Analysis of the Relationship between Entrepreneurial Orientation, Incubation Practices, and Performance of Small and Medium Enterprise in Kenya

Abstract

The ever-changing business environment has prompted countries worldwide to strategically position themselves for emerging market dynamics. To spur this economic growth, entrepreneurial orientation (EO) has been proposed as the top strategy to inform business decisions. Previously, it has been anticipated that these firms would perform better with appropriate use of Entrepreneurial Orientation (EO), such as innovativeness. However, the failure rate of these enterprises continues to affect the SMEs. The study analyzed the relationship between entrepreneurial orientations, incubation practices, and performance of small and medium enterprises in Kiambu County. The study used a quantitative, causal-comparative research design with mixed approaches. A total of 701 registered SMEs in Kiambu County were involved in the study, of which 255 owners/managers were interviewed. At the same time, 15 participants were randomly selected to pre-test the validity and reliability of the instruments. A questionnaire was used in data collection, and descriptive and inferential statistics were employed to analyze the data. The study noted that most business owners had not received any form of business incubation support services. According to the findings' executive summary, EO factors were found to be favorably connected with company performance but with little effect on the expansion of SMEs in Kiambu County. Therefore, the study recommends that all SMEs receive business incubation support services to overcome challenges to growth during the start-up phase.