EFFECT OF ENTREPRENEURIAL ORIENTATION ON THE PERFORMANCE OF FAMILY OWNED BUSINESSES: A CASE STUDY OF SUPERMARKETS IN NAIROBI COUNTY
Karen Mwai - Master of Business Administration, Catholic University of Eastern Africa, Kenya
Dr. Joseph Ntale - Senior Lecturer, Catholic University of Eastern Africa, Kenya
Dr. Thomas Ngui - Senior Lecturer, Catholic University of Eastern Africa, Kenya
ABSTRACT
Family businesses exist on a global scale. In the United States alone, researchers estimate that there are more than 12 million family businesses ranging from small private businesses to large publicly traded corporations. A major reason why family owned supermarkets underperform is due to SMEs inability to build necessary internal capacity to deal effectively with diverse and hostile business requirements. Further, despite the enormous role they play in the economy, supermarkets are faced by numerous challenges that affect their performance including competition, lack of skills in management and regulatory framework. Many supermarkets have closed down due to stiff competition in the market brought about by market liberalization. Many supermarkets are generally low margin, ‘me too’ businesses, have very little differentiation and are survival or necessity driven. This implies that the supermarkets in Kenya may be lacking EO. The purpose of this study was to determine the effect of entrepreneurial orientation on the performance of family owned supermarkets in Nairobi County. A descriptive survey research design was used this study. The target population of the study consisted of the management staff of all the 45 family owned supermarkets in Nairobi County. This research study used a stratified random sampling method to select 30% of the respondents. The researcher therefore selected 216 respondents. The researcher used primary data for this study and was collected using questionnaires. The quantitative data in this research was analyzed by descriptive statistics. In addition, a multivariate regression model was applied to determine the relative importance of each of the five variables with respect to Family Owned supermarket performance. The study found that innovativeness culture promoted a performance of family owned supermarkets in Nairobi County, innovativeness is a tendency, an individual’s or organization’s receptivity and proclivity to adopt new ideas. The study concludes that proactiveness supported performance among family owned supermarkets in Nairobi County. The study concludes that risk taking presented new business opportunities and ventures which had a positive influence on performance among family owned supermarkets in Nairobi County and that features of risk-taking form the basis for the targets of profit acquisition and improved business performance. The study concludes that collaboration in family owned supermarkets though exchange of explicit knowledge promoted better production. The research recommends that the management of family owned supermarkets should work to ensure that that internal flow of activities is effective as the quality of coordination was found to be a crucial factor in the survival of family owned supermarkets. Family owned super markets should endeavor to be in the forefront to introduce new products and services and processes. Family owned super markets should endeavor to form strategic business partnerships this will present an opportunity to grow their customer base and improve their business performance. Family owned super markets should take moderate level of in order to make entrepreneurial venture attainable and thus succeed in entrepreneurial venture.
