The Effects Of Entrepreneurial Orientation On The Performance Of Micro And Small Enterprises In Jimma Town

Abstract

Entrepreneurial Orientation is one interesting area of research in business strategy and entrepreneurship disciplines in the last few decades, as it is influential concept in successful business performance. Although a number of related researches had conducted in different parts of the world, only limited studies had conducted in Ethiopia. This study aimed to examine the effect of entrepreneurial orientation on performance of Micro and Small Enterprises in Jimma town, Ethiopia. Descriptive and explanatory research design had employed for this study. The population was 549registered Micro and Small Enterprises, which have working, experience of at least 3 years in Jimma town. The sample size was 110, which were determined using Yamane sample size, determination technique. Out of total 110 questionnaires distributed, 102 filled and returned. Set of questionnaire on entrepreneurial orientation and performance of Micro and Small Enterprises were self- administered for the collection of the primary data. A pilot study carried out to test the validity and reliability of the research instrument using Cronbach Alpha reliability test, which revealed the coefficient ranging over 0.7. The data collected were analyzed using descriptive, Pearson correlation and multiple regressions. The findings of this study revealed that From four Entrepreneurial orientation dimensions (Risk taking(β = 0.24, t = 5.36, p = 0.000), innovativeness(β = 0.27, t = 5.50, p = 0.000), Pro-activeness(β = -0.81, t = -1.34, p = 0.181) and Competitive aggressiveness(β = 0.39, t = 5.90, p = 0.000))except proactiveness which has an insignificant effect, all have a significant positive effect on performance of small and micro enterprise in Jimma town. The researcher recommend that, micro and small scale enterprises should embrace the entrepreneurial orientation dimensions of risk taking, innovativeness, pro-activeness, and competitive aggressiveness to increase business performance