Influence of entrepreneural networking on small enterprise success in the service industry in Eldoret Town, Uasin Gishu County, Kenya

Abstract

The increasing use of networks in Micro and Small Enterprises (MSEs) has been reported as an influential factor in the development process of entrepreneurial activity. In Kenya Micro and Small enterprises are a source of livelihood of low income earners and also a major source of innovation in creating new products technologies and services. Despite availability of other resources, research indicates that MSEs die before maturity. While network relationships have been recognized as indispensable for MSEs to the achievement of growth, a particular focus on entrepreneurial networks in the service industry has been limited. The main objective of the study was to examine the influence of firm‘s entrepreneurial networking on the success of MSEs in Eldoret Town, Uasin Gishu County. Specific objectives were: to examine the relationship between entrepreneurial networks and enterprise success, to determine the relationship between entrepreneurial ties and enterprise success, to assess the relationship between trust and enterprise success and to examine the relationship between goodwill and enterprise success. The study was guided by Relational Theory of Social Networks. The study utilized exploratory survey design. Micro and Small business owners in the service industry were divided into a sample and a stratified random sampling technique was employed whereby a sample of 240 MSEs was drawn from a target population of 600 registered MSEs in the service sector, Eldoret Town, Uasin Gishu County. The study employed both qualitative and quantitative methods of data collection. Primary data was collected through the use of questionnaires and interview schedules. Secondary data was collected from municipal office, department of Small enterprise development. Data was sorted coded and analyzed using inferential statistics namely, Spearmans Rho Correlation , Analysis of variance (ANOVA) and multiple regression. The whole Cronchbach reliability was significant at 0.834. The study found out that, there was a strong positive relationship between trust [r=.907], good will [r=.833], networking [r=.683] and ties [r=.559] on entrepreneurial success. This indicated that an increase in networks, ties, trust and goodwil lead to great entrepreneurial success. The study recommended that MSEs should be encouraged to use entrepreneurial networks to gather noble business information. The study findings could contribute to the literature of entrepreneurial Networks, theory development and could also assist to sharpen entrepreneurs‘ skills, policy formulation and further research in performance of MSEs.