Entrepreneurial Behaviour and Performance of Small and Medium Animal Feed Manufacturing Enterprises in Kiambu and Nairobi City Counties, Kenya

Abstract

Small and medium animal feed manufacturing enterprises in Kenya continue to underperform, despite the manufacturing sector in Kenya being a key pillar in the country’s Vision 2030 development agenda. The industry has been facing challenges such as internal and external, for example, limited access to finance, inadequate technology adoption, weak innovation capacity, and poor managerial practices. Reviewed literature suggests entrepreneurial behavior has the potential to enhance SME performance. The study aimed to establish the relationship between entrepreneurial behavior and the performance of SMEs in the animal feed manufacturing sector in Kiambu and Nairobi City Counties, Kenya. It was guided by six specific objectives: to establish the relationship between innovativeness, risk-taking, proactiveness, customer orientation, and technology orientation and SME performance, and to determine the moderating effect of entrepreneurial networking on the relationship between entrepreneurial behavior and SME performance. A cross-sectional research design was employed, a census approach was used, and data were collected from 65 SMEs entrepreneurs/managers and sales persons through a self-administered questionnaire. Statistical analysis using correlation and PLS-SEM revealed that all the examined entrepreneurial behavior had a statistically significant and positive relationship with performance: technology orientation (β = .621, t = 2.291, p = .024), risk taking (β = .576, t = 5.240, p = .000), innovativeness (β = .385, t = 11.000, p = .000), customer orientation (β = .478, t = 5.978, p = .000), and pro activeness (β = .556, t = 5.978, p = .000). Furthermore, PLS-SEM analysis revealed that entrepreneurial networking significantly moderates the relationship between entrepreneurial behaviors and performance, with all interaction effects showing positive and statistically significant contributions. Therefore, the study concludes that firms that possess entrepreneurial behaviour always realise superior performance. Additionally, business performance is accelerated by entrepreneurial networking when combined with entrepreneurial behaviour. The study recommends that management and entrepreneurs of SMEs should adopt a culture of innovativeness, risk-taking, and proactivity. Equally, entrepreneurs and managers of SMEs should support and nurture technology, customer focus behaviour, and promote networking. It is therefore recommended that SME owners and managers actively cultivate entrepreneurial traits within their operations and leverage strategic networks to share knowledge, access resources, and build market connections. Policymakers and development agencies should support capacity-building programs focused on entrepreneurial behavior and networking to enhance the competitiveness and sustainability of the animal feed manufacturing sector