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ABSTRACT
The study examined the effect of
educational qualifications on entrepreneurs and performance of small and medium
scale enterprises in Mainland Local Government Area of Lagos State, Nigeria. In
this study, relevant and extensive literatures were reviewed under
sub-headings. The descriptive research survey was used in the assessment of the
opinions of the selected respondents with the adoption of the questionnaire and
the sampling technique. A total of 100 (One Hundred) respondents were selected
and used as samples for this study, the respondents were made up of (50 males
and 50 females). A total of four null hypotheses were generated and used in
this study using both the percentage frequency counts and the t-test
statistical tools at 0.05 level of significance. At the end of the data
analyses, the following results were generated: hypothesis one found that there
is a significant effect of educational qualifications and performance of
entrepreneurs in small and medium enterprises in Lagos State Nigeria, hypothesis
two showed that there is a significant gender difference in the management of
small and medium scale enterprises due to educational qualifications of the
entrepreneurs in Lagos State while hypothesis three indicated that the
effective management of small and medium scale enterprises significantly
depend on the educational qualifications of the entrepreneurs in Lagos State,
Nigeria and finally, hypothesis four revealed that there is a significant
gender difference in the successful management of small and medium scale
enterprises in Lagos State, Nigeria.
TABLE OF CONTENTS
TITLE
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER ONE: INTRODUCTION
1.1 Background
of the
Study 1
1.2 Statement
of the Problem 9
1.3 Purpose
of the
Study 10
1.4 Research
Questions 10
1.5 Research
Hypotheses 11
1.6 Scope
and Delimitation of the
Study 11
1.7 Significance
of the Study 12
1.8 Definition
of
Terms 13
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction 15
2.1 Concept
of
Education 19
2.2 Concept
of
Entrepreneurship
2.3 Conceptual
Framework of Entrepreneur and
Entrepreneurship 22
2.4 Entrepreneurship:
Concepts, Theory and
Perspectives 24
2.5 Concept
of Performance 35
2.6 Relationships
Among The Various Perspective of
Performance 43
2.7 Historical
Growth of Small and Medium Scale Enterprise- Nigeria/ 47
Global
Scene.
2.8 Problems
Militating Against the Development of Small
and 53
Medium
Scale Enterprises in Nigeria.
2.9 Benefits
of Small and Medium Scale Enterprises in
Nigeria. 55
2.10 Factors
Affecting the Growth of Small Firms in
Nigeria. 56
2.11 Small
and Medium Scale Enterprises (SMEs) as a
Panacea 63
for
Poverty Alleviation in Nigeria.
2.12 Summary 65
CHAPTER THREE: RESEARCH DESIGN AND
METHODOLOGY
3.0 Introduction 67
3.1 Research
Design 67
3.2 Population
of the
Study 67
3.3 Sample
and Sampling
Technique 68
3.4 Instrumentation 68
3.5 Validity
of the
Instruments 69
3.6 Reliability
of the
Instrument 69
3.7 Administration
of
Instruments 69
3.8 Procedure
for Data Analysis Method 70
CHAPTER FOUR: DATA ANALYSIS AND
INTERPRETATION OF RESULTS
4.0 Introduction 71
4.1 Descriptive
Analysis of
Bio-Data. 71
4.2 Descriptive
Analysis of Research
Questions. 73
4.3 Testing
of
Hypotheses 79
4.4 Summary
of
Findings. 83
CHAPTER FIVE: SUMMARY, CONCLUSIONS
AND RECOMMENDATIONS
5.1
Introduction 85
5.2 Summary of the
Study 85
5.3
Conclusions 86
5.4 Recommendations 87
References 89
Appendix 93
CHAPTER
ONE
INTRODUCTION
1.1 Background of the Study
In the present day economies of the
world, small and medium scale enterprises have come to be recognized as
veritable engines of growth, employment, poverty reduction and innovative
development. Government of various nations and indeed, world economic
development and financial institutions such as the Brethonwood Institution,
International Monetary Fund, the World Bank, and the United Nations have all in
recognition of the potentials of SMEs, embarked on deliberate developmental
policies aimed at creating a productive base for world economies (Englama,
1997).
The educational qualification
of an entrepreneur who engages in the small and medium scale enterprises is
very paramount for the success of the enterprise. This is because, if the small
and medium scale enterprises are owned and handled by the educated individuals,
the resultant effect will be business boom and success of the small and medium
businesses (Anyanwu, 2004). According to Adeosun (2006), many businesses in
Nigeria, especially the small and medium scale enterprises do not thrive
because their owners are not well educated and in some cases, are total
illiterates who are not well disposed to possess the required educational
ability and skills to handle successful business enterprises such as the small
and medium scale enterprises.
As Onyema (2007), observes that, the
academic qualification or educational level of an individual businessman is
important for success in the business world. According to Onyema, in Nigeria,
where unemployment is high, individual citizens, especially the school
leavers/graduates of the Nigerian tertiary institutions ought to engage
themselves in the small and medium scale enterprises so as to avoid hoping
against hope in looking for the jobs that are non-available. As emphasized by
Harper (1995), with the large increase in world population (especially Nigerian
and many developing countries) “governments can certainly not afford to employ
many more. Also the large scale industry has dramatically failed to
absorb more than a tiny fraction of the multitudes who need jobs. In many
countries, small enterprises are possibly the hope of employment
creation, and it is hardly surprising that policy-makers in developing nations
and almost everywhere else have so eagerly strived to promote and encourage
them”. The availability of efficient infrastructural services is a key
requirement for the take-off of private investment (CBN, 2000).
Reflecting countries experiences in
the performance of small and medium scale enterprises, SMEs employ more than 50
percent of the industrial workforce in Columbia, India, Indonesia, Kenya,
Philippines, Tanzania and Zambia. They are the real job creators in the
European Union (EU) accounting for 99.9 percent of 11.6 million enterprises
(excluding enterprises in agriculture, fishing and other sectors, 72 per cent
employment of the 80.7 million persons employed by all enterprises, and
generate 69.7% percent of turn-over in EU (Deloittee, Touche and Tohmatsu,
1995). SMEs were equally responsible for more than 50 per cent of total
employment in Canada (Government of Ontario, 1995).
Studies have shown that, SMEs have
in many countries, provided the mechanism for stimulating indigenous
entrepreneurship, enhancing greater employment opportunities per unit of
capital invested and aiding the development of local technology (Sule, 1986;
World Bank, 1995). They help to mobilize savings for investment and promote the
use of local raw materials. Through their dispersal nation-wide, they
contribute to more equitable income distribution among individuals and regions,
as well as mitigate rural-urban migration.
In view of these advantages, greater
attention has been given to the promotion of SMEs globally as tool for poverty
alleviation and economic development. Even in the most buoyant economies, such
as the United State of America, small scale enterprises have played an
important role in her transition from the industrial age of the post industrial
information technology era. Also, in other countries like Japan and South
Korea, the use of sophisticated technology has reduced to the minimum efficient
scale of production in industries known for product innovation, such as the
electronics and computer industries (Olorunshola, 2000).
In the same vein, the Nigeria budget
for 2003 was designed among other things to reduce poverty. According to Sanusi
(2003), it is “to pursue macroeconomic policies and sector growth strategy that
will achieve fiscal stability, improve non-oil sector competitiveness, lower
levels of inflation, fix stable and competitive exchange rate in
order to engender growth and reduce poverty through increased employment”.
Specifically, attention has been directed at the development of small and
medium scale enterprises with the aim of turning them into engines of growth
for the various economies.
Various problems confront its growth
and hence, the objective of its establishment and management as engine of
growth. These include among others, lack of information; lack of management and
technical skills; poor ethical values, lack of transparency; lack of proper
policy formulation and implementation; and above all, lack of quality education
on the side of the small and medium scale entrepreneurs in Nigeria.
Many entrepreneurs in Nigeria
have failed in their businesses due to lack of proper education which gives one
the ability to manage and coordinate vital issues that could lead to success in
any undertaken by an individual businessman or woman. Majority of the business
men and women have failed in their small business ventures due to lack of
education which has made them to exhibit poor management and expansion of their
business enterprises. Above all, the small and medium scale industries failed
to achieve the desired economic growth due to poor managerial skills of the
entrepreneurs and their lack of education.
In Nigeria, as in most countries of
the world both developed and developing, small and medium scale enterprises are
faced with a number of problems which seem insurmountable. Often the nature has
been that the only problem which SMEs face is that of inadequate acquisition of
educational qualification and that all other problems are sub-summed under it
(Agundu, 2003). In as much as it is acknowledged that the problem of inadequate
acquisition of needed educational qualification by the entrepreneur is a major
impediment to the development of small industries, most especially in the
developing countries like Nigeria, other problems such as poor transportation,
inadequate and inefficient infrastructural facilities and lack of sufficient
funds, are also predominant. Bureaucratic and inefficiency in the administration
of incentives discourage rather than promote SME growth. Multiplicity of
regulatory agencies and taxes has always resulted in high cost of doing
business and poor management practices and low entrepreneurial skill arising
from inadequate educational and technical background of many SMEs promoter.
Weak demand for products, arising from low and dwindling consumer purchasing
power and lack of patronage for locally produced goods by those in authority.
All these problems should be recognized as inhibiting the development of SMEs
(Ausbeth, 2004).
The problem of inadequate and
inefficient infrastructural facilities has been a major handicap to the
meaningful development of SMEs in Nigeria. These problems include lack of
regular power supply especially in the rural areas. Lack of access to good
roads, and housing militate against efficient production and distribution of
goods and services (Agabi, 2006). The problem of inadequate infrastructural
facilities particularly in the rural areas has frustrated the promotion of SMEs
in such manner as to providing a lasting solution to the current problem of
spatial imbalance in the distribution of industries between the rural and urban
areas, and to check the perennial rural-urban drift which increases social tension
in urban cities in Nigeria.
Additionally, there is weak demand
for products and service of SMEs arising from low and dwindling consumer
purchasing power. They are faced with undue competition from already well
established firms in the industry where they belong or choose to enter
(Funtula, 2005). All strong economies in the world today have a very dynamic
small and medium scale industrial sector. This sector has been the backbone in
the transformation of young and developing economies into very complex and
advanced economies, which are characterized by very high productivity and high
per capita income. A large number of today’s big business and even
multi-nationals started as family business in the small and medium scale
industrial sector. Through growth and expansion, their businesses developed in
managerial and professional expertise to become medium or large scale ventures,
(Nwankwo, 1981).
The benefits of SMEs are well
documented in the literature and would be summarized here to put into proper
perspective the issues involved. They provide an effective means of stimulating
indigenous entrepreneurship, create greater employment opportunities per unit
of capital invested and aid the development of local technology. Through their
wide dispersal, they provide an effective means of mitigating rural-urban
migration and resources utilization. According to Adeleke (2000), by producing
intermediate products for use in large scale enterprises, they contribute to
the strengthening of industrial inter linkages. Small enterprises are known to
adapt with greater ease under difficult and changing circumstances because
their typically low capital intensity allow products lines and inputs to be
changed at relatively low cost. They also retain a competitive advantage over
large enterprises by serving dispersed local markets and produce various goods
with low scale economies for niche markets (Ndu, 1998).
SMEs also serve as veritable means
of mobilization and utilization of domestic savings as well as increased
efficiency through cost-reduction and greater flexibility. To ensure
actualization of their benefits, programmes of assistance in the area of
education, finance, extension, advisory services, training and provision of
infrastructural facilities were designed by the government for the development
of SMEs. Too many challenges face the small and medium enterprises in Lagos
State. Among the problems are the issues of lack of education among the
entrepreneurs who manage these small and medium scale businesses in the state.
It is very disheartening to note that majority of the entrepreneurs who run
their businesses locally, do not have the requisite educational qualification
that will enable them to manage their enterprises effectively. Little wonder
the collapse of many small and medium scale business enterprises in Nigeria,
especially in Lagos State where most of the businesses are carried out.
Lack of education among the small
and medium entrepreneurs, has caused them to suffer the dearth of business
information that are necessary for the growth and success of their business
enterprises. Not only that, due to the receipt of half or non-education by the
owners of the small and medium scale enterprises, their required managerial
skills with which to pilot effectively the daily routine of the business
venture is non-existent. Therefore, these entrepreneurs continue to manage
their businesses on trial- and- error basis, which often times has resulted in
the lost of capital, stunted growth of the businesses which by extension, has
affected the Nigerian economy adversely and the collapse of the businesses,
which equally, has resulted in the loss of manpower and the resultant
unemployment and idleness which are the causes of restiveness, killings,
kidnappings and other vices in the society these days.
The poor management of businesses by
the entrepreneurs, who are basically uneducated, has brought unhealthiness in
the Nigerian economic growth and development. This is because, the uneducated
managers of the enterprises in Lagos State in particular, have lost focus due
to their ignorance and the ability to coordinate the business ventures
effectively and efficiently for the boosting of the economy in the state. Their
failure to manage well, has led to loss of business opportunities to other
up-coming Nigerians, especially the youths who are now skeptical and confused
on the best business ventures to go into because they have seen the failure of
the previous business attempts by others who were there before them.
1.2 Statement of the Problem
One of the critical problems
facing the economic growth in Africa Sub-Sahara and indeed, developing
countries generally is the problem of harnessing the resources to achieve the
desired goals through the acquisition of educational qualifications by the
entrepreneurs. Other factors identified as major issues facing rapid
development of the small and medium scale enterprises in Nigeria are poor
managerial skills, inadequate infrastructure, internal challenges and some
external forces. The central issue in the study is, does educational
qualifications of entrepreneurs actually affect performance in small and medium
scale enterprises?
1.3 Purpose of the Study
The purpose of this study is to:
(1) Establish
whether educational qualifications of entrepreneurs affect the performance of
small and medium scale enterprises.
(2) Examine
whether the performance of small and medium scale businesses is based on the
managerial skills of the entrepreneurs.
(3) Investigate
whether the effective management of small and medium scale enterprises depends
on the educational qualifications of the entrepreneurs.
(4) Determine
whether there is gender difference in the successful management of small and
medium scale enterprises due to educational qualifications.
1.4 Research
Questions
The following research questions
were raised in this study:
(1) Will the
educational qualifications of the entrepreneurs affect the performance of small
and medium scale enterprises in Lagos State?
(2) How can the
managerial skills of entrepreneurs affect the success/performance of small and
medium scale enterprises in Lagos State?
(3) Does the
effective management of small and medium scale enterprises depend on the
educational qualifications of the entrepreneurs?
(4) Will there be
gender difference in the management of small and medium scale enterprises due
to educational qualifications?
1.5 Research
Hypotheses
The following research hypotheses
were formulated and tested in this study:
(1). There
will be no significant effect of educational qualifications and performance of
entrepreneurs in small and medium enterprises in Lagos State.
(2) There
will be no gender difference in the management of small and medium scale
enterprises due to educational qualifications of the entrepreneurs.
(3) The
effective management of small and medium scale enterprises will not
significantly depend on the educational qualifications of the entrepreneurs.
(4) There
will be no significant gender difference in the successful management of small
and medium scale enterprises in Lagos State.
1.6 Scope and
Delimitation of the Study
This study covered the examination
of the educational qualifications and performance of the small and medium scale
enterprises in Lagos State, Nigeria. The small and medium enterprises involved
in this study included the following:
Stonik Enterprises Ltd.
Ejike –Eme Auto Parts.
Emako Auto Enterprises.
Lordswill Nigeria Enterprises.
All the above small and medium
scale enterprises are located in the Mainland Local Government Area of Lagos
State, Nigeria.
1.7 Significance
of the Study
The study may be beneficial in the
following dimensions:
Adult education facilitators
may benefit from the findings and recommendations of this study, because, it
may afford them the opportunity to learn deeply, the effect of education on
successful management of small and medium scale enterprises in Nigeria in
general and Lagos State in particular.
The adult education students
may be able to learn more on what connotes small and medium scale enterprises
and how the level of education of an individual affects his handling or
management of the enterprises.
The school authorities may be
in-the-know concerning the kind of education they would give to an individual
in order to equip him/her to be able to manage effectively the small and medium
enterprises he/she owns.
With the findings and
recommendations of the study, governments of the Federal, States and Local
Governments may be able to know that establishment of small and medium scale
enterprises is important to curb the issue of unemployment and over-dependence
on government for employment.
The members of the society may
be able to understand the importance of effective management of small and
medium scale enterprises in Nigeria as an engine for effective development in
the country, especially in the aspect of the economy.
1.8 Definition of Terms
Small - Scale Industry: An
industry with a labour size of 11-100 workers or a total cost of not more than
N50 million, including working capital but, excluding cost of land.
Medium Scale Industry: An
industry with a labour size of between 101-300 worker’s or a total cost of over
N50million, but not more than N200million, including working capital, but,
excluding cost of land.
Educational Qualification: This
means the academic qualification of an individual, especially the entrepreneurs
of the small and medium scale enterprises.
Performance: This
refers to the level of activity put in by an individual either in his/her work
or any other activities be it in education, organization etc.
TOPIC: EDUCATIONAL QUALIFICATIONS OF ENTREPRENEURS AND PERFORMANCE IN SMALL AND MEDIUM SCALE ENTERPRISES
Format: MS Word
Chapters: 1 - 5
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Delivery: Email
Number of Pages: 65
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