The influence of entrepreneurial leadership on factors affecting SME growth in supply chains: The case of Oman

Abstract

This thesis explores in depth the factors influencing growth in small and medium enterprises (SMEs) from a supply chain perspective and examines how entrepreneurship affects them in Omani SMEs. The study is undertaken in order to complement the scarce literature on SMEs related to supply chains and improve the understanding of what factors are crucial in determining growth in them. The research is focused on the role of entrepreneurial qualities and behaviours for the growth of SMEs in developing countries, as their economies are more dependent on smaller companies. The context of this research is within Oman, which represents a typical developing economy containing a large number of active SMEs. The main factors for SMEs growth are identified through a literature review of past and contemporary research studies on supply chain networks, SMEs, growth and entrepreneurship. The factors are divided into areas related to the positions of the company (market position of the firm, negotiating power, Supply chain relationships and firm’s image), and to SMEs' value-adding capabilities (cost optimisation, and innovations). The review also reveals that the critical entrepreneurial traits are: managers' culture and motivations, strategic thinking, sense for opportunities, risk-taking, continuous learning, their leadership abilities and networking skills. Based on the literature review findings a conceptual framework is proposed. This research is exploratory and explanatory in nature and relies on a qualitative approach to find out how entrepreneurship relates to growth in SMEs. Primary data is collected from in-depth semi-structured interviews with managers in 25 Omani SMEs from various industrial and service sectors 10 representing different supply chain positions. The data is processed through content analysis using the factors identified from the literature review as initial themes. The findings affirm the importance of SMEs' supply chain positions and their value adding capabilities for growth. Furthermore, all elements of entrepreneurship are found to affect growth factors. Results show positive attitude and growth aspirations lead to more proactive market behaviour, while strategic thinking helps managers choose more sustainable market positions. Results indicate leadership improves company costs by increasing employees' motivation and productivity and also facilitates the implementation of innovations. Learning orientation is stated to be crucial for exploring new ideas for innovations, while a good sense for opportunity helps managers evaluate them and choose the right ones. Finally, risk-taking propensity emerges as instrumental in the actual undertaking of innovation projects as it is needed for initiating them.