FACTORS INFLUENCING ENTREPRENEURIAL SUCCESS AMONG BUILDING MATERIAL DEALERS IN PORT HARCOURT NIGERIA.
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FACTORS INFLUENCING ENTREPRENEURIAL SUCCESS AMONG
BUILDING MATERIAL DEALERS IN PORT HARCOURT NIGERIA.
ABSTRACT
Entrepreneurial success makes all the difference
to the rate of economic growth and development. Thus entrepreneurial competency
and development becomes important in achieving the goals of all around
development in the country. The success of any entrepreneur in achieving these
personal and national is influenced by many factors. This paper attempts to
find out the factors influencing entrepreneurial success among building
material dealers in Port Harcourt. The research design utilized is the
quasi-experimental research design. The simple random sampling technique was
used to select 295 building materials dealers used in the study. Pearson
Product Moment correlation coefficient was used to test the postulated
hypotheses at 0.05 percent level of significance. The study revealed that the
level of education, experience and initial capital investment have positive and
significant relationship with entrepreneurial success. The study, however,
revealed that geographical location of business has no positive and significant
relationship with entrepreneurial success, more so level of education, years of
experience and higher initial capital concludes that desirably needed by the entrepreneurs
in order to operate successfully, it also noted that the entrepreneurs play important
roles in the economic development of Nigeria by creating employment
opportunities for citizenry thereby helping in unemployment and poverty
eradication. It is recommended among others, that entrepreneurs should be
purposeful and direction oriented in their business activities and should be
considerate in their pricing method and that government should institute
appropriate measure that could inject discipline and orderliness in the system
to allow for effective and efficient business operation in the sector. Moreover
that entrepreneurs need to integrate effective business strategies to
effectively and efficiently operate their business.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgment v
Abstract vi
Table of Contents vii
CHAPTER
ONE
1.1 Overview 1
1.2 Statement
of the problem 6
1.3 Purpose
of the study 8
1.4 Research
questions 8
1.5 Research
hypotheses 9
1.6 Significance
of the study 10
1.7 Limitation
of the study 11
1.8 Scope
and organization of the study 11
1.9 Definition
of terms 14
CHAPTER
TWO
2.1 introduction 15
2.2 Who
is an entrepreneur? 16
2.3 Entrepreneurial
qualities 17
2.4 Business
success of entrepreneurs 19
2.4.1 Experience and entrepreneurs
success 20
2.4.2 Age and entrepreneurs success 21
2.4.3 Education level and
entrepreneurs success 22
2.4.4 Insufficient capital and
entrepreneurs success 24
2.5 Importance
of entrepreneurs in economic development 26
2.6 Problems
of Nigeria entrepreneurs 29
2.6.1 Competition 30
2.6.2 Lack of qualified manpower 31
2.6.3 Lack of facilitate for the
development of manpower 32
2.6.4 Hostile environment and negative
government policy 33
2.6.5 Lack of adequate
capital/insufficient capital 34
2.7 Functions
of entrepreneurs 35
2.8 Business
failure and the entrepreneurs 36
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Introduction 43
3.2 Research
design 43
3.3 population
of the study 43
3.4 sampling
procedure/sample size determination 44
3.5 test
of validity, reliability and questionnaire design 45
3.5.1 introduction 46
3.5.2 test of validity 47
3.6 data
collection techniques 48
3.7 data
analysis techniques 49
CHAPTER
FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction 51
4.2 Data
presentation and analysis 51
4.3 Statistical
testing of hypotheses 51
4.3.1 Introduction 56
4.3.2 testing of hypothesis I 66
4.3.3 testing of hypothesis II 66
4.3.4 Testing hypothesis III 67
4.3.5 testing of hypothesis IV 69
4.4 discussion of finding 70
4.4.1 introduction 71
4.4.2
the business strategies available to the entrepreneurs
for growth and the level of education
of the entrepreneurs 71
4.4.3 the extent to which
entrepreneurs utilize working experience
and effective business strategies in
their services 72
CHAPTER FIVE: DISCUSSION, CONCLUSION, AND
RECOMMENDATION
5.1 Introduction 77
5.2 discussion
of findings 77
5.3 conclusion 79
5.4 Recommendation 81
References 83
Appendix A 85
Appendix B: questionnaire design 86
Appendix C: computation of (r) for
testing for hypothesis I 91
Appendix D: Computation of (r) for
testing of hypothesis II 93
Appendix E: computation of (r) for
testing of hypothesis III 95
Appendix F: computation of (r) for
testing of hypothesis IV 96
LIST OF TABLES
4.1 administration
and collection of data (questionnaire) 52
4.2 size
of the respondent entrepreneurs with respect to number
of employees 53
4.3 size
of the firm with respect to volume of sales 54
4.4 sources
of finance for the respondent entrepreneurs 55
4.5 respondents years of service as entrepreneur
(working experience) 56
4.6 level of education/qualification of the
entrepreneurs 57
4.7 factors determining the success of the
studied entrepreneurs
58
4.8 factors describing the organizational
objectives of the entrepreneurs 59
4.9 factors describing the service/survival
coverage programme of entrepreneurs 60
4.10 The extent to which geographical location
influence entrepreneurial success 61
4.11 the
extent to which working experience influence entrepreneurial success 62
4.12 the state of agreement on whether initial
capital investment affects the entrepreneurs success 63
4.13 the extent to which level education influences
entrepreneurs
64
4.14 the extent to which entrepreneurs achieve
success in their business operation 65
4.15 statistical testing of hypotheses I 66
4.16 significant relationship between working
experience and
Entrepreneurs success 68
4.17 significant relationship between business
location and entrepreneurs success 69
4.18 significant relationship between initial
capital outlay and
entrepreneurs
success 70
CHAPTER ONE
INTRODUCTION
1.1 CONTEXT
OF THE PROBLEM (OVERVIEW)
Across
the globe, growing numbers of people are realizing their dreams of owning and
operating their own businesses. Although the level of entrepreneurial activity
is up from what it is few years ago, entrepreneurship continues to thrive in
our nation. Every year, Nigerian entrepreneurs starts over one million
businesses, and the level of interest in pursuing entrepreneurship as a career
remain high among people in all age groups. Today the entrepreneurial spirit is
the most significant economic development in recent business history. All over
the world, the entrepreneurs are reshaping the business environment, creating a
world in which their company’s important role is the innovate and health of the
global economy. And have introduced innovative product and services, having
pushed back technological frontiers, created new jobs, opened foreign market
and have also provided their owners with the opportunity of do what they enjoy
most.
Interest
in entrepreneurship has never been higher than as it is today given that the
past two decades have been record numbers of entrepreneurs launching business,
even as the world largest companies and government establishment continue to
engage in massive downsizing campaigns, dramatically cutting the number of
managers and workers in their payrolls. This has spawned a new population of
entrepreneurs: “layoff” or “discharge” from large business corporation and
government establishment with solid management experience and many productive
years left before retirement.
Colleges
and universities have also discovered that entrepreneurship is an extremely
popular course of study. Disillusioned with corporate business down sized job
offering and less promising career paths, rapidly growing number of student now
see owing a business as an attractive career option.
Nwachukwu
(1990) noted that apart from the downsizing in large corporations and
government establishments, there is also a problem of high rate of unemployment
in Nigeria. As a result, people no longer see launching a business as being a
risky career path. Most people no longer see launching a business as being a
risky career path. Most people in Nigeria now see entrepreneurship as the ideal
way to create their own job security and achieve long term success, having to
control their own destinies instead of leaving it in the hand of organizations
that can shatter their dream of long term job security with their regular
layoff or retrenchment practices.
This
high rate of unemployment and downsizing among large companies has created a
more significant philosophic change. It has brought in an age in which “small
is beautiful”. Today, with the pace of change of constantly accelerating,
Zimmerer and Scarborough (20050 observed that small companies have the
competitive advantage they can use modern technology to create within few week
or months, products/services that once took years and all of the resources a
giant corporation could muster. They can also dart into and out of niche market
as they emerge and reduce, and can always move fast to exploit market
opportunities.
Indeed,
entrepreneurship often provides the only avenue for success to those who
otherwise might have been denied of the opportunity. According to NFIB small
business polices guide, National Federation of Independent Business
(Washington, DC) 2003:16; 35 Percent of new business fails within two years,
and 54 percent shutdown within four years. While 64 percent of new businesses,
will have folded within six years. Another research by Nwachukwu in four
eastern states of Nigeria, in (Nwachukwu 1990) showed high rate of mortality
among the new businesses in Nigeria. According to him 53 percent fail in less 3
years, 24.5 of the reaming fail with 3 and 5 years. While only about 7.2
percent exist above ten years.
Although
many entrepreneurs has continue to launch new businesses, the rate at which
most of these ventures fail continue to pose questions that need urgent answers
concerning factors responsible for the high rate of business failures. It may
not be safe to say that entrepreneurs dealing in building materials in Port
Harcourt seem to be succeeding in the face of all the potential environmental
and economic problems in Nigeria.
The
obvious truth is that among many entrepreneurs, too much emphasis has been
increasingly placed on financial factor as the only factor influencing business
success at the expense of non-financial factors which appear to be paramount
just like financial factor. However, many current researches have highlighted
the importance of non-financial factors to be important for business success.
Research
conducted by Cunningham (in Meng and Liang, 1996) on 178 entrepreneurs and
professional managers in Singapore showed that success is closely connected
with individual traits (49%) education level (Bowel and Robert in Staw,1991;
Hasweel et al, Wood in Zimmerer and Scarborough, 1998). But Kim (in Meng and
Liang, 1997) found that experience had no effect on business success. Also,
according to Staw (1991) age is not closely related to success in business.
However,
if age implies entrepreneurs age (the length of time someone conduct business),
there is a relationship between age and entrepreneurial success in Indonesia.
Personality
trails are considered to be important also. The aforementioned individual
traits are creatively and innovation. Holt (1992) underlines both traits as
necessary condition to become a successful entrepreneur. Because innovation is
a special means for entrepreneurs to reach success. Aruwa (2004:72) consider it
as the necessary for an entrepreneur to innovative systematically or
habitually. Creativity and innovation, according to Drucker, are not identical.
However, creatively is antecedent to innovation. (Holt), 1992:32. According to
Amabile (1989) creatively means the emergence of new ideas, while innovation
means the applications of these ideas. Nwachukwu (1990) posit that need/desire
for achievement, access to finance and level of initial investment could bring
about entrepreneurial success.
Nwachukwu
(1990:41) however stated that new invention, technical competency, love of
business ownership etc, on their own will not hold an organization together.
Avender and Raccuia (2001) noted that need for achievement is a strong
predictor of success among entrepreneurs. Interestingly, they demonstrated a
significant relationship between need for achievement and entrepreneurs’
success. Aruwa (2004) maintain that the success of an entrepreneur in
establishing operating a business enterprise depend on personal attributes,
knowledge, experience, resources at his disposal and factors in the business
environment.
Entrepreneurship
development and success has been considered as the crucial input for economic
development of any country, and eh success and activities been identified as
one of the man drivers of the nation’s economic development strategy. These
entrepreneurial success and activities has in recent time, increasingly become
the focuses of research. It is quite glaring that there has been significant
number of studies on entrepreneurial success, yet, review of work done on
entrepreneurial success reveal that there has been no significant effort to
study the factors influencing the entrepreneurial success among building
material dealers in Port Harcourt. To fill this gap, this present study aim to
fill up this need by presenting a systematic study of factors influencing
success among building material dealers in Port Harcourt and is likely to open
further venues of probe in this regard.
1.2 STATEMENT OF THE PROBLEM
Although
entrepreneurs especially those in same sectors are faced with similar or same
external environmental constraints such as economic policy, socio-cultural,
educational, technological and legal political factors. It is clear that while
some entrepreneurs are succeeding and expanding their business others in
majority continue to fold up, change business, merged or are acquired by other
businesses. Research has shown that irrespective of the high mortality among
newly created ventures, entrepreneurial spirits remain high and desire for success
higher even in the midst of uncertainties and global economic meltdown. And
with the rate of social development, and numerous government projects, and
business activities going on within and around Port Harcourt, it becomes more
relevant to consider the factors that influence entrepreneurial success among
building material dealers considering the importance of their busies to the
government, firms and individuals.
What
then therefore, are the factors influencing entrepreneurial success among these
building material dealers in Port Harcourt? What role could the entrepreneurs
paly in the economic development of Nigeria? Is the global financial meltdown
that has created uncertainty among the business world not impacting negatively
on the perceive success among these entrepreneurs? This research will therefore
critically examine or investigate those factors that has influence success
among building material dealers in Port Harcourt, by using those variable that
other researcher has use on other entrepreneurs in others sector in their
research works.
1.3 PURPOSE OF THE STUDY
The
study attempts to (1) identify a measure the extent to which variables like
level of initial capital investment, experience, geographical location of
business and level of education influence entrepreneurial success among
building material dealers in Port Harcourt. (2) To use the brief analysis of
entrepreneurial threats and problems identified by the sample respondents to
help policy makers to plan intervention strategies as to create a more
effective and efficient entrepreneurial climate in the country.
1.4 RESEARCH QUESTIONS
In
the light of the problem stated above, the entire research will be carried out
through a broad frame work of research questions. This will serve to guide the
focus of the research in the proposed investigation.
Ø What
are the management strategies available to entrepreneurs in their business
operations?
Ø To
what extent does the level of education of the entrepreneur impact on his
business success?
Ø To
what extent do entrepreneurs utilize effective management strategies in their
business operations?
Ø To
what extent does experience affected entrepreneurs success?
Ø What
are the major roles of entrepreneurs in the development of Nigeria economy?
1.5 RESEARCH HYPOTHESES
In
order to ascertain the validity and reliability consisting of this research
work, some hypotheses, which are fundamental to this study, must be tested to
provide empirical evidence. Hence, this study will test the following
hypotheses:
H01:
There is no significance relationship between the level of education and
entrepreneurial success.
H02:
There is no significance relationship between experience and entrepreneurial
success.
H03:
There is no significance relationship between geographical location of business
and entrepreneurial success.
H04:
There is no significant relationship between entrepreneurial success initial
capital investments.
1.6 SIGNIFICANCE OF THE STUDY
This
research work will be of immense contribution to the understanding of the
factors responsible for the success of entrepreneurs. It will help the
entrepreneurs to understand how their activities and development could bring
about economic growth and stability of the nation. It is often said that
entrepreneurial activities is the bedrock of any country’s economic
development.
This
study will aid the educational institution to have an understanding about those
factors that enhances entrepreneurial success and thereby, help them to prepare
their students for a successful entrepreneurial career life. Since a rapid
number of students now see owing a business as an attractive career option. The
result of this study could be used to help increase the roles and success of
small scale entrepreneurs in boosting the Nigeria economy.
1.7 LIMITATION OF THE STUDY
The
successful completion of this study was without some limitations. Time is major
constraint to this study. It is a major constraint because this research was
carried out simultaneously with other academic work and writing of examine
leading to the award of B.Sc. Degree. The non-co-operating attitude of some
business owners to release information about their business owners to release
information about their business practices and success was another serious
problem. These entrepreneurs feared that their business secrets will get into
the hands of their competitors. It was also difficult to get them understand
the academic nature of the study. However, enough efforts were made to ensure
that the desired information was obtained from these respondents.
Finally,
finance was another great constraint. It is well known that research work of
this nature cannot be carried out successfully, without involving huge among of
money. As this is needed for transportation, and sourcing of information from
books, journals, articles, and printing and distribution of questionnaire.
1.8 DEFINITION OF TERMS
Building Material Dealers:
Traders/merchants who buys and sells material used for house building and other
construction works. Particularly, iron and steel material and PVC material.
Successful Entrepreneur:
One who has doubled his turnover and/or assets since the inception of his
business, notwithstanding his business or initial capital investment? Or
enterprise who has achieves his objectives of starting up a business.
Entrepreneur:
A person or groups who have business idea (s) and gather the necessary
resources and take appropriate actions to achieve in the business.
Entrepreneurship:
Aruwa, (2004) define this as the willingness and an ability of an individual to
seek for investment opportunities, to establish and run enterprises successful.
1.9 SCOPE AND ORGANIZATION OF THE STUDY
The
scope of this study is the total study coverage of this research work. This
coves three areas:
i) Geographical/survey scope
ii) Content scope
iii) The study unit scope
i. Geographical/Survey Scope: Some
constraints as observed have necessitated the scaling down of this research to
only entrepreneurs dealing on building material in Port Harcourt alone. The
being the case, the researcher would concentrate his attention in selected
entrepreneurs within the area of understudy and his would be used for
generalization of the entire building materials dealers in Port Harcourt.
ii. The
content/theoretical scope of the study is Entrepreneurial Development.
iii. The
study scope of this work is the level of analysis coveted. And the level of
analysis is the entire building material dealers otherwise, referred to as
entrepreneurs in this research works.
THE ORGANIZATION OF THE STUDY
This
study is organize into five chapter:
Chapter one deals with the context of the problem (overview), statement of the
problem, purpose of the study, research questions, research hypotheses,
significance of the study, limitations of the study, definition of terms and
the scope and organization of the study.
Chapter
two deal with the review of related and relevant literature. Chapter three
attempt to describe the research design, sampling procedure/sample size
determination, test of validity and reliability, data collection method,
operational measure of variables, and data analysis technique.
Chapter
four deal with presentation and analysis of data.
Chapter
five presents the discussion, recommendation and conclusion of the research
findings and direction for further research.
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