“Assessment of the moderating effects of Nigerian market environment on the relationship between management success determinants and SMEs' performance”

Abstract

A reported eighty-five percentage failure rate of SMEs in Nigeria before five years of operation was ascribed to a lack of knowledge of the market environment. Hence, this study investigated the moderating effects of the Nigerian market environment on the relationship between management success determinants and SMEs' performance to see how the environment has affected SMEs' performance. The study employed a survey research design, the population of the study comprised chief executive officers (CEOs) of registered SMEs, and a sample size of 1,102 was used. Probability sampling methods of stratified, proportionate, and random sampling were adopted. Responses were collected through a predetermined set of questions and a self-administered questionnaire. Data were analyzed using descriptive and inferential statistics. The study found that the Nigerian market environment had moderating effects on the relationship between management success determinants and SMEs' performance (R = 0.817, R2 adjusted = 0.664, R2 change = 0.041, and Fchange = 19.694 at ρ = 0.000), most of the Nigerian market environment's components have significant moderating effects on all the management success determinants relationship with SMEs' performance; management skills (β = 0.220, 0.182; ρ < 0.05), innovation (β = 0.147, 0.135; ρ < 0.05), operating system (β = 0.083, 0.061; ρ < 0.05), organizational structure (β = 0.290, 0.303; ρ < 0.05), business reporting system (β = 0.142, 0.137; ρ < 0.05), system flexibility (β = 0.110, 0.107; ρ < 0.05), environmental scanning (β = 0.091, 0.062; ρ < 0.05). Only decision-making is not statistically significant (β = 0.037, 0.004; ρ > 0.05). These imply that Nigerian SMEs' decisions under intense environmental turbulence are mostly ineffective, and the effects of management success determinants in facilitating performance were also drastically reduced as well as firms' system flexibility. The study has a practical value of identifying the effect of the Nigerian market environment on the relationship between management success determinants and SMEs' performance, thus revealing the gaps in the Nigerian SMEs' management factors.