Impact of the Tehcnical Entrepreneurial And Market Orientation on Firms' Profitability in Small And Medium Enterprises in Southwestern Nigeria

Ajewole, Olalekan Gbenga (2014)



The study examined the technical entrepreneurial orientation (TEO) and market orientation (MO) possessed by small and medium enterprises (SMEs) in Southwestern Nigeria and determined their effects on profitability. It investigated the relationship between the socio-economic characteristics of the owners of SMEs and their TEO or MO with a view to recommending policy interventions that could influence the effects of TEO and MO on profitability. The study covered technological firms in Osun State, Lagos State and Oyo State of Nigeria. Data were collected from primary and secondary sources. The primary data were collected through the administration of questionnaires and also supplemented by well-guided oral interview. Five Local Governments were selected from each state. One hundred respondents were selected from the five Local Governments in each State, making a total sample size of three hundred. The questionnaire elicited information on the socio-economic characteristics, TEO and MO of the operator sand profitability. The TEO was measured using three indicators which include innovativeness, proactiveness and risk-taking. MO was measured using knowledge of market, dissemination of market information and marketing activities as indicators. Profitability was also measured using change in sales revenue and profit. Secondary data were sourced from the records of the firms. Data were analyzed using descriptive and inferential statistics. The result showed that most of the respondents possessed average innovativeness (62.7%), proactiveness (52.3%) and risk-taking (63.3%). Considering the level of market orientation possessed by the respondents, the study showed that 52.0%, 76.7% and 53.0% of the respondents possessed average knowledge of market, dissemination of market information and marketing activities, respectively. Results of regression analysis showed that there is no significant relationship between technical entrepreneurial orientation and profitability (t = 1.415; p> 0.05), meaning that the technical entrepreneurial orientation of the small and medium scale enterprises did not affect their profitability. There is a significant relationship (t = -3.065, p< 0.05) between market orientation and profitability, implying that the market orientation of the small and medium enterprises had effect on their profitability. The chi-square analysis showed that market orientation had a significant relationship with (gender [x2 (41, N = 300) = 68.663; P<0.05], age [x2 (205, N = 300) = 323.389; P<0.05],tribal group [x2 (123, N = 300) = 342.647; P<0.05],marital status [x2 (123, N = 300) = 239.606; P<0.05],family size [x2 (164, N = 300) = 302.112; P<0.05] and educational qualification [x2 (164, N = 300) = 321.891; P<0.05]) of the respondents. In conclusion, market orientation of the operators of small and medium enterprises was good and improved profitability. However, their technical entrepreneurial orientation did not influence profitability.