Moderating effect of social networking on the relationship between entrepreneurial orientation and performance of small and medium enterprise in Nakuru county, Kenya

Abstract

An emerging stream of research indicates that entrepreneurial orientation is a critical factor in enhancing entrepreneurial outcomes such as firm performance. However, few studies have examined how a firm’s embedded in inter-firm networks influences enterprise performance. The study aimed at evaluating the moderating effect of social networking on the relationship between entrepreneurial orientation and Small and Medium Enterprises performance in Nakuru town Kenya. The specific objectives were; to determine the effect of risk-taking and pro- activeness on performance of small and medium enterprises and finally to determine the moderating effect of social networking on relationship between entrepreneurial orientation and performance of small and medium enterprises. The study utilized the resource based view theory (Barney 1991). Explanatory research design guided the study. A questionnaire was used to collect data from a sample of 214 SMEs in Nakuru town. Collected data was analyzed using descriptive and inferential statistics. Correlation and multiple regression analysis were employed to test the hypotheses. The results indicated that Risk-taking, Pro-activeness and Innovativeness were significant in affecting performance of SMEs. Also the results revealed that social networking positively moderates the relationship between risk-taking Proactiveness and performance of SMEs. It is recommended that SMEs need to endeavor and embrace social networking since it offers a cost effective way in expanding contact bases and enhancing the profitability of firm. Finally the study contributes to knowledge and theory by establishing the moderating effect of social networking on the relationship between entrepreneurial orientation and performance of SMEs in Kenya