ABSTRACT
It is now widely accepted by policy-makers, businesses and academics that innovation and entrepreneurship are essential for the survival of both large and small businesses and for value creation.
This study investigates how best to assess entrepreneurial skills in the medium sized firm. And to identify whether entrepreneurial skills can breed collective task efficacy to enhance performance. We shall also ascertain entrepreneurial skills in individuals (personal skills) and in team or group (heterogeneous skills) and to reaffirm their emanating effects to performance, management and changing environment and culture.
Research questions structured in a questionnaire, interview and observation were used to collate facts and data. Copies of the questionnaire were administered to a pre- determined group respondent to gather relevant information on the task or practices that enable entrepreneurial skills to
operate. The percentage tabulation method was used to analyze the raw data.
The findings yielded that: creative thinking, planning and research, team building spirit, education, financial management skills and record keeping or goals setting were the criteria the firm used to test employees entrepreneurial skill. Others include skills in areas such as problem-solving, inculcate multi-skills orientation, team building spirit, innovation and technology friendly approach, good governance and leadership, effective communication, improve management or performance, adequate decision making risk management in the organization.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Interestingly, in the middle of the last century, economists predicted the dominance of large firms. Size was needed to obtain economies of scale, to exploit foreign markets and to keep abreast with regulations and new opportunities in technology. Indeed, in the 1960s and 1970s, large companies dominated the economy. Since then, the trend has started to reverse (Audretsch et al, 2002).Today, there is growing evidence of a significant causal relationship between entrepreneurship, economic growth and poverty reduction. Small, micro and medium-sized enterprises (SMMEs) are often the backbone of the private sector in the developing world, creating jobs and providing a tax base for local government. SMMEs offer the only employment available to millions of poor people, yet many developing countries have been unable to create and maintain the favourable environment needed to foster SMMEs development (Bridges.org, 2002).
Entrepreneurship may be defined as the visualization and realisation of new ideas by insightful individuals, who are able to use information and mobilize resources to implement their visions. This view does not require entrepreneurs to be highly skilled in generating new ideas, but instead emphasizes promotion and implementation of radical change. Although entrepreneurs who excel in this endeavour often are highly creative, they just as often base their entrepreneurship on the ideas of others. At the same time, entrepreneurs with original ideas of their own are usually highly motivated to succeed, but whether they do so depends on the their ability to market their ideas , as well as their sensitivity and openness to other people’s viewpoints. Although some successful entrepreneurs are also creative inventors, this need not be and often is not the case. Many inventors, on the other hand, lack the entrepreneurial skills necessary to evaluate and promote their ideas. The entrepreneur is a visionary activist who excels in the creation of opportunities and the active
handling of risks and uncertainties. He or she initially increase business risks by searching for new opportunities and experimenting to see if they are worthwhile. Simultaneously, and later on, entrepreneurs are strongly engaged in reducing risks, by actively changing prevailing conditions and also changing the rules of the game. The timing and balancing of risk creation and risk reduction is the hallmark of a successful entrepreneur (Nystrom, 1995, pp.67-68).This indicates that entrepreneurship is multi-dimensional and can occur in different contexts, economic or other, and in all type of organization. However, this paper focuses on entrepreneurship within a business context Why is entrepreneurship important for development? The number of poor people on the planet is increasing exponentially and digital divide statistics show that technology is exacerbating the problem of inequity, not helping to alleviate it. There are now 1.2 billion people living in abject poverty out of the six billion on the planet. More people have lifted themselves out of poverty in the past 50 years than in the previous 500 years; but
because the world population has grown so significantly, there are more poor people than ever before. Political upheavals and natural disasters wreck havoc, but for those living close to the edge, so do smaller tragedies such as an extended illness, death, or one season with too little rain. Having a large percentage of the population thus exposed exacerbates the cycle of poverty and leaves national economies facing disaster, where a stable tax base is difficult to achieve and needed infrastructure difficult to build or maintain. Poverty and insecurity can lead to extremism, which threatens the safety and stability of everyone in every corner of the globe. Fostering the development of SMMEs to help people employ themselves and others may offer the best hope for breaking the poverty cycle in many developing countries and disadvantaged communities. The importance of entrepreneurship should not be underestimated, and the needs of this crucial sector must be understood to frame an effective and sustainable approach to modern development aid.
Moreover, the challenges of the future will demand
both a substantial increase in the volume of management development and increased focus on entrepreneurial skills (Winterton, 2001). The considerable increase over the medium size firms in the recent time has important implications for the nature of the skills required by the growing number of SMEs owner/managers as well as the managers in large enterprises who increasingly are interacting with SMEs. Johnson and Winterton (1999) point out that the range of skills and competences required to run an SME are qualitatively as well as quantitatively different from those needed in a larger organization.
As Storey (1994) notes, the medium firm is not merely a scaled down version of a larger firm, managers of medium size firm have specific training needs especially in globalize and commercialized SMES. This thought has proofed or demonstrated that the incidence of formal training and especially of external training increases with firm size and that there has been very little increase in small firm training. Evidence that the
poor performance of global SMES is caused by inadequate management skills is limited, but suggests that developing entrepreneurial skills among medium size firm managers contributes to profitability and growth. Thus, in the midst of this pursuit for better entrepreneurial and management skills in medium size firms, the organization set-out mission, opportunities and strategic management procedure to realize their objectives.
In the technology lead firm, for example there are four key factors that can dictate success for new ventures; talent technology, capital and know-how (Smilor, 1999). Developing these aspects may depend more on genetics, traits, skills than anything else, and understanding that patterning of behaviour for any individual may describe how they seek opportunity. One current view of how medium size firm find and evaluate opportunity is defined by “scanning” which describes certain behaviours when evaluating a given opportunity. Source scanning is one way in which relevant
information is gained about events occurring inside or outside a company’s future course of action. In any propelling opportunity there are ways to extract talent from firm social network or to develop firm with a certain amount of know-how.
Smilor (1999), views those ways to include, sources of capital (convincing others to give or deposit money), know-how from others (the ability to leverage knowledge in an expanding enterprise), and talent or skills (recognizing market opportunities and organizing to take advantage of them) may all trickledown from sources within a given social network. These three factors rely heavily on social skills, which can help develop a firm’s social capital ( the actual and potential resources individual’s obtain from knowing others, being part of their network or just from having a good reputation), (Baron and Markman, 2000). Together, social competence which is their ability to interact effectively with others as based on discrete social skills. Also, social skills needed to develop these networks and an
entrepreneur’ social competence should never be neglected, whether they are inherent or learned.
Baron and Markman (2000), explore that adaptability to rapidly changing situations and perception of others moods, motives, and intentions has shown to be predictor of success. Developing these skills and utilizing them can lead to better communication and financial success, and it will ultimately enhance firm social capital, which can be a large competitive advantage. The encapsulating view of social competence pulls these concepts together because it printout that although firm network may help them gain access, their social skills will enable them to take the opportunity further(Baron and Marksonb,2003). Developing social skills such as perception, impression management, persuasiveness, social adaptability, expensiveness, and emotional intelligence could yield large dividends in the capital market place. (Baron and Markman,2003).
In the end, social competence or skills helps to expand networks, build business relationships and alliances and provide competitive advantages through privileged information (Baron and Markman, 2003). Encouraging firm’s to development entrepreneurial skills will enhance their networks and build social capital which is vital to the evolution of the entrepreneurial process.
According to Goleman (1995),reiterating the reason why many different social skills appear to exist suggests that the following are highly important a) social perception (accuracy in perceiving others, including their traits, motives, and intentions b) impression management (techniques for inducing them to form favourable impressions, c) persuasion and influence (techniques for changing others attitudes or behaviour undesired directions. D) emotional intelligence (ability to regulate one’s own emotions and to influence others emotional reactions e) long-term relationships (skills that assist individual in establishing effective long-term
relationships, such as providing positive and negative feedback to and proficiency in managing interpersonal conflicts.
(See: also http://www.babson.edu)
Generally, individuals with well-developed social skills grossly attain more favourable outcomes than other persons who are equally competent with respect to technical knowledge/skills, experience and training, but who fall short with respect to various social skills.
Arguably, the performance indicator and collective efficacy defined as entrepreneurial team members beliefs that their group has the abilities necessary to performance successfully, is equally offered as a new lens through which to view entrepreneurial team performance. Many authorities has suggested that there is a positive relationship between collective efficacy and group performance, and that collective efficacy may be composed of the independent conducts. Collective task efficacy and collective interpersonal efficacy. Collective
task efficacy is defined as members beliefs that their group has the task related (or technical) competencies/skills to perform successfully while collective interpersonal efficacy is defined as members beliefs that their group has the interpersonal competencies/skills to perform successfully (ie resolve conflicts, solve problems in a collaborative manner, communicate effectively, set goals, co-ordinate task and span boundaries)
Conclusively, the effect of entrepreneurial skills on management of medium size firm will holistically look at firm as an entrepreneur (entrepreneurship) and focus on entrepreneurial skill as heterogeneous element to effectualised organizational growth and increase performance.
1:2 STATEMENT OF THE PROBLEM
The benefits of encouraging entrepreneurship go beyond pure economics. As people gain confidence, financial breathing room, and access to information, they gain political will and are less likely to tolerate corrupt governments and unhealthy
living conditions. It also follows that they will seek higher levels of education for themselves and their children, along with improvements in their home and community life.
The phase of medium size firm within this 21st century where competitiveness, information technology and integrated capacity building and diversification influx determine the fulcrum of the economy, desirably demands increase in the inbuilt mechanism of firm employable work force to enable them remain in business. The mainstream of this goal as an embodiment to the management of firm effectively call for proper assessment of the entrepreneurial skills of employees, hence an entrepreneur is meant to possess, innovative, creative, risk taking, pattern-multiplier, exploitative trait, goal-achiever (need-achievement), proactive, competitive aggressive and autonomy in his approach to work. The issue that predominate to the above trait in medium size firm is what will be the possible assessment approach to be used by human resource department or personnel to select the prospect employee or applicant with the best skill endowment.
Moreso, the collective efficacy and performance growth has been the objective of management. To this end, the challenge of marrying the heterogeneous skills, which breeds incongruent interest and conflict, cannot be relegated to the background so easily. In this view, Sexton and Smilor (1997:97) reinstated that “growth lead to managerial complexity which can be defined as an indicator of the challenge faced by entrepreneur as a function of the number, variety and interrelationships among tasks required to administer the operations of affirm effectively and efficiently’.
Another divergent aspect of this phenomenon is the challenge to fuse cognitive, trait, competence and entrepreneur orientation, culture and behaviour to enable management stream line its task and synergistically out- weigh their opportunities.
These and other problems (ie external recruitment difficulties and internal skill gap) are what this study will delve in to find solutions to them.
1:3 OBJECTIVES OF THE STUDY
This study will focus on the following objectives viz:-
1) To ascertain the best assessment model of entrepreneurial skills in medium size firm.
2) To determine whether entrepreneurial skills that breed collective task efficacy and interpersonal efficacy will enhance organizational performance.
3) To examine medium sized firm as a heterogeneous team that imbibe a heterogeneous skill and whether it will result to conflict as well as poor performance.
4) To find out how culture, cognitive and management skill will be harmonised in order to achieve organizational objectives.
5) To determine if environmental shift and policy strategies hampers entrepreneurial skills proficiency and performance.
6) To suggest the ways to improve entrepreneurial skills amidst of the competitive economy and medium firm flux.
1:4 RESEARCH QUESTIONS
The research questions that will be used to resolve research problems are as follows:
What are entrepreneurial skills?
What constitutes entrepreneurial skills?
Are there any models to assess entrepreneurial skills?
How will imbalance mix of heterogeneous skills affect management performance?
Do cultural factor and entrepreneurial orientation pitfall to the growth and performance of medium size firm?
Does environment shift and policy strategies effect entrepreneurial skills growth and uses?
What form of entrepreneurial skills do medium size firm need to succeed in business in today’s competitive market?
How does the visionary entrepreneur transfer the skills and the inspiration that made the little enterprise success into something larger?
1:5 SIGNIFICANCE OF THE STUDY
This study will be of benefit to the following groups in their domain of endeavour thus:
MEDIUM SIZE FIRM
It is assumed that the growing rate of firm is at its peak. It is a matter of differentiation if one captures the intricacies embedded to the developed skills, acquired skills and competence (eg experience) to satisfy the growing needs of their customers or clients. It is beneficial to the firm if through good assessment of entrepreneurial skills together with optimal management skills possession by their work force will enable them identify opportunities, pursue and accomplish it for the sole interest of increasing the
performance and profitability range.
CUSTOMER/CLIENT
It is obvious that any rational client or potential customers which retain its loyalty, patronage and obeisance to a particular firm is a derivative of its outstanding managerial and manager skills attribute, competence and capabilities to adopt to changing trend and innovation etc. However, this study will help the customers ascertain their set-out indicators or performance assessment measurement and convinced of their stability, confidence and trust to invest and trade
with them.
GOVERNMENT
The dividend a government derives from a progressive and stable business firms apart from taxes are attraction of foreign investors and good image rating, growth and national income. This credit will be achieved if the firs inculcate good entrepreneurial skill inculcate good entrepreneurial skill and corporate governance in pursuit of their goals will be a matter of public interest.
1:6 SCOPE OFTHE STUDY
This study concentrates on the Oceanic Bank Plc with particular reference to Enugu Branch which hopefully will be used to generalize other locations. This work tries to identify entrepreneurial skills as in individual personal skills and team/group (heterogeneous skill or collective skills) and its emanating effects to performance, management and changing environment and culture.
1:7 LIMATION OF THE STUDY
It is worthy to acknowledge that in the course of this study certain limitations were encountered. Thus, there are non-response and imperfect information from the source. Therefore, due top pressure of work and other engagement time constraints should be a limitation. Again, financial constraint could not be overridden in the quest of this study.
1:8 HISTORICAL BACKGROUND OF OCEANIC BANK PLC
The Oceanic bank PLC was incorporated on March
26, 1990 as a private limited liability company with
100% equity ownership by Nigeria citizens and licensed
on April 10,1990 to carry on commercial banking. The bank commercial business or operation on June 12,
1990 at the waterfront plaza, plot 270 Ozumba Mbadiwe Avenue Victoria Island Lagos. The bank was listed on the floor of the Nigeria stock exchange on June 25, 2004. At present, it has an authorized capital of N32 billion
The bank has a branch network of over 100 business office spread across the states of the federation with its head office at Herbert Macaulay way, Wuse zone 6, P.M.B 5048 Abuja FCT and oceanic bank PLC henceforth is a sixteen year-old commercial bank. Her financial year runs from, October 1 to September 30 of the subsequent year. The banks impressive performance over the years accounts for the quality of its customer portfolio, which includes corporate organisation, high net worth individuals the federal and some sates governments. Moreover, its service excellence is being driven by the constant4 reaction of innovative ways of adding value to our customer relationships.
The bank prides itself as a known to deliver first class ICT based solution to meet the specific needs of its
customers. For excellence understanding of customers business needs, oceanic bank is strategically structured into 5 business units which are:
i. Corporate Banking Group (CBG)
ii. Treasury and Financial Institution Service Group(TFIG)
iii. Retail Banking Group (RBG)
iv. Public Sector Group (PSG)
v. International Banking Group (IBG)
The bank’s board chairman is “Olorogun M.C.O. Ibru (OFR) and the from the top management team, the managing Director/CEO is Dr (Mrs.) Cecilia Ibru. While the oceanic bank vision and mission, run thus, “think banking think oceanic. The mission is “to provide excellent and comprehensive services to all our customers in a friendly environment using qualified and experienced personnel with appropriate technology. Again their core values (TEAMS) stand as:- (Transparency, E-equal opportunity A-Accountability).The equally, use following methods of training programmes (i.e. on-the-job, vestibide, operative, supervisory and executive development) which
help them develop a capable entrepreneurial skills in a diverse form. (http”//www.oceanicbankknigeria.com).
1.9 DEFINITION OF TERMS
The following terms were concisely defines viz:-
Entrepreneur: Is a co-coordinator and middleman that never disappears, even in general equilibrium.
Entrepreneurship: Is the process of creating something different with value by deviating he necessary time ands effort, assuming the accompanying financial psychological and social risks and receiving the resulting reward of monetary and personal satisfaction.
Entrepreneurial Skills: Is skills related to identifying business opportunities and receiving a sustainable income from these opportunities.
Entrepreneurial Orientation; Is refers to the processes, practices and decision making activities that5 lead to new entry.
This material content is developed to serve as a GUIDE for students to conduct academic research
THE INFLUENCE OF ENTREPRENEURIAL SKILLS IN THE MANAGEMENT OF COMMERCIAL BANKS
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