Abstract

The purpose for this study was ‘‘to examine the effect of Entrepreneurial development on Employees Performance of SMEs in Buea. Its specific objectives were to examine the effect of team creativity on employee performance of SMEs and to evaluate the effect of competitive advantage on employee performance of SMEs.

A descriptive research design was adopted as appropriate study designs were a sample of 40 employees of SMEs were selected using simple random and purposive sampling techniques. It also combined quantitative as well as qualitative research approaches.

The quantitative methods of data collection were used in this work were a self-administered questionnaire composed of closed ended, and likert scale questions was used to collect data from the respondents. Data obtained through a structured questionnaire were analysed using analysed using descriptive statistics and the multiple regression analysis (Ordinary least square Regression technique) with the help of Statistical Package for Social Sciences (SPSS) software.

The findings show that entrepreneurial development has a significant impact on employee’s performance of SMEs.  Both team creativity and competitive advantage has a positive and significant effect on employee’s performance of SMEs.

The study therefore recommends that for every policy measure taken by SMEs to improve entrepreneurial development, team creativity and competitive advantage should be taken into consideration because failure to do so will lead to detrimental effects on employee performance. It further recommends that the management of SMEs should build a strong relationship with their employee’s based on team creativity and competitive advantage so as to build positive relationship with the employee’s performance and operations.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Small and medium-size enterprises are usually individually owned or family managed businesses offering basic goods and services. Microenterprises tend to lack organizational and management structures, and are generally characterized by uncertainty, innovation and evolution. Udechukwu (2003) notes that micro/small enterprises are mostly constituted of sole proprietorships and partnerships, and only a few are registered as limited liability companies.

Micro enterprises generally have a simple management structure, and in many cases the owner is the manager. With few employees who in most cases lack the appropriate skills and competencies. Given the simple management structure and extensive dependence on the owner, the lifespan of the enterprise is often dependent on the longevity the owner and his/her interest in continuing the business.

According to Akinsulire (2010), SMEs accelerate rural development, decrease urban immigration and the problems of congestion in large cities because they have lesser competition by serving dispersed local markets. Moreover, they contribute to domestic capital formation; and play a value adding role in mobilizing private savings.

Small business enterprises are generally recognized as important drivers of economic success.  They are key ingredient in the „ecology of firms‟ in healthy economy, as job creators, sales generators and source of tax/ fiscal revenue. (Talam C. 2014).

The importance of small business enterprises as a creator of jobs, particularly for those with low skills level, is widely recognized. SMEs contribute 25% of the country’s gross domestic product (GDP) and employ about 60% of the workforce in the private sector. In agriculture, construction and retail sector SMEs employ more than 75% of the total workforce. Over the last few years, the growth of SMEs employment has exceeded the growth in their contribution to the GDP the reason why most developing nations have notably been supporting them through financial institutions credit lending, sponsorships, and other financial aids (Cynthia J. 2014).

Small and medium businesses have several advantages over large companies, including innovation, job opportunities, and flexibility. However, these businesses may face financial, marketing, production, research, and development constraints due to their low resource size and structural features.

One of the phenomena being debated among experts and a review of the organizational and leadership literature reveals that a vital and critical need at this time is to address the issue of leadership development in small and medium enterprises (SMEs). Currently, the goal of every organization is to survive and maintain its entity by improving its performance. Consequently, the role of the leader in ensuring excellent organizational performance must be considered.

The performance of Small and Medium Enterprises (SMEs) as a topic generates much discussion among researchers, practitioners, academics, and politicians. The contribution of SMEs to the country’s growth and economic development is an essential feature of economic development in various countries in the world. According to many researchers, the impact of leadership is a crucial factor in the rolling of organizational performance. However, research on this factor in small businesses, especially SMEs, is still being researched by researchers so that they can provide views and descriptions regarding the impact of the entrepreneurial leadership role in various countries with various cultures. Innovation ability, technological differences, entrepreneurial orientation, and so on.

Thus, the entrepreneurial leadership style has more opportunities to manage the organization effectively than just a manager or informal leader with no status authority. SMEs are considered a fundamental part of a country’s economy, and it is essential to understand how the role of entrepreneurial leadership can affect organizational performance (Kurniati, 2015).

Entrepreneurial Development (ED) is considered as the fire that fuels goal pursuit and enables entrepreneurs to overcome challenges they encounter during the entrepreneurial process (Cardon et al., 2009, 2013). Two dominant theoretical frameworks have been employed to examine passion in the entrepreneurship literature—the dualistic model of passion (Vallerand et al., 2003) and the identity-based model of passion (Cardon et al., 2009). Researchers have noted that Cardon and colleagues’ framework is specific to role identity as it focuses on understanding how entrepreneurs’ passion for different entrepreneurial activities impacts cognitive and behavioral outcomes.

The framework of Vallerand and colleagues is more general and focuses on examining how obsessive and harmonious passion toward an “entrepreneur identity” influences firm outcomes (Murnieks et al., 2020). Accordingly, Cardon et al. (2013) operationalized three distinct domains of ED that mirror the entrepreneurial process, namely inventing, founding, and developing, each involving distinct sets of activities and tasks. Cardon et al. (2009, 2013) state that entrepreneurs with an inventor role identity display passion for inventing, prototyping, and exploring new opportunities. In contrast, entrepreneurs with a founder role identity tend to have passion for starting ventures and assembling resources (for example, financial and human resources) to pursue new opportunities, and those with a developer role identity have passion for activities related to venture growth and expansion.

When testing different mediating factors in the two relationships, some studies provide evidence of a connection between entrepreneurial development, and business performance (Calantone et al., 2004; Hull and Rothenberg, 2008; Miller, 1983).

Meanwhile, team creativity, dynamic capabilities, and competitive advantage have frequently been suggested as mediators for the relationship between entrepreneurial development and business performance (Huang et al., 2014; Leitch and Volery, 2017). More importantly, considering the gaps from previous studies, business context should receive a significant focus.

Primarily, this study aims to examine the influence of entrepreneurial development on employee’s performance of SMEs. Another concern is the mediating effects of internal organizational factors, including entrepreneurial orientation, team creativity, dynamic capabilities, and competitive advantage. Finally, the research proposes the theoretical and managerial implications for both companies and the authorities to manage better and promote entrepreneurial inspiration.

1.2 Statement of the Problem

Despite the significant contributions made by scholars over the last few years to advance our understanding of identity-based ED (Drnovsek et al., 2016; Mueller et al., 2017; Strese et al., 2018), several issues constrain our understanding of this domain. First, identity-based ED researchers have predominantly focused on the positive effects of ED, and in the process, they have overlooked the negative effects of ED on outcomes.

This lack of attention toward understanding the conditions under which passion positively or negatively influences firm outcomes is surprising given the differential effect of the three ED domains (Cardon & Kirk, 2015; Stenholm & Renko, 2016) and the dysfunctional effect of founders’ ED on employee commitment (Breugst et al., 2012). Second, researchers often associate ED with a particular venture stage, and this obfuscates the effect of ED on entrepreneurial outcomes.

In managing a business, they are also required to have good managerial skills apart from having an individual entrepreneurial orientation. Development as an entrepreneurial behavior is critical because it has the potential to recognize values and various aspects related to organizational sustainability, such as encouraging innovation and adapting to environmental changes. Research studies on entrepreneurial development show results where entrepreneurial development, measured through several indicators of vision, innovation ability, risk-taking, and proactive attitude, has a positive effect on business performance (Rahim et al., 2015).

However, other studies conducted by (Purwati et al., 2021; Zainol et al., 2018) showed that proactive attitude does not affect business performance. In a sense, there are several research studies relevant to entrepreneurial development.

From the differences or research gaps that have developed between several researchers, this research, through a literature review, aims to evaluate and provide a structured description of the impact of entrepreneurial development on employee’s performance of SMEs in Buea.

1.3 Research Questions

1.3.1 Main Question

What is the effect of entrepreneurial development on employee’s performance of small and medium sized enterprises in Buea?

1.3.2 Specific Questions

1. To what extent does team creativity affect employee performance of small and medium-sized enterprises in Buea?
2. What is the effect of competitive advantage on employee performance of small and medium-sized enterprises in Buea?

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