This study takes a direct approach to examine how the owner-operators’ entrepreneurial behavior and managerial competence impact the performance of small enterprises operating in the economically, politically, and environmentally fragile and resource-scarce context of the Horn of Africa (HoA) sub-region. These enterprises are the major drivers of the sub-region’s socio-economic development. Thus far, efforts in the sub-region have primarily focused on external factors, with little attention to the direct and observed behaviors and competence of the owners who operate the enterprises prevailing over the multiple adversities.
The study empirically tested the relationships of entrepreneurial behavior (EB), managerial competence (MC), entrepreneurial bricolage (EBR), and the small enterprises’ performance (SEP). The study also accounts for the interference of competition intensity (CI) in the relationships. It is based on survey data collected from 137 owners who operate small enterprises in Ethiopia, a core state in the Horn of Africa (HoA) sub-region.
The findings of this study supported the hypothesized relationships that entrepreneurial behavior, bricolage, and managerial competence positively and significantly contribute to the performance of the small enterprises. The moderation effect further reveals that competition intensity positively moderates the relationship between managerial competence and small enterprise performance. Our findings highlight the significance of strengthening entrepreneurial behavior and managerial competence of the owners to operate enterprises that prevail over the multiple adversities.
Policies and development initiatives in fragile and resource-scarce economies mostly concentrate on institutional factors; they rarely take direct approaches to enhancing the owner-operators’ potential (entrepreneurial behavior, bricolage and managerial competence), which is crucial to challenge conventional norms, envision beyond the immediate and unlock the untapped potential of the context. This study sheds light on the significance of strengthening the owner-operators’ observable behaviors and competence that act on and utilize the institutional resources to make valuable offerings.
By taking a direct approach, this study offers integrated and practical implications that complement existing efforts in the sub-region, which have primarily focused on external factors, aiming at strengthening the enterprises' performance and scaling up their contribution. The study integrated EB, MC, EBR and SEP and considered CI as a moderator to provide police-makers and development workers with a holistic view for an integrated intervention. The empirical evidence from this typically fragile and resource-constrained study context extends previous findings and the applicability of entrepreneurship theories.
