Entrepreneurial Orientation (EO) and Performance of Small and Medium Enterprises (SMEs) in Nigeria: A Literature Overview

Abstract

Entrepreneurial orientation is critical for small and medium enterprises performance because all SMEs are striving to survive due to fierce competition from bigger players. SMEs are catalysts for reducing poverty and serve as engine for economic growth and development in Nigeria, yet the poor entrepreneurial orientation of proactiveness, competitive aggressiveness, innovativeness, risk taking initiative and autonomy has made it pretty difficult for small and medium scale enterprises to thrive and perform their roles as economic change agents and engine for industrial development. This study adopts a narrative literature review approach to synthesize existing literature on entrepreneurial orientation and its impact on the performance of SMEs. A narrative literature review provides a synthesis of existing literature by considering issues and the development of the research over time. The study concludes that the 5 EO dimensions significantly contribute to the performance of SMEs, improve customer retention, and achieve operational efficiency, ultimately driving profitability and long-term sustainability. The study recommends that business organizations, particularly small businesses must develop capability that will foster entrepreneurial orientation. This can be through formation of professional associations and participation in entrepreneurship training and development programmes. Policymakers can also create an enabling environment, such as access to funding and organizing business development programs to sensitize entrepreneurs on the significance of the 5 EO dimensions on the performance of SMEs.