International Journal of Applied Research
Vol. 2, Issue 4, Part J (2016)
Performance predicting effect of factors residing in a firm: Evidenced from small scale manufacturing enterprises in Ethiopia
Mekonnen Bogale Abegaz, M. Madhusudhana Rao
Performance of an enterprise is the function of multifaceted factors linked to a person who start and run firm, to the firm itself, and to external environment. This article aimed to describe and explain the effect of factors residing in a firm itself on its performance. In order to carry out this, personal data of 359 owner-managers of enterprises in six subsectors of small scale manufacturing sectors were planned to collect data using self-administrated questionnaire. 306 of the sampled owner managers have properly filled the questionnaire and returned. The association between predictors and the outcome variable was explained using ordinal logistic regression model. The significance level of their association was tested using Wald test statistics embodied by default in ordinal regression model. The finding shows that age of the firms has no significant effect in predicting enterprise performance difference. Sole owned firms perform better than collectively own firm. Internal process capacity, customer handling ability, and absorptive capacity create performs difference among targeted firms. The better capable in these dimensions, the higher the performance. Location also plays a significant role in predicting the higher performance. From these results, it is recommended to those under-performers that enhancing the stated capabilities help them to be competent. Location of a firm which is appropriate for production and commercialization is the other factors that low performers need to recognize to survive or to compete. Age of the firm may create performance difference if there is a wider age gap among firms under consideration in a given research. In this article, the age gap does not show a significant performance difference.
How to cite this article:
Mekonnen Bogale Abegaz, M. Madhusudhana Rao. Performance predicting effect of factors residing in a firm: Evidenced from small scale manufacturing enterprises in Ethiopia. International Journal of Applied Research. 2016; 2(4): 605-614.