Abstract:
This study aims to investigate the impact of entrepreneurs’ decision-making styles on SMEs
financial performance in Tarime Town in Tanzania. The first specific objective of this study was
to examine the impact of rational entrepreneurs’ decision-making style on financial performance
of SMEs in Tarime Town. The second specific objective of this study was to examine the impact
of intuitive entrepreneurs’ decision-making style on financial performance of SMEs in Tarime
Town. The third specific objective of this study was to examine the impact of dependent
entrepreneurs’ decision-making style on financial performance of SMEs in Tarime Town. The
study applied descriptive research design with a quantitative research approach. The study
sampled 148 SMEs owners and reached 119 SMEs owners were reached. Data were collected
using closed-ended questionnaires. Data analysis was done through descriptive statistics and
simple linear regression analysis. The study findings showed that while sole traders are more
inclined to intuitive decision making style, the partnerships and companies owned SMEs are
more inclined to apply rational and dependent decision making styles which rely on data rather
than personal feelings. This study further noted that despite the noted distinctions, the
entrepreneurs from all three surveyed groups slightly apply all three decision-making styles in
rare occasions. The regression results showed that rational, intuitive and dependent decision
making styles have significant impact on financial performance of SMEs through influencing
revenues, profitability, liability management and cash flow. Therefore, this study includes that
the best decisions are the ones that combine both rationality style driven by facts and intuition
driven by feelings, experiences and intuitions.
