SMEs management success determinants and its implications on their performance in South West, Nigeria

Abstract

Purpose: In developing nations, like Nigeria, Small and Medium scale Enterprise (SME) is supposed to be a catalyst for socio-economic development and employment generation. Eighty-five percent of the SMEs failed before their fifth anniversary. The study undertook to identify influential management success determinants and the concomitant effects on SMEs’ performance in Nigerian unstable business environment. Approach/Methodology/Design: The study used a cross sectional survey research design and probability sampling methods of stratified, random and proportional samplingto select 1102 CEOs. There were 988 completed questionnairesreceived back from respondents, giving and excellent response rate of 89.66%. Findings: The result of the study revealed significant difference in the evaluations of management success determinants to performance and management skills of the SMEs operators, organizational structure and innovation as being the most critical success factors for the SMEs in the Nigerian business environment. The most significant individual effects on SMEs performance are traceable to organizational structure, management skills and environmental scanning. There is a combined strong effect of the management success determinants on SMEs performance. Practical Implications: Apart from contributing to the existing literature on SMEs performance, the study also noted that new entrants into Nigerian market environment will succeed if the right organizational structure is put in place and innovation as well as management skills are taken seriously. Originality/Value: This study contributes by discovering that management skills of the SMEs operators, organizational structure and innovation are the most critical success factors for the SMEs in the Nigerian business environment.