Entrepreneurial Orientation and the Performance of Small and Medium Enterprises (SMEs) in Nigeria

Abstract

Despite the general finding that a positive association exists between entrepreneurial orientation (EO) and firm performance (FP), the evidence is not consistent, and there is wide variation in the magnitude of the reported impact. Researchers make the case that examining a simple bivariate link, often with constrained methods, provides an inadequate assessment of this focal relationship. Accordingly, scholars have called for wide-ranging modeling of the impact of EO on firm performance. We respond to this call by testing a comprehensive model using 352 entrepreneurs in the Manufacturing sector located in four urban areas, namely: Lagos, Kano, Aba and Abuja, with a multi-theoretic approach in the area of SMEs using the Structural Equation Model (AMOS). By so doing, research result shows that a highly integrated and implementation of entrepreneurial orientation will impact SMEs' performance. Revising relevant survey instruments for the benefit of investigating this relationship in Nigerian manufacturing SMEs was carried out due to limited literature in such a direction and exploring greater insights in the relationship between EO and firm performance is inevitable. Therefore, to address this concern, this study developed a concept facilitating an atmosphere of the relationship between Entrepreneurial Orientation (EO) and performance relative to competitors. This, in turn, leads to improved performance. The results support conceptualization and findings that proper implementation of entrepreneurial orientation will improve the firm's performance.