Description
Turnaround Strategies of Entrepreneurs With Succession Problems
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Turnaround Strategies of Entrepreneurs With
Succession Problems
1
Akande, Olusola. O,
2
Yinus Oluwaseun
1
Dept. of Management and Accounting, Faculty of Management Sciences
2
Ladoke Akintola University of Technology, Ogbomoso, Oyo State, Nigeria
Abstract
This paper assessed whether participation Of Entrepreneur in
turnaround strategies will serve as Sustainable Business Strategies
to Entrepreneurs businesses with succession problems and also
determine whether there is relationship between Turnaround
strategies and Business Failure. The study was carried out
in Ogun state, Multi-stage sampling techniques were used in
which Ogun state was stratifed into Three (3) Geo-Political
Zone(Ogun-West, Ogun-Central and Ogun-East) from which
the sample of (150) Entrepreneur were selected from a list of
registered SMEs-Owners randomly. One hundred and Fifty
(150) Questionnaires were administered and distributed to the
identifed Entrepreneurs in Ogun State. This was done in such a
way that all the three (3) identifed geo political were represented
with each zone having Fifty (50) Entrepreneurs. One hundred
and Twenty fve (125) questionnaires were found useful. Data
collected was analyzed using frequency table, percentage and
mean score while non-parametric statistical test (Chi- square)
was used to test the formulated hypothesis. Finding reveal that
Turnaround Strategies serve as Sustainable Business Strategies
to Entrepreneurs and the result of the tested hypothesis show that
there is signifcant relationship between Turnaround strategies
and Business Failure. It is recommended that an entrepreneur
must acquire more knowledge and skill that serve as a backbone
for any business venture and focus more on leading their teams
rather than micro-managing their enterprises.
Keywords
SMEs; Turnaround Strategies; Ogun-Nigeria; Business Failure;
Entrepreneur
I. Introduction
There is no uniform defnition of business failure Evidence
from literature described business failure as a situation when
an organization goes bankrupt or out of business. From the
various defnitions, it is obvious that lack of proftability alone
is not a necessary and suffcient basis to declare a business as
failed. Furthermore, it must be borne in mind that any business,
regardless of size can fail. The question then arise as to why the
strong emphasis on, or interest in entrepreneur business failure
The answer probably lies in the relative ease of entry and exit as
well as the strong potentials of entrepreneur to simultaneously
and signifcantly contribute to economic growth, employment
generation, and poverty alleviation. The fact is that entrepreneurs
contribute up to 95% of total employment in middle income
country like Nigeria as observed by Blunden, (1987). In this
wise, close attention must be given to the causes of entrepreneur
failure in business.
Turnaround Strategies (TAS) is a sustainable process that help
entrepreneur in business crisis situation to establish a solid
operational and fnancial basis that ensure business survival and
proftable growth. Turnaround Strategies has been described as
“entrepreneur relief under business attack.” For instance when
entrepreneurs and business leaders face signifcant challenges,
turnaround strategies bring interdisciplinary planning and expert
implementation skill that can actualize progress in business.
Turnaround Strategies has also been seen as a possible option
to redress the incidence of entrepreneur business failures in a
developing country such as Nigeria. The extent to which turnaround
strategy best solves the problems of business succession has great
impact on the entrepreneurship development.
A. Statement of the Problem
Entrepreneurs in Nigeria lag behind their counterparts in other
countries in terms of productivity and contributions to aggregate
economic growth. The absence of a well thought-out programme of
converting necessity to opportunity entrepreneurship is one of the
factors militating against the survival of entrepreneurial businesses
in Nigeria. A corrupt value system, coupled with weak operating
capacity in terms of skills, knowledge and right attitude, constitute
major killers of entrepreneurial businesses in Nigeria. The issue of
multiple-taxation is also problem to entrepreneur business growth.
The paper aim to examine the turnaround strategies best suited
for entrepreneur businesses succession problem. Specifcally, the
study will answer the following research questions:
What is the extent of business failure and discontinuance •
in Nigeria?
Which turnaround strategy best solves the problems of •
business succession?
What are the problems of succession in Entrepreneur •
businesses?
B. Research Hypothesis
The hypotheses for this study are stated in the null form as •
follows:
Ho •
1
: There is no signifcant relationship between entrepreneur
business failure and turnaround strategies.
II. Literature Review
A. Concept of Entrepreneurship
The concept of Entrepreneurship has been viewed from different
conceptual perspectives. However, in spite of the differences,
there are some common aspects such as risk taking, creativity,
new business formation and rewards. These commonalities have
continued to be the driving force behind the concept and the
permeating features of all the defnitions about entrepreneur. For
instance, Janis (2004) defned entrepreneurs as the process of
creating something new and assuming the risks or rewards. Akpor-
Robaro (2004) defned entrepreneur as the capacity or ability to
identify opportunities and from there originate a new business idea
and organize resources to implement it; or to organize resources
in a new way to implement an existing business idea. Stokes
(2005) linked entrepreneurs with small business organizations
and defned it as the process of creating new organizations and
more specifcally, small Business organizations.
The pivotal and critical element in entrepreneurship is creativity.
Hence to many, an entrepreneur is about creativity towards positive
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change. More recent views on entrepreneurs point out that it is the
ability to cause change on a continuous basis through innovative
creation. In this perspective, an entrepreneur is concerned with
commitment of resources to business venture. Simply, it is the
process of business ownership and operation.
B. Reason Behind Business Failure in Developing
Country
There is a huge and continuously growing literature on this
subject. Michael Gerber (Mar.2007) listed ten reasons why most
businesses fail. These are lack of management systems; lack of
vision, purpose, or principles; lack of fnancial planning and
review; over-dependence on specifc individuals in the business
and poor market segmentation and/or strategy. Others are failure
to establish and communicate company goals; competition or
lack of market knowledge; inadequate capitalization; absence of
a standard-quality programme and owners concentrating on the
technical, rather than the strategic, work at hand.
Edrich (2003) came up with twenty fve basic reasons why small
businesses fail. Some of these, which had not gotten any mention
in this presentation include fear, procrastination, choosing quantity
over quality (or cutting corners), poor follow-ups, wrong spending
pattern (too little or too much), cockiness (pride and arrogance)
and blame shifting/incessant excuses. Also, retardation occurs to
business growth which may eventually cause its failure due to
very many reasons which include:
1. Poor Management
This is a major problem as most entrepreneurs lack technical
competences in chosen ventures and because of the size of the
enterprise; they cannot afford to out-source for competent hands
to manage the enterprise. They would rather depend on trial by
error method of doing things. In order words, not all entrepreneurs
are all round managers
2. Inadequate Capital
Many Entrepreneurs suffer inadequate capital and thus making it
diffcult to fund their business operation especially in the area of
acquisition of raw material, expansion or growth of the business
etc.
3. Poor Record Keeping
Many entrepreneurs do not keep proper records of accounts such
as purchase and sales on daily basis. This has made it diffcult to
determine the performance of the enterprise in terms of proft or
loss and consequently growth.
4. Managerial Indiscipline
Some entrepreneurs are not fnancially disciplined when it comes
to fund management. There are instances where funds are diverted
for other purposes rather than being used for the purpose of
borrowing. This makes such loans or money borrowed diffcult
to be paid back as the business cannot generate enough revenue
to pay the loan and interest thereon. This often results into the
enterprise being starved of funds and consequently falling.
5. Restrictions To Lending By Financial Institutions
Many small and medium scale enterprises fnd it diffcult to access
loan or credit from some commercial and specialised fnancial
institutions as strict requirements such as fnancial report for a
period of fve years, collateral, and other specifed requirements.
This would be a diffcult task for an entrepreneur who has not
been keeping records and does not have landed property or assets
that can be used as collateral.
6. Frequent Change In Government Policies
For the small and medium scale enterprise to survive there is
need for stability in the policies that affect entrepreneurship
development. For instance government policies implementation
should accommodate the period where their entrepreneurs can
afford to plan in line with the policies instead of frequent change
in policy. This would help the entrepreneur to consolidate on his
plans bearing in mind that the policy will be stable for a while.
7. Lack of Information
Most entrepreneurs do not have enough data or information on the
venture intended and where such are available: it is either scanty
or non-adaptable to local environment. Information is powerful
in business as this can be turned into fortune or misfortune as the
case may b. Generally, one major constraint that also affects the
small and medium scale enterprises is the issue of succession. This
is because most enterprises are either family or small partnership
with the aim of becoming a limited liability company. It is therefore
necessary to consider the issue of succession and the crisis in small
and medium scale enterprises.
C. Turnaround Strategies for Entrepreneur Business
Failures in Nigeria
Evidence from the literature suggests that the solution to arresting
the failure of entrepreneur businesses in Nigeria is by dealing
with all the causative factors focusing on both the internal and the
external operating environment of the Nigerian business. On the
internal side, the frst priority is for the entrepreneur to acquire
the right skills and knowledge needed to start, operate and expand
the business or adapt it to changing environmental dictates. He
needs to advance beyond what can be described as a mere practice
of technical skills towards a true running of business. To do this,
a strong awareness creation is the number one step to let the
entrepreneur know what he needs to know but which he does
not know or is not aware of. Until he is convinced about this, a
knowledge/skills impartation programme will not fully achieve the
intended effects. This is major gap in the current entrepreneurship
promotion programme in Nigeria. Qimiao Fan,(2003) stress that
experience of Lagos Entrepreneurship Development Centre (EDC)
so far has helped to confrm this. It is the responsibility of the
Entrepreneur to respond positively to the awareness campaign by
taking steps to learn about Free Enterprises. It is in this process
that he will get to appreciate the fact that there is great danger in
underestimating the diffculty of starting a business. More than a
decade ago, Qimiao Fan, (2003) came up with an often quoted
research report that 88.7% of businesses fail due to management
mistakes. Therefore, an enhancement of entrepreneurship training
and the Business Development Service (BDS) market in Nigeria
is a major step to arresting business failures.
The matter of capital inadequacy has gotten repeated mention in this
paper and should therefore be tackled to reduce the likelihood of
failure. There should be effcient access (in terms of size, time and
cost/price) to fnance Entrepreneur. The microfnance banks, in their
present forms, have not met the needs of Entrepreneur. Therefore,
the ongoing review by the Central Bank should emphasis the
issue of effciency in credit delivery to small businesses. Instead
of doing direct disbursements, the existing Development Finance
Institutions (e.g. Bank of Industry, National Agricultural and
Cooperative Development Bank and NERFUND) should be made
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to do wholesale funding to reformed MFBs, which will in turn
retail to Entrepreneur businesses.
D. Succession Problems and Sustainability of
Entrepreneur Business
Succession in legal parlance is the passing of “property to persons
upon the death of the owner of the property” Patricial (2006). By
the simple law of nature, everyone must eventually die. However,
human beings acquire properties during their lifetime and many
successful entrepreneurs have the business or enterprise as one
of such assets. After the demise of the entrepreneur, the assets
will have to be distributed to their living relations. The law of
succession regulates the transmission of the rights and obligations
of the deceased individual with respect to his estate to his successors
and heirs. In organizational theory, succession is the process of
transferring management control from one generation of leader
to the next generation including the dynamics before, during and
after the actual transition according to Toyo (1991).
However, in the business world, it is not compulsory that the owner
must die before the issue of succession arises in the management
of an enterprise. The owner-manager may choose to retire and
enjoy the rest of his life after a hectic working life or he may be
compelled to retire for health reasons. It is necessary to note that
Nigerian businessmen and entrepreneurs hardly voluntarily retire.
This characteristic of Nigerian entrepreneurs further complicates
succession issues which Okafor (2008) described as ‘the thorniest
issues within family-owned businesses’. Generally, succession
problems may arise from internal or external sources. At the center
of both sources of the problems is the culture of the people and this,
when considered against the backdrop of the over 250 different
ethnic groups in Nigeria, constitutes a great cause for concern.
E. Internal Source of Succession Problems
This set of problems arises as a result of the internal dynamics
within the enterprise. These include as evidenced from the
literature inter alia:
1. Lack of Succession Planning
Most Entrepreneurs never give a thought to the need to prepare
an acceptable successor in the event of their exit. The cultural
values and beliefs of the society do not help matters as planning for
death is not positively viewed. They always bask in the euphoria
that they still have many years of healthy life ahead. Still on
cultural infuence, the frst male child in many African cultures is
automatically assumed to be the ‘heir apparent’ giving no reason
for deliberate well-thought out succession plan.
2. Succession Crisis
This is a situation whereby fear and resistance is generated within
the workforce as a result of the uncertainty about what the new
leadership will portend for their future. Usually it constitutes
a temporary problem if quickly and properly addressed. For
example, a teenage-successor daughter of the proprietress of a
fourishing Secondary School in Lagos, Nigeria, took a few clumsy
decisions during her frst month in offce which generated so
much anxiety within the workforce that some of her best teachers
resigned immediately. This was followed by large withdrawals of
pupils by many parents resulting in serious fall in the income of
the School. The faithful foundation managers who had worked on
a frst-name-basis with the founder may fnd it diffcult working
with the successor.
3. Intestate Succession
The Law of nature dictates that everyone must, of necessity, die.
When the deceased entrepreneur made a Will, he is said to have
died testate otherwise, he is said to have died intestate. The family
members who may be entitled to his property [the family business
inclusive] under the appropriate laws of succession are referred
to in legal parlance as ‘Benefciaries’ or ‘successors. Audretisch
(2008) have highlighted three ways by which the Estate of a
deceased person can be shared in Nigeria. This could be by using:
The customary laws of the deceased’s society which includes
Islamic laws, the intestacy rules or the statutory law governing the
administration of the estate and The Will made by the deceased.
4. Management Misfit Succeeding the Entrepreneur
Following from the above an incompetent person may fnally
inherit a blooming unit of the family business, which he may
be unable to run effectively. In this case, the heir has not been
adequately trained or prepared to effectively run the business.
This could lead to the management and fnancial ill-health and
fnal collapse of the business.
5. The Extended Family System
This creates severe pressures for the successors and the family
business as cultural values and customary laws operational in
Nigeria give them a claim to the properties of the entrepreneur. The
extended family which includes uncles, aunts, nephews, nieces
and cousins could also be deemed survivors to the estate of the
enterprise founder. In fact the founder’s choice of a successor
may be reversed or the enterprise fragmented upon the death of
the founder as a result of ferce posthumous antagonism within
the family members. This is a great threat to the sustainability of
the family-owned business.
6. Founder’s Children
Induced Problems. Sometimes the founder’s children may not
be interested in the family business. Again they may disagree
with the founder’s choice of sibling heir and may decide to leave
the business for such a reason (Mar, 2007). Hence they invest
little time into the family business. This tends to atrophy the
Entrepreneur business over time.
F. External Sources of Succession Problems
These are succession problems which arise from the external
environment within which the organization operates. This
Include
1. Government Policy on Recapitalization
In managing the Nigerian economy, successive governments
have attempted a re-engineering of key sectors of the economy
– particularly the banking, insurance and oil sectors. A change in
the capitalization requirements could result in mergers [a forced
succession] which jeopardize the sustainability of the enterprise.
This was experienced in 2006 when the minimum capital base of
banks was increased from N5 billion to N25 billion. Many banks
were forced to merge. Change management also becomes a key
issue in such cases.
2. Legal Requirements
The Legal requirements stipulated by government regulatory
bodies may create sustainability problems for family businesses
like for any other. For example, the Nigerian Deposit Insurance
Corporation [NDIC] stipulates only a N50,000.00 (approx. US
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$333) insurance cover for depositors in the case of the liquidation
of any bank. This policy has created succession problems and
threat to the sustainability of many entrepreneur businesses. The
closure of Society General Bank of Nigeria is an example.
3. The Political Coloration of Government Policies
In Nigeria, experience abound where different governments use
state power to foreclose renowned entrepreneur’s businesses or
craft policies targeted at ruining his business. It can, therefore,
be said that the founder’s political expedition can be a source of
threat to the sustainability of an Entrepreneur business.
III. Methodology
The study made use of cross-sectional survey design. The study
area was Ogun State, Southwestern Nigeria; a choice based on its
strategic location as a Gate-way to commercial Centre Conurbation
in Nigeria. Multi-stage sampling techniques were used in which
Ogun state was stratifed into Three (3) Geo-Political Zone(Ogun-
West, Ogun-Central and Ogun-East) from which the sample of
various SMEs Owner(Entrepreneurs) was drawn through the
simple random sampling, a sample of (150) Entrepreneur were
selected from a list of registered SMEs-Owner (Entrepreneur).
One hundred and Fifty (150) Questionnaires were administered
and distributed to the Entrepreneurs across all the Three (3)
identifed geo political zone in Ogun State. This was done in such
a way that all the three (3) identifed geo political were represented
with each zone having Fifty (50) Entrepreneurs. One hundred and
Twenty fve (125) were found useful for the purpose of the study
representing 83.3% of the total questionnaire distributed. The
questionnaire consists of questions that are related to Sustainable
turnaround strategies of Entrepreneur business and Entrepreneur
succession problem as identifed in the literature. Likert fve point
scales ranging from 1-5(1=strongly agree &5=strongly disagree)
were used as a basis of the questions. Data collected was analyzed
using frequency table, percentage and mean score analysis while
the non-parametric statistical test (Chi- square) was used to test
the formulated hypothesis using STATA 10 data analysis package/
software.
IV. Results and Discussions
The study examined the turnaround strategies of Entrepreneur
businesses with succession problems. This study, having examined
thoroughly the turnaround strategies of businesses, Analysis show
that Entrepreneur in recent years have tried to respond to some
degree of unprecedented failure arising from many factors and
notable ways by which they are truly responding to these challenges
are in the turnaround strategies with succession planning. The data
were analysed using descriptive statistics such as frequency count,
percentage and Mean Score. The statistical tool that was used to
test the hypothesis was chi-square at 0.5 level of signifcant. The
results, analysis and discussions are presented as follows.
A. Respondent Demographic Profile
The Table1 shows indicate that 29.60% of the respondents were
male while the remaining 70.40% were female. The table1 above
reveal that a total of 29 respondents representing 23.20% are
Single, 80 respondents representing 64% are Married while 16
respondents representing 12.80% are divorcees. Furthermore the
table signifes that total of 84 respondents represent 67.20% which
are between the ages of 25-35 years. 27 respondents representing
21.60% are between the ages of 36-45 years, while 14 respondents
representing 11.20% are between 46-55 years. In addition The table
above shows that the total of 20 respondents representing 16% were
WASCE/GCE holders, 57 respondents were representing 45.60%
of OND/NCE holders and 40 respondents were representing
32% who are HND and degree holders, while 8 respondents are
representing 6.40% of others. Finally, the table support that most
of entrepreneur has experience of 6-10 of business representing
36%. Hence this shows that majority of the Entrepreneur have
been into businesses for a long time.
Table 1: Frequency and Mean Score Distribution of Respondent
Demographic Profle
Variables Number Percentage
Sex:
Male
Female
Mean- 1.704
37
88
29.60
70.40
Age:
25-35
36-45
46-55
56 & Above
Mean- 1.44
84
27
14
0
67.20
21.60
11.20
00.00
Education Background:
Wasce/Gce
Ond/Nce
Hnd/Degree
Other
Mean- 2.642
20
57
40
8
16.00
45.60%
32.00
6.40
M-status:
Single
Married
Divorced
Widow
Mean-2.992
29
80
16
-
23.20
64.00
12.80
16.00
Year in Service:
1-5
6-10
11-14
15 & Above
Mean- 2.192
40
45
16
24
32.00
36.00
12.80
19.20
Source: Data Analysis, (2014).
B. Perception of Turnaround Strategies Influence on
Business Succession Problem
Table 2 below displayed the entrepreneur perception of Turnaround
Strategies Infuence on business succession problem. For instance
entrepreneurs perceived that good succession planning will make
a Entrepreneur business to continue even to the next generation
(74 %).Also(76%) of entrepreneur believed that Innovation of
pricing as a turnaround strategy can help a declining business.
Furthermore (68%) of respondent support the notion Good
communication process will sustain the growth of any Entrepreneur
business. In addition (95%) of the respondent Disagree with the
idea that there is no relationship between business failure and
Turnaround strategies. Finally (64%) of entrepreneur support the
notion that turnaround strategies serve as Sustainable Business
Strategies to Entrepreneurs. In variable the analysis reveal that
turnaround strategies serve as a sustainable business strategy and
buttress signifcant relationship between turnaround strategy and
Entrepreneur business succession problem.
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Table 2: Entrepreneur perception of Turnaround Strategies Infuence on Business Succession Problem.
QUESTIONS SA A D SD U TOTAL
Good succession planning will make a
Entrepreneur business to continue even to the
next generation.
40
(32.00)
55
(44.00)
0
(0)
0
(0)
30
(24.00)
125
(100)
Government’s lending also has effect on the level
of capital growth of an Entrepreneur business.
88
(70.40)
24
(19.20)
12
(9.60)
0
(0)
1
(0.80)
125
(100)
Innovation of pricing as a turnaround strategy
can help a declining business.
70
(56.00)
25
(20.00)
0
(0)
30
(24.00)
0
(0)
125
(100)
Good location can help a small or medium scale
business to survival.
70
(56.00)
40
(32.00)
0
(0)
0
(0)
15
(12.00)
125
(100)
Innovation can also be of help in advancing the
growth of the business.
70
(56.00)
25
(20.00)
10
(8.00)
15
(12.00)
5
(4.00)
125
(100)
Good communication process will sustain the
growth of any Entrepreneur business.
50
(40.00)
30
(24.00)
0
(0)
25
(20.00)
20
(16.00)
125
(100)
Maintenance of a specifc quality of performance
enhances the level of productivity of a business.
55
(44.00)
26
(20.80)
0
(0)
14
(11.20)
30
(24.00)
125
(100)
Turnaround strategies serve as Sustainable
Business Strategies to Entrepreneurs
53
(42.40)
27
(21.60)
12
(9.60)
20
(16.00)
13
(10.40)
125
(100)
There is no Relationship between Business
failure and Turnaround strategies
10
(8.00)
20
(16.00)
55
(44.00)
40
(32.00)
0
(0)
125
(100)
Note: the bracket Figures indicate the percentage& fgure not bracket indicate the frequency
Source: Computations and Output of STATA10 based on Authors’ Field Survey (2014).
C. Test of Hypothesis
H
0
: There is no Signifcant Relationship between Entrepreneur
Business failure and Turnaround strategies.
This is analysed in table 3 below, where the chi-squares calculated
(X2-cal) are greater than chi-square tabulated (X2-tab) these
makes all the fgures to be highly statistically signifcant with the
probability of F = 0.000. Collectively; we reject null hypothesis
stated earlier: There is no Signifcant Relationship between
Entrepreneur Business failure and Turnaround strategies in Nigeria
due to the result. Thus, we accept alternative hypothesis that: There
is Signifcant Relationship between Entrepreneur Business failure
and Turnaround strategies of sampled SMEs Owner (Entrepreneur)
in Nigeria.
Table 3: Chi-square Analysis Table of Relationship Between
Business Failure and Turnaround Strategies
S/N Relationship
Pearson Chi-
Square (Value
Pr
(Value)
Remark
1 Q1 VS Q2 100.3027 0.000 Signifcant
2 Q1 VS Q3 157.4675 0.000 Signifcant
3 Q1 VS Q4 97.0982 0.000 Signifcant
4 Q1 VS Q6 168.1818 0.000 Signifcant
5 Q1 VS Q7 191.1157 0.000 Signifcant
6 Q1 VS Q8 116.0760 0.000 Signifcant
7 Q1 VS Q9 180.6207 0.000 Signifcant
8 Q2 VS Q3 107.3895 0.000 Signifcant
9 Q2 VS Q4 158.6806 0.000 Signifcant
10 Q2 VS Q5 174.9242 0.000 Signifcant
11 Q2 VS Q6 146.4915 0.000 Signifcant
12 Q2 VS Q7 117.5979 0.000 Signifcant
13 Q2 VS Q8 93.4343 0.000 Signifcant
14 Q2 VS Q9 232.3232 0.000 Signifcant
16 Q5 VS Q8 122.7891 0.000 Signifcant
17 Q4 VS Q8 109.6939 0.000 Signifcant
18 Q8 VS Q9 212.3352 0.000 Signifcant
19 Q4 VS Q5 211.8056 0.000 Signifcant
20 Q7 VS Q8 216.1198 0.000 Signifcant
21 Q8 VS Q9 156.9562 0.000 Signifcant
Source: Computations and Out-Put of STATA 10 based on Author’s
Field Survey ` (2014).
V. Conclusion
From the fndings of this research work, it is the conclude that
turnaround strategies will help to restore a declining business and
also that a good succession planning will aid Business continuous
existence. It can be put better that the more the turnaround strategies
are employed, the more Entrepreneur will experience growth and
the more it has chances of Business continuous existence. Business
growth and succession has become imperative due to the cut-throat
competition and it is only those entrepreneurs that are prepared
to work hard effciently that can survive. Finding reveal that TAS
serve as Sustainable Business Strategies to Entrepreneurs and the
result of the tested hypothesis showed that there is relationship
between Turnaround Strategies (TAS) and Business Failure
(BF).
VI. Recommendations
In view of the above fnding the following recommendation were
made:
An entrepreneur must acquire more knowledge and skill that 1.
serve as a backbone for any business venture.
Entrepreneurs must always realize that an entrepreneurial 2.
venture is an organisation, not a single person. They need to
focus more on leading their teams rather than micro-managing
their enterprises.
Entrepreneurs must be fnancially disciplined when it comes 3.
to fund management. There are instances where funds are
diverted for other purposes rather than being used for the
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INTERNATIONAL JOURNAL OF MANAGEMENT & BUSINESS STUDIES
purpose of borrowing. This makes such loans or money
borrowed diffcult to be paid back
Entrepreneurs should keep proper records of accounts such as 4.
purchase and sales on daily basis so as not to make it diffcult
to determine the performance of the enterprise in terms of
proft or loss and consequently growth.
References
[1] Audretisch, B.O,"Innovation in Large and Small Firms",
London Cossel and Co., 2008.
[2] Aldrich, H.E.,"The Pervasive Effects Of Family On
Entrepreneurship", Journal of Business Venturing, Vol. 18.
25-46, 2003.
[3] Akpor, R.M,"Entrepreneurship and Regional Growth",
Journal of evolutionary Economics, Vol.14, 2004.
[4] Bluden,"Entrepreneurship Process and Small Business
Management", Macmillan Press, London, 1987.
[5] Meredith et al,"Basic Marketing and Managerial Approach",
Irwin Publisher, 1991.
[6] Mar M. G,"Why Most Small Businesses Fail and What
You Can Do About It"? Published Booklet, available on the
Internet, 2007.
[7] Okafor E.E.,"Development Crisis of Power Supply and
Implications for the Industrial Sector. Dept of Sociology,
University of Ibadan, 2008.
[8] Patricia S. H.,"Why Small Businesses Fail", Attard
Communications, Inc., 2006.
[9] Stoke,“Why Small Businesses Fail”, Attard Communications,
Inc., 2005.
[10] Qimiao Fan,“Importance of SMEs and the Role of Public
Support in Promoting SME Development", McGraw-Hill
International Book Company, 6th Edition, 2003.
[11] Toyo E.K,"The impact of SMEs on the economic development
of the population in town and country", Published Booklet,
available on the Internet, 1999.
[12] Janis P. H,"Why Some Small Businesses Fail", Internet
business, 2004.
[13] World Bank Group,"Doing Business in Nigeria, 2010.
DR. MRS AKANDE OLUSOLA
OYINLADE is currently a lecturer
in the Department of Management
and Accounting of Ladoke
Akintola University of Technology
(LAUTECH), Ogbomoso, Oyo state
Nigeria. She has B.B-ED in Business
Education, from Ahmadu Bello
University, Zaria. M.Tech and Ph.D
in management science, from Ladoke
Akintola University of Technology (LAUTECH), Ogbomoso,
Oyo state Nigeria. Her research interest includes Small business
management, Finance and Entrepreneurship.
MR YINUSA OLUWASEUN is
currently a E-tutor in LAUTECH Open
Distance (ODL) Learning and master
student (M-tech) in the Department of
Management and Accounting of Ladoke
Akintola University of Technology
(LAUTECH), Ogbomoso, Oyo state
Nigeria. He has BSc in Accounting
from Olabisi Onbanjo University, Ago
Iwoye, Ogun state Nigeria. He is an
associate member of Institute of Corporate Managers and Public
Administrators of Nigeria (ACMPAN), and student member of
Institute of Chartered Accountants of Nigeria (ICAN. His master
thesis is on mobile banking impact on bank performance. His
research interest includes Accounting, Finance, Entrepreneurship
and E-commerce.
doc_423256285.pdf
Turnaround Strategies of Entrepreneurs With Succession Problems
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Turnaround Strategies of Entrepreneurs With
Succession Problems
1
Akande, Olusola. O,
2
Yinus Oluwaseun
1
Dept. of Management and Accounting, Faculty of Management Sciences
2
Ladoke Akintola University of Technology, Ogbomoso, Oyo State, Nigeria
Abstract
This paper assessed whether participation Of Entrepreneur in
turnaround strategies will serve as Sustainable Business Strategies
to Entrepreneurs businesses with succession problems and also
determine whether there is relationship between Turnaround
strategies and Business Failure. The study was carried out
in Ogun state, Multi-stage sampling techniques were used in
which Ogun state was stratifed into Three (3) Geo-Political
Zone(Ogun-West, Ogun-Central and Ogun-East) from which
the sample of (150) Entrepreneur were selected from a list of
registered SMEs-Owners randomly. One hundred and Fifty
(150) Questionnaires were administered and distributed to the
identifed Entrepreneurs in Ogun State. This was done in such a
way that all the three (3) identifed geo political were represented
with each zone having Fifty (50) Entrepreneurs. One hundred
and Twenty fve (125) questionnaires were found useful. Data
collected was analyzed using frequency table, percentage and
mean score while non-parametric statistical test (Chi- square)
was used to test the formulated hypothesis. Finding reveal that
Turnaround Strategies serve as Sustainable Business Strategies
to Entrepreneurs and the result of the tested hypothesis show that
there is signifcant relationship between Turnaround strategies
and Business Failure. It is recommended that an entrepreneur
must acquire more knowledge and skill that serve as a backbone
for any business venture and focus more on leading their teams
rather than micro-managing their enterprises.
Keywords
SMEs; Turnaround Strategies; Ogun-Nigeria; Business Failure;
Entrepreneur
I. Introduction
There is no uniform defnition of business failure Evidence
from literature described business failure as a situation when
an organization goes bankrupt or out of business. From the
various defnitions, it is obvious that lack of proftability alone
is not a necessary and suffcient basis to declare a business as
failed. Furthermore, it must be borne in mind that any business,
regardless of size can fail. The question then arise as to why the
strong emphasis on, or interest in entrepreneur business failure
The answer probably lies in the relative ease of entry and exit as
well as the strong potentials of entrepreneur to simultaneously
and signifcantly contribute to economic growth, employment
generation, and poverty alleviation. The fact is that entrepreneurs
contribute up to 95% of total employment in middle income
country like Nigeria as observed by Blunden, (1987). In this
wise, close attention must be given to the causes of entrepreneur
failure in business.
Turnaround Strategies (TAS) is a sustainable process that help
entrepreneur in business crisis situation to establish a solid
operational and fnancial basis that ensure business survival and
proftable growth. Turnaround Strategies has been described as
“entrepreneur relief under business attack.” For instance when
entrepreneurs and business leaders face signifcant challenges,
turnaround strategies bring interdisciplinary planning and expert
implementation skill that can actualize progress in business.
Turnaround Strategies has also been seen as a possible option
to redress the incidence of entrepreneur business failures in a
developing country such as Nigeria. The extent to which turnaround
strategy best solves the problems of business succession has great
impact on the entrepreneurship development.
A. Statement of the Problem
Entrepreneurs in Nigeria lag behind their counterparts in other
countries in terms of productivity and contributions to aggregate
economic growth. The absence of a well thought-out programme of
converting necessity to opportunity entrepreneurship is one of the
factors militating against the survival of entrepreneurial businesses
in Nigeria. A corrupt value system, coupled with weak operating
capacity in terms of skills, knowledge and right attitude, constitute
major killers of entrepreneurial businesses in Nigeria. The issue of
multiple-taxation is also problem to entrepreneur business growth.
The paper aim to examine the turnaround strategies best suited
for entrepreneur businesses succession problem. Specifcally, the
study will answer the following research questions:
What is the extent of business failure and discontinuance •
in Nigeria?
Which turnaround strategy best solves the problems of •
business succession?
What are the problems of succession in Entrepreneur •
businesses?
B. Research Hypothesis
The hypotheses for this study are stated in the null form as •
follows:
Ho •
1
: There is no signifcant relationship between entrepreneur
business failure and turnaround strategies.
II. Literature Review
A. Concept of Entrepreneurship
The concept of Entrepreneurship has been viewed from different
conceptual perspectives. However, in spite of the differences,
there are some common aspects such as risk taking, creativity,
new business formation and rewards. These commonalities have
continued to be the driving force behind the concept and the
permeating features of all the defnitions about entrepreneur. For
instance, Janis (2004) defned entrepreneurs as the process of
creating something new and assuming the risks or rewards. Akpor-
Robaro (2004) defned entrepreneur as the capacity or ability to
identify opportunities and from there originate a new business idea
and organize resources to implement it; or to organize resources
in a new way to implement an existing business idea. Stokes
(2005) linked entrepreneurs with small business organizations
and defned it as the process of creating new organizations and
more specifcally, small Business organizations.
The pivotal and critical element in entrepreneurship is creativity.
Hence to many, an entrepreneur is about creativity towards positive
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INTERNATIONAL JOURNAL OF MANAGEMENT & BUSINESS STUDIES
change. More recent views on entrepreneurs point out that it is the
ability to cause change on a continuous basis through innovative
creation. In this perspective, an entrepreneur is concerned with
commitment of resources to business venture. Simply, it is the
process of business ownership and operation.
B. Reason Behind Business Failure in Developing
Country
There is a huge and continuously growing literature on this
subject. Michael Gerber (Mar.2007) listed ten reasons why most
businesses fail. These are lack of management systems; lack of
vision, purpose, or principles; lack of fnancial planning and
review; over-dependence on specifc individuals in the business
and poor market segmentation and/or strategy. Others are failure
to establish and communicate company goals; competition or
lack of market knowledge; inadequate capitalization; absence of
a standard-quality programme and owners concentrating on the
technical, rather than the strategic, work at hand.
Edrich (2003) came up with twenty fve basic reasons why small
businesses fail. Some of these, which had not gotten any mention
in this presentation include fear, procrastination, choosing quantity
over quality (or cutting corners), poor follow-ups, wrong spending
pattern (too little or too much), cockiness (pride and arrogance)
and blame shifting/incessant excuses. Also, retardation occurs to
business growth which may eventually cause its failure due to
very many reasons which include:
1. Poor Management
This is a major problem as most entrepreneurs lack technical
competences in chosen ventures and because of the size of the
enterprise; they cannot afford to out-source for competent hands
to manage the enterprise. They would rather depend on trial by
error method of doing things. In order words, not all entrepreneurs
are all round managers
2. Inadequate Capital
Many Entrepreneurs suffer inadequate capital and thus making it
diffcult to fund their business operation especially in the area of
acquisition of raw material, expansion or growth of the business
etc.
3. Poor Record Keeping
Many entrepreneurs do not keep proper records of accounts such
as purchase and sales on daily basis. This has made it diffcult to
determine the performance of the enterprise in terms of proft or
loss and consequently growth.
4. Managerial Indiscipline
Some entrepreneurs are not fnancially disciplined when it comes
to fund management. There are instances where funds are diverted
for other purposes rather than being used for the purpose of
borrowing. This makes such loans or money borrowed diffcult
to be paid back as the business cannot generate enough revenue
to pay the loan and interest thereon. This often results into the
enterprise being starved of funds and consequently falling.
5. Restrictions To Lending By Financial Institutions
Many small and medium scale enterprises fnd it diffcult to access
loan or credit from some commercial and specialised fnancial
institutions as strict requirements such as fnancial report for a
period of fve years, collateral, and other specifed requirements.
This would be a diffcult task for an entrepreneur who has not
been keeping records and does not have landed property or assets
that can be used as collateral.
6. Frequent Change In Government Policies
For the small and medium scale enterprise to survive there is
need for stability in the policies that affect entrepreneurship
development. For instance government policies implementation
should accommodate the period where their entrepreneurs can
afford to plan in line with the policies instead of frequent change
in policy. This would help the entrepreneur to consolidate on his
plans bearing in mind that the policy will be stable for a while.
7. Lack of Information
Most entrepreneurs do not have enough data or information on the
venture intended and where such are available: it is either scanty
or non-adaptable to local environment. Information is powerful
in business as this can be turned into fortune or misfortune as the
case may b. Generally, one major constraint that also affects the
small and medium scale enterprises is the issue of succession. This
is because most enterprises are either family or small partnership
with the aim of becoming a limited liability company. It is therefore
necessary to consider the issue of succession and the crisis in small
and medium scale enterprises.
C. Turnaround Strategies for Entrepreneur Business
Failures in Nigeria
Evidence from the literature suggests that the solution to arresting
the failure of entrepreneur businesses in Nigeria is by dealing
with all the causative factors focusing on both the internal and the
external operating environment of the Nigerian business. On the
internal side, the frst priority is for the entrepreneur to acquire
the right skills and knowledge needed to start, operate and expand
the business or adapt it to changing environmental dictates. He
needs to advance beyond what can be described as a mere practice
of technical skills towards a true running of business. To do this,
a strong awareness creation is the number one step to let the
entrepreneur know what he needs to know but which he does
not know or is not aware of. Until he is convinced about this, a
knowledge/skills impartation programme will not fully achieve the
intended effects. This is major gap in the current entrepreneurship
promotion programme in Nigeria. Qimiao Fan,(2003) stress that
experience of Lagos Entrepreneurship Development Centre (EDC)
so far has helped to confrm this. It is the responsibility of the
Entrepreneur to respond positively to the awareness campaign by
taking steps to learn about Free Enterprises. It is in this process
that he will get to appreciate the fact that there is great danger in
underestimating the diffculty of starting a business. More than a
decade ago, Qimiao Fan, (2003) came up with an often quoted
research report that 88.7% of businesses fail due to management
mistakes. Therefore, an enhancement of entrepreneurship training
and the Business Development Service (BDS) market in Nigeria
is a major step to arresting business failures.
The matter of capital inadequacy has gotten repeated mention in this
paper and should therefore be tackled to reduce the likelihood of
failure. There should be effcient access (in terms of size, time and
cost/price) to fnance Entrepreneur. The microfnance banks, in their
present forms, have not met the needs of Entrepreneur. Therefore,
the ongoing review by the Central Bank should emphasis the
issue of effciency in credit delivery to small businesses. Instead
of doing direct disbursements, the existing Development Finance
Institutions (e.g. Bank of Industry, National Agricultural and
Cooperative Development Bank and NERFUND) should be made
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to do wholesale funding to reformed MFBs, which will in turn
retail to Entrepreneur businesses.
D. Succession Problems and Sustainability of
Entrepreneur Business
Succession in legal parlance is the passing of “property to persons
upon the death of the owner of the property” Patricial (2006). By
the simple law of nature, everyone must eventually die. However,
human beings acquire properties during their lifetime and many
successful entrepreneurs have the business or enterprise as one
of such assets. After the demise of the entrepreneur, the assets
will have to be distributed to their living relations. The law of
succession regulates the transmission of the rights and obligations
of the deceased individual with respect to his estate to his successors
and heirs. In organizational theory, succession is the process of
transferring management control from one generation of leader
to the next generation including the dynamics before, during and
after the actual transition according to Toyo (1991).
However, in the business world, it is not compulsory that the owner
must die before the issue of succession arises in the management
of an enterprise. The owner-manager may choose to retire and
enjoy the rest of his life after a hectic working life or he may be
compelled to retire for health reasons. It is necessary to note that
Nigerian businessmen and entrepreneurs hardly voluntarily retire.
This characteristic of Nigerian entrepreneurs further complicates
succession issues which Okafor (2008) described as ‘the thorniest
issues within family-owned businesses’. Generally, succession
problems may arise from internal or external sources. At the center
of both sources of the problems is the culture of the people and this,
when considered against the backdrop of the over 250 different
ethnic groups in Nigeria, constitutes a great cause for concern.
E. Internal Source of Succession Problems
This set of problems arises as a result of the internal dynamics
within the enterprise. These include as evidenced from the
literature inter alia:
1. Lack of Succession Planning
Most Entrepreneurs never give a thought to the need to prepare
an acceptable successor in the event of their exit. The cultural
values and beliefs of the society do not help matters as planning for
death is not positively viewed. They always bask in the euphoria
that they still have many years of healthy life ahead. Still on
cultural infuence, the frst male child in many African cultures is
automatically assumed to be the ‘heir apparent’ giving no reason
for deliberate well-thought out succession plan.
2. Succession Crisis
This is a situation whereby fear and resistance is generated within
the workforce as a result of the uncertainty about what the new
leadership will portend for their future. Usually it constitutes
a temporary problem if quickly and properly addressed. For
example, a teenage-successor daughter of the proprietress of a
fourishing Secondary School in Lagos, Nigeria, took a few clumsy
decisions during her frst month in offce which generated so
much anxiety within the workforce that some of her best teachers
resigned immediately. This was followed by large withdrawals of
pupils by many parents resulting in serious fall in the income of
the School. The faithful foundation managers who had worked on
a frst-name-basis with the founder may fnd it diffcult working
with the successor.
3. Intestate Succession
The Law of nature dictates that everyone must, of necessity, die.
When the deceased entrepreneur made a Will, he is said to have
died testate otherwise, he is said to have died intestate. The family
members who may be entitled to his property [the family business
inclusive] under the appropriate laws of succession are referred
to in legal parlance as ‘Benefciaries’ or ‘successors. Audretisch
(2008) have highlighted three ways by which the Estate of a
deceased person can be shared in Nigeria. This could be by using:
The customary laws of the deceased’s society which includes
Islamic laws, the intestacy rules or the statutory law governing the
administration of the estate and The Will made by the deceased.
4. Management Misfit Succeeding the Entrepreneur
Following from the above an incompetent person may fnally
inherit a blooming unit of the family business, which he may
be unable to run effectively. In this case, the heir has not been
adequately trained or prepared to effectively run the business.
This could lead to the management and fnancial ill-health and
fnal collapse of the business.
5. The Extended Family System
This creates severe pressures for the successors and the family
business as cultural values and customary laws operational in
Nigeria give them a claim to the properties of the entrepreneur. The
extended family which includes uncles, aunts, nephews, nieces
and cousins could also be deemed survivors to the estate of the
enterprise founder. In fact the founder’s choice of a successor
may be reversed or the enterprise fragmented upon the death of
the founder as a result of ferce posthumous antagonism within
the family members. This is a great threat to the sustainability of
the family-owned business.
6. Founder’s Children
Induced Problems. Sometimes the founder’s children may not
be interested in the family business. Again they may disagree
with the founder’s choice of sibling heir and may decide to leave
the business for such a reason (Mar, 2007). Hence they invest
little time into the family business. This tends to atrophy the
Entrepreneur business over time.
F. External Sources of Succession Problems
These are succession problems which arise from the external
environment within which the organization operates. This
Include
1. Government Policy on Recapitalization
In managing the Nigerian economy, successive governments
have attempted a re-engineering of key sectors of the economy
– particularly the banking, insurance and oil sectors. A change in
the capitalization requirements could result in mergers [a forced
succession] which jeopardize the sustainability of the enterprise.
This was experienced in 2006 when the minimum capital base of
banks was increased from N5 billion to N25 billion. Many banks
were forced to merge. Change management also becomes a key
issue in such cases.
2. Legal Requirements
The Legal requirements stipulated by government regulatory
bodies may create sustainability problems for family businesses
like for any other. For example, the Nigerian Deposit Insurance
Corporation [NDIC] stipulates only a N50,000.00 (approx. US
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$333) insurance cover for depositors in the case of the liquidation
of any bank. This policy has created succession problems and
threat to the sustainability of many entrepreneur businesses. The
closure of Society General Bank of Nigeria is an example.
3. The Political Coloration of Government Policies
In Nigeria, experience abound where different governments use
state power to foreclose renowned entrepreneur’s businesses or
craft policies targeted at ruining his business. It can, therefore,
be said that the founder’s political expedition can be a source of
threat to the sustainability of an Entrepreneur business.
III. Methodology
The study made use of cross-sectional survey design. The study
area was Ogun State, Southwestern Nigeria; a choice based on its
strategic location as a Gate-way to commercial Centre Conurbation
in Nigeria. Multi-stage sampling techniques were used in which
Ogun state was stratifed into Three (3) Geo-Political Zone(Ogun-
West, Ogun-Central and Ogun-East) from which the sample of
various SMEs Owner(Entrepreneurs) was drawn through the
simple random sampling, a sample of (150) Entrepreneur were
selected from a list of registered SMEs-Owner (Entrepreneur).
One hundred and Fifty (150) Questionnaires were administered
and distributed to the Entrepreneurs across all the Three (3)
identifed geo political zone in Ogun State. This was done in such
a way that all the three (3) identifed geo political were represented
with each zone having Fifty (50) Entrepreneurs. One hundred and
Twenty fve (125) were found useful for the purpose of the study
representing 83.3% of the total questionnaire distributed. The
questionnaire consists of questions that are related to Sustainable
turnaround strategies of Entrepreneur business and Entrepreneur
succession problem as identifed in the literature. Likert fve point
scales ranging from 1-5(1=strongly agree &5=strongly disagree)
were used as a basis of the questions. Data collected was analyzed
using frequency table, percentage and mean score analysis while
the non-parametric statistical test (Chi- square) was used to test
the formulated hypothesis using STATA 10 data analysis package/
software.
IV. Results and Discussions
The study examined the turnaround strategies of Entrepreneur
businesses with succession problems. This study, having examined
thoroughly the turnaround strategies of businesses, Analysis show
that Entrepreneur in recent years have tried to respond to some
degree of unprecedented failure arising from many factors and
notable ways by which they are truly responding to these challenges
are in the turnaround strategies with succession planning. The data
were analysed using descriptive statistics such as frequency count,
percentage and Mean Score. The statistical tool that was used to
test the hypothesis was chi-square at 0.5 level of signifcant. The
results, analysis and discussions are presented as follows.
A. Respondent Demographic Profile
The Table1 shows indicate that 29.60% of the respondents were
male while the remaining 70.40% were female. The table1 above
reveal that a total of 29 respondents representing 23.20% are
Single, 80 respondents representing 64% are Married while 16
respondents representing 12.80% are divorcees. Furthermore the
table signifes that total of 84 respondents represent 67.20% which
are between the ages of 25-35 years. 27 respondents representing
21.60% are between the ages of 36-45 years, while 14 respondents
representing 11.20% are between 46-55 years. In addition The table
above shows that the total of 20 respondents representing 16% were
WASCE/GCE holders, 57 respondents were representing 45.60%
of OND/NCE holders and 40 respondents were representing
32% who are HND and degree holders, while 8 respondents are
representing 6.40% of others. Finally, the table support that most
of entrepreneur has experience of 6-10 of business representing
36%. Hence this shows that majority of the Entrepreneur have
been into businesses for a long time.
Table 1: Frequency and Mean Score Distribution of Respondent
Demographic Profle
Variables Number Percentage
Sex:
Male
Female
Mean- 1.704
37
88
29.60
70.40
Age:
25-35
36-45
46-55
56 & Above
Mean- 1.44
84
27
14
0
67.20
21.60
11.20
00.00
Education Background:
Wasce/Gce
Ond/Nce
Hnd/Degree
Other
Mean- 2.642
20
57
40
8
16.00
45.60%
32.00
6.40
M-status:
Single
Married
Divorced
Widow
Mean-2.992
29
80
16
-
23.20
64.00
12.80
16.00
Year in Service:
1-5
6-10
11-14
15 & Above
Mean- 2.192
40
45
16
24
32.00
36.00
12.80
19.20
Source: Data Analysis, (2014).
B. Perception of Turnaround Strategies Influence on
Business Succession Problem
Table 2 below displayed the entrepreneur perception of Turnaround
Strategies Infuence on business succession problem. For instance
entrepreneurs perceived that good succession planning will make
a Entrepreneur business to continue even to the next generation
(74 %).Also(76%) of entrepreneur believed that Innovation of
pricing as a turnaround strategy can help a declining business.
Furthermore (68%) of respondent support the notion Good
communication process will sustain the growth of any Entrepreneur
business. In addition (95%) of the respondent Disagree with the
idea that there is no relationship between business failure and
Turnaround strategies. Finally (64%) of entrepreneur support the
notion that turnaround strategies serve as Sustainable Business
Strategies to Entrepreneurs. In variable the analysis reveal that
turnaround strategies serve as a sustainable business strategy and
buttress signifcant relationship between turnaround strategy and
Entrepreneur business succession problem.
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Table 2: Entrepreneur perception of Turnaround Strategies Infuence on Business Succession Problem.
QUESTIONS SA A D SD U TOTAL
Good succession planning will make a
Entrepreneur business to continue even to the
next generation.
40
(32.00)
55
(44.00)
0
(0)
0
(0)
30
(24.00)
125
(100)
Government’s lending also has effect on the level
of capital growth of an Entrepreneur business.
88
(70.40)
24
(19.20)
12
(9.60)
0
(0)
1
(0.80)
125
(100)
Innovation of pricing as a turnaround strategy
can help a declining business.
70
(56.00)
25
(20.00)
0
(0)
30
(24.00)
0
(0)
125
(100)
Good location can help a small or medium scale
business to survival.
70
(56.00)
40
(32.00)
0
(0)
0
(0)
15
(12.00)
125
(100)
Innovation can also be of help in advancing the
growth of the business.
70
(56.00)
25
(20.00)
10
(8.00)
15
(12.00)
5
(4.00)
125
(100)
Good communication process will sustain the
growth of any Entrepreneur business.
50
(40.00)
30
(24.00)
0
(0)
25
(20.00)
20
(16.00)
125
(100)
Maintenance of a specifc quality of performance
enhances the level of productivity of a business.
55
(44.00)
26
(20.80)
0
(0)
14
(11.20)
30
(24.00)
125
(100)
Turnaround strategies serve as Sustainable
Business Strategies to Entrepreneurs
53
(42.40)
27
(21.60)
12
(9.60)
20
(16.00)
13
(10.40)
125
(100)
There is no Relationship between Business
failure and Turnaround strategies
10
(8.00)
20
(16.00)
55
(44.00)
40
(32.00)
0
(0)
125
(100)
Note: the bracket Figures indicate the percentage& fgure not bracket indicate the frequency
Source: Computations and Output of STATA10 based on Authors’ Field Survey (2014).
C. Test of Hypothesis
H
0
: There is no Signifcant Relationship between Entrepreneur
Business failure and Turnaround strategies.
This is analysed in table 3 below, where the chi-squares calculated
(X2-cal) are greater than chi-square tabulated (X2-tab) these
makes all the fgures to be highly statistically signifcant with the
probability of F = 0.000. Collectively; we reject null hypothesis
stated earlier: There is no Signifcant Relationship between
Entrepreneur Business failure and Turnaround strategies in Nigeria
due to the result. Thus, we accept alternative hypothesis that: There
is Signifcant Relationship between Entrepreneur Business failure
and Turnaround strategies of sampled SMEs Owner (Entrepreneur)
in Nigeria.
Table 3: Chi-square Analysis Table of Relationship Between
Business Failure and Turnaround Strategies
S/N Relationship
Pearson Chi-
Square (Value
Pr
(Value)
Remark
1 Q1 VS Q2 100.3027 0.000 Signifcant
2 Q1 VS Q3 157.4675 0.000 Signifcant
3 Q1 VS Q4 97.0982 0.000 Signifcant
4 Q1 VS Q6 168.1818 0.000 Signifcant
5 Q1 VS Q7 191.1157 0.000 Signifcant
6 Q1 VS Q8 116.0760 0.000 Signifcant
7 Q1 VS Q9 180.6207 0.000 Signifcant
8 Q2 VS Q3 107.3895 0.000 Signifcant
9 Q2 VS Q4 158.6806 0.000 Signifcant
10 Q2 VS Q5 174.9242 0.000 Signifcant
11 Q2 VS Q6 146.4915 0.000 Signifcant
12 Q2 VS Q7 117.5979 0.000 Signifcant
13 Q2 VS Q8 93.4343 0.000 Signifcant
14 Q2 VS Q9 232.3232 0.000 Signifcant
16 Q5 VS Q8 122.7891 0.000 Signifcant
17 Q4 VS Q8 109.6939 0.000 Signifcant
18 Q8 VS Q9 212.3352 0.000 Signifcant
19 Q4 VS Q5 211.8056 0.000 Signifcant
20 Q7 VS Q8 216.1198 0.000 Signifcant
21 Q8 VS Q9 156.9562 0.000 Signifcant
Source: Computations and Out-Put of STATA 10 based on Author’s
Field Survey ` (2014).
V. Conclusion
From the fndings of this research work, it is the conclude that
turnaround strategies will help to restore a declining business and
also that a good succession planning will aid Business continuous
existence. It can be put better that the more the turnaround strategies
are employed, the more Entrepreneur will experience growth and
the more it has chances of Business continuous existence. Business
growth and succession has become imperative due to the cut-throat
competition and it is only those entrepreneurs that are prepared
to work hard effciently that can survive. Finding reveal that TAS
serve as Sustainable Business Strategies to Entrepreneurs and the
result of the tested hypothesis showed that there is relationship
between Turnaround Strategies (TAS) and Business Failure
(BF).
VI. Recommendations
In view of the above fnding the following recommendation were
made:
An entrepreneur must acquire more knowledge and skill that 1.
serve as a backbone for any business venture.
Entrepreneurs must always realize that an entrepreneurial 2.
venture is an organisation, not a single person. They need to
focus more on leading their teams rather than micro-managing
their enterprises.
Entrepreneurs must be fnancially disciplined when it comes 3.
to fund management. There are instances where funds are
diverted for other purposes rather than being used for the
IJMBS VOL. 4, ISSUE 2, APRIL - JUNE 2014 ISSN : 2230-9519 (Online) | ISSN : 2231-2463 (Print)
www. i j mb s . c o m
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INTERNATIONAL JOURNAL OF MANAGEMENT & BUSINESS STUDIES
purpose of borrowing. This makes such loans or money
borrowed diffcult to be paid back
Entrepreneurs should keep proper records of accounts such as 4.
purchase and sales on daily basis so as not to make it diffcult
to determine the performance of the enterprise in terms of
proft or loss and consequently growth.
References
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Management", Macmillan Press, London, 1987.
[5] Meredith et al,"Basic Marketing and Managerial Approach",
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[6] Mar M. G,"Why Most Small Businesses Fail and What
You Can Do About It"? Published Booklet, available on the
Internet, 2007.
[7] Okafor E.E.,"Development Crisis of Power Supply and
Implications for the Industrial Sector. Dept of Sociology,
University of Ibadan, 2008.
[8] Patricia S. H.,"Why Small Businesses Fail", Attard
Communications, Inc., 2006.
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Inc., 2005.
[10] Qimiao Fan,“Importance of SMEs and the Role of Public
Support in Promoting SME Development", McGraw-Hill
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[11] Toyo E.K,"The impact of SMEs on the economic development
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DR. MRS AKANDE OLUSOLA
OYINLADE is currently a lecturer
in the Department of Management
and Accounting of Ladoke
Akintola University of Technology
(LAUTECH), Ogbomoso, Oyo state
Nigeria. She has B.B-ED in Business
Education, from Ahmadu Bello
University, Zaria. M.Tech and Ph.D
in management science, from Ladoke
Akintola University of Technology (LAUTECH), Ogbomoso,
Oyo state Nigeria. Her research interest includes Small business
management, Finance and Entrepreneurship.
MR YINUSA OLUWASEUN is
currently a E-tutor in LAUTECH Open
Distance (ODL) Learning and master
student (M-tech) in the Department of
Management and Accounting of Ladoke
Akintola University of Technology
(LAUTECH), Ogbomoso, Oyo state
Nigeria. He has BSc in Accounting
from Olabisi Onbanjo University, Ago
Iwoye, Ogun state Nigeria. He is an
associate member of Institute of Corporate Managers and Public
Administrators of Nigeria (ACMPAN), and student member of
Institute of Chartered Accountants of Nigeria (ICAN. His master
thesis is on mobile banking impact on bank performance. His
research interest includes Accounting, Finance, Entrepreneurship
and E-commerce.
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