Role of Entrepreneurial Networks and Eefect of Failure Attributions on Growth Orientation of Survival-Focused Micro-Entrepreneurs in the Slums of Nairobi, Kenya

Abstract

Micro-entrepreneurs have opened up international markets, increased exports and created employment worldwide. However, among many of the Africa informal economies, approximately 400,000 micro-entrepreneurs do not survive 3 years and 90% remain survival-focused. Previous researches have failed to analyze the benefits and inefficiencies of affective networks together. Empirical evidence on how micro-entrepreneurs can overcome restraining effects of affective networks is limited. Empirical research on cognitive networks has been on economic aspects but psychologically informed conceptualization is lacking. Although research indicates that internal and external attributions have effect on entrepreneurs, failure attributions micro-entrepreneurs with survival-driven mentality have not been tested. The focus has been on actual growth and not growth orientation. Thus, the overall objective of this study was to investigate the role of entrepreneurial networks and effect of failure attributions on growth orientation of survival-focused micro-entrepreneurs in the slums of Nairobi. Specifically, the study sought to investigate the role of affective, role of cognitive networks, examine the effect of internal failure attributions, effect of external failure attributions and determine the effect of entrepreneurial networks and failure attributions on growth orientation of survival-focused micro-entrepreneurs in the slums of Nairobi. The study is anchored on actor-network theory, attribution theory and theory of planned behavior. Pragmatic paradigm guided the study. The target population comprised of 304 survival-focused micro-entrepreneurs. Both primary and secondary data were collected. A sequential, exploratory, mixed method design was adopted. Saturation principle was used to select (N=20) participants in the qualitative interviews. Yamane formula was used to sample (N=166) participants for the quantitative study. For qualitative interviews, confirmability was used to test for reliability. Reliability of questionnaires tested on pilot data targeting 16 respondents revealed α above 0.70.Validity of narrative interviews was achieved through transcripts checks by supervisors. Content and criterion validity of questionnaires was achieved through literature reviews and factor analysis was used to access construct validity. Qualitative data was analyzed using thematic content analysis addressing objective 1 and 2. Multiple linear regression analysis was used on objective 3 and 4. The findings of objective one were that affective networks are effective after failure but turn destructive during growth. The findings of objective two were that besides economic support, cognitive networks provide psychological support to micro-entrepreneurs. The findings for objective three were that the change in coefficient of external failure attribution F6 and internal failure attribution F1(intentionality) was significant and negative, external failure attribution F7 (Low financial independence) was significant and positive (R2=0.452 P<0.05). Findings for objective four were that low finanacial independenc (F7) and cognitive networks was significant and positive, intentionality (F1) and affective networks was significant and negative (R2=0.552 P<0.05). The study is deemed significant in its ability to creating entrepreneurial linkages capable of conveying growth signals. The study concludes that affective networks are beneficial after failure beyond which they turn destructive, cognitive networks provides entrepreneurial confidence and attributing failure to specific external factors is beneficial. Thus, mechanisms should be devised that fosters cognitive linkages and addresses external environment needs of micro-entrepreneurs.