Managerial competences and enterprise growth among small and medium enterprises: a moderating effect of digitalisation adoption in Kampala capital city authority

Abstract

The study examined the managerial competences and enterprise growth among Small and Medium enterprises; A moderating effect of digitalisation adoption in Kampala Capital City Authority. The objectives of the study were to; assess the relationship between experience and the enterprise growth among SMEs in Kampala District, examine the relationship between knowledge and enterprise growth among SMEs in Kampala District, establish the relationship between skills and enterprise growth among SMEs in Kampala District, examine the relationship between managerial competencies and enterprise growth among SMEs in Kampala District, establish the moderating effect of digitalisation adoption on relationship between managerial competencies and enterprise growth among SMEs in Kampala District. The research design deployed was a cross section survey design where a sample of 382 SMEs was selected using simple random technique. The study approach was both quantitative and qualitative. Qualitative data was analysed using SPSS to generate descriptive analysis and inferential statistics. Data collected was analysed using SPSS version 23.0 where regression analysis was performed to establish the effect between the variables. The findings shows, experience, knowledge and digitalisation adoption has a positive and significant effect on enterprise growth among SMEs, with experience being highest predictor (β = 0.330, p<0.00), followed by knowledge (β = 0.288, p<0.00) and digitalisation adoption (β =0.191, p<0.00). The skill was found insignificant despite having a positive contribution to enterprise growth (β = 0.103, p>0.216). This means that the main predictor of enterprise growth is experience followed by knowledge then digitalisation adoption and lastly skills. The researcher recommends that there is need to formulate and implement a strong SME training and intervention policy. SMEs need to do routine workshops to share experience and influence their mode of operations, and consequently enhance enterprise growth among SMES. Further still, SMEs need to do self-evaluation and tailor outcomes to their managerial obligations, because experience was found as a key factor for SME performance. Therefore, in order to set a favourable environment for SMEs to flourish, there is need for extensive survey- based analysis of small firms to be able to provide incentives for overall growth. In conclusion, from the analysis of three predictors of managerial competence, it was generally concluded that managerial competence affects growth of SMEs by close to 14.6 percent. Therefore, if SMEs are to attain outstanding performance, there is need for SMEs to put significant effort in managerial competence especially experience and knowledge. The relationship between managerial competencies and enterprise growth among SMEs can be well moderated by digitalisation adoption as the findings have clearly revealed that digitalisation adoption by business has got a numerous advantages and a significant impact on the enterprise growth. The theories that inform the study is UTAUT and human capital theory.