ENTREPRENEURIAL ORIENTATION AND PERFORMANCE OF SMALL AND MEDIUM SIZE ENTREPRISES (SMEs) IN MACHAKOS COUNTY, KENYA

Peter Mulandi Musyoka, Dr. Alexander Kyule

Abstract


Small and Medium-sized Enterprises (SMEs) play a pivotal role in the economic development of Kenya, serving as a major source of employment, innovation, and economic diversification. In Machakos County, however, SMEs face considerable challenges that impact their performance and sustainability. Despite their potential, many small businesses in the region struggle with issues such as inadequate access to finance, limited market access, and insufficient technical and managerial skills. This study sought to establish the influence of entrepreneurial orientation on performance of SMEs in Machakos County, Kenya. Specifically, the study sought to assess the influence of innovativeness on performance of SMEs in Machakos County, Kenya and to examine the effect of pro-activeness on performance of SMEs in Machakos County, Kenya. This study was guided by: Resource-Based View (RBV) Theory and Resource Dependence Theory (RDT). This study used a descriptive research design. The population of this study included all SMEs located in Machakos County. This number is large and hence can be considered infinite population). Since the population was infinite, purposive sampling of 100 SMEs was used. In this study the unit of analysis was Small and Medium Size Organizations in Machakos County while the unit of observation was 100 SME owners/managers. Since the population was infinite, purposive sampling of 100 SMEs was used. Primary data was collected through use of questionnaires. Statistical Packages for Social Sciences (SPSS) version 26.0 was used for analysis and presentation. The data was analyzed using descriptive and inferential statistics. Descriptive statistics included the mean, standard deviation, coefficient of variation and percentages. Pearson Correlation analysis was used to determine the relationship between individual variables in the objectives Multiple Regression analysis was used in testing the research questions by establishing the influence of each independent variable on the dependent variable. The significance of the model was interpreted using a significance level of 0.05. The results were presented on frequency tables, charts, and graphs. The study concludes that innovativeness has a significant effect on performance of SMEs in Machakos County, Kenya. The study also concludes that pro-activeness has a significant effect on performance of SMEs in Machakos County, Kenya. The study recommends that the management of SMEs should foster a culture of innovativeness through the establishment of innovation hubs and collaborative networks. These hubs can serve as platforms for entrepreneurs to share ideas, access resources, and collaborate on new products or services.

Key Words: Entrepreneurial Orientation, Innovativeness, Pro-Activeness, Performance of Small and Medium Size Enterprises (SMEs)


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