Abstract
This paper examined the effect of spiritual capital on the performance of SMEs in in Benue state. The paper specifically sought to examine the effect of business culture, business ethics, personal values, and moral reasoning on the performance of Small and Medium Enterprises (SMEs) in Benue State. A survey design was employed in gathering the needed data from a sample of 323 out of a total population of 1674 registered SMEs in Benue State. The data gathered were further subjected to a regression analysis with the aid of Statistical Package for Social Sciences (SPSS) version 21. The study found that all the spiritual capital components used in the study have a positive and significant effect on SMEs’ performance. The study recommended among others that the management of SMEs in Benue State should employ strategies that will enhance the quality of its business culture, ethics, personal values, and moral reasoning to boost SMEs’ performance.
Keywords: Culture, Ethics, Performance, Small and Medium Enterprises, Spiritual Capital.
Introduction
Small and Medium Enterprises (SMEs) no doubt plays a vital role in economic growth and development in any nation, especially the developing countries as it is found to be the major sector with the highest rate of employment (Valadez, 2011). Consequently, the growth and development of SMEs in Nigeria and Benue State, in particular, are of significant importance to the development of Benue State and Nigeria as a whole.
Despite the release of support funds by the federal government of Nigeria in recent times to support the growth of SMEs in Nigeria, it is, however, pertinent to note that despite the significant role SMEs play towards development in Benue State and Nigeria as a whole, the high rate of failure and collapse of SME is alarming in recent times. This failure is attributed to several factors, which are not only tied to its physical assets alone but also to its invisible assets such as; cultural practices, ethical practices, moral reasoning, lack of functional skills, poor attitude towards customers, inefficient leadership styles, and conduct of unethical behaviour amongst others. It is also pertinent to note that scanty literature exists in assessing the effect of spiritual capital on SME performance and most researchers focus more on assessing the physical assets alone. This study is driven by the desire to elaborate on the effect of spiritual capital on the performance of SMEs in Nigeria. This study is considered significant in this present time as it intends to generate empirical findings on the nexus between spiritual capital and performance among SMEs in Benue State. More so, the findings of this study will help improve the theoretical framework for business performance. In light of the contribution of the SMEs in Nigeria and Benue State in particular, it is of significance to investigate factors that can improve their performance. Hence the findings of this study, if access will be useful to SMEs owners and organisations that assist SMEs to better understand factors that can be of immense help to improve the performance of SMEs.
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