Effects of Risk Taking on the Market Share of SMEs in Ado-odo/Ota, Local Government Area, Ogun State, Nigeria

Samuel, Henry E., Adeyeye, Mosunmola, Salau, Odunayo P. and Efe-Imafidon, Emmanuel O.

Abstract:

Small and Medium-scale enterprises are well-thought-out as formidable engine for economic growth and development in Nigeria. For SMEs to build a robust market share there is need for calculated risk taking. Risk taking is an essential part of business including SMEs and has the capacity to determine market share of the organisation among others. Hence, this study examined the effect of risk taking on market share among selected SMEs in Ado-odo/Ota, Ogun state. The sample size for this study was 153 respondents who are business owners, managers, supervisors, or staffs of selected SMEs. The analyses were done using the frequency distribution table and the multiple regression technique on SPSS version 23. Findings from the study shows that more than half of the SMEs (115, 77.2%) have only existed for less than 5 years and were mostly (52, 34.9%) within age group 33-37 years. Findings from the multiple regression analyses shows that there is a significant relationship between risk taking and the market share of SMEs. The R- value = 0.58 which means that the indicators of risk taking (i.e., SMEs owners and managers are prompt to move ahead with a promising new approach when others might hold back, ability to create a culture of risk taking within the working environment, enjoyment of uncertainty and risk taking and the willingness to take risks for the sake of the business to attract more market shares) as adopted in the study explained 58% of variation in the outcome variable. The ANOVA table shows that the F-statistic was 18.3; P= 0.000. This means that the four indicators of risk taking jointly have a highly significant effect on market share. Of the four indicators, willingness to move ahead with a promising new approach (t-statistic = 7.8; p< 0.01) and ability to create a culture of risk taking within the working environment (t-statistic = 2.2; p<0.05) had stronger effects on employee satisfaction among others. The study recommends and concluded that there is need for SMEs to constantly improve on their business strategies and have a positive behavior towards risk taking.