Market Orientation in Small Business Enterprises (SBES) in North-Eastern Nigeria: A Research Agenda

Transcription

1 Market Orientation in Small Business Enterprises (SBES) in North-Eastern Nigeria: A Research Agenda Linus Osuagwu The importance of SBEs (Small Business Enterprises) and the dynamics of the Nigerian business environment initiated the need for this research. The proposed research aims to examine the market orientation strategies of SBEs operating in North Eastern Nigeria, influences on such strategies, and the associated effectiveness. Using qualitative and quantitative research approaches, the planned research hopes to provide insight into the market orientation strategies used by SBEs in North-Eastern Nigeria, factors constraining or enhancing such strategies, and the effectiveness of market orientation strategies in the SBEs. The findings from the research would be of relevance for managerial actions in the SBEs and assist State and Federal governments policies and interventions geared towards improving the growth and development of Nigerian SBEs, in addition to stimulating future research efforts in cognate areas of SBE management strategies in Nigeria and other developing economies, especially in Sub-Saharan Africa. Name of Track: Marketing 1.0: Background Nigeria is a country with a population of about one hundred and seventy (170) million people. The country s balance of payment problems have continued to affect, adversely, business activities in the economy. Also, the country s business organizations experience resource acquisition difficulties from an economy that depends substantially on oil exports. In addition, the dwindling purchasing power of the Naira (the country s currency), the high level of inflation and unemployment, the high preference (by Nigerians) for imported goods and services to locally produced ones, poor and inadequate infrastructural facilities, and the high level of poverty, among other relevant issues, have conspired to complicate the policies and strategies of business organisations in Nigeria. According to Canagarajah and Thomas (2001), the economy of Nigeria is characterized by a large, rural agriculture-based traditional sector with two-thirds of the population living in acute poverty. As in many African and developing economies, smallscale business operators, poor farmers, and informal traders characterize the rural, traditional, and agricultural-based economy of Nigeria. Nigeria constitutes an important part of the world economy, especially on the African continent where it accounts for substantial part of the business activities. It is the largest economy in Africa and may be rightly described as the economic, social, and political summary of the West African sub-region. Linus Osuagwu, PhD, Professor of Marketing, School of Business & Entrepreneurship, American University of Nigeria, linus.osuagwu@aun.edu.ng

2 Poverty is one of the major problems confronting an average Nigerian presently. The presence of poverty among Nigerians has created violent tendencies among Nigerian youths, non-beneficial social activism, and lack of knowledge and interest regarding their rights, duties, obligations, tasks and responsibilities as Nigerian citizens (World Bank, 1996). In the presence of poverty in Nigeria, the interest in, and acceptance of, democratic values by Nigerians would be doubtful. The consequences of poverty in Nigeria are more severe in the North-Eastern part of Nigeria where poverty has been implicated as one of the major causes of current insecurity situation in that part of Nigeria. Poverty in Nigeria is, generally, a function of many factors, including illiteracy, bad government, lack of economic empowerment, and absence of enabling environment for business and economic activities, among others. Of these major factors, lack of economic empowerment seems to be the most salient factor contributing to the level of poverty in Nigeria. Therefore, policies, programmes, strategies and approaches designed to empower Nigerians economically will go a long way in eradicating the level of poverty in Nigeria. One of such approaches is encouraging entrepreneurship in small business enterprises (SBEs). According to Okongwu (2001), SBEs generate the industrial wealth of Nigeria, in addition to being a major agent in the economic, technological, social and political growth and development of Nigeria. Expectedly, many managerial practices, policies, strategies and governmental interventions are put in place to encourage the establishment and management of SBEs efficiently and effectively. However, the strategic emphases of SBEs and the efficacy of such strategies are not always clear as a result of the variations in goals, practices, outputs and business environments. In recent times, attention has been directed towards the contribution and role of SBEs within world economy (Osuagwu, 2001; 2009). This is, partly, as a result of the increasing volume of businesses which SBEs account for. According to Graham (1999), SBEs constitute a large part of many economies of the world, and number up to half of two-thirds of all world business activities (Tuteja, 2001). The study of SBEs, therefore, is important, but is currently in its infancy (Honig and Karlsson, 2004). Small business enterprises (SBEs) have played significant roles in the lives of individuals in many countries of the world, especially in advanced countries. SBEs have also contributed towards the growth and development of many economies. Therefore, via SBEs in Nigeria, jobs can be created which will help in reducing the social, economic and political problems prevalent in present day Nigeria. However, the extent to which Nigerian SBEs can contribute towards job creation and assist in economic growth and development will depend on the approaches, policies and strategies used in their (SBEs) business operations, in addition to how these approaches, strategies and policies approximate international best practices used by SBEs from other parts of the world. After all, the world is presently a knitted global village. One of the strategies used by SBEs from other countries in achieving efficiency and effectiveness is market orientation. Specifically, SBEs in some developed countries are utilizing market orientation strategies in order to improve their productivity of resources, access to relevant global markets, reduction in product development periods, and beneficial interaction with their customers/clients and other relevant stakeholders. As a result, they (SBEs) help in the growth and development of their countries economies, especially in unemployment reduction and active participation of their countries nationals in beneficial social, political and economic activities.

3 Market orientation has been widely accepted by scholars and business executives as the implementation of the marketing concept (Gunnay, 2005); as an integral part of market economies (Matsuno et al., 2005); and as one of the strategic management behaviours leading to competitive advantage (Olson et al., 2005). Therefore, marketers in various industries and cultures have been advised to embrace market orientation strategies in their business activities (Harris and Ogbonna, 2001). Although some research efforts have been made to clarify relevant issues pertaining to the theory and practice of market orientation in developed economies (Kohli and Jaworski, 1990; Narvar and Slater, 1990, among others), it has been argued that further research is needed (Harris and Ogbonna, 2001). Chelariu et al (2002) have advised, with regard to Sub-Saharan African countries (including Nigeria), for the designing of market orientation research measures which will capture the unique peculiarities, practices and strategies of companies in such countries. In this regard, some research efforts have been made with respect to the strategies of large scale organizations in Sub-Saharan African firms (Appiah-Adu, 2001, Chelariu et al., 2002; Iyanda, 2002; Okoroafo, 2004, Osuagwu, 2001; Osuagwu, 2002; Osuagwu, 2006; Osuagwu, 2009; Osuagwu, 2011;and Winston and Dadzie, 2002, among others). However, not much research effort has been undertaken regarding the market orientation strategies of small business enterprises operating in sub-saharan African economies in contemporary times. Many Nigerian governments (ancient and modern) embraced the structural adjustment programme which emphasized, to some extent, the free-market orientation or philosophy. Some of these governments have, consequently, instituted reforms for national growth and development in all sectors of the Nigerian economy. These reforms, to some considerable extent, have encouraged interest, understanding and application of marketing knowledge and theories in the economic management of Nigerian organizations (Winston and Dadzie, 2002). Some Nigerian economic policies such as privatization and commercialization, floating of currencies, encouraging of foreign investments, and NEEDS (New economic empowerment and development strategy), among others, have been adopted, and these economic policies have highlighted the relevance of marketing strategies and performance (Okoroafor, 2004). According to Hooley et al (2005), market orientation is the only widely accepted and empiricallyderived scale for measuring the marketing strategies of companies in developed and developing economies, such as Nigeria. In Nigeria, it is not clear regarding the extent to which SBEs in North-Eastern Nigeria practise market orientation in their business operations. Also, it is not clear regarding the factors constraining or enhancing the practice of market orientation strategies in the business operations of SBEs in North-Eastern Nigeria. Again, the effectiveness (or otherwise) of market orientation strategies in such SBEs is yet to be empirically ascertained and documented. The proposed research, therefore, attempts to provide.empirical facts regarding market orientation strategies in SBEs operating in North-Eastern Nigeria, influences on such strategies, and the associated effectiveness of the market orientation strategies in the SBEs. A proper understanding of these three broad issues will assist policy design and managerial actions geared towards achieving efficiency and effectiveness in Nigerian SBEs (especially those in North-Eastern Nigeria), and reduction in the high level of unemployment and poverty, including

4 reduction in social, economic and political ills associated with poverty and unemployment, in that part of Nigeria. 2.0: Statement of Problem The problem of the proposed research, stated in question form, is: 1. What are the market orientation strategies of SBEs operating in North- Eastern Nigeria? 2. What are the relative impacts of environmental factors on the market orientation strategies of SBEs operating in North-Eastern Nigeria? 3. What is the level of effectiveness of market orientation strategies of SBEs in North-Eastern Nigeria? It is the objective of the proposed research to provide data-based answers to the above questions. 3.0: Hypotheses The propositions of the proposed study, derived from the statement of problem, extant literature, and anecdotal evidence, are that: 1. The market orientation strategies of SBES in North-Eastern Nigeria emphasize effectiveness-related, environment-related and information-related issues. 2. Level of insecurity and infrastructural facilities are the most impacting environmental factors on the market orientation strategies of SBEs in North- Eastern Nigeria. 3. SBEs in North-Eastern Nigeria have been most effective in achieving profitability objectives via their market orientation strategies. 4.0: Research Objectives The major objective of the proposed research is to provide knowledge regarding the market orientation strategies of Nigerian SBEs. Specifically, the objectives of the research are to: (a) determine the relative emphases of SBEs in North-Eastern Nigeria on different dimensions of market orientation. (b) determine the relative impacts of environmental factors on the market orientation strategies of SBEs in North-Eastern Nigeria. (c) determine the relative effectiveness of the market orientation strategies of SBEs in North-Eastern Nigeria. (d) determine the validity and reliability of the relevant research measures. (e) make managerial and policy recommendations for improved understanding and practice of market orientation strategies in Nigerian SBEs, especially SBEs in North-Eastern Nigeria. (f) Suggest cognate areas for future research.

5 5.0: Research Methods The methods for the proposed research will involve a triangulation of qualitative and quantitative research approaches. The qualitative research method will comprise focus group discussions with operators of SBEs, scholars, and executives of relevant agencies dealing with SBEs such as Chamber of Commerce and Industry, Bank of Industry (BOI), National Association of Small and Medium Enterprises (NASME), and small and medium enterprises development agency of Nigeria (SMEDAN), among others. The focus group discussion will take place in the six state capitals in the North- Eastern part of Nigeria: Yola, Jalingo, Gombe, Bauchi, Damaturu and Maiduguri. Based on literature and input from the focus group discussion, a survey research instrument will be developed which will capture the major research issues. The survey research instrument will be pre-tested to clarify order, and to assess survey time. The research instrument will then be administered to the relevant respondents (operators of SBEs) sampled in each of the six states of Adamawa, Bauchi, Borno, Gombe, Taraba abd Yobe. Data will be collected, cleaned, and analysed to identify relevant research issues using the SPSS (Statistical Package for the Social Sciences) with AMOS software. The research will be presented in an international conference of management scholars and practitioners, and reported in a reputable refereed international journal. 6.0: Literature (to be reviewed) Relevant literature review will be conducted using the Meta-analysis software. Specifically, relevant literature will be reviewed in the areas of small business management, strategic management practices, market orientation strategies, environmental influences on market orientation strategies, and performance of market orientation measures, among others. The literature review is expected to assist the development of the research instrument, in addition to helping in identifying consensus, controversy, support, and gaps pertaining to extant thought regarding the market orientation strategies of SBEs, particularly in developing economies. 7.0: Potential Benefits of the Proposed Research This research hopes to establish the managerial attention given by SBEs operating in North-Eastern Nigeria to market orientation. Specifically, the research will clarify the emphases on market orientation strategies, influences on such strategies, and the effectiveness of market orientation strategies in SBEs operating in North-Eastern part of Nigeria. This understanding will assist managerial action and governmental interventions geared towards improving SBE management in Nigeria, generally, and in North-Eastern Nigeria, specifically. In addition, this research is conceived with the need to meet the need for knowledge of the market orientation strategies of Nigerian SBEs. This research will, therefore, serve as a research spin for further research efforts with regard to market orientation strategies, in particular, and strategic management practices, in general, in Nigerian SBEs. Such studies, in addition to the proposed research, would go a long way in assisting executive managerial actions and governmental policy interventions for efficient and effective management of SBEs in Nigeria, particularly, and other developing countries, generally.

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7 Osuagwu, L. (2002), TQM Strategies in a Developing Economy: Empirical Evidence from Nigerian Companies, Business Process Management Journal (UK), Vol. 8 No. 2, pp Osuagwu, L. (2002), The Marketing Research Practices of Nigerian Companies: An Exploratory Study, Journal of African Business (USA), Vol. 3(1), pp Osuagwu, L. (2006), Market Orientation in Nigerian Companies, Marketing Intelligence & Planning (UK), Vol. 24 Issue 6, pp Osuagwu, L. (2009), Strategic Management in Small Business Enterprises (SBEs): Empirical Evidence from Nigerian SBEs, African Journal of Business & Economic Research (UK), Vol. 4 Issue 1, pp Osuagwu, L. (2011), Entrepreneurship& Small Business Management, Lagos (Nigeria): Grey Resources Limited. Tuteja, S. K. (2001), New Enterprises in the Digital Era, WIPO Milan Forum on Intellectual Property and Small and Medium-sized Enterprises, Milan Italy, 9 th -10 th February. Winston, E. and Dadzie, K. Q. (2002), Market Orientation of Nigerian and Kenyan Firms: The Role o TopManagers, Journal of Business & Industrial Marketing, 17(6), 2002, pp World Bank (1996), Nigeria: Poverty in the Midst of Plenty- The Challenge of Growth with Inclusion, Report No UNI, Washington DC: World Bank.