Global Journal of Management and Business Research, A: Administration and Management, Volume 22 Issue 7

The Moderating Factor of Social Capital and Capability Development as Entrepreneurial Orientation Enablers for SMEs Business Performance in Nigeria Blessing Obehi Ayemhere Abstract- Social capital and capability development have been determined as effective business orientation enablers in achieving good business performance. To understand the effect of entrepreneurial orientation on business performance, there were a number of findings that were recorded in this research based on the notable variables. Six hundred questionnaires were provided to SMEs in Nigeria where 67% of the population provided their honest and reliable opinion. Normality tests on the collected data were conducted by examining Kurtosis, Skewness, Shapiro-Wilk test and Komogorov-Smimov test. It is required that for normality condition to be met, the Sig. value of the Shapiro-Wilk and Kolmogorov-Smimov is expected to be greater than 0.05 and if less than 0.05, then the data significantly deviate from normal distribution. The result of this study shows that the Shapiro- Wilk and Kolmogorov-Smimov Test is less than 0.05, hence, the data is not normally distributed. According to Pallant (2013, p.59), the skewness value provides “an indication of the symmetry of distribution” while the kurtosis value provides “information about the “peakness” of the distribution”. It has also been validated from the quantitative study that both social capital (P < .10) and capability development (P <.10) have significant impact on SME performance and positive.The major findings from the research indicated that the direct effect of entrepreneurial orientation on business performance are positive and significant. Also, social capital and capability development as moderators were a notable significant factor that helped to affect business performance; these were variables that affect business performance in the long run. Keywords: entrepreneurial orientation, social capital, capability development. I. I ntroduction ntrepreneurial orientation (EO) is the behavior, structure, and process of an organization characterized by risk-taking, proactiveness, and innovativeness (Lumpkin & Dess, 1996; Wiklund & Shepherd, 2003; Walter et al. 2006). It is an important notion applied by business leaders in creating strategies to venture into novel things and take up opportunities strategically ahead of other organizations (Bonillo, 2017; Lumpkin and Dess 1996). Author: e-mail: Obehi8@gmail.com Entrepreneurial Orientation represents one construct that is connected to firm’s success (Palmer et al., 2019; Semrau et al., 2016; Wales et al., 2013). The entrepreneurial orientation appears to be focal construct in entrepreneurship and strategic management fields in recent years (Morris and Kuratko, 2002; Palmer et al., 2019). Knight et al. (2004) argues that entrepreneurial Orientation is seen as a cultural construct consisting of a firm’s level of risk-taking, innovativeness and proactiveness (Covin and Slevin, 1989; Miller, 1983). Within the economy, there are several challenges facing SMEs which tend to undermine their growth and market penetration. Some of the notable challenges include lack of access to finance which tend to limit business expansion and growth. The only available finances from commercial banks attract huge interest and possess complex conditions which are impossible for the SMEs to meet. It therefore means SMEs will require grants and support from the government to succeed in the market. In addition, SMEs also face the challenge of lack of training and managerial skills at the leadership level. It means employees lack necessary training that will equip them with modern business operations in the market. Training for the employees can be done by the government or non-profit organizations. In Nigeria, there is no precise and straightforward definition for small and medium scale business. Through its Monetary Policy Circular No. 22 of 1988, The Central Bank of Nigeria defined small-scale enterprises as having an annual turnover not exceeding 500,000 naira. The Nigeria Bank of Industry (BOI) define micro businesses as those with less than or equal to 10 employees, less than or equal to 5 million naira total asset value and turnover of less than 20 million naira. The Bank of Industry further classified small enterprises as those with greater than 11 but less than 50 employees and, total assets of more than 5 million but less than or equal to 100 million naira with an annual turnover of less than 100 million naira. Medium businesses are classified by BOI as those with between 51 to 200 employee, 100 to 500 total assets and 100 million annual turnover (Bank of Industry, Nigeria 2020). E 41 Global Journal of Management and Business Research Volume XXII Issue VII Version I Year 2022 ( ) A © 2022 Global Journals