Description
The purpose of this paper is to examine factors influencing small- scale business performance in Lagos state, Nigeria using gendered based analysis. The study hinges on feminist theory which explains that the differences in behaviour of women and men in business could be attributed to their individuals' access to strategic resources and socialization process.
1
FACTORS AFFECTING SMALL-SCALE BUSINESS PERFORMANCE IN
INFORMAL ECONOMY IN LAGOS STATE-NIGERIA: A GENDERED BASED
ANALYSIS
By
Olabisi, Sherifat Yusuff.
Department of Sociology
Lagos State university
E-Mail address: [email protected]
Andrew Akinola Olagbemi
Department of Sociology
Lagos State University
E-mail address: Olagbemi [email protected]
Adewole Akinwole Atere(PhD)
Osun State University
E-Mail address:[email protected]
ABSTRACT
The purpose of this paper is to examine whether there is difference between factors
influencing small scale business performance among the female- owned enterprise
and male-owned enterprises in informal economy in Lagos state, Nigeria. This
paper is anchored on feminist theory to explain such differences between genders.
From review of the literature, variables on factors influencing business performance
were collated and ones that are relevant to Nigeria situation were tested empirically
in informal economy. Fifty (50) Small –scale businesses that varied in sizes and
types were purposively chosen in two-local government areas of Lagos state,
Nigeria. Structured Questionnaire was used to collect the data from the respondents.
Percentages, frequency and chi-square statistical analysis were used to analyse the
results.
The results reveal that factors that affect women-owned business are significantly
different from factors that affect men-owned business. Recommendations were
made as a result of this finding.
2
Key words: Gender, Small-Scale business, performance, informal economy,
Nigeria.
1.1 Introduction.
The purpose of this paper is to examine factors influencing small- scale business
performance in Lagos state, Nigeria using gendered based analysis. The study
hinges on feminist theory which explains that the differences in behaviour of women
and men in business could be attributed to their individuals’ access to strategic
resources and socialization process. Factors affecting business enterprises
performance have been a well research area by scholars for many years. Previous
research indicates that several factors influence business performance includes
among many others: their professional background, their entrepreneurship
capabilities and preferences, cultural and religious beliefs, as well as the technology
and micro –environment (Buttner, 2001, Makhbul, 2011).
However, despite previous research, empirical data segregation on factors
influencing gender performances is rather scare and difficult to obtain. Brush,( 2000)
succinctly stated that this is because gender differences in factors affecting small
business performance remained largely unaddressed by social scientists. And
majority of studies either disregarded gender as a variable of interest or excluded
female subjects from their design. It is also generally accepted that male and female
differences influence business performance, while these differences have been
recognized, the factors influencing the performance of gender have not been fully
explained (Brush & Hirsch 2000) despite the gender differences among small scale
business operators.
The small business sector is recognized as an integral component of economic
development and a crucial element in the effort to lift countries out of poverty
(Wolfenson, 2001). Small- Scale businesses are driving force for economic growth,
job creation, and poverty reduction in developing countries. They have been the
means through which accelerated economic growth and rapid industrialization have
been achieved (Harris et al, 2006; Sauser, 2005). Furthermore small scale business
has been recognised as a feeder service to large- scale industries (Fabayo, 2009).
3
While the contributions of small businesses to development are generally
acknowledged, entrepreneurs in this sector face many obstacles that limit their long-
term survival and development. Scholars have indicated that starting a business is a
risky venture and warn that the chances of small-business owners making it past the
five-year mark are very slim (ILO, 2005). Some researches into small-business
development have also shown that the rate of failure of small scale businesses in
developing countries is higher than in the developed world (Marlow, 2009). In
Nigeria in particular, despite the support and incentive programmes to small scale
business, Akabueze, (2002) succinctly stated that it would seem reasonable to
expect that small businesses would grow and flourish, but the rate of business failure
continues to increase because of the obstacles affecting business performance
which include: lack of financial resources, lack of management experience, poor
location, laws and regulations, general economic conditions, as well as critical
factors such as poor infrastructure, corruption, low demand for products and
services, and poverty. Others include: shortage of raw materials, handicap in
obtaining finance, inadequate competent personnel, inability to control costs and
problems of dumping of cheap foreign products and others.
Despite the Inherent problems associated with the growth of Small- scale
businesses, women entrepreneurs are increasingly venturing into ownership of small
-scale enterprises either on their own or in partnership with male entrepreneurs (ILO,
2005). This has been made possible primarily because of ease of entry, limited
access to other enterprises and lack of employment opportunities in formal sector of
the economy. Also, given the growth of entrepreneurship among women,
understanding the social and economic factors influencing their success
performance is of critical importance.
Hence the need for this study which intends to fill this gap .To fill this gap, this study
aims to provide holistic view through empirical study on the factors affecting
performance in small scale business in Lagos state, Nigeria using gendered based
analysis. The general objective of the study is to examine and explain the factors
influencing performance among small –scale enterprises in informal economy. The
specific objectives of this study are:
(1) To present a descriptive profile of small – scale enterprises operators in Lagos
state by gender.
4
(2) To determine the factors influencing the performance of female enterprises and
men owned enterprises in Lagos state.
(3) to determine greatest obstacles and challenges for the operators of small
businesses among gender in Lagos state with a view of coming up with
recommendations to improve effective small business development.
(4.) to make recommendations on intervention measures that can help in improving
the performance of small business enterprises in the informal sector.
To achieve the stated objectives, this paper is organized into five sections. The first
section was the introduction. The second part consists of literature review and
theoretical framework. The third part is the research methods; the fourth part is the
discussions and critical analysis of the data while section five is the last part which
consists of conclusion and implication of study.
2.1 Literature Review
2.1.1 Conceptualizing and understanding Gender questions, Small –scale
enterprises and Performance in Nigeria.
Gender is a socially constructed experience, not biological imperative. Sociologists
distinguish between the terms sex and gender to emphasize this point. Sex refers to
one’s biological identity as male or female, while gender refers to the social identities
attributed to women and men. Gender is rooted in social institutions and results in
patterns within society that structure relationship between women and men and that
give them differing positions of advantage and disadvantage within the institutions
(Anderson,et ,al. 2001). In Nigeria, gender roles are prescribed expectations and
obligations, responsibilities and behaviour of the masculine and feminine gender
(Ezumah, 2003 cited by Onuoha, 2009)
It is important to note that discourses on gender in Nigeria usually slide into an
analysis of the disadvantaged position of Nigerian women as they struggle to realize
their full potentials in the society. The reason for the greater focus of women rather
men are primarily because of the patriarchal nature of the Nigeria society. Oyekanmi
(2004) defined patriarchy as a set of social relations with material base that enables
men to dominate women. It should not be surprising therefore that the gender
question in this article would focus on women entrepreneurs given that they are the
marginalized gender.
5
Small-scale Business: There is no single criterion for classifying business
enterprises as small or medium scale globally. In a study carried out by International
labour Organization (2005), over 50 definitions were identified in 75 different
countries. However, evidence from literature shows that in defining small- scale
business, reference is usually made to some quantifiable measures such as:
number of people employed by the enterprises, investment outlay, the annual
turnover (sales) and the asset value of the enterprise or a combination of these
measures. At the moment in Nigeria, following the National Council for Industry (NCI,
2002) classification, small –scale business fall within the following categories of
enterprises; Small --scale business, if the enterprise has a capital outlay of between
N1.5million and N50million including working but excluding cost of land and or
workforce of between 11-100 employees.
Generally, these enterprises engage in the production of light consumer goods that
are primarily related to food and beverages, clothing, electrical parts, automotive
parts, manufacture, leather products, soap and detergents, woodworks. Small scale
business in Nigeria are divided into three sectors: 1, Production sector including
agricultural processing, manufacturing, and mining 2,Service sector and 3,Trading
sector including wholesales and retails (Fabayo,2009) small-scale enterprises
usually operate in informal and semi-formal sectors (EUROPA, 2003) . Ajiebefun et,
al, (2003) defined small scale enterprises as commercial enterprises that have ten or
fewer employees. This study will take on NCI and Ajibefun (2003) classification of
an enterprise with capital outlay of between N1.5 million and N50million including
working capital but excluding cost of land , and work force from 11employees and
above
The concept of performance
GEM, (2004) defined Performance as the act of performing; of doing something
successfully; using knowledge as distinguished from merely possessing it. However,
performance seems to be conceptualised, operationalised and measured in different
ways thus making cross-comparison difficult.
Cooper et al (1992) examined various factors which influence business performance
such as: as experience, education, occupation of parents, gender, race, age, and
entrepreneurial goals. While, Lerner and Hisrich (1997) conducted a study on Israeli
women entrepreneurs and categorised the factors that affect their performance into
6
five perspectives, that is, motivations and goals, social learning theory (entrepreneurial
socialization), network affiliation (contacts and membership in organizations); human
capital (level of education, skills) and environmental influences (location, sectoral
participation, and socio political variables).
Thibault et al. (2002) suggest that factors influencing business performance could be
attributed to personal factors such as demographic variable and business factors such
as amount of financing, use of technology, age of business, operating location,
business structure and number of full-time employees as important factors in
examining the performance as small scale business operators.
The most comprehensive summary of factors influencing performance was noted in a
literature review by Theo, et, al. (2007) to include: individual characteristics, parental
influence, business motivation and goals, business strategies, goals and motives,
networking and entrepreneurial orientation. Others include environmental factors.
2.2. Theoretical Framework of Analysis.
The argument of this paper rest on the fact that the factors that would affect
business performance of women owned enterprises would be significantly different
from male owned enterprises. This argument is anchored on liberal and social
feminist theories. Liberal feminist theory is rooted in liberal political philosophy which
encompasses basic beliefs in the equality of all beings, and in human beings as
essentially rational, self-interest-seeking agents. The liberal feminist theory attributes
gender-based differences to the variations in power and opportunity accorded men
and women in society, that is, the structural positions women and men occupy in
society (Beasley, 1999). Thus, differences in the achievements of men and women
are ascribed to the inability of women to realise their full potential because they are
denied equal access to opportunities in the labour markets and to resources. This in
turn has hindered women from acquiring the skills and capabilities necessary to
compete on equal basis with men. According to the liberal feminist theory, once
equal access to resources is ensured, gender differences in performance seemingly
disappear (Carter et al., 1997).
In contrast to the liberal feminist theory, the social feminist theory, which emanates
from the social learning theory and psychoanalysis, holds that differences between
men and women exist from their earliest moments in life and result in fundamentally
7
different ways of viewing the world. These differences are seen in the way women
and men construct and interpret reality and how these influence the formation of their
values and intentions (Carter et al., 1997). Men and women are inherently different
because of differences in their socialisation, training and experiences encountered
prior to entry into particular work positions. Differences in nurturing result in different
self-perceptions, motivations and belief structures. As a consequence women adopt
different approaches to work which may, or may not be as equally effective as those
adopted by men (Fischer et al., 1993).Drawing on these two feminist theories and
research on the factors that influence performance of small enterprises this paper
proposes a conceptual framework to guide the examination of factors affecting
gender differences in small business performance in Nigeria.
3.1. Research Method
The purpose of this study is to examine factors that influence performance of both
male and female owned small –scale business operators in Lagos state. The study
was conducted in some selected local government of Lagos state, Nigeria. This
study was limited only to cities because (1) many Small –scale non agricultural
enterprises are actively concentrated in the city. (2) It is easily accessible for the
researchers. Based on the criteria of small scale enterprises, 50 small –scale
businesses were randomly and purposively selected in the designated urban areas
of Lagos state. Based on extant literature, a carefully constructed questionnaire was
designed to elicit responses from small- scale business operators. Nineteen
variables were identified as factors affecting small scale business performance.
These Variables and others more relevant to Nigeria situation were carefully collated
Individual Characteristics
Motivation and Goals
Resources
Entrepreneurial Orientation
Environmental Factors
Performance
Male
Female
Gender
8
and tested among small-scale business operators in informal economy in Lagos
state.
Small- scale businesses were purposively selected and questionnaires were
dropped with the owners after explaining the purpose of the study and seeking their
consents. Sometimes, we had to pay return visits before collecting back the
questionnaires .At other times, research assistants had to wait and interpret the
questions to the business owners. The data was collected from August-November;
2010.During the survey it was ascertained that selected enterprises represented
diversity in an economic activities, size and type.
4.1. Data Analysis
4.1.1 Individual characteristics and performance
Table 1 shows individual characteristics of small- scale business operators. Majority
of the respondents are male (54%) while female constitute (46%).Majority of the
respondents had tertiary educational qualification (Male-24% and female 20%).
Majority of the respondents are married especially among male and female. The
majority of married women in the sample could be attributed to report by Adegbite et
al (2007) study which established that married men and women worked harder in
managing a business because of the social, financial and psychological support than
single, divorced or widowed individuals. This is important because of family
responsibilities and commitments.
Majority of the respondents are in the age group of 45yrs and above. While among
the male respondents (20%) and Female (26%) started their businesses between
4.6yrs.
4.1.2. Motivations and goals as determinants factors that influence business
performance.
An increasing number of scholars believed that motivation and goals of an
entrepreneur affect business performance. The motivation of an entrepreneur
determines success of such enterprise. In the table 2, results reveal that majority of
men are motivated to start business because they are business achievement
oriented (29.5%), and 18.5% of men respondents were motivated to start their
business because of economic status and survival. This is in contrast with women
entrepreneurs. Factors related to desire to achieve flexibility between work and
9
family are valued differently by genders (Cinnanon, 2002).The result shows that
women value this variable more than men. Women respondents started their
businesses because of their ability to combine family and work together, and for
household survival (34.8%).However, studies had shown that men who are business
achievement oriented are likely to achieve growth than others who are not.
Motivation as a factor shows a strong relation to business performance.
4.1.3. Factors affecting business performance among genders.
Chi-Square differences were computed among the respondents on factors that affect
business performance. Results in Table 3 reveal that factors that affect men-owned
businesses are significantly different from women owned businesses. Women
perceived Marital Status (64%), Age of Children (68%), Role –Model/advisors (58%),
Business Location (60%), Customers (64%) and business development services
(56%).
On men entrepreneurs factors affecting their business including Friends (70%),
Government Support (80%), Adequate training (-68%), innovativeness (72%), Risk-
Taking (84%), Re-training( 60%),Business Premises (66%).Men respondents also
considered access to information as important factor affecting business
performance. Access to loans and presence of family influence and members were
considered significant by men and women entrepreneurs.
4.1.4. Table V1 shows the detailed analysis of challenges experienced by gender in
small- scale business .women owned business considered access to financial
resources as the major challenge to business performance. This is in line with the
liberal feminist theory that women are denied access to financial resources. Other
challenges mentioned include: inability to control costs (62%), inadequate competent
Staff (76%) and problems of policies, incentives and operation (64%). While men
respondents perceived poor locations (96%) and low demands for their products.
5.1. Discussion, Conclusion and Implication of the study
This paper investigates factors influencing small –scale business performance in
informal economy using gendered basis analysis. The study reveals the profile of
small- scale operators in informal economy among gender. Most of the respondents
had gone through tertiary institutions. They are married. Most of them had been in
the business for 4-6yrs and most of the businesses are family owned with individuals
contributing funding to the establishment of the business. Age of the business, the
10
human capital of the entrepreneur had been found to be positively correlated with
small business performance.
The paper also investigates the motivations and goals of women and men
entrepreneurs. While women considered the ability to combine family and work
together as the motivation for starting business, men were business achievement
oriented. Studies have shown that business are likely to grow when an individual is
business oriented other than other reasons (Brush, 2000).
The study also reveals that women owned business reveals that role-model/ advisor
significantly affect their business growth. Other factor that affects business
performance is inadequate access to financial resources. A study by Sitterly, (2001)
found that the presence of parent entrepreneurial role-model was associated with an
individual’ business performance. In line with social learning theory, parents must be
encouraged to motivate their children, particularly daughters venturing into
entrepreneurship. Socialization on entrepreneurial activities is needed to inculcate
the spirit of entrepreneurship into our children. This can be done by inculcating
entrepreneurial education into school curricular from primary school. Government
also need to provide entrepreneurial training opportunities to small-scale operators in
informal economy.
5.2 Implication of the study.
From the research perspective, we can therefore make a safe conclusion that our
present knowledge on factors affecting performance of men and women separately
in developing countries is still insufficient in developing countries especially in
Nigeria. More cross country research is needed to develop data base on factors that
influence small- scale business in Nigeria along gender analysis. A better
understanding of enterprises and entrepreneurs can make a major contribution to the
development of improved approaches for promotion of efficient and equitable growth
of small-scale business.
From policy perspective, in the long run, effective policies and programmes to
support the development of small-scale enterprises depend critically on adequate
knowledge of characteristics and constraints of small-scale business operators. .
11
Such an understanding of the pre-requisites for Nigeria women entrepreneurs to
succeed in their businesses is of critical importance especially in today’s competitive
environment.
Limitation of the study
The characteristics of this study have certain limitations in the applicability of the
findings. First, the empirical evidence was limited only to certain local government
areas of lagos state. Secondly, a more detailed questionnaire with detailed
questionnaire with more specific questions could be more helpful to gain a better
description of factors affecting business performance by genders.
REFERENCES
Andersen, M.I., and Collins, P.H. Race,Class and gender. An Anthology. Fourth
Edition. Wadswoth Thomson learning.
Ajiebefun,I.A. and Daramola, A.G.(2003).Efficiency of Microenterprises in the Nigerian
Economy. AERC Research Paper 134,Nairobi,Kenya.
Akabueze,B.(2002).Financing small and medium enterprises (SMEs):The Small and
Medium Indusries Equity Investment Scheme (SMIEIS) Option.Lagos. Nigeria.
Beasley, C. (1999) What is Feminism Anyway? Singapore: South-wind production
limited.
Brush, C.G, And Hisrich, R.D. (2000) Women-Owned Business: An exploratory study
comparing factors affecting performance. Available at www.riseb.org?finalbrysh.Pdf.
Retrieved October, 2010.
Buttner,E.H. (2001) Examining Female Entrepreneur Management style: An
application of a relational frame. Journal of Business Ethics.29 (3).Pp 253-269.
12
Carter, N.M, Williams and Reynolds, P.D (1997) Discontinuance among new firms in
retail: the influence of initial resources strategy and gender. Journal of Business
Venturing. 12 (2)Pp 125-145
Cooper,A.C. (1998) Findings on predictors of performance from large-scale research
program. Small Enterprises research. The Journal of SEAANZ,6(1) Pp 3-9
Cunningham, J.B and Lischeron, J (2000) .Defining entrepreneurship.Journal of Small
Business Management. 15(5) Pp 45-61
EUROPA, (2003) Definition of Micro, Small and Medium- sized Enterprises. Official
Journal. Available at LIZU http// europa.eu.scadplus/leg/en/vh/n26026.htm.
Ezumah, N. (2003) Gender Awareness in Reproductive Health with some Example
from bigeria. Nigeria Journal of Social sciences Vol 2 (1) In Onuoha, F.C. ‘Yet
Unanswered Questions? The Youth and Gender questions in a decade of democratic
government in Nigeria’’ in Ogundiya, S.I. (eds) A decade of Re-Democratization in
Nigeria (1999-2009).Department of Political Science , University of Sokoto, Nigeria.
Fabayo, J.A. (2009) Small and Medium Enterprises development strategy: A critical
Option for sustainable Long –Term Economic Development in Nigeria. A paper
presented at the first Annual International Conference on: Effective Management of
Small and Medium scale Enterprises for sustainable Economic Development held at
Abraham Adesanya Polytechnic, Ijebu-Ode held from 25-27 August.
Fischer, E.M, Reuber, A.R, and Dyke, L.S (1993) A theoretical Overview of the
extension of research on Sex, Gender and Entrepreneurship. Journal of Business
Venturing.8 (2) Pp151-168
Global Entreprenuership Monitor (GEM) (2004) Women and Entrepreneurship. Center
for Women ‘s leadership. Banson College.MA,USA.
Hisrich , R,D.(2004) Small Business Solutions. How to fix and prevent the biggest
problems that derail business.
13
Learner,M.,Brush,C., and Hisrich,R. (1997) Israel Women Entreprenuer: An
Examination of factors affecting Performance. Journal of Business Venturing 12
(4) Pp 315-339
Makhbul, Z.M. (2011) Entreprenuerial Success: Ann exploratory Study Among
Entreprenuers. International Journal of Business Management. Vol 1(6).Pp1-10
Oyekanmi, F.D (2005), Gender Issues in Globalization: An Overview of the Situation
in Africa – Paper Presented at the Third Lecture Series of the Department of
Sociology; Lagos State University, Ojo, Lagos.
Sitterly, C.(2001) More Women Succeed as Business Owners.Sitcom.Inc. Available at
Sit.com.com/women/succeed.htm. retrieved-september, 2010
Thibault,M. Wilcock,A.and Kanetkar,V.(2002) An exploratory study of factors
influencing sales performance of small and medium –sized enterprises .Proceedings
of the Administrative Sciences association of Canada.Winnipeg,Manitoba.
Wolfenson, J.D.(2001) Comparing the performance of male and Female –controlled
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91-100.
doc_747238534.pdf
The purpose of this paper is to examine factors influencing small- scale business performance in Lagos state, Nigeria using gendered based analysis. The study hinges on feminist theory which explains that the differences in behaviour of women and men in business could be attributed to their individuals' access to strategic resources and socialization process.
1
FACTORS AFFECTING SMALL-SCALE BUSINESS PERFORMANCE IN
INFORMAL ECONOMY IN LAGOS STATE-NIGERIA: A GENDERED BASED
ANALYSIS
By
Olabisi, Sherifat Yusuff.
Department of Sociology
Lagos State university
E-Mail address: [email protected]
Andrew Akinola Olagbemi
Department of Sociology
Lagos State University
E-mail address: Olagbemi [email protected]
Adewole Akinwole Atere(PhD)
Osun State University
E-Mail address:[email protected]
ABSTRACT
The purpose of this paper is to examine whether there is difference between factors
influencing small scale business performance among the female- owned enterprise
and male-owned enterprises in informal economy in Lagos state, Nigeria. This
paper is anchored on feminist theory to explain such differences between genders.
From review of the literature, variables on factors influencing business performance
were collated and ones that are relevant to Nigeria situation were tested empirically
in informal economy. Fifty (50) Small –scale businesses that varied in sizes and
types were purposively chosen in two-local government areas of Lagos state,
Nigeria. Structured Questionnaire was used to collect the data from the respondents.
Percentages, frequency and chi-square statistical analysis were used to analyse the
results.
The results reveal that factors that affect women-owned business are significantly
different from factors that affect men-owned business. Recommendations were
made as a result of this finding.
2
Key words: Gender, Small-Scale business, performance, informal economy,
Nigeria.
1.1 Introduction.
The purpose of this paper is to examine factors influencing small- scale business
performance in Lagos state, Nigeria using gendered based analysis. The study
hinges on feminist theory which explains that the differences in behaviour of women
and men in business could be attributed to their individuals’ access to strategic
resources and socialization process. Factors affecting business enterprises
performance have been a well research area by scholars for many years. Previous
research indicates that several factors influence business performance includes
among many others: their professional background, their entrepreneurship
capabilities and preferences, cultural and religious beliefs, as well as the technology
and micro –environment (Buttner, 2001, Makhbul, 2011).
However, despite previous research, empirical data segregation on factors
influencing gender performances is rather scare and difficult to obtain. Brush,( 2000)
succinctly stated that this is because gender differences in factors affecting small
business performance remained largely unaddressed by social scientists. And
majority of studies either disregarded gender as a variable of interest or excluded
female subjects from their design. It is also generally accepted that male and female
differences influence business performance, while these differences have been
recognized, the factors influencing the performance of gender have not been fully
explained (Brush & Hirsch 2000) despite the gender differences among small scale
business operators.
The small business sector is recognized as an integral component of economic
development and a crucial element in the effort to lift countries out of poverty
(Wolfenson, 2001). Small- Scale businesses are driving force for economic growth,
job creation, and poverty reduction in developing countries. They have been the
means through which accelerated economic growth and rapid industrialization have
been achieved (Harris et al, 2006; Sauser, 2005). Furthermore small scale business
has been recognised as a feeder service to large- scale industries (Fabayo, 2009).
3
While the contributions of small businesses to development are generally
acknowledged, entrepreneurs in this sector face many obstacles that limit their long-
term survival and development. Scholars have indicated that starting a business is a
risky venture and warn that the chances of small-business owners making it past the
five-year mark are very slim (ILO, 2005). Some researches into small-business
development have also shown that the rate of failure of small scale businesses in
developing countries is higher than in the developed world (Marlow, 2009). In
Nigeria in particular, despite the support and incentive programmes to small scale
business, Akabueze, (2002) succinctly stated that it would seem reasonable to
expect that small businesses would grow and flourish, but the rate of business failure
continues to increase because of the obstacles affecting business performance
which include: lack of financial resources, lack of management experience, poor
location, laws and regulations, general economic conditions, as well as critical
factors such as poor infrastructure, corruption, low demand for products and
services, and poverty. Others include: shortage of raw materials, handicap in
obtaining finance, inadequate competent personnel, inability to control costs and
problems of dumping of cheap foreign products and others.
Despite the Inherent problems associated with the growth of Small- scale
businesses, women entrepreneurs are increasingly venturing into ownership of small
-scale enterprises either on their own or in partnership with male entrepreneurs (ILO,
2005). This has been made possible primarily because of ease of entry, limited
access to other enterprises and lack of employment opportunities in formal sector of
the economy. Also, given the growth of entrepreneurship among women,
understanding the social and economic factors influencing their success
performance is of critical importance.
Hence the need for this study which intends to fill this gap .To fill this gap, this study
aims to provide holistic view through empirical study on the factors affecting
performance in small scale business in Lagos state, Nigeria using gendered based
analysis. The general objective of the study is to examine and explain the factors
influencing performance among small –scale enterprises in informal economy. The
specific objectives of this study are:
(1) To present a descriptive profile of small – scale enterprises operators in Lagos
state by gender.
4
(2) To determine the factors influencing the performance of female enterprises and
men owned enterprises in Lagos state.
(3) to determine greatest obstacles and challenges for the operators of small
businesses among gender in Lagos state with a view of coming up with
recommendations to improve effective small business development.
(4.) to make recommendations on intervention measures that can help in improving
the performance of small business enterprises in the informal sector.
To achieve the stated objectives, this paper is organized into five sections. The first
section was the introduction. The second part consists of literature review and
theoretical framework. The third part is the research methods; the fourth part is the
discussions and critical analysis of the data while section five is the last part which
consists of conclusion and implication of study.
2.1 Literature Review
2.1.1 Conceptualizing and understanding Gender questions, Small –scale
enterprises and Performance in Nigeria.
Gender is a socially constructed experience, not biological imperative. Sociologists
distinguish between the terms sex and gender to emphasize this point. Sex refers to
one’s biological identity as male or female, while gender refers to the social identities
attributed to women and men. Gender is rooted in social institutions and results in
patterns within society that structure relationship between women and men and that
give them differing positions of advantage and disadvantage within the institutions
(Anderson,et ,al. 2001). In Nigeria, gender roles are prescribed expectations and
obligations, responsibilities and behaviour of the masculine and feminine gender
(Ezumah, 2003 cited by Onuoha, 2009)
It is important to note that discourses on gender in Nigeria usually slide into an
analysis of the disadvantaged position of Nigerian women as they struggle to realize
their full potentials in the society. The reason for the greater focus of women rather
men are primarily because of the patriarchal nature of the Nigeria society. Oyekanmi
(2004) defined patriarchy as a set of social relations with material base that enables
men to dominate women. It should not be surprising therefore that the gender
question in this article would focus on women entrepreneurs given that they are the
marginalized gender.
5
Small-scale Business: There is no single criterion for classifying business
enterprises as small or medium scale globally. In a study carried out by International
labour Organization (2005), over 50 definitions were identified in 75 different
countries. However, evidence from literature shows that in defining small- scale
business, reference is usually made to some quantifiable measures such as:
number of people employed by the enterprises, investment outlay, the annual
turnover (sales) and the asset value of the enterprise or a combination of these
measures. At the moment in Nigeria, following the National Council for Industry (NCI,
2002) classification, small –scale business fall within the following categories of
enterprises; Small --scale business, if the enterprise has a capital outlay of between
N1.5million and N50million including working but excluding cost of land and or
workforce of between 11-100 employees.
Generally, these enterprises engage in the production of light consumer goods that
are primarily related to food and beverages, clothing, electrical parts, automotive
parts, manufacture, leather products, soap and detergents, woodworks. Small scale
business in Nigeria are divided into three sectors: 1, Production sector including
agricultural processing, manufacturing, and mining 2,Service sector and 3,Trading
sector including wholesales and retails (Fabayo,2009) small-scale enterprises
usually operate in informal and semi-formal sectors (EUROPA, 2003) . Ajiebefun et,
al, (2003) defined small scale enterprises as commercial enterprises that have ten or
fewer employees. This study will take on NCI and Ajibefun (2003) classification of
an enterprise with capital outlay of between N1.5 million and N50million including
working capital but excluding cost of land , and work force from 11employees and
above
The concept of performance
GEM, (2004) defined Performance as the act of performing; of doing something
successfully; using knowledge as distinguished from merely possessing it. However,
performance seems to be conceptualised, operationalised and measured in different
ways thus making cross-comparison difficult.
Cooper et al (1992) examined various factors which influence business performance
such as: as experience, education, occupation of parents, gender, race, age, and
entrepreneurial goals. While, Lerner and Hisrich (1997) conducted a study on Israeli
women entrepreneurs and categorised the factors that affect their performance into
6
five perspectives, that is, motivations and goals, social learning theory (entrepreneurial
socialization), network affiliation (contacts and membership in organizations); human
capital (level of education, skills) and environmental influences (location, sectoral
participation, and socio political variables).
Thibault et al. (2002) suggest that factors influencing business performance could be
attributed to personal factors such as demographic variable and business factors such
as amount of financing, use of technology, age of business, operating location,
business structure and number of full-time employees as important factors in
examining the performance as small scale business operators.
The most comprehensive summary of factors influencing performance was noted in a
literature review by Theo, et, al. (2007) to include: individual characteristics, parental
influence, business motivation and goals, business strategies, goals and motives,
networking and entrepreneurial orientation. Others include environmental factors.
2.2. Theoretical Framework of Analysis.
The argument of this paper rest on the fact that the factors that would affect
business performance of women owned enterprises would be significantly different
from male owned enterprises. This argument is anchored on liberal and social
feminist theories. Liberal feminist theory is rooted in liberal political philosophy which
encompasses basic beliefs in the equality of all beings, and in human beings as
essentially rational, self-interest-seeking agents. The liberal feminist theory attributes
gender-based differences to the variations in power and opportunity accorded men
and women in society, that is, the structural positions women and men occupy in
society (Beasley, 1999). Thus, differences in the achievements of men and women
are ascribed to the inability of women to realise their full potential because they are
denied equal access to opportunities in the labour markets and to resources. This in
turn has hindered women from acquiring the skills and capabilities necessary to
compete on equal basis with men. According to the liberal feminist theory, once
equal access to resources is ensured, gender differences in performance seemingly
disappear (Carter et al., 1997).
In contrast to the liberal feminist theory, the social feminist theory, which emanates
from the social learning theory and psychoanalysis, holds that differences between
men and women exist from their earliest moments in life and result in fundamentally
7
different ways of viewing the world. These differences are seen in the way women
and men construct and interpret reality and how these influence the formation of their
values and intentions (Carter et al., 1997). Men and women are inherently different
because of differences in their socialisation, training and experiences encountered
prior to entry into particular work positions. Differences in nurturing result in different
self-perceptions, motivations and belief structures. As a consequence women adopt
different approaches to work which may, or may not be as equally effective as those
adopted by men (Fischer et al., 1993).Drawing on these two feminist theories and
research on the factors that influence performance of small enterprises this paper
proposes a conceptual framework to guide the examination of factors affecting
gender differences in small business performance in Nigeria.
3.1. Research Method
The purpose of this study is to examine factors that influence performance of both
male and female owned small –scale business operators in Lagos state. The study
was conducted in some selected local government of Lagos state, Nigeria. This
study was limited only to cities because (1) many Small –scale non agricultural
enterprises are actively concentrated in the city. (2) It is easily accessible for the
researchers. Based on the criteria of small scale enterprises, 50 small –scale
businesses were randomly and purposively selected in the designated urban areas
of Lagos state. Based on extant literature, a carefully constructed questionnaire was
designed to elicit responses from small- scale business operators. Nineteen
variables were identified as factors affecting small scale business performance.
These Variables and others more relevant to Nigeria situation were carefully collated
Individual Characteristics
Motivation and Goals
Resources
Entrepreneurial Orientation
Environmental Factors
Performance
Male
Female
Gender
8
and tested among small-scale business operators in informal economy in Lagos
state.
Small- scale businesses were purposively selected and questionnaires were
dropped with the owners after explaining the purpose of the study and seeking their
consents. Sometimes, we had to pay return visits before collecting back the
questionnaires .At other times, research assistants had to wait and interpret the
questions to the business owners. The data was collected from August-November;
2010.During the survey it was ascertained that selected enterprises represented
diversity in an economic activities, size and type.
4.1. Data Analysis
4.1.1 Individual characteristics and performance
Table 1 shows individual characteristics of small- scale business operators. Majority
of the respondents are male (54%) while female constitute (46%).Majority of the
respondents had tertiary educational qualification (Male-24% and female 20%).
Majority of the respondents are married especially among male and female. The
majority of married women in the sample could be attributed to report by Adegbite et
al (2007) study which established that married men and women worked harder in
managing a business because of the social, financial and psychological support than
single, divorced or widowed individuals. This is important because of family
responsibilities and commitments.
Majority of the respondents are in the age group of 45yrs and above. While among
the male respondents (20%) and Female (26%) started their businesses between
4.6yrs.
4.1.2. Motivations and goals as determinants factors that influence business
performance.
An increasing number of scholars believed that motivation and goals of an
entrepreneur affect business performance. The motivation of an entrepreneur
determines success of such enterprise. In the table 2, results reveal that majority of
men are motivated to start business because they are business achievement
oriented (29.5%), and 18.5% of men respondents were motivated to start their
business because of economic status and survival. This is in contrast with women
entrepreneurs. Factors related to desire to achieve flexibility between work and
9
family are valued differently by genders (Cinnanon, 2002).The result shows that
women value this variable more than men. Women respondents started their
businesses because of their ability to combine family and work together, and for
household survival (34.8%).However, studies had shown that men who are business
achievement oriented are likely to achieve growth than others who are not.
Motivation as a factor shows a strong relation to business performance.
4.1.3. Factors affecting business performance among genders.
Chi-Square differences were computed among the respondents on factors that affect
business performance. Results in Table 3 reveal that factors that affect men-owned
businesses are significantly different from women owned businesses. Women
perceived Marital Status (64%), Age of Children (68%), Role –Model/advisors (58%),
Business Location (60%), Customers (64%) and business development services
(56%).
On men entrepreneurs factors affecting their business including Friends (70%),
Government Support (80%), Adequate training (-68%), innovativeness (72%), Risk-
Taking (84%), Re-training( 60%),Business Premises (66%).Men respondents also
considered access to information as important factor affecting business
performance. Access to loans and presence of family influence and members were
considered significant by men and women entrepreneurs.
4.1.4. Table V1 shows the detailed analysis of challenges experienced by gender in
small- scale business .women owned business considered access to financial
resources as the major challenge to business performance. This is in line with the
liberal feminist theory that women are denied access to financial resources. Other
challenges mentioned include: inability to control costs (62%), inadequate competent
Staff (76%) and problems of policies, incentives and operation (64%). While men
respondents perceived poor locations (96%) and low demands for their products.
5.1. Discussion, Conclusion and Implication of the study
This paper investigates factors influencing small –scale business performance in
informal economy using gendered basis analysis. The study reveals the profile of
small- scale operators in informal economy among gender. Most of the respondents
had gone through tertiary institutions. They are married. Most of them had been in
the business for 4-6yrs and most of the businesses are family owned with individuals
contributing funding to the establishment of the business. Age of the business, the
10
human capital of the entrepreneur had been found to be positively correlated with
small business performance.
The paper also investigates the motivations and goals of women and men
entrepreneurs. While women considered the ability to combine family and work
together as the motivation for starting business, men were business achievement
oriented. Studies have shown that business are likely to grow when an individual is
business oriented other than other reasons (Brush, 2000).
The study also reveals that women owned business reveals that role-model/ advisor
significantly affect their business growth. Other factor that affects business
performance is inadequate access to financial resources. A study by Sitterly, (2001)
found that the presence of parent entrepreneurial role-model was associated with an
individual’ business performance. In line with social learning theory, parents must be
encouraged to motivate their children, particularly daughters venturing into
entrepreneurship. Socialization on entrepreneurial activities is needed to inculcate
the spirit of entrepreneurship into our children. This can be done by inculcating
entrepreneurial education into school curricular from primary school. Government
also need to provide entrepreneurial training opportunities to small-scale operators in
informal economy.
5.2 Implication of the study.
From the research perspective, we can therefore make a safe conclusion that our
present knowledge on factors affecting performance of men and women separately
in developing countries is still insufficient in developing countries especially in
Nigeria. More cross country research is needed to develop data base on factors that
influence small- scale business in Nigeria along gender analysis. A better
understanding of enterprises and entrepreneurs can make a major contribution to the
development of improved approaches for promotion of efficient and equitable growth
of small-scale business.
From policy perspective, in the long run, effective policies and programmes to
support the development of small-scale enterprises depend critically on adequate
knowledge of characteristics and constraints of small-scale business operators. .
11
Such an understanding of the pre-requisites for Nigeria women entrepreneurs to
succeed in their businesses is of critical importance especially in today’s competitive
environment.
Limitation of the study
The characteristics of this study have certain limitations in the applicability of the
findings. First, the empirical evidence was limited only to certain local government
areas of lagos state. Secondly, a more detailed questionnaire with detailed
questionnaire with more specific questions could be more helpful to gain a better
description of factors affecting business performance by genders.
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