Role of Entrepreneurial Orientation in the Performance of Small and Medium Enterprises: Evidence from Federal Capital Territory, Abuja, Nigeria

Abstract

This study investigated the role of entrepreneurial orientation in the performance of Small and Medium Enterprises in FCT, Abuja, Nigeria. The study employed a descriptive and quantitative research design. The instrument for data collection was structured questionnaire and works on entrepreneurial orientation-Performance nexus. The data was analyzed using the Principal Component Analysis and multiple linear regression analysis. The results showed that five entrepreneurial orientation dimensions as identified in the literature were not exhibited by SMEs in the study area. The entrepreneurial orientation dimensions exhibited by SMEs in Abuja in order of importance were: autonomy, proactiveness, innovativeness, and risk-taking. The entrepreneurial dimension of competitive aggressiveness was not demonstrated by SMEs in Abuja.  Innovativeness was the only entrepreneurial orientation dimension out of the five that exerted a positive and statistically significant relationship with the performance of SMEs. However, the other three dimensions of entrepreneurial orientation: proactiveness, risk-taking, and autonomy exerted a positive and insignificant relationship with the performance of SMEs.  Therefore, the study, recommends that to add values to their firms, SMEs operators in Abuja need to be innovative in their entrepreneurial activities with emphasis on process and radical innovations. In addition, considering the enabling environment provided by the government for business, SMEs operators should strive and build capacities on the four entrepreneurial orientation dimensions demonstrated by them in this study. Furthermore, the government should organize training for SMEs operators in collaboration with development partners to ensure the adoption and effective implementation of innovativeness in FCT, Abuja.