Assessing the impact of enteprenureship decision making style on smess financial performance in Tanzania

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.