Managerial skills and the performance of small and medium enterprises in Kampala

Abstract

This study was motivated by the fact that SMEs are important to the development of Uganda’s economy, and that their performance is greatly hampered by skill inadequacies. The purpose of the study was to establish the effect of managerial skills on the performance of Small and Medium Enterprises (SMEs) in Kampala. The study was guided by the following objectives; to assess the availability of managerial skills (decision making, leadership and delegation among Small and Medium Enterprise (SME) business owners in Kampala, Uganda, and to assess the effect of managerial skills among Small and Medium Enterprise (SME) business owners in Kampala, Uganda. The study was based on a descriptive survey design. Primary data was collected using self-administered questionnaires issued to respondents. A sample size of 384 respondents was selected from a population of 110,714 SMEs, using simple random sampling method. Of these, 287 (74.7%) responded to the study questionnaire. Data was analyzed using SPSS version 20.0. Correlation and regression analysis was carried out to establish the association among the variables. The results indicated a significant positive association among the variables of the level of managerial skills and SME performance of SMEs. Regression analysis revealed that managerial skills contributed 54.3% of the variance in SME performance. In order to improve managerial skills among SMEs, government and other stakeholders have to provide incentives to lower the cost of acquisition of managerial skills by SMEs in order to improve their performance.