CALCULATED RISK-TAKING AND PERFORMANCE OF VALUE-SYSTEM ACTORS IN THE LEATHER INDUSTRY IN KENYA

Abstract

The importance of entrepreneurial orientation traits in determining performance of businesses has
been empirically established in Small and Micro Enterprises (SME’s) but little studied in Africa
or from an industry ecosystem perspective. Further, traditional factor-based industries such as
leather have also not received enough attention in entrepreneurship studies with the increasing
attention to knowledge-based industries. This study was exploratory and diagnostic research on
the influence of calculated risk-taking and performance of value-system actor businesses in
Kenya’s leather industry. A mixed sampling was carried out of sixty-eight value-system actors as
industry representatives. Fifty-two responses were found to be valid for analysis. Factor analysis
showed calculated risk-taking was a unidimensional construct comprising three indicators while
performance comprised two dimensions dependent on the wording of measurement items. The
study showed a significant positive casual relation between calculated risk-taking and
performance of value-system actors in Kenya’s leather industry (r=0.212, p<0.05), determining
46.1% (β=0.461, t-statistic 3.670, p-value 0.000) of performance. The study concludes that
enhancement of calculated risk-taking as an entrepreneurial orientation of value-system actors
determines their performance. It recommends an ecosystem perspective in entrepreneurship
studies, policy and practice for enhancing risk-taking propensity amongst industry actors in order
to realize economic benefits of entrepreneurship in the wake of globalized competition.
Key words: Calculated risk-taking, entrepreneurial orientation, value-system actors, leather
industry, performance, entrepreneurial ecosystem