Relationship between Entrepreneurial Orientation and Growth of Mid-Sized Enterprises in Kenya

Abstract

Many SMEs failed to appreciate the role of industry experience and thus a slow growth hence lacking competitive advantage in the ever changing business environment. Studies have showed that most of the SMEs do not operate beyond their fifth year. Despite there being many studies conducted on the topic of entrepreneurial orientation and performance none of these studies focused on the relationship between entrepreneurial orientation and growth of mid-sized enterprises in Kenya and the moderating role of industrial experience. This makes this study to be unique as it was conducted to fill the gap. The specific objectives of the study were to investigate the influence on autonomy, innovativeness; risk taking, proactiveness and managerial competences on the growth of mid-sized SMEs in Kenya. In addition, the study sought to establish the moderating effect of industry experience on the relationship between entrepreneurial orientation and growth of mid-sized SMEs in Kenya. Descriptive research design was used. In the study, the target population comprised of 287 mid-sized SMEs in Kenya between the years 2010 - 2015. The sample size for the study was 164 top managers in the targeted mid-sized companies. The study used the stratified random sampling technique as it ensured that all listed companies were represented according to the various sectors. The target population was stratified into the 2 strata (service sector SMEs and non-service sector SMEs). Further, random sampling was used to select 164 top managers in the mid-sized companies. Random sampling ensured that the study eliminated bias in its choice of respondents. The study used primary data collected through questionnaire. Statistical Package for Social Sciences (SPSS) was used for analysis. The descriptive analysis involving frequencies, percentage, mean and standard deviations were used as measures of central tendencies and dispersion respectively. A multivariate regression was also used to test the combined effect of all independent variables. The findings were presented in forms of Tables and charts. The study found out that autonomy, innovativeness, risk taking, proactiveness, managerial competence have a positive and significant effect on growth. Further, the study found out that industry experience moderates the relationship between entrepreneurial orientation and the growth of mid-sized Enterprises in Kenya. Therefore the study concluded that entrepreneurs that display autonomous behavior base their feelings on the fact that they can conquer all necessary challenges on their path to success and still attain their desired goal. That innovativeness plays significant role in solving business problems and challenges regardless of market turbulence, which in turn provides firms with the ability to succeed. That proactiveness leads antedate imminent prospects, both in terms of products or technologies as well as in markets and consumer demand. It brings about change in an environment by predicting trends through the exploration of opportunities, hence the introduction of new products and services. The managerial competence leads to completeness of tasks. Finally the study concluded that industry experience moderates growth. Therefore, the study recommends for mid-sized enterprises to consider entrepreneurial orientation programs since they are very crucial in the growth of the enterprises.