Academic journal article Academy of Entrepreneurship Journal

Entrepreneurs' Commitment and Business Performance in a Recessed Economy

Academic journal article Academy of Entrepreneurship Journal

Entrepreneurs' Commitment and Business Performance in a Recessed Economy

Article excerpt

INTRODUCTION

The global economic downturn is not restricted to a particular region or economic block. The impact and experiences are creating chaos and sending waves which mostly defied generalised policies and recommendations by major world international consortiums and economic bodies. The resultant effect caused economy recession which degenerate to massive jobs cut by existing companies and closures of so many small and medium sized enterprises (SMEs). The economic indices for most nations of the world especially in developing countries are characterised with massive unemployment, high interest rate and fall in aggregate demand, reduction in income and wages and increasing foreign debts.

The organisations and business enterprise that survived and are thriving in a recessed economy point to the fact that the entrepreneurs are either doing things uniquely or exposed to unidentified resources inherently in them or within their operating environment. The commitment of the entrepreneurs is however important for the survival and sustainability of business enterprises all over the world (Cardon & Kirk, 2013). This makes it imperative to know the influence of entrepreneur's commitment on performance of business in a recessed economy. Gupta & Muita (2013) however focused on the entrepreneurial characteristics as indicators of entrepreneurial performance. Commitment of the entrepreneurs is seen as the engines that oil the daily activities that propel improve performance and ability to withstand the thunderous effect of recessed economy. It is the passion that makes the business experience growth (Dhaenens, Marler, Vardaman & Chrisman, 2017). Even though many scholars (Allen & Meyer, 1990; Porter, Mowday & Boulian, 1974; Indrawati, Salim, Djumahir & Djawahir, 2015) have written on entrepreneurs' commitment and business performance, but there is paucity of studies on how state of the economy mediate or suppress the effect of commitment on business performance. This study has been able to close this gap in the literature.

LITERATURE REVIEW

Entrepreneur

Gartner (1988) asked "who is an entrepreneur?" Entrepreneur is referred to an individual that identify, develop and bring new vision to life in order to create wealth (Ogbo & Agu, 2012; Osemeke, 2012). Perry (2002) believed that an entrepreneur is affected by the environment which he or she operates. He is the originator of an enterprise for the provision of goods and services to meet the need of people with the aim of making profit. (Ogundele & Abiola, 2012; Ayoade & Agwu, 2015). The bearer of the instrument that bring forth change in the economic (Ogbo & Agu, 2012), a bearer of risk who turns problems into opportunity and combine the necessary resource to meet the need of people (Ayodeji, 2015).

Entrepreneurship

Mckenzie, Ugbah and Smothers (2007) opined that entrepreneurship is the process of exploiting opportunity and making a way of using it for economic advancement. Most developed countries promote entrepreneur and considered entrepreneurship as very vital to the growth and development of any country (Syed, Musaffa & Minna, 2017). The continuous promotion of entrepreneurship as a propelling growth of the economy, social status and employment as well as livelihood creation could not be over emphasized (Alam, Rohani & Kamaruddin, 2015; Teoh & Chong, 2014). Emmanuel (2016) emphasised that the wealth of the nation and the backbone of the economy emanated from entrepreneurship.

Beeka and Rimmington (2011); described entrepreneurship as the way of bringing everybody in the society into the realm of entrepreneurial activities and subsequently into the economic activities. Fatoki (2014) buttress their point by describing entrepreneurship as one of the ways to improve on the economic activities of the people and increase their standard of living and reduce poverty, crime and other social vices in the society. …

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