The Effect of Entrepreneurial Culture on Financial Performance. Evidence from Manufacturing SMEs in Mutare Nyakamete

Abstract

The research aimed at investigating the influence of entrepreneurial culture on the financial performance of SMEs as measured by return on investment (ROI). The objectives of the research were to identify elements of entrepreneurial culture, and factors promoting institutionalising entrepreneurial culture, establish reasons inhibiting institutionalising entrepreneurial culture in manufacturing SMEs and examine the association between entrepreneurial culture and financial performance in manufacturing SMEs. A mixed method research strategy which blends quantitative and qualitative research design was used. Data was collected from a sample of 61 participants using questionnaires and interviews as data collection instruments. Descriptive statistics and inferential statistics analysis tools were employed. Data analysis and presentation employed the convenience of MS Excel packages. The research investigation found that the level of education of most manufacturing SMEs in the Mutare Nyakamete industrial zone is commensurate with the minimum requirements necessary for the adoption of an entrepreneurial culture, manufacturing SMEs in Mutare are aware of the critical constituent entrepreneurial culture elements to be embedded in their organisational culture, appreciate and understand the factors which promote institutionalisation of entrepreneurial culture. Further, manufacturing SMEs in Mutare admit that they have no strategy for incorporating entrepreneurial culture in their organisations, face many limitations which need to be addressed if they decide to institutionalise entrepreneurial culture in their organisations and lastly deliberate incorporation of entrepreneurship culture in manufacturing SMEs in Mutare will improve profitability of these firms and value for money for all its stakeholders. The study recommended training organisational members in strategy formulation and organisational behaviour, setting the right tone at the top management level of SMEs, rewarding workers for innovations, setting up research and development policies and considering introducing share ownership schemes for employees so that they develop a sense of ownership for their employer organisations. It also recommended that the government should create conducive entrepreneurial culture environment by incentivising innovations using fiscal policy statements and statutory instruments.