FIRM CAPABILITIES, ENTREPRENEURIAL COMPETENCY AND PERFORMANCE OF UGANDAN SMES

Abstract

This paper is based on a study that examined the relationship between the firms’ capabilities, entrepreneurial competency and performance of Small and Medium Enterprises (SMEs) in Uganda. The study used stratified random sampling to derive a sample of 314 SMEs and a cross-sectional research design. Data was collected using self-administered questionnaires that were filled out by firm owners and managers as units of enquiry whereas a firm was the unit of analysis. The study findings indicate that an increase in the level of a firm’s capabilities through competent management, market linkages and marketing capabilities leads to enhanced SME performance. As entrepreneurial competences and firm capabilities predict 30.4 percent of the variance in SME performance, SME owners and managers, through their entrepreneurial competences, can use firm capabilities as tools to influence their firms’ operations to enhance their performance. Future research can be carried out in other geographical places to verify whether what was observed in Uganda specifically in Jinja district is applicable to the rest of the world. Similarly, future research can explore other predictors of SME performance.