Influence of Successors’ Entrepreneurial Competencies on Performance in Family-Owned Small and Medium Enterprises in Arusha City, Tanzania: Entrepreneurial competencies, Family Business, Successors, Performance

Entrepreneurial competencies, Family Business, Successors, Performance

Abstract

This paper examines attributes of successors’ entrepreneurial competencies
such as risk-taking propensity, ability to exploit business opportunities,
innovation and commitment in family businesses in Arusha City, Tanzania.
A cross-sectional research design was employed using a quantitative survey
approach, in which two hundred family business successors provided data for
this paper. The data were analysed using the Hierarchical Regression Model
to assess the influence of successors’ entrepreneurial competencies on the
performance of family-owned SMEs. The findings indicate that successors’ risktaking propensity and the ability to exploit business opportunities influence
the performance of family-owned SMEs. The paper concludes that familyowned SMEs managed by successors who can take calculated risks and are also
able to exploit business opportunities are in a good position to realize better
performance in terms of net profit. It is recommended that family business
founders should build their successors’ entrepreneurial competencies.