OPPORTUNITY RECOGNITION AND PERFORMANCE OF VALUE-SYSTEM ACTORS IN THE LEATHER INDUSTRY IN KENYA

Abstract

The importance of entrepreneurial orientation traits in determining performance of businesses has been empirically established in SME’s but little studied in Africa. With the growth of the knowledge economy, factor-based industries have also received less research attention. Adopting an industry ecosystem perspective, this research involved exploratory and diagnostic analysis of the relationship between opportunity recognition and performance of value-system actor businesses in Kenya’s leather industry. Mixed sampling was carried out involving a census of members of an industry association in the environs of Nairobi and snowballing of other industry roles in a cross-sectional survey of sixty-eight Kenya leather industry actors. The sample was representative of leather industry ecosystem value-system roles including tanners as primary processors, manufacturers as secondary processors, primary and secondary delivery agents, networking associations, research institutions and the regulatory agent. Fifty-two responses were found to be valid for analysis achieving a 76% response rate. Factor analysis showed opportunity recognition was a unidimensional construct comprising three indicators while performance comprised two dimensions dependent on the wording of measurement items. Regression analysis and hypothesis testing showed opportunity recognition was a significant determinant of performance of value-system actors. Opportunity recognition had a strong positive relationship with performance of value-system actors (r=0.584, p<0.05) and could determine 58.4% of performance (β=0.584, t-statistic 5.090, p-value 0.000) in Kenya’s leather industry. The study concludes that enhancement of opportunity recognition of value-system actors determines their performance. It recommends studies and policies for the enhancement of opportunity recognition as an entrepreneurial disposition amongst industry-ecosystem actors for improvement of performance and realization of economic benefits of entrepreneurship the face of globalized competition in traditional industries.