INFLUENCE OF ENTREPRENEURIAL COMPETENCIES ON MICRO AND SMALL ENTERPRISE SURVIVAL IN WAKISO DISTRICT, UGANDA

Abstract

Micro and Small enterprises (MSEs) in Uganda face survival challenges and many of them collapse before celebrating their first birthday, and those that manage to reach one year still show survival challenges. Prior studies highlight a number of reasons for failure but do not clearly explain how entrepreneurial competencies (ECs) of the owner/manager influence MSE survival. The purpose of the study was to examine the influence of ECs on the MSE survival in Wakiso district, Uganda using the six significant ECs as determined by Morris‟ model. The specific objectives were to establish the influence of: (social networking, opportunity recognition, risk management, creative problem solving, guerrilla skills and perseverance) on MSE survival in Wakiso district, Uganda. The descriptive survey research design using a pragmatic approach were used. Purposive sampling was used to select five sub-counties from a total of sixteen based on their nature of importance, such as possessing a high record of MSE failure, being rural, periurban and urban,

and a high concentration of MSEs. From the accessible population of 1,500 MSE owners/managers obtained from Wakiso District records of MSEs as of 2018, questionnaires were distributed to a sample of 306 of which 281 usable questionnaires were returned giving a response rate of 91.8 percent. Sub-counties were stratifies from which respondents were obtained using simple random sampling by use of a lottery method.Officers responsible for business operations at each sub-county were the key informants and were interviewed. The study targeted the owners/managers of MSEs within Wakiso district who employed from 0 – 4 people (micro) and from 5 – 50 people (small). Multiple linear regression analysis was used to establish the influence of entrepreneurial competencies on MSE survival in Wakiso district, Uganda and results depited that social networking, creative problem solving, guerrilla skills, and perseverance had a positive and statistically significant influence on MSE survival in Wakiso district, Uganda. Opportunity recognition had a negative significant influence on MSE survival, while Risk management was found insignificantly influencing MSE survival. Results from interviews also showed that entrepreneurial competencies under study were very important in contributing to MSE survival and elicited for other factors contributing to MSE survival. The study concluded that all the entrepreneurial competencies under study, except for risk management were contributors to MSE survival. It was recommended that MSE owner/managers strive to utilize their social network skills, opportunity recognition skills, creative problem solving skills, guerrilla skills and perseverance skills maximally. They should establish short and long-term networks with relevant stakeholders, should take advantage of opportunities that arise after careful assessment, should utilize their creative problem solving abilities in their product and service offering, employ tactics that are unique low cost tactics, and should persevere at all costs during periods of adversity. MSE owners/managers should establish forums or associations where they could facilitate the development of these competencies further if they want to enhance business survival.