Does Learning Orientation Enhance Financial Performance of Micro and Small Food Agro-processing Enterprises? Lessons from Tanzania

Abstract

This study was set to investigate the relationship between learning orientation and financial performance of micro and small food agro-processing enterprises. The study was carried out in Arusha, Morogoro and Dar es Salaam regions in Tanzania. A quantitative approach and a cross-sectional survey design were employed. A total of 302 owner-managers were assessed using semi-structured questionnaire whereas stratified sampling technique was used to pick the sample. Data analysis was performed through structural equation modelling. The study confirmed positive link between learning orientation and the financial performance of food micro and small agro-processing enterprises in Tanzania. More specifically, both gross profit margin and net profit margin showed positive significant relationship with firm’s learning orientation. On the other hand, return on capital employed was found to have positive none significant relationship with learning orientation. The findings provide an indication that, deliberate efforts for improving learning behaviours are needed for improved financial performance of micro and small agro-processing firms. Hence, business owners of food agro-processing MSEs need to establish their learning frameworks by attending workshops, training and business exhibitions where they can acquire necessary business knowledge for improving their firms’ financial performance. Again, government and trainers can enhance learning habits of the agro-processing MSEs by establishing conducive environment for the enterprises to learn and acquire knowledge to positively enhance financial outcomes of these firms.