CHAPTER ONE
INTRODUCTION
1.1
Background of the Study
The
term Entrepreneurship is the process of learning the skills needed to assume
the risk of establishing a business venture. Entrepreneurship is a process of
bringing together creative and innovative ideas, combining them with management
and organization skills in order to combine people, money and resources to meet
an identified need and thereby create wealth (Agomuo, 2012). It can also refer
to as the willingness and ability of an individual to seek out investment
opportunities, establish and run an enterprise successfully. Entrepreneurial
skills are skills which are acquired by entrepreneurs or prospective business
owners in a bid to recognize business opportunities, strength, weaknesses and
threat in an environment of business. Entrepreneurial skills are simply
business skill, which an individual acquires to enable him function effectively
in the turbulent business environment as an entrepreneur of a self-employed
(Folahan and Omoriyi, 2006). Agbonifoh (2009) also define entrepreneurial
skills as skills relating to identifying business opportunities and receiving a
sustainable income from these opportunities. The acquisition of entrepreneurial
skills means combining personal characteristics, financial resources within
one’s environment and taking advantage of them for rewarding outcome.
The
myth that entrepreneurs are born, no more holds good, rather it is well
acknowledged now that entrepreneurs can be created and nurtured through
addressing issues such as opportunity identification and entrepreneurial
orientation which has to a high degree potential to increase enterprise growth
of SMEs (Kerosi and Kayisime, 2013).
Moreno
(2008) observed an increased interest in the best way of explaining the phenomenon
of enterprise growth, that there are diverse motives for this growing interest.
As a result from the economic and social point of view, there is the fact that
firms that grow more are the ones that generate more new jobs. Also, from the
academic point of view, growth constitutes one of the least studied dimensions
of performance within the field of management, as compared to other variables
such as profitability.
Brouwer
(2011) opined that the acquisition of entrepreneurial skills means possessing
the ability to find and evaluate business opportunities, gather the necessary
resources, initiate appropriate action to ensure success; and implement actions
to take advantage of the opportunities for rewarding outcome. The entrepreneur
according to the chambers 21st Century Dictionary (2006) is defined as someone
who engages in business enterprises, often with some financial risk.
Entrepreneur can be defined as a person who always searches for change,
response to it and exploit it as an opportunity.
Believe
of Akpotowoh and Amahi (2006) is that the skills acquired in any of the area of
business related programme promotes training in entrepreneurship as well as
equip graduates with requisite skills to establish and run small businesses on
their own.
Uche
(2006) as quoted by Ademiluyi (2007) opined that the acquisition of marketing
skills offers the entrepreneur the unique strategy for succeeding in business.
The entrepreneur is able to offer the right product to his targeted customers
then cost and determine his product price which will be acceptable to the
customers, based on their perception of the value and a cost that allows for
profit making.
Ademiluyi
(2007) opinioned that entrepreneurship skills are simply business skills which
individuals acquire to enable them effectively function in the turbulent
business environment as an entrepreneur or self-employed. Nevertheless, the
various skills embedded in business related programmes need to be explored and
learn by it prospective graduates for them to succeed as later entrepreneurs.
However, graduates of business related program without the relevant
entrepreneurial skills will find the labour market most unrewarding and
unfavorable in terms of creating to be for them instead of seeking jobs where
none exists, and operating them for effective productivity.
Entrepreneurial
and business skills can be acquired through learning on the job or training
according to Antonctes, A.Y (the transfer of skills of skilled
individuals/employees in the learning of unskilled individuals. This study
based on the ways of entrepreneurial learning, emphasized on the importance of
the development of entrepreneurial skills in order to lead a competitive
entrepreneurial business. It pointed out that all the business and
entrepreneurial skills are vital to the sustainability of the business and
should, therefore be taught to the aspiring entrepreneurs.
Entrepreneurial
skill is seen to help an entrepreneur establish an enterprise, nurses it from
its cradle to its matured level (small to large) and consequently contributes
to fiscal intensification of a nation’s economy. Therefore, if the acquisition
of entrepreneurial skills is encouraged and developed, can lead to the
effective and efficient performance and productivity of SMEs which will in turn
be of great benefit to the nation’s economy.
MCTI
(2003) indicated severe deficiencies in skills relating to the following
fundamental areas:
i.
Strategic management capacities i.e. the SMEs
ability to manage entry into new markets.
ii.
Functional management skills i.e. skills
required in production, finance, purchasing and marketing to improve production
of capital, quality control etc.
iii.
Technical management skills i.e. the
actual technical know how to achieve the required quality and quantity.
1.2
Statement of the Problem
Entrepreneurship
deals with the process of recognizing existing business opportunity, creating
an opportunity or repositioning the process available, operating and
maintaining that business, though people engages into it without acquiring much
skills and competencies that will enable them to effectively operate the
business. (Akpotowoh, 2005) As a result of this attitude, failure followed
instead of success. Their failure is not because they do not have the necessary
capital and machines to stay in already established business, but because they
lack the prerequisite skills needed to grow the firms from a small position to
a bigger one, and as well to remain in the business.
In
the recent time, most business related graduates make little or no attempt to
establish small scale business of their own despite the abundant business
opportunities in the country. Instead, they continue to besiege ministries and
government offices in search of white collar jobs that are either extremely few
in supply or even non-existent. Also, managers and staff of SME’s tend to
neglect the importance attached to the productivity. The question now is what
entrepreneurial skills are needed for effective productivity of SME’s. Against
this backdrop, therefore this study tends to discuss the effect of
entrepreneurial skills on productivity of selected SMEs in Nnewi Anambra State
Nigeria.
1.3
Research Question
The
following Research questions were posed for this study:
1.
How can entrepreneurial skills help in establishing small scale business?
2.
To what extent can entrepreneurial skill acquisition be of importance to SME’s?
3.
To what extent can entrepreneurial skills affect SME’s productivity?
1.4
Objectives of the Study
The
broad objective of this study will be to identify entrepreneurial skills needed
for effective productivity of SMEs in Nnewi North, Anambra State. The specific
objectives will be:
1.
To examine the entrepreneurial skills needed for establishing small scale
business.
2.
To examine the importance attached to acquisition of entrepreneurial skills.
3.
To determine how these skills are effective to SME productivity.
4.
To examine the outcome of entrepreneurial skills.
5.
To examine the level of entrepreneurial skills needed in SME
1.5
significance of the Study
To
answer the three research questions posed for this study the following
hypotheses were formulated in a null form.
Ho1:
Entrepreneurial skills is not relevant to the establishment of SME’s
Ho2:
To a large extent the acquisition of entrepreneurial skill is not important to
SME’s
Ho3:
To a large extent entrepreneurial skills cannot affect SME’s productivity
1.6 Scope
of the Study
This
study will be carried out in Nnewi South L.G.A of Anambra State and for the
purpose of the study, four (3) communities; Ubaha, Umunama, Umuonyelikpa.
1.7 Limitation
of the Study
In
conducting this research, the researcher will encounter certain challenges that
will affect the study, some of these challenges include;
Finance:
Lack of adequate finance militates against extensive tours to visit libraries
and conduct questionnaire in many areas.
Time:
most of my precious time was consumed in the course of collection and
arrangement of good information in order to make sure that this research
becomes a successful one.
Respondent:
most of the respondents were reluctant to answer question feeling that it could
be a way of knowing or revealing their secrets while some took it for granted.
1.8 Definition of Terms
Entrepreneur:
An entrepreneur is an individual who, rather than working as an
employee, founds and runs a small business, assuming all the risks and rewards
of the venture.
Skills:
skills are what makes you
confident and independent in life and are essential for success. It might take
determination and practice, but almost any skill can be learned or improved.
Productivity: Productivity
describes various measures of the efficiency of production. It is also a crucial factor in production performance of firms and nations.
Training:
Training may be viewed as
related to immediate changes in organizational effectiveness via organized
instruction.
Human
capital: is the backbone of human development and economic
development in every nation.
Small
and medium-sized enterprises (SMEs) or small and medium-sized
businesses (SMBs) are businesses whose personnel numbers fall below certain
limits.
Business:
business comes from the word busy, and means doing things.
Skills management: is the practice of understanding, developing
and deploying people and their skills.