The effect of entrepreneurial mind set on the performance of manufacturing businesses in Nairobi industrial area rch 2012

Abstract

The growth and development of an economy propelled by increased and improved entrepreneurial activities spells better living standards for its citizen. It would mean creation of employment, increased wealth creation, expanded market, variety of goods and services and high quality goods and services. It is therefore the intent of all stakeholders likes the government, investors and the society at large to promote entrepreneurial activities and encourage individual with entrepreneurial mindset to excel in their businesses and increase these activities. In the past the government and many micro financiers have made enormous efforts through variety of financial and non financial programmes to assist small and medium enterprises. In spite of these efforts majority of these enterprises have continued to perform below expectation leaving many to wonder what really propels good performance in them. This study sought to investigate the extent of entrepreneurial mindset or the lack of it and its effect to the performance of small manufacturers in Nairobi Industrial Area. The focus of the research was to measure the entrepreneurs’ mindset exhibited through innovativeness, business alertness and creativity and how these attributes contributed to the performance of a business enterprise. The research focused on a population of 625 small and medium manufacturers based in Nairobi industrial area from whom a sample of 230 firms were selected through stratified random sampling method. A questionnaire was used to collect the data. The SPSS software was used by the researcher to run a descriptive statistical analysis and to establish the relationship between the variables. Pearson’s correlation analysis was used. The study revealed that business alertness, innovativeness and creativity respectively played a great role in business performance. xv Gender and age plus the size of the business were not significant on entrepreneurial mindset and hence not significant on the firm’s performance. It was not however clear as to what exactly creates the entrepreneurial spirit is an individual entrepreneurs and this is an area where further research has been recommended. Similarly, the researcher recommended that all stake holders in economic development review strategies to emphasis on events, policies and programmes that promote entrepreneurial mindset to the players in the market. The study revealed that entrepreneurial mindset or lack of it has a major effect on business performance and if any economy is bended towards development and growth, it would have to embrace this concept.