Key determinants of micro and small-scale enterprises success in case of manufacturing sectors in Bench Sheko and Shaka zone, southwest Ethiopia people region

Abstract

In spite of their importance as social and economic functions, every Entrepreneur exposed to the risk of failure as well as to the possibility of success when operating in the business environment. The current study aims to answer the key determinant factors behind the success and failure of micro and small enterprises (MSEs) in case of manufacturing sectors in Bench Sheko and Shaka zone, southwest Ethiopia people region, and the main objective of this study was to examine how firm size, capital investment, managers or owners educational level, innovation, and competition affect success of the manufacturing enterprises in the study area. For the sake of achieving this objective, the researchers employed sequential explanatory research design, which is characterized by the collection, and analysis of quantitative data, followed by a qualitative method based on the results of the quantitative method with cross-sectional data sources and collection instruments. From the total 580 manufacturing enterprises running in the two zones, 237 samples were taken (139 from Mizan Amman town and 98 from Tepi town) by using Yamane’s formula (1977) (cited in Israel, 1992) and the selection of the sample respondents is carried out by using proportional stratified random sampling method. Data collected using likert scale questionnaire analyzed quantitatively by using descriptive statistical analysis such as percentage, frequency and inferential statistical analysis like Pearson Product Moment Correlation Coefficient and multiple regression analysis. The Major finding of the study revealed that the size of the firm, the level of education of the owner/manager, the amount of capital invested, the level of innovation, and the level of competition are all significant determinants of entrepreneurial success in the manufacturing sector in the study area. Based on these finding the researchers recommended that companies can consider mergers and acquisitions as a strategy to increase their size, invest in training and development programs to improve the knowledge and skills of their managers, firms may consider increasing their investment in long-term assets to improve the efficiency and effectiveness of their operations, and consider strategies such as price differentiation or developing unique products or services to stand out in the market.