TITLE OF THE PAPER

RELATIONAL EMBEDDEDNESS AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN SOUTHWESTERN NIGERIA

NAME OF AUTHORS:

ALARAPE, Aderemi Ayinla. Management Consultant/Lecturer Centre for Industrial Research and Development Obafemi Awolowo University, Ile-Ife, Nigeria NASSAR, Moshood Lanre Professor of Business Administration Department of Management and Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife, Nigeria

Corresponding Author: Telephone: Email:

ALARAPE, Aderemi Ayinla. +2348034090821 remialarape@yahoo.com or remialarape@gmail.com

Keywords: Business Networks, relational embeddedness, SMEs performance, Nigeria

RELATIONAL EMBEDDEDNESS AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN SOUTHWESTERN NIGERIA ABSTRACT The paper examined the impact of relational embeddedness on the performance of SMEs. The primary data were collected through questionnaire and analyzed using descriptive and inferential statistics. 279 firms were selected for the study. The relational embeddedness was operationalised based on (i) strong ties and (ii) weak ties and the performance of the firm were contrasted on the basis of growth in assets. The result of the study showed that personalised strong ties do not automatically translate to better performance, atimes, weak ties enhance firms performance due to removal of unnecessary pressure, obligations and expectations associated with strong relation.

Introduction The concept of relational embeddedness assumes that firms are closely linked to their local production environments in a world of increasing globalisation. Relational embeddedness emphasises the importance of trust-based networks in firms development and explain why under the same market condition some firms perform better than others. Literature on relational embeddedness in term of effect of degree of relations a firm cultivated with members of its business networks on the firms performance is not only scarce but there is controversy among the available literature on the effect of strong and weak ties on firms performance. Strong and weak ties have direct effects on individual economic action (Granovetter 1990). Strong ties enhance firms performance directly through trust building, information transfer and joint problem solving arrangement (Uzzi, 1997). Whereas, (Burt, 1992) hypothesized that weak ties are performance boosting devices because they provide that crucial freedom to act upon opportunities and the entrepreneurs are likely to gain most when not bound by expectations and obligations.

In this paper, the concern is not to engage on the debate whether is better for firm to cultivate strong relations with the member of is business network or not but provide empirical information on the effects of strong and weak ties on entrepreneurial performance of SMEs as it relates to the Nigeria Business environment. Further, this study is a follow-up to a previous study that found the performance of entrepreneurs who are members of business associations to be significantly higher than those who did not belong to business association.

Theoretical Perspective of Effect of Relational Embeddedness on the Performance of Firms Embeddedness plays an important role in social relations among economic actors. There are many theoretical approaches to the study of firms relations, such as transaction cost approach (TCA), resource dependence approach (RDA) and social network approach (SNA). These theories look at firms relations with social, cultural and economic environments from different perspectives and provide insights into the causes as well as the structure of small enterprise relationship. The TCA analyses firms relations from an economic point of view, while the management point of view is the basis of the RDA and the SNA explains firms relations from a sociological point of view. The Transaction cost approach (TCA) provides a rationale for enterprise networks rather than analyzing the direction of the relations. The focal point of the TCA is transactional event rather than any other relationships. The TCA provides a better basis for analyzing the organizational integration. However, formal integration of small firms among themselves is not a general phenomenon in less developed countries (LDCs). What is commonly found in LDCs are informal relations with other supporting organizations and other firms, because small firms in developing countries are generally seeking for support

rather than looking for avenues to reduce their transaction costs (Ring and Van de Ven 1994). The Resource Dependency Approach is an organizational ecology perspective that looks into the behaviour of an organization in relation to its external environment. According to the RDA, successful performance of a firm depends on resources and supporting networks. The resources and supports are, particularly for small firms, control by outside actors of the firms. Thus, in order to access these resources and supports at a relatively low cost, firms are linked by federations, associations, customer-supplier relationships, competitive relationships, and a social-legal apparatus that define and control the nature and limits of these relationships (Butler and Sohod 1995, Pfeffer and Salanick 1978). Despite, this support from businesses federations and associations, individual firms develop different degrees (strong or weak) of relationship with their customers, suppliers, bankers, larger firms, consultants that cause variance in their performance. Granovetter (1990) stated that relational embeddedness has typically quite direct effects on individual economic actions that is constrained and facilitated by history of interactions and consequent mutual expectations. Therefore, relational quality as preconditioned affects sharing of knowledge and pertinent information essentials for firms development. Specifically, coping with increasing globalization, promoting technology transfer, achieving economies of scale, internalising specialised functions (such as training, marketing intelligence, logistics and technical innovation) and overcoming the problem of poor physical infrastructure which adversely affect their operation and competitive positions of the firm in the market. Strong ties enhance firm performance directly through trust building, information transfer, and joint problem solving arrangements (Uzzi, 1997).

Relational trust and closeness as indicators of relational quality have been found significantly related to managerial sales and innovation performance (Galunic & Moran, 1999). Therefore, the relational quality has effect on firm performance by directly affecting the access to physical and financial resources of the firm. Hence, the study hypotheses are: 1(a) Firms that have strong ties with their Bankers perform better than firms that have weak ties with their Bankers. 1(b) Firms that have weak ties with their Bankers perform better than firms that have strong ties with their Bankers.

2(a)

Firms that have strong ties with their business counsellor perform better than firms that have weak ties with their business counsellor.

2(b)

Firms that have weak ties with their business counsellor perform better than firms that have strong ties with their business counsellor.

3(a)

Firms that have strong ties with their competitors perform better than SMEs that have weak ties with their competitors.

3(b)

Firms that have weak ties with their competitors perform better than firms that have strong ties with their competitors.

4(a)

Firms that have strong ties with larger firms perform better than firms that have weak ties with larger firms.

4(b)

Firms that have weak ties with larger firms perform better than firms that have strong ties with larger firms.

The Conceptual Framework for the Study In explaining entrepreneurship and small business firms, the SNA applies network concept in four different manners. These are: (1) the effect of social forces that increase the density of networks, (2) the role of brokers and other persons or organizations that increase the accessibility of networks, (3) the importance of linkage diversity to the question of which positions in networks are most likely to produce entrepreneurs, and (4) the importance of the social resources embedded in entrepreneurs network. However, these are based on the premises that (i) the entrepreneurial process involves the gathering of scarce resources (finance, and other material resource like information, ideas, advice, customers among others and (ii) resources are usually obtained through the entrepreneurs personal network. In this aspect, a social network provides the entrepreneur with information, support, contact, and credibility. Hence, the SNA is necessary for the analysis of business relations because economic actions are infused and mixed with social context and the embedded business relations is a focal issue in social network analysis (Granovetter 1985, Johannisson 1990, Uzzi 1997). However, since it reveals how actors such as entrepreneurs use their social relations to obtain necessary resources in carrying out economic activities, it complements the resource-based view. The foci of RBV are competitive advantages generated by the firm, from its unique set of resources (Wernerfelt, 1984; Barney, 1986, 1991; Peteraf, 1993). The RBV is based on the assumptions that: (i) firm resource heterogeneity - firms can be thought of as bundles of productive resources and that different firm possesses different bundles of these resources (Penrose, 1959, Barney 1991); and (ii) resource immobility - some of these resources are either very costly to copy or inelastic in supply (Richardo, 1966).

Therefore, the RBV describes a firm in terms of the resources that firm integrates. Thus, for a firm to take high levels of performance and a sustained competitive advantage, it needs to integrate variant resources that should be difficult to create, to substitute or to imitate by other firms. These resources can be tangible or intangible in nature. Tangible resources include capital, access to capital and location (among others). Intangible resources consist of knowledge, skills and reputation, entrepreneurial orientation, among others (Runyan et al., 2006). In this sense, this theory defends that, under imperfection of markets exists a diversity of firms and a variation in the specialisation degrees that provokes a limited transfer of resources, which present type, magnitude and different nature (Amit and Schoemaker, 1993). Therefore, the main reason for firms grow and success is inside of the firms, that is, firms with resources will build up a basis for gaining and sustaining competitive advantage (Peteraf, 1993; Ferreira and Azevedo 2007). The SNA thus provide the explanation for the ways the firm utilised the personalised relations to gain access to this resources and have sustained competitive advantage in the markets. The firm with the greater resources due to the strong ties it has with the members of its social networks will be more equipped with necessary physical and financial resources. Hence, have higher performance compared to firms with weak ties that cannot equally access the resources.

The Research Methods The data for the study were collected from 279 firms from a sample frame of one thousand and forty seven (1,047) SMEs. The two hundred and seventy nine firms are selected using proportionate stratified random sampling procedure. The questionnaire was drawn to collect relevant information on the growth performance of SMEs, the forms of

relationship in the SMEs networks and the state of the physical and financial resources in the SMEs. The performance of the firms was measured using the growth rate in total assets calculated based on Gilbrats rule. Mathematically, the growth rate is expressed as: Xt1 = Xt0 (1+g)t1-t0 Then, g = Xt1 1/t1-t0 1 Xt0 g Xt1 Xt0 refers to growth rate(GR), i.e. the annual growth rate refers to the value of the unit of measure (i.e. assets, employee as at inception). refers to the value of the unit of measure (i.e. assets, employee as present).

The relational embeddedness is expressed in terms of the nature of relevant actors in the networks, such as: (i) the Bank manager, (ii) the Business Counsellor, (iii) Competitors, and (iv) the relations with larger firms. Furthermore, relationship that is at acquaintances level is regarded as weak ties and the one friendly is regarded as strong ties. The data collected were analysed using descriptive and inferential statistics The frequencies distribution and percentages are employed for describing the sample population. The t-test is employed in comparing the mean-values of performance of firms having personalised strong ties to firms having weak ties. The Kruskal-Walliss test compares the rank the mean performance of the firms based on the extensiveness of utilising relationship with members of network. The Correlation test is employed to test the significance of the relationship in firms network on performance.

Result and Discussion The Description of the Relational Embeddedness among the Sample population In general, the majority of the firms have weak ties with the members of their networks. For examples: more than seventy percent (i.e. 72.6%) have weak ties with bank mangers, seventy seven percent (77%) have weak ties with business counsellor, eighty four percent (84.4%) have weak ties with fellow firms in the same business (i.e. competitors) and eighty five percent (85%) have weak ties with larger firms. Whereas, only twenty seven percent (i.e. 27.4%) have strong ties with their bank managers, twenty-three percent (i.e. 22.9%) have strong ties with business counsellor, fifteen percent have strong ties with competitors and another fifteen percent have strong ties with larger businesses (see Table 1). Furthermore, less than twenty percent moderately, quite extensively or very extensively utilized their relations with bank managers. While, twenty six percent and thirty-one percent do not used or sparingly utilized the relationship they have with their bank managers. The above pattern is replicated in terms of the utilization of relationship with business counsellors by the firms. Eighteen percent, twenty percent and three percent of the firms moderately, quite extensively and very extensively utilized their relationship with their business counsellors, While, more than fifty percent of the firms do not utilize or sparingly utilize their relationship with business counsellors. In addition, more than sixty percent of the firms do not utilize or sparingly utilize relationship with their fellow firms, whereas, only thirty-eight percent moderately or quite extensively utilize their relationship with fellow firms. However, no firms extensively utilize the relationship with fellow firms. With respect to having relationship with larger firms: seventy two percent do not utilize or sparingly utilize their relationship with larger firm in their network but thirteen percent, eight percent and seven percent moderately, quite extensively and very extensively utilize their relationship with larger firms in their network (see Table 2). The Effect of Relational Embeddedness on the Performance of Firms The mean value of the performance measure growth in assets of the firms is generally low. The annual growth rate of firms with weak ties is .03 percent and the growth rate of firms with strong ties is -.27 percent. This implied that the performance of small and

medium enterprises in Southwestern Nigeria is generally poor in terms of growth in total assets. The statistical significance test (t-test) show that there is no significant differences between the mean performance measure of firms with weak ties and strong ties with their bank managers. Therefore, developing strong relationship or having weak relationship with the Bank mangers does not have significant effect on the performance (i.e. total growth in assets) of firms (see Table 3). However, the nonparametric test (kruskal-wallis test) based on how extensively the firms utilized their relationship with bank managers vis--vis their performance showed that the mean rank of firms that very extensively utilized their relationship with their bank managers, significantly is the highest (see table 4). Therefore hypotheses 1(a) and 1(b) is rejected and introduce another dimension and proposition that strong ties with bank managers may not lead to better performance in firms, if the relationship is not extensively utilized. This result does not contradict the view of (Uzzi, 1999) that personalized relations between entrepreneurs and their bankers lead to improved performance, it only brings out the importance of extensive utilisation of personalized relationship. The result of the t-test of the effect of having strong ties or weak ties with business counsellor on performance show that mean growth rate in total assets of firm with weak ties with business counsellors in their network is higher than firm with strong ties with business counsellor in their network. The mean growth rate for firms with weak ties is .08 percent while the mean growth rate of those having strong ties is -.56 percent (see Table 5). This is further confirmed by the non parametric kruskal wallis test that returns lower mean rank values for those who extensively utilize business counsellor compare to those who do not or sparingly utilize their relations with business counsellor (see Table 6).

In addition, the non-parametric bivariate correlation further confirmed the above trend. There is a significant negative relationship (i.e. Kendalls tau b = -.180 and rho = -.250) between the extensiveness of utilizing business counsellor and the growth performance of firms at 99 percent confidence level (Table 7). Hypotheses 2(a) is rejected and 2(b) is upheld that firms with weak ties with their business counsellor perform better than firms that have strong ties with their business counsellor. This support the findings of Burt (1992) that Weak ties are also performance boosting devices because vaguely defined relationships provide that crucial freedom to act upon opportunities and entrepreneurs are likely to gain most being not bound by expectations and obligations. The analysis of the relational effect of weak ties or strong ties with fellow firms (i.e. competitors) shows that both types of relationships return negative growth rates in total assets of the firms. However, the t-test of the effect of the relations on performance shows that they are not significant (see Table 8). The nonparametric Kruskal-Walliss test shows that the extensiveness of utilizing the relations with fellow firms in the same business does not have significant effect on the performance of the firms 9see Table 9). Thus, hypotheses 3(a) and 3(b) is rejected. The non significance of the effect of the modes of relationship firm has on other competitively related firms is because competitively related firms see one another as rivals and do not cultivate the required networking relationship that could significantly reduce the cost of transactions by internalizing the advantages of economics of scale as postulated by Nassar and Remi Alarape (2007). The result of test of the personalized relationship of small firms with larger firms shows that the mean performance value of firms with weak ties is significantly higher than mean performance value of firms with strong ties with larger firms (see Table 10). The nonparametric test of the extensiveness of utilizing personalized relations with larger firms shows that the mean rank of the performance measure (growth in total assets) of those who

do not utilize or sparingly utilize the personalized relations is higher than those who quite and very extensively utilize the personalized relations with larger firms (Table 11). This is further confirmed through nonparametric correlation test. The result of the correlation test show that the extensiveness of utilizing the personalized relations is significantly negative related to performance (see Table 12).Therefore, hypothesis 4(a) is rejected and hypothesis 4 (b) is upheld. This implies that firms with weak ties with larger firms perform better than firms that have strong ties with larger firms. This may result from lack of what Uzzi (1997) describes as trust building, information transfer, and joint problem solving arrangements in the relationship between firms.

Conclusion This study contributes to the literature on the empirical effect of relational embeddedness on performance of SMEs by investigating the effect of strong ties and weak ties of small firms with selected members (bank managers, business counsellor, competitors and larger firms) of its network on growth performance of SMEs. Study of this nature is scarce in this part of the world, thus, it is of high relevance to researchers interested in explaining firm performance from a sociological perspective. The results of this study complement existing studies, and it suggests that personalised strong ties with members of firms network is not sufficient to lead to high performance, it has to be extensively utilised. This is because weak ties or non-extensive cultivation of personalised relations can also lead to high performance due to the removal of unnecessary pressure, obligations and expectations that can adversely affect the performance of firms as previously explained by Burt (1992). Therefore, firms need not only cultivate strong informal relationship with member of its business network but it should be extensively utilised for the good of the business. Firms should be very careful in developing strong informal relations because not all such relations contributed positively to performance. Despite the fact that the study does not provide information on those factors that may make developing strong or weak informal relations with members of the firms

network to be injurious or catalyst for improved performance, this may be focus of future research. However, this has not limit its relevance and application by researchers, trainers, owner-managers of SMEs and other practitioners because it highlights the effects of personalised relationship on performance of firms and the importance of well-cultivated informal relationship on growth performance of SMEs. Thus, the study has enhanced the understanding of the relevance of firms social relations with the members of its business network in the explanation of the dynamism of firms performance.

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Appendix
Table 1: The Distribution of the Relational Strength of the Firms with Selected Members of the its Network Valid Percent 72.6 27.4 100.0 Cumulative Percent 72.6 100.0

Bank manager Valid weak strong Total Missing Total Business counsellor Valid weak strong Total Missing Total Competitor Valid weak strong Total Missing Total Larger firms Valid weak strong Total Missing Total Source: Field survey 2008 99 99 99 99

Frequency 199 75 274 5 279 Frequency 212 63 275 4 279 Frequency 232 43 275 4 279 Frequency 234 41 275 4 279

Percent 71.3 26.9 98.2 1.8 100.0 Percent 76.0 22.6 98.6 1.4 100.0 Percent 83.2 15.4 98.6 1.4 100.0 Percent 83.9 14.7 98.6 1.4 100.0

Valid Percent 77.1 22.9 100.0

Cumulative Percent 77.1 100.0

Valid Percent 84.4 15.6 100.0

Cumulative Percent 84.4 100.0

Valid Percent 85.1 14.9 100.0

Cumulative Percent 85.1 100.0

Table 2:

The Distribution of the Extensiveness of Utilisation of Firms Personalised Relations with Selected members of its Network Cumulative Percent 26.3 57.7 72.6 89.1 100.0

Bank Manager Valid Not used at all Used sparingly Used moderately Used quite extensively Used very extensively Total Missing Total Business Counsellor Valid Not used at all Used sparingly Used moderately Used quite extensively Used very extensively Total Missing 99 System Total Total Competitors Valid Not used at all Used sparingly Used moderately Used quite extensively Total Missing Total Larger Firms Valid Not used at all Used sparingly Used moderately Used quite extensively Used very extensively Total Missing Total Source: Field survey, 2008 99 99 99

Frequency 72 86 41 45 30 274 5 279 Frequency 85 79 48 56 7 275 2 2 4 279 Frequency 123 48 61 43 275 4 279 Frequency 167 31 36 23 18 275 4 279

Percent 25.8 30.8 14.7 16.1 10.8 98.2 1.8 100.0 Percent 30.5 28.3 17.2 20.1 2.5 98.6 .7 .7 1.4 100.0 Percent 44.1 17.2 21.9 15.4 98.6 1.4 100.0 Percent 59.9 11.1 12.9 8.2 6.5 98.6 1.4 100.0

Valid Percent 26.3 31.4 15.0 16.4 10.9 100.0

Valid Percent 30.9 28.7 17.5 20.4 2.5 100.0

Cumulative Percent 30.9 59.6 77.1 97.5 100.0

Valid Percent 44.7 17.5 22.2 15.6 100.0

Cumulative Percent 44.7 62.2 84.4 100.0

Valid Percent 60.7 11.3 13.1 8.4 6.5 100.0

Cumulative Percent 60.7 72.0 85.1 93.5 100.0

Table 3:

The Result of the T-Test of Effect of Firm Relationship with Bank Managers on Performance of Firms

Group Statistics Std. Error Mean .16133 .23703

Growth in Asset

Bank manager Weak Strong

N 175 74

Mean .0303 -.2714

Std. Deviation 2.13425 2.03898

Independent Samples Test Levene's Test for Equality of Variances F Growth in Asset Equal variances assumed Equal variances not assumed Sig. t Df

t-test for Equality of Means Sig. (2tailed) Mean Difference Std. Error Difference 95% Confidence Interval of the Difference Lower Upper .87698 .86840

1.616

.205

1.033 1.052

247 143.397

.303 .295

.30165 .30165

.29210 .28672

-.27367 -.26510

Table 4:

Kruskal Wallis Mean Ranks Test of Performance of SMEs and the Extensiveness of Utilising the Relationship with Bank Managers Bank Managers Growth in Asset Not used at all Used sparingly Used moderately Used quite extensively Used very extensively Total Test Statistics(a,b) N 60 76 28 44 25 233 Mean Rank 144.00 114.84 102.27 72.61 153.38

Chi-Square Df Asymp. Sig.

Growth in Asset 37.435 4 .000

a Kruskal Wallis Test b Grouping Variable: Bank manager

Table 5:

The Result of the T-Test of Effect of Firm Relationship with

Business Counsellors on Performance of Firms

Group Statistics Std. Error Mean .16914 .06336

Growth in Asset

Business counsellor Weak Strong

N 194 56

Mean .0808 -.5576

Std. Deviation 2.35591 .47411

Independent Samples Test Levene's Test for Equality of Variances F Sig. T df

t-test for Equality of Means Sig. (2tailed) Mean Difference Std. Error Difference 95% Confidence Interval of the Difference Lower Upper 1.26299 .99431

Growth in Asset

Equal variances assumed Equal variances not assumed

6.551

.011

2.014 3.535

248 234.740

.045 .000

.63847 .63847

.31709 .18062

.01394 .28262

Table 6:

Kruskal Wallis Mean Ranks Test of Performance of SMEs and the Extensiveness of Utilising the Relationship with Business Counsellor Business Counsellor Growth in Asset Not used at all Used sparingly Used moderately Used quite extensively Used very extensively Total Test Statistics(a,b) Growth in Asset 20.649 4 N 75 76 43 49 7 250 Mean Rank 145.37 131.30 124.59 86.23 130.00

Chi-Square Df Asymp. Sig.

.000 a Kruskal Wallis Test b Grouping Variable: Seek advice of a Consultant in managing biz

Table 7:

The Result of the Correlation Test of the relationship of Extensiveness of Utilising the Relationship with Business Counsellor and Performance of Firms

Kendall's tau_b

Growth in Asset

Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N

Growth in Asset 1.000 . 254 -.180(**) .000 250 1.000 . 254 -.250(**) .000 250

Seek advice of a Consultant in managing biz -.180(**) .000 250 1.000 . 275 -.250(**) .000 250 1.000 . 275

Seek advice of a Consultant in managing biz Spearman's rho Growth in Asset

Correlation Coefficient Sig. (2-tailed) N

Seek advice of a Consultant in managing biz

Correlation Coefficient Sig. (2-tailed) N

** Correlation is significant at the 0.01 level (2-tailed).

Table 8:

The Result of the T-Test of Effect of Firm Relationship with Competitors on Performance of Firms Group Statistics Std. Error Mean .15326 .14640

Growth in Asset

Competitor Weak Strong

N 214 36

Mean -.0129 -.3554

Std. Deviation 2.24201 .87837

Independent Samples Test Levene's Test for Equality of Variances F Sig. T df

t-test for Equality of Means Sig. (2tailed) Mean Difference Std. Error Difference 95% Confidence Interval of the Difference Lower Upper 1.08903 .76194

Growt h in Asset

Equal variances assumed Equal variances not assumed

1.614

.205

.904 1.616

248 128.415

.367 .108

.34259 .34259

.37899 .21194

-.40386 -.07677

Table 9:

KruskalWallis Mean Ranks Test of Performance of SMEs and the Extensiveness of Utilising the Relationship with Competitors

Growth in Asset

Competitors Not used at all Used sparingly Used moderately Used quite extensively Total

N 114 45 55 36 250

Mean Rank 134.65 121.53 114.06 118.96

Test Statistics(a,b) Growth in Asset 3.633 3

Chi-Square df Asymp. Sig.

.304 a Kruskal Wallis Test b Grouping Variable: relations with Competitors

Table 10:

The Result of the T-Test of Effect of Firm Relationship with Larger firms on Performance of Firms

Group Statistics Std. Error Mean .15502 .06709

Growth in Asset

Contractual Relations Weak Strong

N 213 37

Mean .0220 -.5466

Std. Deviation 2.26239 .40807

Independent Samples Test Levene's Test for Equality of Variances F Sig. t df

t-test for Equality of Means Sig. (2tailed) Mean Difference Std. Error Difference 95% Confidence Interval of the Difference Lower Upper 1.30434 .90122

Growth in Asset

Equal variances assumed Equal variances not assumed

4.559

.034

1.522 3.366

248 247.684

.129 .001

.56854 .56854

.37358 .16891

-.16726 .23585

Table 11:

Kruskal Wallis Mean Ranks Test of Performance of SMEs and the Extensiveness of Utilising the Relationship with Larger firms

Growth in Asset

Relations with larger firms Not used at all Used sparingly Used moderately Used quite extensively Used very extensively Total

N 152 28 33 20 17 250

Mean Rank 140.01 115.80 93.23 92.53 113.18

Test Statistics(a,b) Growth in Asset 17.861 4

Chi-Square Df Asymp. Sig.

.001 a Kruskal Wallis Test b Grouping Variable: Develop contractual relations with larger firms

Table 12:

The Result of the Correlation Test of the relationship of Extensiveness of Utilising the Relationship with Business Counsellor and Performance of Firms

Kendall's tau_b

Growth in Asset

Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N

Growth in Asset 1.000 . 254 -.189(**) .000 250 1.000 . 254 -.249(**) .000 250

Develop contractual relations with larger firms -.189(**) .000 250 1.000 . 275 -.249(**) .000 250 1.000 . 275

Develop contractual relations with larger firms Spearman's rho Growth in Asset

Develop contractual relations with larger firms

Correlation Coefficient Sig. (2-tailed) N

** Correlation is significant at the 0.01 level (2-tailed).