SMEs Longevity: The Wax of Learning Orientation

Abstract

Longevity is the soul of businesses. Nevertheless, failure/closed-shop rates for Nigerian SMEs are 80% within the first five years of inception. Moreover, can learning orientation and its proxies (intra-organizational knowledge sharing, open-mindedness, goal-oriented learning) serve to wax and revamp the narrative on SME longevity? The paper implemented a cross-sectional survey research design to obtain empirical data from 471 owners/managers of SMEs in South-West Nigeria through a structured questionnaire. The simple random sampling technique was used, while the reliability and validity tests were determined based on the pilot study results. The partial least squares structural equation modeling (PLS-SEM) analysis findings revealed that learning orientation had a negative and insignificant effect on SMEs longevity in South-West, Nigeria [(Adj R2= 0.038; F2 = 0.005; SRMR = 0.430, NFI = 0.445, p < 0.05)]. Besides, the effect size of the proxies was small (2.5%, 0.7%, and 0.5% respectively) but statistically significant on SMEs longevity. Therefore, SME managers/owners should reassess their approach to learning orientation components to enhance intra-organizational knowledge sharing, promote a more open-minded culture, and emphasize goal-oriented learning to revamp SME longevity in the short and long run.