Entrepreneurial Orientation and SME Growth: A Study of the Food Processing Sector of Ghana

Abstract

This study examines the influence of entrepreneurial orientation on the growth of SMEs in Ghana’s food processing sector. The importance of Small and Medium Enterprises (SMEs) to the well-being of an economy cannot be overemphasized. Many studies have been undertaken, both in developed and developing countries to indicate the major developmental role that SMEs play in an economy. However, despite their acknowledged contributions to the economy and series of interventions by government and non-governmental agencies, SMEs in Ghana are bedeviled with challenges that seem to stifle their growth. Many studies have sought to identify some of these challenges, however, it appears few of them have considered the extent to which SMEs entrepreneurial orientation will lead to growth. This study adopted Lumpkin and Dess’s (1996) multidimensional entrepreneurial orientation concept to examine the influence that the construct has on SME growth in the food processing sector in the Greater Accra region of Ghana. The study employed a survey research design using structured questionnaire while multiple regression and one tail test were used to analyze data. The study observed that even though SMEs in the food processing sector display some traits of entrepreneurial orientation, the business environment in which these firms fine themselves often acts as an impediment to their growth propensity. The findings also indicated that SMEs in the food processing sector often exhibits high levels of proactiveness and competitive aggressiveness whereas innovativeness, risk-taking and autonomy seem to be non-existent when the environment is unstable. The study, therefore, recommends that firms encourage employee creativity in the performance of assigned tasks and also invest in current technologies and R&D (research and development). The findings are subject to a limited sample size, thus, future studies are advised to use much larger sample size so as to test the robustness of these findings.