RELATIONSHIP BETWEEN ENTREPRENEURIAL ORIENTATION AND PROFITABILITY OF SMALL AND MEDIUM-SCALE ENTERPRISES IN DELTA STATE

Abstract

The purpose of the study was to ascertain the relationship between entrepreneurial orientation and profitability of Small and Medium Scale Enterprises in Delta State. Three research questions were raised for the study, while three hypotheses were tested at the 0.05 level of significance. A correlational research design was used for the study. The population of the study consisted of all 3,976 registered owners of Small and Medium Enterprises (SMEs) in Delta State. The sample of the study consisted of 794 registered owners of Small and Medium Enterprises (SMEs) drawn through a proportionate sampling technique. Face-validated “Entrepreneurial Orientation Questionnaire” (EOQ) and Profitability of SMEs Questionnaire (PSMESQ) were used to collect data for the study. The reliability of EOQ and PSMESQ was established using Cronbach's alpha statistics to obtain coefficients of 0.71 and 0.79 for EOQ and PSMESQ. The data collected were analyzed using Pearson Product Moment Correlation. It was found that: a high positive and significant relationship existed between innovativeness and profitability of Small and Medium Scale Enterprises in Delta State; a high positive and significant relationship existed between risk-taking and profitability of SMEs; and a high positive and significant relationship existed between proactiveness and profitability of SMEs. It was recommended, among others, that Entrepreneurs should endeavor to continually take advantage of their innovativeness so as to enhance profitability. They can do this by creating a supportive culture, empowering employees, and identifying market opportunities