Managerial Skills for Micro, Small and Medium-sized Enterprises (MSMEs)



Effective managerial skills can play a key role in the internal governance of micro and small businesses in Africa, enabling them to survive, compete and thrive in a dynamic business environment. However, due to the low absorption capacity, many micro and small entrepreneurs and managers lack the necessary managerial skills. We collected data from MSMEs owners and managers in Tanzania to examine the managerial skills required and their effect on business performance based on thematic content analysis and regression analysis. The results show that the managerial skills of MSMEs owners and managers have a significantly positive effect on MSMEs performance, in particular, financial management, marketing, human relations, and entrepreneurial skills were crucial skills in running small businesses successfully. However, financial management, marketing and entrepreneurial skills were the main skills gaps for many MSMEs owners and managers, suggesting that education, mentoring, and training in these areas for MSMEs owners and managers need to be strengthened. This study argues that since young people form the majority of the stakeholders running small businesses, targeted policies and strategies to promote entrepreneurship among young people through entrepreneurial learning and experiences can help instil an entrepreneurial mindset, one of the crucial skills in small business management.


Adomako, S., Danso, A., & Ofori Damoah, J. (2016). The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana. Venture Capital, 18(1), 43–61.

Afolabi, B., & Macheke, R. (2012). An Analysis of Entrepreneurial and Business Skills and Training Needs in SMEs in the Plastic Manufacturing Industry in the Eastern Cape Province, South Africa. International Review of Social Sciences and Humanities, 3(2), 236-247.

Agbonifoh, B.A., Oseyomon, P., & Asein, E. I. (2007). Small business enterprises and marketing functions. Journal of National Institute of Marketing of Nigeria, 1(1), 131-144.

Aikaeli, J. (2012). Improving Competitiveness for SMEs to Harness Available Trade and Investment Opportunities: The Case of Tanzania. Huria: Journal of the Open University of Tanzania, 11(1), 25–43.

Anderson, V. (2017). Criteria for Evaluating Qualitative Research. Human Resource Development Quarterly, 28(2), 125-133.

Ardiana, I. D. K. R., Brahmayanti, I. A., & Subaedi. (2010). Kompetensi SDM UKM dan pengaruhnya terhadap kinerja UKM di Surabaya (HR competences of SMEs and their effects on SMEs performance). Jurnal Manajemen dan Kewirausahaan, 12(1), 42-45.

Ayyagari, M., Beck, T., & Demirguc-Kunt, A. (2005). Small and Medium Enterprises across the Globe. Small Business Economics, 29(2007), 415-434.

Balunywa, W. (1992). Constraints to Small Business Growth Entrepreneurship and Small Business Enterprise Growth in Uganda.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.

Barney, J. B. (1986). Types of competition and the theory of strategy: toward an integrative framework. Academy of Management Review, 11(4), 791-800.

Becker, G. S. (1964). Human Capital. A theoretical and Empirical Analysis, with Special Reference to Education. The University Chicago Press.

Bratianu, C., & Vasilache, S. (2009). Evaluating linear-nonlinear thinking style for knowledge management education. Management & Marketing, 4(3), 3-18.

Bratianu, C., Prelipcean, G., & Bejinaru, R. (2020). Exploring the latent variables, which support SMEs to become learning organizations. Management & Marketing. Challenges for the Knowledge Society, 15(2), 154-171.

Brixiova, Z., & Kangoye, T. (2014). Youth Employment in Africa: New Evidence and Policies from Swaziland Disadvantaged workers. Springer.

Buchdadi, A. D, Sholeha, A., Ahmad, G. N., & Mukson, U. (2020). The Influence of Financial Literacy on Smes Performance Through Access to Finance and Financial Risk Attitude as Mediation Variables. Academy of Accounting and Financial Studies Journal, 24(5), 1-16.

Chinedu, E., Nwoha, C., & Udeh, S. N. (2020). EFFECT OF AUDIT QUALITY ON FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA (2006-2016). Advance Journal of Management, Accounting and Finance, 5(1), 1-12.

Churchill, G., & Brown, T. (2004). Basic Marketing Research. In R. Cooper & S. Schindler (Eds.), Business Research Methods. McGraw-Hill.

Creswell, J. W. (2008). Mapping the Field of Mixed Methods Research. Journal of Mixed Methods Research, 3(2), 95-107.

Criveanu, M., & Iacob, C. (2011). Role of Management Control on SMEs Performance assurance (MPRA Paper No. 31159).

Dalberg. (2011). Report on Support to SMEs in Developing Countries Through Financial Intermediaries.

Dew, J., & Xiao, J. J. (2011). The Financial Management Behavior Scale. Development and validation. Journal of Financial Counseling and Planning, 22(1), 43–59.

Dissanayake, K. (2016). Institutional Forces and Life Cycle Stages of Women-led SMEs in Developing Economies. Journal of Business Studies, 3(2), 40-55.

Dobbs, M., & Hamilton, R. T. (2007). Small business growth: recent evidence and new directions. International Journal of Entrepreneurial Behavior & Research, 13(5), 296–322.

Dragan, S. (2012). 3 Managerial Skills Each Manager Should Have. Entrepreneurship in a box.

Effiom, L., & Edet, S. E. (2018). Success of small and medium enterprises in Nigeria: Do environmental factors matter. Journal of Economics and sustainable Development, 9(4), 117-127.

Eniola, A. A., & Entebang, H. (2015). Government policy and performance of small and medium business management. International Journal of Academic Research in Business and Social Sciences, 5(2), 237-248.

ESRF. (2016). Participation of Small and Medium Enterprises (SMEs) in International Trade: Country updates. PACT EAC2.

Freeman, R. (2008). Labour Productivity Indicators, Comparison of two OECD Databases Productivity Differentials & The Balassa-Samuelson Effect.

Gärling, T., Kirchler, E., Lewis, A., & van Raaij, F. (2009). Psychology, Financial Decision Making, and Financial Crises. Psychological Science in the Public Interest, 10(1), 1–47.

Gupta, B. C. (2009). Management: Theory and Practice (14th ed.). Sultan Chand & Sons.

Gümüsay, A. A., & Bohné, T. M. (2018). Individual and organisational inhibitors to the development of entrepreneurial competencies in universities. Research Policy, 47(2), 363–378.

Hamisi, S. (2010). Challenges and opportunities of Tanzanian SMEs in adapting supply chain management. African Journal of Business Management, 5(4), 1266-1276.

Hamsani, B., Prihardini, D., & Ayu, W. (2020). The Analysis of Locus of Control and Managerial Skills on the Competitiveness of Micro, Small and Medium Enterprises (MSMEs) in Pangkalpinang City. Advances in Economics, Business and Management Research, 163(1), 76-81.

Haselip, J., Desgain, D., & Mackenzie, G. (2015). Non-financial constraints to scaling-up small and medium-sized energy enterprises: Findings from field research in Ghana, Senegal, Tanzania and Zambia. Energy Research & Social Science, 5(1), 78-89.

Huck, J. F., & McEwen, T. (1991). Competencies needed for small business success: Perception of Jamaican entrepreneurs. Journal of Small Business Management, 3(29), 90-93.

Hussain, J., Salia, S., & Karim, A. (2018). Is knowledge that powerful? Financial literacy and access to finance: An analysis of enterprises in the UK. Journal of Small Business and Enterprise Development, 25(6), 985– 1003.

Ibidunni, A. S., Olokundun, M. A., Oke, A. O., & Nwaomonoh, I. C. (2017). Enhancing the performance of agro-based SMEs: The role of entrepreneurship competencies. Covenant Journal of Entrepreneurship, 1(1), 44–51.

Jennings, P., & Beaver, G. (1997). The Performance and Competitive Advantage of Small Firms: A Management Perspective. International Small Business Journal, 15(2), 63-75.

Juma, S. A., & Said, F. A. (2016). SME Globalization-Tanzania Case Study. International Journal Advances in Social Science and Humanities, 4(6), 1-4.

Karami, A. (2004, April 1-3). How Human Resource capabilities affect the organizations’ performance? The case of electronic industry in the United Kingdom. Paper presented at the Fifth European Conference on Organizational Knowledge, Learning and Capabilities, Centre of Strategic Management & Leadership, University of Innsbruck, Austria.

Kauffman C. (2005, May 7). Financing SMEs in Africa. Policy Insights.

Kazimoto, P. (2014). Assessment of Challenges facing Small and Medium Enterprises towards International Marketing Standards: A Case Study of Arusha Region Tanzania. International Journal of Academic

Research in Accounting Finance and Management Sciences, 4(2), 303–311.

Kimani, P. M., & Ntoiti, J. (2015). Effects of financial literacy on performance of youth led entreprises: A case of equity group foundation training program in kiambu county. International Journal of Social Science Management and Entrepreneurship, 2(1), 2018–2231.

Kotorri, M., & Krasniqi, B. A. (2018). Managerial Characteristics and Export Performance – Empirical Evidence from Kosovo. South East European Journal of Economics and Business, 13(2), 32–48.

Kozan, M. K., & Akdeniz, L. (2014). Role of strong versus weak networks in small business growth in an emerging economy. Administrative Sciences, 4(1), 35–50.

Lee, C., Lee, K., & Pennings, J. M. (2001). Internal capabilities, external networks. and performance: A study on technology-based ventures. Strategic Management Journal, 22(6-7), 615-640.

Lwesya, F., Mwakalobo, A. B. S., & Mbukwa, J. (2021). Utilization of non-financial business support services to aid development of Micro, Small and Medium Enterprises (MSMEs) in Tanzania. Small Business International Review, 5(2), 358.

Mănăilă, I., Pop, F., Dimitriu, R., Măntescu, R., Petcu, M., Enache, L., Hăhăianu, L., Badea, G., Neveanu, P. (2014). Consilier - Ghid complet pentru managerul HR. Rentrop & Straton.

Mbago, A. (2013). The Constraints Faced by Tanzania SMEs in Exploitation of the Regional Markets. Case of Selected SMEs at Ilala Municipality (Doctoral dissertation, Mzumbe University). Business Administration (MBA-CM) of Mzumbe University.

Mkenda, K. B. (2005, July 28). The Impact of Globalisation on Tanzania’s Labour Market: Evidence from the Manufacturing Sector [Paper presentation]. Conference hall ‘’Policy Dialogue for Accelerating Growth and Poverty Reduction in Tanzania’’, Tanzania, Africa.

Mkenda, B. K., & Rand, J. (2020). Examining the Ability of Tanzanian Small and Medium Enterprises (SMEs) to Increase their Penetration into Export Markets. Business Management Review, 23(1), 79-102.

Nandonde, F. A. (2019). Building Commitment in Supplier–Retailer Relationship in Developing Economies: The Case of Tanzania. FIIB Business Review 8(1) 39–50.

Nishantha, B., & Kawamura, Y. (2011). The Role of Human and Social Capital on Small Enterprise Growth: Evidence from Sri Lanka. Ryukoku Journal of Economic Studies, 50(3), 54-71.

Nyangarika, A. (2016). Social Economic Constraints towards Women Business Growth in Tanzania. European Journal of Business and Management, 8(5), 130-139.

OECD. (2015). New Approaches to SME and Entrepreneurship Financing: Broadening the Range of Instruments. OECD Publishing.

OECD. (2017). Fostering markets for SME finance: Matching business and investor needs. OECD Publishing.

Olomi, R.D. (2006, March 23). Policy Dialogue Seminar on Opportunities and Challenges for Rural SMEs Development in Tanzania [Conference session]. Economic and Social Research Foundation (ESRF), Tanzania, Africa.

Onah, J. O., & Allison, P. U. (2007). Marketing and entrepreneurship development. Journal of National Marketing Institute of Nigeria, 1(1), 122-130.

Oparah, P. C., Aghara, G. C., Ndubuisi, V. N. O. A., & Chidozie, E. (2018). The Importance of Marketing in Entrepreneurial Development and Poverty Alleviation in Nigeria. International Journal of Academic Research in Business and Social Sciences, 8(10), 524–538.

Pasape, L. (2018). Internationalization of Small and Medium Enterprises from Arusha Tanzania: Market information, Financial Resources and Product Quality Setbacks. Business and Management Studies, 4(2), 77-89.

Popescu, L., Iancu, A., Avram, M., Avram, D., & Popescu, V. (2019). The Role of Managerial Skills in the Sustainable Development of SMEs in Mehedinti County, Romania. Sustainability, 12(3), 1119.

Programme on Boosting Employment through Small Enterprise Development Job Creation and Enterprise Department International Labour Office · Geneva. (2005). Support for Growth-oriented Women Entrepreneurs in Tanzania. OPSD.

Purwaningsih, R., & Kusuma Damar, P. (2015). Analisis faktor- faktor yang mempengaruhi kinerja usaha kecil dan menengah (ukm) dengan metode structural equation modelling (studi kasus UKM berbasis industri kreatif Kota Semarang). Prosiding SNST Fakultas Teknik Universitas Wahid Hasyim Semarang, 1(1), 7–12.

Purwidianti, W. (2015). Pengaruh faktor internal dan eksternal terhadap kinerja usaha industri kecil dan menengah di Purwokerto utara (Internal factor effect toward SMEs performances in North Purwekerto). Jurnal Kinerja, 19(1), 149-159.

Rutashobya, L., & Jaensson, J. (2004). Small firms' internationalization for development in Tanzania: Exploring the network phenomenon. International Journal of Social Economics, 31(2), 159-172.

Stanislous, Z., & Mornay, R. L. (2011). The influence of human investment on the performance of small and medium enterprises (SMEs) in the manufacturing sector of Harare, Zimbabwe. African Journal of Business Management, 6(33), 9431- 9436.

Shehnaz, T., & Ramayah, T. (2015). Entrepreneurial competencies & SMEs business success: The contingent role of external integration. Mediterranean Journal of Social Sciences, 6(1), 50–61.

Soetjipto, W. B. (2002). Paradigma baru manajemen sumber daya manusia. (A new paradigm of HR). Penerbit Amara Books.

Tamkin, P. (2005). Measuring the Contribution of Skills to Business Performance: A Summary for Employers. Institute for Employment Studies.

Taraki, S. A. (2019). The Role of SMEs in Capital Formation, Equitable Growth and Income Distribution in Developing Countries. International Journal of Science and Research (IJSR), 8(1), 707-809.

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533.<509::AID-SMJ882>3.0.CO;2-Z

The United Republic of Tanzania. (1999). The Tanzania Development Vision (TDV) 2025. Planning Commission.

UNEP. (2008). Innovative financing: For sustainable small and medium enterprises in Africa. United Nations.

URT. (2002). Small and Medium Enterprises Development Policy. UNIDO.

Vandenberg, P. (2009). Micro, Small and Medium-sized Enterprises and the Global Economic Crisis: Impacts and Policy Responses, Sustainable Enterprise Programme. International Labour Organization.

Wei, J. (2020). Entrepreneurs caring for the elderly: Perspectives from Finland and China An exploratory study between Finland and China [Master Thesis, Helsinki Metropolia University of Applied Sciences]. Health Business Management.

Xion, J. (2001). Determinants of salary growth in Shenzhen, China: An analysis of formal education, on-the-job training, and adult education with a three-level model. Economics of Education Review, 21(6), 557-577.

Yahya, A. Z., Fatt, C. K., Othman, A. S., Rahman, I. A., & Moen, J. (2011). Management skills and entrepreneurial success of small and medium enterprises (SMEs) in the services sector. African Journal of Business Management, 5(26), 10410-10418.

Yin, R. K. (1981). The case study crisis: Some answers. Administrative Science Quarterly, 26(1), 58–65.




How to Cite

NG’ORA, S., MWAKALOBO, A. B. S. ., & LWESYA, F. (2022). Managerial Skills for Micro, Small and Medium-sized Enterprises (MSMEs) . Management Dynamics in the Knowledge Economy, 10(4), 343–359. Retrieved from