MANAGEMENT FACTORS AFFECTING THE OPERATIONAL EFFICIENCY OF MICRO BUSINESS ENTERPRISES: THE CASE OF KONSO WOREDA KARAT CITY ADMINISTRATION

Abstract

ABSTRACT In the study area, most of the micro enterprises emerged and ceased without showing a good growth progress and become productive. To reveal the problems, the study aimed at investigating the management factors affecting the operational efficiency of micro business enterprises based in Konso Former Woreda, now Konso Zone, in Karat City Administration. A sample of one hundred and nineteen micro business enterprises was selected and information was collected by use of a questionnaire which made use of both open and closed ended questions. The questionnaire used a five-point Likert scale which ranged from ‘strongly agree’, ‘Agree’, ‘undecided’, ‘disagree’ and ‘strongly disagree’. The collected data was entered into a statistical package for social sciences for analysis and manipulated through simple relationship and OLS model. The analysis done in two ways indicated that management factors effect on operational efficiency in the micro business enterprises in Karat City Administration in Konso Zone were determined largely by management good planning, leadership, organizing capacity, controlling and experiences status as the very important factors. The findings indicated that the six factors which include management education, experiences, planning, organizing, leading and controlling affect operational efficiency to 80% as depicted by the factor’s relation computation and coefficient of determination. The other factors not investigated in this study, constitute the remainder 20%. Through used OLS model, the above-mentioned factors without managerial education contributed 83.17% impact on operational efficiency of micro enterprises and remaining 16.83% unknown factors not considered by this study. From the finding, it is clearly shows that management factors have significant effect on the operational efficiency of micro business enterprises. Therefore, the micro enterprises must focus working on improvement of those management factors to become efficient. The government stakeholders, privates & NGO’s must focus on those issues to make micro enterprises operationally efficient.