EFFECT OF MANAGERIAL SKILLS ON GROWTH OF SMALL AND MEDIUM ENTERPRISES IN SOUTH EAST NIGERIA

Abstract

Despite the significant contribution of SMEs to national economic development and various government support initiatives, including credit schemes, tax incentives, and regulatory interventions, the sector has continued to experience declining performance. This decline is reflected in the reduction of SMEs’ contribution to Nigeria’s GDP from 50% in 2021 to 43.3% in the fourth quarter of 2022. The study specific objective was to examined the effect of communication skills and interpersonal skills on the growth of small and medium enterprises in South East, Nigeria.  Survey designed was adopted wherein, a sample of 400 owners/managers of SMEs was drawn by using Taro Yamani (1967) from 57,035 population. The sample was selected using convivences sampling technique. Data was collected using a five-point Likert scale questionnaire and analyzed using the Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings revealed that interpersonal skills have positive but insignificant effect on growth, while communication skills had positive and significant effect on growth of small and medium enterprises in South East, Nigeria. Based on the findings, the study recommends that SME managers should pay greater attention to developing effective communication through training, feedback mechanisms, active listening, interpersonal communication, and clear dissemination of information. Improved communication can enhance coordination and employee commitment, strengthen customer and supplier relationships, reduce misunderstandings, and facilitate timely managerial decisions. In addition, managers should particularly focus on applying interpersonal skills in ways that directly support customer retention, employee productivity, supplier relationships, networking, and identification of new business opportunities.