Evaluation and Assessment of the Effects of Moderating Factors of Entrepreneurial Orientation on the Performance of SMEs in Tanzania

This chapter assesses the effects of Moderating Factors of Entrepreneurial Orientation (EO) on the
performance of SMEs in Tanzania. According to the literature EO refers to the strategy
making process that provides organizations with the basis for entrepreneurial decisions and
actions. The dimensions of EO are innovativeness, proactiveness, risk taking, competitive
aggressiveness and autonomy. The need for firms to exercise EO has been widely recognized. In less
developed countries like Tanzania where the growth rate of SMEs is very limited, the subject
matter has not been fully exploited for firms to cope and understand the effects of EO on firm
performance especially SMEs. According to the literature several moderating factors such as cultural
orientation and organizational structure (internal factors), social economic factors and political
and legal factors (external factors) have a contribution on the applicability of EO hence performance
of SMEs. The chapter concludes that the moderating factors have an effect on performance of
SMEs.