IMPACT OF BUSINESS ENVIRONMENT ON ENTREPRENEURSHIP PERFORMANCE
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IMPACT OF BUSINESS ENVIRONMENT ON ENTREPRENEURSHIP PERFORMANCE
Chapter one
INTRODUCTION
1.1 Background of the Study
The current business environment is characterised by a variety of dynamic features, including global competition, information technology, the quality service revolution, and corporate social responsibility, all of which are compelling managers to reconsider and reshape their approach to their various operational responsibilities.
Because of this paradigm shift, new businesses are emerging that are more sensitive to both their internal and external surroundings (Luthans, 1995). Internal influences occur within an organization’s operational basis and have a direct impact on several aspects of the business.
These internal factors include firms’ mission, resistance to change, poor quality staff, lapses in internal control, bad resource/financial management, operational weaknesses, high staff turnover, and over-leveraging, while the external factors include government regulation, economic recession, political turmoil, low-cost competitors
changes in customer behaviour, environmental/health issues, technological changes, natural disasters, change in input supply, changes in macro To survive in the long run, a firm must keep up with the various changes in the environment.
Similarly, every company setting frequently introduces fresh ways of thinking about the business world and new methods to perform. (Belohlav,1996). As a result, dealing with these numerous issues necessitates a company that can quickly adapt to change.
This makes small and medium-sized enterprises (SMEs) the driving force behind economic growth and job creation in both developed and developing countries, thanks to their ability to experiment with new approaches at low cost and create standardised products/services that can meet the needs of a large target market (Sunter, 2000).
However, more than half of newly founded enterprises last more than five years. As a result, identifying the factors that empirically lead to entrepreneurial success/failure would aid in providing small business owners with the managerial skills required to survive in today’s competitive environment, as well as implementing a variety of strategies to improve operational efficiency.
Overall improvement of the business climate is seen as a critical component of market transformation success and economic reform in transitional countries. It is also regarded as one of the most important criteria in attracting foreign investment and a vital driver of economic growth acceleration (Alexandrova, 2004).
In general, the business environment is made up of a variety of variables that are outside the immediate control of firm-level management; as a result, it can generate both possibilities and risks for businesses.
Most past research has supported the influence of the business environment in firm operations, however their conclusions have been inconsistent. Previous research has shown that the specific local business environment in which a firm is embedded can have a significant impact on its performance (e.g., Neneh & Vanzyl, 2012; 2014; Ng & Kee, 2012; Tu, 2012; Chittithaworn, Islam, Keawchana, & Yusuf, 2011; Kennerley & Neely, 2003; Tan, 1996; Tan & Litschert, 1994; Okoroafo, 1993).
Other studies have indicated an inverse association between these characteristics (De Jong, Phan, & van Ees, 2012; Chittithaworn et al., 2011; Luo, 1999; Ward, Duray, Keong Leong, & Chee-Chuong, 1995).
These conflicting findings may imply that the impact of the business environment on enterprises varies by national or regional economic setting (Ng & Kee, 2012; Alexandrova, 2004). Firms in industrialised countries, in particular, benefit significantly from a predictable business environment.
However, the impact of their business environment on enterprises in transition economies such as China, Thailand, and Vietnam may vary (Chittithaworn et al., 2011). The effect may not even be the same across transition economies.
As a result, we suggest that the conclusions of earlier research examining the effects of the business climate on enterprises in other countries are still being debated and may not be applicable to Vietnam in general or the Mekong Delta (MD) specifically. In this region, such topics have received little attention.
As a result, the goal of this study is to address this vacuum by looking into how the local business environment influences SMEs’ success in the MD. The study’s findings provide important information on how local governments may improve the business environment by increasing SMEs’ competitive advantage and performance.
The paper makes two distinct contributions. First, we construct a model that captures the relationship between the local business environment and SMEs’ success by expanding theoretical considerations about the importance of local government policy, “speed money,” and the local labour force in SMEs’ performance.
Second, the study experimentally validates the effects of these determinants on SMEs’ performance by evaluating 63 manufacturing and service SMEs in Can Tho, An Giang, and Hau Giang.
The study of these SMEs sheds new light on the significance of the local business environment for SME operations and the SME literature.
1.2 Statement of the Problem
Entrepreneurial development has remained a popular notion around the world due to its key role as a driver for national progress and economic development. Entrepreneurship may brag of being a big employer of labour when compared to major industries and multinational corporations (Kadiri, 2011).
The Nigerian government has launched a number of schemes aimed at mobilising, training, and supporting development activities. Despite all of this, the efforts appear futile, which can be attributed to challenges inherent in the Nigerian business climate, such as corruption, a lack of decent roads, intermittent power supply, political instability, and the existence of inflation.
1.3 PURPOSE OF THE STUDY
The primary goals of this study are to evaluate the impact of the business environment on entrepreneurial performance in Akwa Ibom State. There are specific objectives for reaching the main goal, which are:
1. Identify the environmental concerns that Nigerian businesses face.
2. Determine the impact of the corporate environment on entrepreneurial productivity.
3. Evaluate the government’s monitoring and control activities to ensure entrepreneurial performance in sustaining economic development in Akwa Ibom state.
1.4 RESEARCH QUESTIONS.
While conducting this research, various questions become imperative:
1. What environmental obstacles face entrepreneurship in Akwa Ibom State?
2. How does the business climate impact entrepreneurship performance in Akwa Ibom State?
3. What are the government’s monitoring and control activities to ensure entrepreneurial performance and economic development in Akwa Ibom State?
1.5 Research Hypotheses
H0: There are no environmental challenges that affect entrepreneurship performance.
H1: an environmental challenge confronts entrepreneurship performance.
H02: The business environment has little effect on the success of entrepreneurs in Akwa Ibom state
H2: The business environment influences entrepreneurship performance in Akwa Ibom state.
1.5 Significance of the Study
This study will be relevant in the following ways:
The study would benefit Akwa Ibom entrepreneurs since the research findings will enable them pay special attention to those issues that have the potential to negatively impact their business. Their research will also contribute to existing information about entrepreneurship development.
The study will also be useful as a reference material for students conducting similar research.
1.6 Scope and Limitations of the Study
This study examined the impact of the business climate on entrepreneurship in Akwa Ibom State, utilising a specific enterprise in the state as a case study.
The limitations of the study
Some of the study’s limitations included:
The Factor: Because the researcher only had three months to finish the research, the factor resulted in a smaller sample size for the study.
Financial Factor: The study was also restricted by financial constraints. The researcher’s insufficient money influenced how data was obtained because the researcher had to travel to distribute the questionnaire.
Material factors also hampered the investigation. The researcher did not have any written materials to use for the study, so he had to surf the internet, ask acquaintances questions, brainstorm as many ideas as possible, and visit the library to get more knowledge for the research.
1.7 Definition of Terms
Environment refers to everything that surrounds us. It can include both living and nonliving entities. It encompasses physical, chemical, and other natural forces.
Business: Business is the action of earning a living or making money by manufacturing, purchasing, and selling goods or services. Simply put, it refers to any profit-generating activity or enterprise.
Entrepreneur
Entrepreneurship is the process of creating, launching, and operating a new firm, which is frequently a small one.
Entrepreneurship
Entrepreneurship is the process of creating, launching, and operating a new firm, which is frequently a small one. The people who start these enterprises are known as entrepreneurs.
1.8 Organisation of the Study
This research study is organised into five chapters for simple understanding, as follows: The first chapter is concerned with the introduction, which includes the (overview of the study), statement of problem, aims of the investigation, research question, significance of the study, research methods, term definitions, and historical backdrop of the study.
The second chapter focuses on the theoretical framework that underpins the study, as well as a review of relevant literature. Chapter three discusses the research design and technique used in the study.
Chapter four focuses on data gathering, analysis, and presenting of findings. Chapter 5 provides a summary, conclusion, and suggestions from the study.
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