AN APPRAISAL OF THE EFFECT OF ENTREPRENEURSHIP SKILL ON PRODUCT PORTFOLIO DEVELOPMENT
This research work examined the effects of entrepreneurial skill on product portfolio development of medium scale enterprise in Lagos. It is important for business owners (be it a small medium scale enterprises operator or large scale enterprise), who aspire for optimum success in their endeavour to take cognisance of the essential entrepreneurial skills which will aid the effective achievement of their organization goal and objective. The research design adopted for the study is survey research design. The main instrument used was self administered questionnaires. The data obtained from the questionnaires were analysed using mean, median mode and standard deviation. Two hypotheses were tested using Z-test at 0.05% level of significance. The analysis done reveal that there is significant relationship between entrepreneurship skills and product portfolio development. Also, co-operation between small medium scale entrepreneurs and research institutes, for exploitation of research findings of these institutes should be encouraged in order to achieve development in general was recommended.
1.1 Background of the study:
The success or failure, of any organization product offering(s), be it goods or services, depends immensely on the strategies and technologies used in developing, maintaining and sustaining such products or services in the target market. The extent to which these responsibilities/duties/tasks are successfully carried out is as a result of the unusual skills, experience and ability possessed by the owner (entrepreneur), of the said business organization; to effectively co-ordinate the human and material resources in that organization, in order to achieve the stated organisation objectives either to make profit or community service rendering.
The said responsibility of the ‘entrepreneur’ can be emphasized in the definition given by Edward P. Lazear. According to him, an ‘entrepreneur’ is a generalist who put together terms of people and assembles resources and capital. To do this effectively, they must have a general set of skills.
Although an individual maybe endowed with a set of skills but endowment can be augmented by investment in human capital. Therefore, responsibility of assembling, coordinating, etc. of these said resources cannot be carried out effectively by a mere business owner whether it is a small organization or a large firm.
These said skills, possessed by ‘entrepreneur’, enables them provide products ( in form of goods or services), of great additives, which is second to none in the market of industry; is referred to as the quality that must be possess by an individual to be a successful entrepreneur, and it’s called ‘entrepreneurial skills’.
The term, ‘entrepreneurial’, is an adjective concept that is used to describe the degree of entrepreneurial trait, that an individual possess or exhibit or the pattern of entrepreneurial behaviour, present in an individual activities. Therefore, it can be said that a person who displays some skills or habits, typical of an entrepreneur, is said to be ‘entrepreneurial’.
It is possible, that entrepreneurial skills are embodied in the networks with customers, suppliers and other market participants that enhance the outcomes of entrepreneurs. It’s also possible that it is the greater ability to identify markets, set strategy and correctly analyse the various business problems and also enables organization develop their product portfolio.
In enhancing the outcomes of an entrepreneur, a sequential process or procedures must be followed. This is termed as ‘entrepreneurship’.
According to Kuratko and Hodgetts (2001), entrepreneurship is the dynamic process of creating incremental wealth. This wealth is to be created by individuals who assume major risks in terms of equity, time and career commitment of providing value inform of some products or services, which may not be new or unique, but the entrepreneur must place value by securing and allocating the necessary skills and resources.
The focus of this study, is on skills which will also encompass the ability to successfully allocate resources (human and material), for the achievement of the objective.
A skill, can be said to be an organized and coordinated pattern of mental and or physical activity in relation to an object or other display of information usually involving both the receptor and effect or process. It involves having enough ability knowledge and experience to be able to do something well.
Hence, for a person to be regarded as an entrepreneur he/she must possess some certain unusual and personal attributes, behaviour, values and skills or skills that allows them to successfully develop, setup, grow, render and maintain a product of great addictive which consumers within the industry sees as second to none. They are referred to as the agent of effective economic changes, an enterprising individual, job creator, the goal getters, etc.
The various skills of entrepreneurs have been classified into three (3), (Linus Osuagwu, 2006). They are ‘technical skills’, ‘business management skills’ and ‘personal entrepreneurial skills’. Technical skills are said to involve such things as writing, listening, oral presentation & communication, monitoring environment, ability to organize, etc. on the other hand, management skills includes those areas involved in starting, developing and managing any enterprise i.e. skills in decision making, marketing, general management/administration, financing, accounting, production, controlling and negotiating which are essential in launching and growing a new business venture.
While personal skills are some skills that differentiate an entrepreneur from a manager i.e. inner control/discipline, risk taking, being innovative, being change-oriented, being persistent, visionary leader, etc.
All these entrepreneurial skills are undoubtedly needed in every facet or an organization product development or product life cycle (development, growth, maturity and decline stages), to ensure the sustainability of the various products to a state of economic stability and growth in order to maximize profit.
For a setup to be referred to as organization, it must have a product offering i.e. goods or services which it is to render to consumer in exchange for profit. An organization product(s) offering, is the set goods or services rendered by the said organization to satisfy the needs and wants of its target market, for the purpose of achieving it stated goals and objective. And if the said product offering is well coordinated, it will lead to high demand and continuous existence of the product and it will automatically bring about the need for the said organization to expand its scope or area of production either by diversifying, integrating, among other option available to the organization. Hence, the need to develop or design a product portfolio arises.
A portfolio is referred to be a set of investment. In other words, an organization product portfolio can be referred to as a set or list of the organization product offering (their investment).
When an entrepreneur owns only a single enterprise, he is referred to as a novice owner/entrepreneur. Habitual-serial owners/entrepreneurs are those that start more than one business consecutively and habitual-portfolio owners/entrepreneurs are those who start more than one business concurrently. As documented by extant relevant literature on small business ownership (Carter, 1999).
‘Portfolio entrepreneurship’ is concerned with the ownership of multiple businesses by a single entrepreneur and it is viewed as a means of reducing or spreading business risk.
The need for entrepreneurial skills for product portfolio development evolved as a result of the strong gaps or lack of qualification often faced by small, medium scale enterprises (SMEs) owners, which leads to some set back such as liquidation, low profit, product offering reaching the decline stage within a short period, etc.
Also, there are certain commonalities that exist between small, medium enterprises and entrepreneurship that allows ‘entrepreneurs’ venture in to the medium scale enterprises and making it their habitat. It has gotten to the point that it has become a common practice or tradition to discuss entrepreneurship in relation to small, medium enterprises. For instance, SMEs requires low capital setup which will encourage ‘entrepreneurs’ who have what it take but low capital to setup a business, they can both be a sole proprietorship business or partnership i.e. joint venture, merger, etc.
Hence, SMEs and entrepreneurship needs to be dealt with or handled hand in hand for development to take place in an organization because most SMEs owners lack the required skills and ability to manage a business to a state of stability and sustainable growth and help build their business activities in to an empire and reduce/minimize the setbacks mostly faced by SMEs.
With the small enterprise inventions, adaption’s and general technological development are possible (Kilby (1965), and Mothweit & Zegveld (1981). Also, Steel and Takasi (1982), note that small enterprises have potentials for absorbing labour while maintaining output. And this objective can be greatly achieved with the help of entrepreneur intervention in SMEs industry through the application of the various entrepreneurial skills.
In other word, if all the necessary entrepreneurial skills are also use and maintain in SMEs it will help greatly in developing their product portfolio. Also due to entrepreneurs ability to perceive new business opportunities in the environment they will be able to expand the business horizon in SMEs and thus develop the organization product portfolio by increasing the set of number of product produced by such organization; if well-coordinated hence product portfolio development.
With all the above explanation of who an entrepreneur is and the skills and abilities they possess, including the weakness of SMEs, one will see that there is need to develop entrepreneurial skill for product portfolio of an organization to be developed mostly in small medium enterprises, which will lead to economic development in general ( at a speedy rate).
1.2: STATEMENT OF THE PROBLEM
There are thousands of people who have nursed the aspiration to setup their own business(s). for most the prospect remains just a wishful thought, for others, something happens in their live which presents an opportunity, which they perceived or make use of, perhaps an un-expected inheritance; or an event which forces or bring about a change in direction. But having the capital available to start a business is not enough. Even in the case of the trade men who is made redundant and possesses both the technical skills needed to work and the redundancy pay out to start his, surviving in business requires some unique or unusual skills. The problems lies firstly in identifying which specific skills are mostly relevant to the business proposal, and secondly in determining objectively whether or not they are available in the person (entrepreneur to be). In the event that the required skills are not currently available, then those deficient skills must either be developed or imported i.e. by employing an intrepreneur (imported skilled personnel), or going for training (developed skills).
1.3 OBJECTIVES OF THE STUDY
The aim of this study is to examine the effects of entrepreneurial skill on the development of organizations product portfolio. The specific objectives are to:
1. Identify the skills of an entrepreneur.
2. Evaluate the relationship between entrepreneurship skills and product portfolio development.
3. Identify the problems militating against entrepreneurs in the product portfolio development.
4. To proffer solutions to the identified problems
1.4 RESEARCH QUESTIONS:
For the purpose of this research work, the following question will enable one to find answer to the patient problem of entrepreneurial skills on product portfolio development. They are:
i) What are the skills of an entrepreneur?
ii) What is the relationship between entrepreneurship skills and product portfolio development?
iii) What are the challenges militating against entrepreneurs in the product portfolio development.
1.6: SIGNIFICANCE OF THE STUDY:
The study considers the effects of entrepreneurial skills on product portfolio development. This will guide owners of businesses, managers, researcher and students in the area of skill development. The study will provide basic understanding of the impact of entrepreneurial skills development in Lagos and Nigeria in general. It will also contribute knowledge as to how business in Nigeria could create and refine their capacity to establish and implement an effective product portfolio for the sustainability of organizations in the future.
1.7 LIMITATIONS OF THE STUDY:
The scope of this study is limited or shall be restricted to forty (40) small-medium scale enterprises in Lagos state, specifically in Ojo and Lagos island local government area. Also problems such as funds, sources for appropriate materials and time were encountered.
1.8 DEFINITION OF TERMS:
Entrepreneur: He is a risk taker, who buys at a certain price and sells at an uncertain price. He brings all factors of production and resources of both man and materials needed for effective production together.
Skills: Any work-related to learning or training or personal ability that results in enhanced knowledge and aptitude to perform a job.
Products: A product offering of an organization is the goods or services that is provided by the organization to satisfy its consumers’ needs and wants for profit making purpose or community service rendering.
Product development: It is the process of creating new products or enhancing old products to serve the needs and wants of customers who are ready to buy the product or is already purchasing the product.
Market: It is referred to as the group of consumers or organization that is interested in the product offering of the organization, has the resources (fund) to purchase the product and is permitted by law and other regulatory bodies to acquire the product. A potential market or target market is the total population who has interest in acquiring the product. While the penetrated markets are those in the target market who actually purchased the product.
Product portfolio: This is the list of the set or range of products which is being offered by the firm to its market.
Entrepreneurial: Is an adjective concept that is used to describe the degree of entrepreneurial trait that an individual possess or exhibit.
Business: Business is any purposeful activity engaged in by an individual or groups of individual in other to satisfy their customers’ needs and wants in exchange for profit.
Development: It is a state of growth where by a particular individual, community, country, etc. becomes larger, more nature or more advanced.
Small medium enterprises: Are business enterprises that are setup with low capital and less management team.