIC ENTREPRENEURSHIP AND PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) IN SOUTH- WEST NIGERIA
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Date
2021
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Abstract
The study analysed the extent of which strategic entrepreneurship was practiced among small and
medium scale enterprises in South-west Nigeria; and, examined the determinants of strategic
entrepreneurship practices in the enterprises. It also investigated the influence of strategic
entrepreneurship on the operational performance of the enterprises and determined the effect of
strategic entrepreneurship on the firms’ financial performance. Furthermore, the study assessed the
challenges confronting the practice of strategic entrepreneurship in the enterprises. These were with a
view to evaluating how strategic entrepreneurship enhanced organisational performance of Small and
Medium-scale Enterprises (SMEs) in South-west Nigeria.
The study adopted a descriptive survey research design and used primary and secondary sources of
data. The population for the study consisted of 23,290 owners/managers of enterprises in South-west
Nigeria. Multi-stage sampling technique was used. At the first stage, three (3) states, namely: Lagos,
Oyo and Ogun states were purposively selected out of the six states in South-west Nigeria because of
the concentration of enterprises in the three states. At the second stage, three (3) Local Government
Areas (LGAs) were purposively selected from each of the selected states because of the concentration
of enterprises in the area, giving a total of nine (9) LGAs. Using Slovin’s formula, a sample size of
three hundred and ninety-three (393) enterprises was randomly selected from the population. In
addition, proportionate stratification method was used to obtain the sample from the selected Local
Government Areas (LGAs). A structured questionnaire was administered to the respondents who
were owners/managers of the selected enterprises. The secondary data were obtained from pamphlets
and official releases of the Ministry of Commerce and Industry in addition to already existing
literature. The data collected were analysed with descriptive statistics: means score, graphs and
inferential statistics: Pearson correlation.
The results showed that 58.6% of the enterprises in South-west Nigeria were beyond average level
in the practice of strategic entrepreneurship while 41.4% of the 374 enterprises were below average.
Specifically, opportunity recognition (75.6%), judgment (79.8%), innovation (81.0%), and creativity
(75.0%) were prominent strategic entrepreneurship practices in the firms. The study also showed that
the determinants of strategic entrepreneurship in the SMEs were government policy (t = 3.50, p <
0.01), competitor (t = 3.13, p < 0.01), technology (t = -8.89, p < 0.01), resources (t = 2.76, p < 0.01)
and culture (t = 2.10, p < 0.01). Furthermore, the study established that strategic entrepreneurship
strongly influenced the operational performance of the SMEs (t = 16.84, p < 0.01) in the study area.
Also, the study established that strategic entrepreneurship had a significant effect on the financial
performance of SMEs in South-west Nigeria (t = 8.87, p < 0.01). Finally, the study found that the
major challenges encountered in the practice of strategic entrepreneurship included accessing of
funds for the business (84%), unstable government policies (76%), inadequate customer database
(64%), unstable business environment (61%), and government interference (54%).
The study concluded that the practice of strategic entrepreneurship had a notable effect on the
performance of small and medium scale enterprises in the study area.