Entrepreneurial Networks And Performance Of Small And Medium Enterprises In Tanzania: The Role Of Entrepreneur’s Social Competence

ABSTRACT

The purpose of the study was to examine the influence of Small and Medium Enterprise (SME) owner-manager‘s social competence on networks formation. Similarly, the study examined the interrelationship of three constructs namely: entrepreneurial networks, social competence, and business performance. Specifically, it investigated how entrepreneur‘s social competence made up of social perception, social adaptability, social expressiveness, impression management, and persuasiveness influences the types of networks formed by owner-managers and how in turn the relationship between these networks and SME performance is influenced by social competence. The study was undertaken in the two cities of Dar es Salaam and Mwanza. This research adopted a cross-sectional study design where by data were collected from manufacturing SMEs in Tanzania in four types of sub-sectors viz food processing, woodwork, ironwork, and textile. 250 owner-managers were selected through stratified random sampling procedure and interviewed. The collected data were analysed using Statistical Package for Social Sciences (SPSS) version 21. Three major statistical analyses were performed viz factor analysis, multiple linear regression model, and Poisson regression model. Factor analysis was adopted in order to reduce social competence items into factors that are easily manageable in subsequent analyses. Poisson regression model was used to test the influence of social competence on networks formation. Regression analysis was done to test the direct relationship between social competence and SME performance as well as the interrelationship between networks, social competence and SME performance