Effect of Entrepreneurial Orientation on the Survival and Sustainability of Small and Medium-Sized Enterprises (SMEs) in Nigeria:

Introduction

1.1 Background of the Study

Globally, entrepreneurial orientation is important in order to achieve an entrepreneurial performance climate. Covin and Lumpkin (2012); Miller, Breton-Miller, and Lester (2011) define entrepreneurial orientation as the strategic dimension for organizational performances. However, Agboje (2018) define entrepreneurial orientation as a visionary expert who proactively takes advantage of opportunities irrespective of the prevailing uncertainty for profit making. The conception of entrepreneurial orientation vision requires that the SMEs develops norms and behaviors that will fosters entrepreneurial processes in their business activities as studies emphasized that an internal strategy remains an essential factor that will facilitates employee effectiveness to prevent dearth in survival (Ajake, 2015).

Entrepreneurial orientation is described by Etim, Adabu, and Ogar (2017) as a group of decision-making processes, procedures, guidelines, and standards that a corporation uses to increase its capacity for innovation, initiative, and risk-taking. According to Omisakin, Nakhid, Littrell, and Verbitsky, entrepreneurial orientation has also been defined as SMEs’ readiness to innovate, seek out risks, engage in self-directed behaviour, and be more proactive and aggressive than rivals in response to new market opportunities (2016). According to Brettel, Chomik, and Flatten (2015), EO comprises the identification, assessment, and exploitation of possibilities to launch new goods or services, whereas Asad, Sharif, and Hafeez (2016) described EO as the standards and guidelines applied to decision-making.

Entrepreneurial orientation is linked to the ability of startups in this sense to evaluate and exploit openings (Messersmith & Wales, 2013) as well as review these opportunities or openings in other to take advantage of them. Entrepreneurship orientation is seen as an uninterrupted affiliation, and connection that helps an organization stand out in the singularity of increasingly and progressively competitive, tempestuous, turbulent, and stormy business environment (Messersmith & Wales, 2013), as such; a strong entrepreneurship orientation in terms of innovativeness and pro-activeness is synonymous or identical with investigations into the progressively essential area of startups going global.

Mienpre and Onuoha, (2018) observed that in totality, the aim and idea behind entrepreneurial orientation are to establish self-employing businesses, a new enterprise that ensures the availability of new products, to meet shareholders’ and customers’ value, and to satisfy the marketplace, thereby creating job opportunities that will contribute to the growth of the economy (Duru, 2011). This is in line with the earlier work of Drucker (2010) who made it plain that the activities of the entrepreneur will influence the economy as the entrepreneurs take risks, create new business ideas and values from the existing ones, and start up new organizations.

Hsiung and Tsai (2017) in their view described entrepreneurial orientation as a strategic component available and needed for improving the survival and sustainability of SMEs. Masa‟deh, Al-Henzab, Tarhini and Obeidat, (2018) revealed that entrepreneurial orientation are key and has a positive impact on the survival of SMEs considering the five EO dimensions of (innovativeness, proactiveness, risk-taking, autonomy and competitive aggressiveness). Entrepreneurial orientation is seen as a key strategic resource that enables SMEs to adapt to changing market conditions, exploit new opportunities, and build competitive advantage over time (Wiklund and Shepherd, 2005). Dynamic capabilities theory further emphasizes the importance of organizational learning, innovation, and adaptation in achieving competitive advantage and long-term sustainability (Teece et al., 1997). SMEs with a strong entrepreneurial orientation are better equipped to develop and deploy dynamic capabilities, enabling them to respond effectively to market challenges and capitalize on emerging opportunities.

1.2 Statement of the Problem

The modern business environment is characterized by intense global competition. SMEs face more challenging changes than ever in the way they compete in what is now a global and technology flooded economy, rapid technological changes such as methods, components, and techniques with processes to create a product or service. These factors have prompted management to search for means to ensure business survival. The relationship between entrepreneurial orientation and survival of SMEs is widely studied within the field of entrepreneurship, but the results vary from a strong positive relationship to no significant direct relationship between the two (Rauch, Wiklund, Lumpkin & Frese, 2009).

In Nigeria, SMEs have not had the expected vital and dynamic impact on the country’s economic growth and development because the environment in which they operate is changing, and technological advancements, the scarcity of resources, and a lack of an entrepreneurial mindset have threatened the survival and stability that have long characterised its market and performance (Wassim, 2015). Some of the features deduced for the dearth in sustainability of SMEs are paucity in implementation of entrepreneurial orientation dimensions, insufficient capital outlay, lack of focus, inadequate market research, and lack of planning. Because they lack the same level of preference for innovation, proactivity, competitive aggression, and risk-taking, small and medium-sized firms around the world are more likely to fail. This is due to the undesirable attributes that businesses, their owners, and management exhibit (Ayeni-Agbaje & Osho, 2015). Additionally, there are pressing issues like a lack of entrepreneurial initiative, a lack of long-term planning for products, operations, employees, and competition, a lack of ability to engage in creative processes and new ideas, a lack of management willingness to take risks, a lack of intention to leave comfortable positions in order to pursue novel ideas, a lack of ability to gain a competitive edge over rivals, a lack of customer satisfaction, a low growth and profit rate, and finally, a lack of information (Ayeni-Agbaje & Osho, 2015). These issues has significantly affected the survival and sustainability of SMEs in Nigeria.

1.3 Objectives of the Study

The main objectives of this study is to examine the effect of entrepreneurial orientation on the survival and sustainability of small and medium-sized enterprises (SMES) in Nigeria. Specifically the study intends to:

Assess the level of entrepreneurial orientation (EO) exhibited by SMEs in SMES in Ado-Odo Ota, Ogun State.

Determine whether there is a significant relationship between entrepreneurial orientation and SMEs’ survival rates in Ado-Odo Ota, Ogun State.

Find out whether adequate entrepreneurial orientation promotes the sustainability of SMEs in Ado-Odo Ota, Ogun State.

Ascertain the dimensions of entrepreneurial orientation which aids the sustainability of SMEs in Ado-Odo Ota, Ogun State.

Investigate moderating factors which influences the relationship between entrepreneurial orientation and SMEs’ survival and sustainability in the Nigeria.

1.4 Research Questions

The researcher raised the following research questions to guide this study:

What is the level of entrepreneurial orientation (EO) exhibited by SMEs in Ado-Odo Ota, Ogun State?

Is there a significant relationship between entrepreneurial orientation and SMEs’ survival rates in Ado-Odo Ota, Ogun State?

Does adequate entrepreneurial orientation promote the sustainability of SMEs in Ado-Odo Ota, Ogun State?

What are the dimensions of entrepreneurial orientation which aids the sustainability of SMEs in Ado-Odo Ota, Ogun State?

What are moderating factors which influences the relationship between entrepreneurial orientation and SMEs’ survival and sustainability in the Nigeria?

1.5 Research Hypothesis

Ho: Entrepreneurial orientation does not facilitate the survival and sustainability of SMEs in Ado-Odo Ota, Ogun State.

Ho: Entrepreneurial orientation facilitates the survival and sustainability of SMEs in Ado-Odo Ota, Ogun State.

1.6 Significance of the Study

The findings of this study were significant to entrepreneurs in establishing the relationship that exists between entrepreneurship orientation and survival of small and medium enterprises. The findings of the study were significant to the Ministry of Industrialization and planning mandated with economic planning by highlighting the need to assess the influence of key pillars to the success of entrepreneurial activities. Besides, adding to the pool of knowledge in entrepreneurship, this study formed a basis for further research in the field of entrepreneurship.

1.7 Scope of the Study

The study focuses on the effect of entrepreneurial orientation on the survival and sustainability of small and medium-sized enterprises (SMES) in Nigeria. Geographically, this study will be carried out among SMEs in Ado-Odo Ota, Ogun State.

1.8 Limitation of the Study

Finance for the general research work will be a challenge during the course of study. Correspondents also might not be able to complete or willing to submit the questionnaires given to them.

However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite these constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.

1.9 Definition of Terms

Entrepreneurship:

This is a process of creating something different with the value by devoting the necessary time and effort assuming the accompanying financial, psychic and social risks and receiving the resulting rewards of monetary and personal satisfaction.

Entrepreneurial Orientation:

Is a firm-level strategic orientation which captures an organization’s strategy-making practices, managerial philosophies, and firm behaviors that are entrepreneurial in nature.

Small Scale Enterprise:

An enterprise with a labor size of 11-1000 workers or a total cost of not more than 50 million including working capital but excluding cost of land.

Medium Scale Enterprise:

An industry with a labor size of between 10-300 workers or a total cost of over 50 million but not more than 200 million including working capital but excluding cost of land.

1.10 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows.

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.

Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.

Chapter three deals on the research design and methodology adopted in the study.

Chapter four concentrate on the data collection and analysis and presentation of finding.

Chapter five gives summary, conclusion, and recommendations made of the study.