Assessment of Critical Entrepreneurial Skills Possessed By Small Scale Business Operators in Delta State of Nigeria

Transcription

1 International Journal of Management Sciences Vol. 5, No. 12, 2015, Assessment of Critical Entrepreneurial Skills Possessed By Small Scale Business Operators in Delta State of Nigeria G. O. Onajite 1 Abstract This study assessed the opinions of small scale business operators in Delta state of Nigeria on ethical and moral and interpersonal skills they possessed. The problem of the study is that small scale businesses in Delta State are either not doing well or have failed. The design of the study was survey method and the area of study is Delta State of Nigeria. The population consists of all the 984 small scale business operators in Delta state who were registered by the Ministry of Commerce and Industries. A sample of 625 registered small scale business operators from the 25 LGAs in the state were used for the study. Two research questions guided the study and two hypotheses were tested at 0.05 level of significance. Questionnaire was the instrument used for data collection. The validity of the instrument was established by experts in business education while the cronbach alpha reliability method was used which yielded a coefficient index of Data collected were analyzed using mean ratings, z-test and one way analysis of variance (ANOVA). From the results of the analysis of the data, it was discovered that ethics and moral skills and interpersonal relation skills were rated as highly possessed by small business operators in the state. Small scale business operators did not differ significantly in their mean ratings of the extent they possessed ethics and moral skills as a result of their sex. However, they differed significantly in their mean rating of the extent they possessed interpersonal relation skills as a result of their years of operation. Based on the results, it was recommended that curriculum planners should incorporate the identified entrepreneurship skills in the curriculum of entrepreneurship programmes both at the secondary and tertiary levels of Business Education so that prospective entrepreneurs could effectively manage their enterprises. It was also recommended that irrespective of the course of study at any tertiary institution, entrepreneurship training should be integrated so that the level of business failure could be minimized. Furthermore, it was recommended that workshops and seminars should be organized for operators of small scale business owners by the agencies responsible for the development of small scale businesses at all levels of government to create in-depth knowledge and technical know-how on the identified entrepreneurship skills. Keywords: Business, Delta State, Ethics, Entrepreneurs, Interpersonal relation, Nigeria, Skills. 1. Introduction All over the world, governments are involved in small businesses in one way or the other because of the importance they attach to the business sector in their development. In both developed and developing countries, the governments are turning to small scale industries as a means of economic development and a veritable means of solving their economic problems. Countries such as U.S.A., Japan, South Korea, Malaysia, India and Jamaica accord prominence to small business sector because of its contributions to the economic growth and stability of their nations. In Nigeria, small scale businesses assist in promoting the growth of the country s economy, hence all levels of government have at different times formulated policies intended to promote the growth and sustenance of such businesses. Agbonifoh (2009) states that small scale businesses have served as a vehicle for rapid industrialization, sustainable development, poverty alleviation 1 Phd, Business Education Unit, Department of Educational Foundations and Management, Ekiti State University, Ado- Ekiti, Nigeria 2015 Research Academy of Social Sciences 795

2 G. O. Onajite and employment generation in many countries. Small scale businesses account for a large segment of productive population, and Nigeria falls within this segment of the economy, as small scale businesses account for over 95 percent of non-oil productive activities outside agriculture. Osamwonyi (2009) points out that small scale industry generates employment for many Nigerians. These include youths and unemployed persons and most small scale shops, restaurants, poultry farms, telephone shops have been established and managed profitably by Nigerians who would have been unemployed till date. Globally, the definition of small scale businesses varies from country to country, depending on criteria considered most suitable to promote the sub-sector in each country. In Nigeria, the mostly used criteria for the definition of small scale businesses include, ownership structure, number of employees, capital outlay, annual turnover, nature of business and technology employed. The above criteria share common idea that small scale businesses are generally low in terms of number of persons employed and in the amount of investment and annual business turnover. However, some of the major characteristics of small scale enterprises that are universally recognizable are that, they are typically small, because of limited access to financial resources, have simple management structure, which generally combines ownership and management in one person. The small scale enterprises use a lot of local inputs (raw materials), they are also widely dispersed in any economy. Many factors can make an individual decide to establish his/her own enterprise which can either be negative or positive. The negative factors include job dissatisfaction, lack of job challenges, pay dissatisfaction, unemployment, dependence, and job insecurity while the positive factors are encouraged by friends and government policies. Awolola (2000) also asserts that small-scale businesses have made significant contributions to any economy and this is why there is no clear understanding of what small-scale businesses are. To some people, a small scale business is a firm with no more than a specific number of employees, such as five to ten while others consider a business small if they are in a certain line of business such as barbing salon, supermarket, etc. The United Nations Industrial Development Organization (UNIDO) established guidelines for classifying small-scale businesses, which states that a business is small, if it meets two or more of the following criteria: Ownership and management are usually vested in the same individual(s)-that is, the management is not independent and the managers are usually also the owners. The small business controls a small share of the market and therefore constitutes a little quota in the large size market. Capital is made available by the owner and policy decisions are in the hand of the individual or small groups of entrepreneurs. The area of operation is localized and workers and owners concentrate in the local community, some do have branches in other towns but most of such branches serve as mere depots. The owner participates very actively in all decision-making on a day-to-day operational basis with a high degree of rigid control. Therefore, the above criteria signify that there is no agreement of definition. One basic fact is that there is a chord that links all of them, and it is hinged on small capital outlay. In developing countries, entrepreneurs are the heroes and heroines of the economic sphere of such nations and in any market oriented economy they are the agents of social and economic transformation and change. They create jobs for themselves and others by establishing businesses. In managing a small scale business one will possess a broad array of entrepreneurial skills to succeed in a competitive business environment. These include personality attributes, business skills and management capabilities, while the entrepreneur may not have all the skills needed for the effective management of an enterprise, there are some basic skills he/she must possess for the success of the enterprise. 796

3 International Journal of Management Sciences Entrepreneurship skills are simply business skills, which an individual acquires to enable him or her to function effectively in the turbulent business environment as an entrepreneur. Generally, these skills include the following: i. Planning, organizing and managing small scale businesses. ii. Sourcing for funds for the running of the small scale business. iii. Developing broad based investment plans iv. Developing time management skill v. Developing decision making skill vi. Developing moral and ethical skill vii. Interpersonal relation skills. It is important to note that complex business decisions need ethical and moral reasoning, in-depth understanding of issues involved, concern for fairness, justice and due process for all people. Business is part of society and whatever ethical and moral principle apply in society also apply to business. Hill and Jones (2004) refer to moral and ethics as accepted principles of right or wrong that govern the conduct of a person, the members of a profession or the actions of an organization. Specifically, business ethics are the accepted principles of right or wrong governing the conduct of business people. Nnabuife and Ikon (2008) say that entrepreneurs, business people and managers often encounter moral and ethical dilemma when they confront a situation that requires them to make a choice between two courses of action, especially if each of them is likely to serve the interest of one particular interest group to the disadvantage of the other. To make right business decisions and be successful, entrepreneur must have high ethical and moral standard. So, an entrepreneur who is dishonest, insincere, untruthful, disloyal to friends and business colleagues, inconsiderate towards other people and self-centered cannot succeed. There is need for people to interact in order to achieve set objectives through joint efforts and this interaction of people is interpersonal relation. Ubogu (2008) states that dealing with human relationship is a complex subject that is always given inadequate attention at the place of work and it entails working with others understanding and appreciating individual differences. This implies using those differences to one s advantage and it is important to make some determination about oneself and how it is likely to affect the group one belongs before getting to know each other. Many organizations neglect this by assuming that business is more important than their relationship. Inegbenebor (2006) states that interpersonal relations skills involve the ability of someone to create a good impression of himself with those he comes in contact with and in addition such a person should be able to cultivate a harmonious interpersonal relationship with others. Although good interpersonal relationship is necessary at all the levels but this review dwells more on the personal relationship between the entrepreneurs and customers. The reason is that the entrepreneur is the prime mover in the business system and he is always in contact with the customers (both existing and potential) who are the primary motives of his business. His relationship with the customers is affected and can make or mar the effectiveness of the business and impede the achievement of set goals. His lack of good interpersonal skills can cause upheavals in the business which may lead to devastating consequences, thus business failure. Entrepreneurial skills are paramount to entrepreneurs as they reduce the incidence of unemployment problem and business failure and this therefore, implies that the entrepreneur s most essential tool to succeed is his skill, creativity and ideas generation ability. Similarly, Tijani- Alawe (2004) says that the absence of strategic management skills and attitude are responsible for business failure. He also said that some of the problems faced by small scale entrepreneurs include lack of appropriate skills required to manage their businesses, that, it is pertinent to assess some salient entrepreneurial skills possessed by these small scale business operators especially in Delta State in order to reposition them. Statement of the Problem In Delta State and other parts of Nigeria, people desire to establish their own small scale enterprises to improve their income and standard of living. The need for appropriate skills which enable the individuals to start and operate their businesses and succeed now comes to mind. As indicated earlier, there are some skills 797

4 G. O. Onajite that are often deemed essential for any business to succeed, as most businesses fail because of lack of relevant skills by their operators. That there is high rate of unemployment in the country among the productive class in Nigeria today and especially in Delta State cannot be over emphasized. Delta State is rich in petroleum and gas resources and is one of the largest oil producing states in the country. It is endowed with business opportunities because of crude oil exploitation and exploration activities. This has led to many people in Delta State wanting to establish one form of business or the other because of the opportunities abound but these businesses hardly survive the test of time, that is, they fail or liquidate within some period. The failure could be associated with lack of relevant entrepreneurship skills by most business owners/operators. Igbo (2005) disturbed by rate of business failure, state that this may be as a result of lack of entrepreneurship skills. On their part, Ekpenyong and Ojo (2008) note that private sector entrepreneurs lack proper management and basic technical skills needed to operate their chosen businesses and therefore concluded that this resulted in their poor performance and failure. In view of the fact that the government has spent large sums of money to assist small business owners in Delta State, many of the enterprises continue to fail on regular basis. In real terms, the researcher is no doubt as to the level of some salient entrepreneurial skills which these enterprise owners have. Again, there is scarcely any empirical evidence as to extent of ethics and moral, and interpersonal relation skills the small business owners in Delta State posses. The problem of this study is that, in spite of the numerous opportunities made available to assist small scale businesses by the Delta State Government, many small scale businesses in the State are still either not doing well or have failed resulting to further unemployment and poverty with their attendant consequences on the state. The researcher is therefore interested in finding out the extent small scale business operators possess ethics and moral and interpersonal relation skills which could enhance their entrepreneurship competence, but which they may not have. Purpose of the Study The purpose of the study was to assess some of the entrepreneurial skills possessed by small scale business operators in Delta State of Nigeria. Specifically, the study sought to determine the extent small scale business operators in Delta State possess: Ethics and moral skills. Interpersonal relation skills. Research Questions The following research questions guided the study. 1. To what extent do small scale business operators in Delta State possess ethics and moral skills? 2. To what extent do small scale business operators in Delta State possess inter-personal relation skills? Hypotheses The following null hypotheses were tested at 0.05 level of significance 1. Male and female small scale business operators in Delta State do not differ significantly in their mean ratings of the extent they possess ethics and moral skills. 2. Small scale business operators in Delta State do not differ significantly in their mean ratings of the extent they possess inter-personal relation skills as a result of their years of operation. 2. Research Method The research design adopted for this study was survey. According to Osuala (2001), through survey researchers identify present conditions, prevailing needs as well as provide information on which to base 798

5 International Journal of Management Sciences sound decisions. Consequently, since this study involved assessing of the opinions of small scale business operators on the entrepreneurial skills they possess in Delta State, the survey design was considered appropriate. The research was carried out in Delta State of Nigeria. The state presently has 25 local government areas with 14 towns designated as urban. The people of Delta State are predominantly farmers and small scale business operators because of the vegetation and the presence of large resources of petroleum and gas. The decision to use Delta State for the study was informed by the fact that the state has many small scale businesses which have failed or not doing well. The population of the study consisted of all the 984 registered small scale business operators in Delta State of Nigeria. The data were made available by the Delta State Ministry of Commerce and Industries. Small scale businesses are spread over the 25 local government areas of the state. The sample was 625 registered small scale business operators drawn from the 25 local government areas of the state using stratified random sampling technique. Twenty-five (25) registered small scale business operators were selected from each of the 25 local government areas of the state to make up the sample of 625 for the study. The instrument for data collection was a structured questionnaire. The questionnaire was developed by the researcher after careful study of related literature guided by the research questions. The questionnaire has three sections; Section A contains four items on respondents personal data while the other two sections were organized in such a way that respondents expressed their opinions on a five-point scale as follows: Very High Extent (VHE), High Extent (HE), Moderate Extent (ME), Low Extent (LE), No Extent (NE). The two sections were organized as follows; Section B consists of 12 items that elicited data related to possession of ethics and moral skills, while Section C consists of 11 items on Inter-personal Relation Skills. The face and content validity of the instrument were established by two experts in Business Education. Their inputs were incorporated to improve the validity of the instrument. Also, Cronbach Alpha reliability method was used to ascertain the consistency of the instrument. The instrument was administered on 20 registered small scale business operators in Benin City, Edo State. The data collected from the trial test were analyzed using the Cronbach Alpha to determine the degree of reliability. The reliability coefficient index of the instrument was 0.94, which was considered adequate. The 625 copies of questionnaire were administered to the respondents by the researcher through the aid of six research assistants who were briefed by the researcher on what to do. The researcher and the research assistants handed over copies of the instrument to all the respondents and allow two weeks for the completion and retrieval. At the end of the two weeks, 568 copies of the questionnaire were collected and used for the analysis. The data gathered from the questionnaire were analyzed using descriptive statistics of mean in order to answer the research questions. Inferential statistics of z-test was used to analyze hypothesis 1 while one way analysis of variance (ANOVA) was used to analyze hypothesis 2 at 0.05 level of significance. In order to determine the extent of possession of the skills in relation to the research questions, a decision rule based on real limit of numbers was used to interpret the mean of each item response. The real limit of means is stated below; Real Limits of Mean Response Rating X Real Limits Very High Extent High Extent Moderate Extent Low Extent No Extent

6 G. O. Onajite For hypothesis 1, where the calculated z-value is less than the z-critical value, hypothesis is acceptable. However, where the calculated t-value is equal to or greater than the t-critical value, the hypothesis is rejected (Owie, 2001). For the analysis of variance (ANOVA) where the calculated F-value is less that the F- critical value, the null hypothesis is accepted and if the calculated F-value is greater than the F-critical value, the hypothesis is rejected. 3. Analysis of Data This section presents the analysis of the data collected in respect of the study. The analysis is two phases. Phase A Answering of Research Questions and Phase B Hypotheses Testing. Analysis of Research Questions Research Question 1 To what extent do small scale business operators in Delta State possess ethics and moral skills? Analysis of data collected in respect of research question one is presented in Table 1. Table 1: Mean scores of small scale business operators in Delta State on the extent they possess ethics and moral skills S/N Ethics and Moral skills Mean Decision 1. Ability to demonstrate honesty in business dealings 3.80 High Extent 2. Ability to obey laws 4.06 High Extent 3. Ability to demonstrate respect for others right 4.00 High Extent 4. Ability to recognize other people s effort 3.98 High Extent 5. Ability to tolerate others 3.73 High Extent 6. Ability to determine standard in organizational environment 3.41 Moderate Extent 7. Ability to keep promise 4.15 High Extent 8. Ability to act with moral courage 3.64 High Extent 9. Ability to establish transparency in setting standard 3.89 High Extent 10. Ability to determine actions that injurious to others 3.95 High Extent 11. Ability to act with fairness in business dealings 3.89 High Extent 12 Ability to meet obligations to employees 4.53 Very high extent Grand Mean 3.92 High Extent The data presented in Table 1 reveals that the mean scores of the respondents ranged from 3.41 to 4.53 with a grand mean of Small scale business operators responded to items, 1, 2, 3, 4, 5, 7, 8, 9, 10 and 11 with mean of 3.8, 4.06, 4.00, 3.98, 3.73, 4.15, 3.64, 3.89, 3.95 and 3.89 respectively were assessed as High Extent by the respondents. Item 6 with mean of 3.41 was assessed as Moderate Extent and item 12 with mean of 4.53 was assessed as Very High Extent by the respondents. However since the grand mean of 3.92 falls within the range of it indicates that Delta State small scale business operators possession of ethics and moral skills is of High Extent. Research Question 2 To what extent do small scale business operators in Delta State possessed interpersonal relation skills? Analysis of data collected in respect of research question two is presented in Table 2 below. 800

7 International Journal of Management Sciences Table 2: Mean scores of small scale business operators in Delta State on the extent they possess interpersonal relation skills S/N Interpersonal relation skills Mean Decision 1. Ability to interact with others 4.18 High Extent 2. Ability to appreciate others 4.18 High Extent 3. Ability to show interest in other people s idea 4.03 High Extent 4. Ability to be a good listener 4.07 High Extent 5. Ability to make others feel important 4.17 High Extent 6. Ability to avoid argument 4.04 High Extent 7. Ability to approach others calmly 4.17 High Extent 8. Ability to admit ones wrong 3.84 High Extent 9. Ability to hold back criticism 4.07 High Extent 10. Ability to encourage others 4.11 High Extent 11. Ability to resolve conflict 4.20 High Extent Grand Mean 4.10 High Extent The data shown on Table 2 revealed that the mean scores of the respondents range from 3.84 to 4.20 with a grand mean of Item 1-11 with mean scores that ranged from 3.84 to 4.20 were assessed by respondents as of High Extent. With the grand mean of 4.10 which falls between 3.5 and 4.9, it implies that Delta State small scale business operators possession of inter-personal relation skills was of High Extent. Testing of Hypotheses Two hypotheses were formulated and tested at 0.05 level of significance to provide useful information for the study. Hypothesis 1 Male and female small scale business operators in Delta State will not differ significantly in their mean ratings of the extent they possess ethics and moral skills. To test hypothesis 1, the mean values of the two groups were compared, using the z-statistics and the data is presented in Table 3. Table 3: Summary of z-test of mean scores of male and female small scale business operators in Delta State on their possession of ethics and moral skills Respondents N X SD Df z-cal z-critical Decision Male Upheld Female From the z-test analysis in Table 3, it can be seen that the calculated z-cal is and the z-crit is Since the t-cal (1.946) is less than the z-crit (1.964), the null hypothesis was upheld. In the light of this, it can be concluded that there is no significant difference in the mean ratings of male and female small scale business operators on their possession of ethics and moral skills. 801

8 Hypothesis 2 G. O. Onajite Small business operations in Delta State will not differ significantly in their mean ratings of the extent they possess inter-personal relation skills as a result of their years of operation. To test hypothesis 2, the mean values of the three groups were compared using the Analysis of Variance (ANOVA) and the data is presented in Table 4. Summary of Analysis of variance (ANOVA) of the mean ratings of small scale business operators in Delta State on the possession of inter-personal relation skills as a result of their years of operations. Table 4: ANOVA: Single factors Summary Respondent Groups Count Sum Average Variance 1 5 years years Above 10 years Source of variation Between groups ANOVA S.S Df Ms F P-Value f-crit Decision Rejected Within groups Total P < 0.05 From the analysis of variance (ANOVA) in Table 4, it can be seen that the f-value is and the F- crit is Since the F-value exceeds the F-crit, the null hypothesis is rejected that is not upheld. In light of this result, it can be concluded that differences exist in the means ratings of small scale business operators in Delta on their possession of inter-personal relation skills as a result of their years of operation. 4. Discussion of Findings Based on the results obtained from the analysis of data, discussion of the findings of the study is presented below: The analysis of research question one, shown in Table 1 indicates that Delta State small scale business operators possession of ethics and moral skills is of high extent. However it is difficult to understand why ethics and moral skills were rated high by small scale business operators in Delta State. In any case, ethics and moral skills to high extent enhance the management of small scale businesses. The findings is in agreement with that of Nnabuife and Ikon (2008) which stated that to make right business decisions and be successful, an entrepreneur must have high ethical and moral standard. The finding is in consonance with that Agbonifoh (2009) who stated that a person s value helps in the formation of his ethical and moral standard and this in turn helps in achieving those things he aspired to achieve in cause of managing his business. The result of the analysis of research question two shown on Table 2 reveals that small scale business operators in Delta State possession of interpersonal relation skills is of high extent. This finding is in 802

9 International Journal of Management Sciences agreement with Inegbenebor (2006) who stated that interpersonal relation skills involves the ability of someone to create a good impression of himself with those he comes in contact with, in addition such a person should be able to cultivate a harmonious interpersonal relationship with others in cause of managing his business. Ugiagbe (2007) also agrees with the finding when he said that entrepreneur is the prime mover of the business system and he is always in contact with the customers who are the primary motives of his business. His relationship with the customers is affected and can make or mere the effectiveness of the business and impede the achievement of set goals. His lack of good interpersonal relation skills can cause an upheaval in the business which may lead to devastating consequences thus business failure. The result of the null hypothesis one tested revealed that male and female small scale business operators in Delta State did not differ significantly on their mean rating of the extent they possess ethics and moral skills. This means that gender has no influence over ethics and moral skills of small scale business operators in Delta State of Nigeria. However, small scale business operators in Delta State differed significantly in their mean ratings of the extent they possess interpersonal relation skills as a result of their years of operation. This could be influenced by the years of experience possessed by different operators/owners in the cause of managing their businesses. 5. Conclusion In the light of the findings of this study however, the following conclusions are reached: That ethics and moral and interpersonal relation skills are salient in nature but at the same time very important for the management and success of small scale businesses. That small scale business operators did not differ significantly as a result of their sex on their mean ratings of the extent they possess ethics and moral skills and that the level of years of operation has significant role to play in the small scale business operators ability to exhibit interpersonal relation skills in the cause of managing their businesses. 6. Recommendations Based on the findings and conclusion from the study, the following recommendations were made: i. Curriculum planners should incorporate the assessed entrepreneurship skills in the curriculum of entrepreneurship programme both at the secondary school and tertiary levels in Business Education so that prospective entrepreneurs can effectively manage their enterprises. ii. Workshops and seminars should be organized for operators of small scale business owners by the agencies responsible for the development of small businesses at all levels of government to create indepth knowledge and technical know-how on the assessed entrepreneurship skills. iii. Professional bodies such as Association of Small and Medium Entrepreneurs (NASME) should organize their members coherently with the view to guiding them through dissemination of relevant and up-to date information on the assessed entrepreneurship skills possessed for successful management of businesses. iv. Irrespective of the course of study at any tertiary institution, entrepreneurship training should be integrated so that the level of business failure could be minimized whenever established. References Agbonifoh, B.A. (2009). The Business Enterprise in Nigeria. Lagos: Longman. Awolola, J.A. (2000). Planning and Controlling the Small Scale Business World, Strategic Issues in the Management of Small Scale Enterprises in Nigeria. Benin City: Joeseg Associates. 803

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