Manager’s Comprehension of External Environment and the Performance of the SMEs in Kinshasa

Abstract

The relationship between the understanding of the remote environment by the managers and performance of SMEs has received little attention in empirical studies. The main drive of this study was to determine the effect of manager’s comprehension of external environmental factors on performance of SMEs in Kinshasa. The purpose is to increase the understanding of the external forces to reduce the negative influences it has on the activities of the organizations. In the quest to fulfill the aim of this research, positivism paradigm was employed; primary and secondary info were gathered. Former was collected using a well-organized set of questionnaires. A descriptive survey design-sectional of 520 SMEs on managers in Kinshasa was conducted. The collected data was coded and the SPSS version 23 program was used to do analysis. The study found that it was only the comprehension of the political environment which significantly and positively (p=0.006>0.05) influenced profitability at 5% level of significance. However, the comprehension of the other environmental factors negatively but insignificantly (p > 0.05) influenced profitability at the SMEs in Kinshasa DRC. There was no significant relationship between technological, socio-cultural and economic factors with all the indicators of performance. These results suggest that the relationship is largely indirect. Hence, there is need to introduce the mediating and moderating variables such as decision making and strategy implementation to improve and explain the relationship.