Influence of the Internal Locus of Control on the Growth of Micro and Small Enterprises in Bomet County, Kenya

Abstract

The importance of micro and small enterprises for economic growth and poverty alleviation has been recognized by Kenya Government, like many other countries. As a result of this acknowledgement, the Government of Kenya has implemented various policies and programs to support the growth of small and micro enterprises . Only a few small and medium enterprises have managed to develop and expand despite the existence of different programs. In their first three years of service, the majority deteriorated, stagnated or even close down. The high mortality rate and stunted growth trajectory of MSMEs in Kenya was blamed on shortage of operating funds, increased operating expenses, declining income, losses incurred from the businesses and other personal issues. Individuals play a great role in these firms. Several studies worldwide have acknowledged the importance of entrepreneurs for the growth of MSEs. Most of the MSEs depend on the entrepreneur himself/herself for their survival and development. The entrepreneur makes the important decisions concerning products, markets, motivation of employees, expansion plans and other strategic decisions concerning the firm. There is an ongoing argument if internal locus of control of business owner or manager can be related to the growth and survival of the business. The internal locus of control might be affecting the growth of enterprises as internal locus of control of an entrepreneur differ from the characteristics of a non-entrepreneur Some researchers have tried to define success in terms of turnover, sustainability and growth. There are researchers who have observed that the entrepreneurial characteristics are indicators of success. The overall research problem to be addressed in this study is that there are other factors influencing high mortality rate and stunted growth of MSMEs in Kenya and especially Bomet County apart from the overused hindrance of finance and markets. This study will therefore investigate the influence of internal locus of control on the growth of micro and small enterprises in Bomet County. The target population was micro and small enterprises in Bomet County which were 14,574 in number in 2016. The unit of observations were the managers and owners of these enterprises. The unit of analysis are the micro and small enterprises in Bomet County and their growth over the last five years. The study used stratified sampling technique to pick the respondents from the manufacturing, trade and services strata of micro and small enterprises. The sample size was 384 micro and small enterprises. Data was collected using a questionnaire. Data collection was done by administering the instrument to the owners or managers of the enterprises. The data was processed using the computer software. Multiple regressions model was used to establish the relationship between the entrepreneurs’ internal locus of control and growth of enterprises. The key findings were that internal locus of control influences the growth of enterprises in Bomet County, Kenya. The major recommendation of the study is that there is need for the key players in the MSMEs to build the characteristics of the owners and managers through training. It is also the recommendation of this study that it is not everybody who can become an entrepreneur. Methodology and resources should be avail to identify the potential entrepreneurs. It is only after identification that the required resources can be availed.