Knowledge of the Business Environment and its Impact on the Performance of Small and Medium Scale Enterprises

Abstract

This research work examined the level of awareness of SME operators of business environment and its influence on their performance. The researcher intended to find out how the lack of knowledge of laws governing business operations and other external factors can hinder the successful operation of Small and Medium Scale Enterprises in Nigeria. The study was limited to primary data obtained from some selected SMEs in Abuja. Secondary sources of data were utilized for the study from relevant literatures. The introduction in the study looked at the definition of the keywords, explained the nature of the business environment and its component parts, also discussed the importance of the business environment to an small and medium business operator. Conceptual issues relating to this paper was deliberated upon. The study depended on resources from academic publications, reports and publications of government agencies and other stakeholders in the field of entrepreneurship in Nigeria and outside the country. This research study also x-rayed the impact or especially the influence of the Nigerian business environment as it affected the productivity of businesses operating in the country, taking Abuja as a case study.  The findings from reviewed literature showed that the external business environment (political, economic, legal, socio-cultural, technological, environmental and financial environment) have influence on entrepreneurial operators in Nigeria. The researcher also identified that lack of the knowledge of the influence of environmental factors have made businesses not to prepare for environmental changes. It was also discovered that there exists relationship between SMEs and the environment in which it occurs. The study also found out that external environmental force such as exchange rate, inflation rate, interest rate and government tax revenue have negative relationship with SMEs performance. The implication of this negative relationship is that consistent increase in government tax revenue, exchange rate, inflation rate and interest rate have propulsive effect on performance of SMEs in Nigeria, vice versa and recommended that the federal government should come up with economic policy and regulatory framework that will maintain fixed exchange rate, interest rate and low inflation because stabilizing these economic variables would drive the operations of small and medium enterprises, as they will innovate, create and invent new things, products and services to stimulate productivity, which in turn, create resource-based economy. The study further recommended that SME operators should understand all these types of external business environment and their implications on organizational performance of their business activities in order to identify opportunities and threats to their businesses and update their knowledge, understanding and skills to meet the predicted changes in realm of their enterprises.

                                                

 

TABLE OF CONTENT

Title Page

Declaration

Certification

Approval Page

Dedication

Acknowledgement

Abstract

Table of Contents

 

TABLE OF CONTENT

CHAPTER ONE

1.1       Introduction  -           -           -           -           -           -           -           -           1

1.2       Background of the Study    -           -           -           -           -           -           3         

1.3       Statement of the problem    -           -           -           -           -           -           4

1.4       Objective of the study         -           -           -           -           -           -           5

1.5       Research Questions -           -           -           -           -           -           -           5

1.6       Research Hypothesis           -           -           -           -           -           -           5

1.7       Significance of the Study    -           -           -           -           -           -           6

1.8       Scope of the study   -           -           -           -           -           -           -           6

1.9       Definition of terms -            -           -           -           -           -           -           -           7

1.10    Organization of the Study   -           -           -           -           -           -           8

 

CHAPTER TWO

LITERATURE REVIEW

 

2.1       Conceptual Framework of the Study        -           -           -           -           9

2.1.1   Concept of the Business Environment     -           -           -           -           9

2.1.2   The Business Environment: PESTLE Analysis   -           -           -           10

Figure 2.1 PESTLE Model  -           -           -           -           -           -           -           13

2.1.3   Features of Business Environment            -           -           -           -           -           13

2.1.4   Importance of Business Environment to Entrepreneurs            -           -           14

2.1.5   Concept of Small and Medium-scale Business   -           -           -           15

2.1.6   Types and Classification of Micro and Small Scale Enterprises          16

Table 2.1:   Classification Adopted by SMEDAN           -           -           -           17

Table 2.2: European Union Definition of SMEs -           -           -           -           17

2.1.7   A Critical Look at the Nigerian Business Environment -           -           17

2.1.8   Some Legal Requirements of the Nigerian Business Environment      19

2.2       Empirical Review of Previous Studies     -           -           -           -           24

2.3       Theoretical Framework of the Study        -           -           -           -           25

 

CHAPTER THREE

RESEARCH METHODOLOGY

3.1       Area of Study            -           -           -           -           -           -           -           27

3.2       Research Design and Source of Data        -           -           -           -           27

3.3       Study Population and Determination of Sample Size    -           -           27

3.4       Research Instrument and Technique         -           -           -           -           27

3.5       Procedures for Data Collection and Analysis     -           -           -           28

3.6       Justification for the Study  -           -           -           -           -           -           29

 

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1       Data Presentation and Analysis

4.1.1 Questionnaire Response Rate          -           -           -           -           -           30

4.1.2   Data Presentation and Analysis     -           -           -           -           -           30

4.1.3   Ranking of Knowledge        -           -           -           -           -           -           41

4.2       Test of Hypothesis   -           -           -           -           -           -           -           42

4.3       Discussion of Findings        -           -           -           -           -           -           43

 

CHAPTER FIVE

Summary, Conclusion and Recommendation

5.1       Summary                   -           -           -           -           -           -           -           45

5.2       Conclusions  -           -           -           -           -           -           -           -           45

5.3       Recommendations   -           -           -           -           -           -           -           46

5.4       Proposal for Further Studies          -           -           -           -           -           47

Bibliography -           -           -           -           -           -           -           -           -     48-51

Appendix 1     -           -           -           -           -           -           -           -           -           52

Appendix 2     -           -           -           -           -           -           -           -           -      53-55