Abstract:
The focus of the study was to investigate the Effect of Entrepreneurial Orientation (EO) on
Business Performance in Case of Small Enterprises in Addis Ababa. The study applied
correlational research design to identify and evaluate the relationship between Entrepreneurial
Orientation and Small Enterprise Business Performance. Both quantitative and qualitative
research approaches were used to collect data through the utilization of a questionnaire in the
form of Likert scale, open ended questionnaire and interviews. A total of 200 questionnaires were
distributed to respondents and 180 of them were returned back. The finding of the study revealed
that autonomy and innovativeness has high effect on the performance of small enterprise while the
remaining (pro-activeness, competitive aggressiveness and risk taking) has a moderate role in
impacting small enterprise performance. Results from Pearson Correlation Coefficient, there were
strong significant correlation existed between SE Business Performance and innovativeness
(r=.687**) and autonomy (r=. 671**) respectively. Other variables such as risk-taking(r=.431**)
pro-activeness(r=.392**) and competitive aggressiveness(r=.469**) has Moderate correlation.
From an open ended question determinate challenges that has adverse effect on entrepreneurial
orientation were lack of access to capital, poor infrastructure, lack of experience, lack of working
premises and lack of market linkage or access to market. Therefore, based on the finding, the
researcher recommends, the government should solve the problems of lack of access to capital,
poor infrastructure, lack of experience, lack of working premises and lack of market linkage or
access to market and small enterprise owners and managers should give autonomy to their
employees to enhance their innovative capacity.
