ENTREPRENEURIAL ORIENTATION AND GROWTH OF FAMILY-OWNED ENTERPRISES IN KISUMU COUNTY, KENYA

NDERITU MICHAEL NGUGI, KARANJA PATRICK

Abstract


Family-owned enterprises in Kenya play a very important role in the economy through provision of employment and contribution to the GDP. Even though there is significance in the economy, growth of family-owned enterprises has been a challenge over a long period of time with many of the firms not surviving under more than one generation It is estimated that over 40% of family-owned enterprises collapse after the exit of the initiators with most of them ending up in disputes and misunderstanding among the family members. In addition, the statistical data on the registration and liquidation of a specific form of commercial activity for the last 21 years reveal the issue of viability of the enterprises in Kenya. The purpose of this study was to examine the role of entrepreneurial orientation on growth of family owned enterprises in Kisumu City, Kenya.The specific objectives of the study were  to: examine the role of innovativeness on growth of family owned enterprises in Kisumu City, Kenya; Determine the role of proactiveness on growth of family owned enterprises in Kisumu City, Kenya; Establish role of risk taking propensity on growth of family owned enterprises in Kisumu City, Kenya; Find out the role of creativity on growth of family owned enterprises in Kisumu City, Kenya. The study was based on the Diffusion Innovation Theory, Componentail Theory of Creativity, Competency Theory and Frank Knight’s Risk Bearing Theory. The target population of this study was 633 family owned enterprises in Kisumu County, Kenya. The study adopted a descriptive survey and systematic sampling technique was used for the data collected through the use of questionnaires. On the other hand, secondary data was obtained from published documents such as journals, periodicals, magazines and reports to supplement the primary data. A pilot study was conducted to pretest the validity and reliability of instruments for data collection. The data was analyzed with help of SPSS. The study adopted a regression analysis at 0.05 level of significance to determine strength and direction of the relationship of the variables under study. Results revealed that all the entrepreneurial orientation had a positive and significant relationship with growth of family-owned enterprises in Kisumu City, Kenya. However, the magnitude of the influence was different for the specific entrepreneurial orientation dimension.  The proactiveness contribution had the largest effect followed by risk taking propensity then innovativeness and finally the aggressiveness. Consequently, this study provides family-owned enterprises with insights of how to improve growth of family-owned enterprises through entrepreneurial orientation. The key recommendations are that family-owned enterprises should embrace proactiveness, risk-taking, aggressiveness in order to realize growth in their businesses. Policies regarding training of entrepreneurs in the family-owned enterprises should be put in place in order to help them innovate and be successful in their businesses.

Keyword: Business Growth, Entrepreneurship, Entrepreneurial Attitudes and Behaviour Entrepreneurial Orientation, Innovation, Risk-Taking and Pro-activeness.


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