Does Innovative use of Social Media Training Enhance Business Growth? A Case of Subira Self Help Group, Nairobi
Sedina Misango
School of Business and Economics, South Eastern Kenya University,
Abstract
The general purpose of this study was to investigate the role of innovative entrepreneurial training programs on business growth among Subira Self-help group Nairobi. The innovative training included use of smart mobile phones to conduct business and market products, use of social media to reach customers and advertising of products by use of mobile phone technology. The study used a descriptive research design approach. The study sample was all the 48 members of the Self-help business group. A research questionnaire was used to collect the data. Descriptive statistics techniques were used to analyze the quantitative data. The researcher conducted regression analysis on the dependent variable aspect of business growth and the independent variable aspects of innovative business training programs (use of social media). According to the ANOVA results, the aspect of the independent variable was found not to be significant towards business growth represented by p- value of 0.324. We therefore accept the null hypothesis and conclude that business growth does not depend on innovative social media training.The study found that a unit increase in social media training programs led to an increase in business growth penetration by a factor of 0.146 but is weak.The study concluded that various types of business training programs were responsible for the business growth. The study therefore recommends that there is need for the members of the group to adopt and equip themselves with modern use of phone technology and applications that can grow businesses but still adopt other factors of business growth in the market. They should also be ready to be trained by field officers and colleagues on those programs that enhance business growth; since such programs portray positive impact towards business growth.
Keywords: Business growth, Innovation, Mobile phone technology, Training program, Social media, Self-help group
Introduction
Background of the Study
In the last three decades there has been a dramatic increase in the urban informal sector all across sub-Saharan Africa. Most of this growth has taken the form of an ever increasing number of very small enterprises, typically with no paid employees. The World Bank (2001) has shown that lack of access to business training and innovative opportunities, lack of affordable credit facilities is also a major cause of poverty in Kenya which leads to economic stagnation. Economic growth in industrialized as well as developing countries remains a central issue and, as such, particular interest is focused on the role of innovative entrepreneurship to achieve and maintain thriving and modern economies.
Subira self help group is a group of businessmen and women who came together, pooled resources in the name of revolving funds or Chamas as they are popularly known in Kenya to boost their businesses. The group lends money to individuals who are members of the group at a low interest rate of 10%. Besides lending, the group sources for experts in the area of business to offer training programs that may be of interest to them at a small fee. Among the training programs that have been offered is the use of social media to win customers and grow business networks.
Statement Problem
In Kenya, there are many examples of businesses that have been started and operated by people who have received no formal training, financial aid, or extension assistance (Gully, Payne, Koles & Whiteman, 2002). Lack of current and innovative entrepreneurial training has led to businesses operating at below capacity and many business people are unable to enter the global market due to fear of competition and ignorance. Subira self help group had the capacity to pull resources and yet the individual businesses were not operating in a way to demonstrate growth and increase. As such it is essential to incorporate modern methods of training, namely: use of social media training programs to achieve growth and reach customers, rather than depend on physical clients only.
Research Questions
This study was guided by the following research question; to what extent does the use of social media training program affect business growth among members of the business group?
Hypothesis
H0 (null hypothesis): There was no significant influence in business growth reported by entrepreneurs of the business group before and after social media training program
H1 (alternate hypothesis): There was significant influence in business growth reported by entrepreneurs before and after social media training among members of the business group
Literature Review
Facilitation Theory (the humanist approach)
Facilitation theory developed by Carl Rogers and others in 1965 indicates that a facilitator has to be present for learning to take place the facilitator acts as a guide and creates an environment that is fit and comfortable for learning to take place. Dunn (2002) identified that people are always waiting and responsive to new ideas hence ready to learn. The learner is willing to change behavior especially when faced with unpleasant consequences.
The theory explains that facilitators are supposed to be responsive, accept feedback and are good listeners for learning to take place. The learner enjoys an environment that has a variety of activities and relevant training programs. Learning and training at given to Subira self help group members is handled by qualified and experienced facilitators who ensure that a conducive environment is in place, materials and equipments are set, while at the same time ensuring that the learning is well conducted. The facilitator selects staff of the right profile and puts them in work teams for better learning to take place. Any training that takes place has to be implemented for it to be effective; the facilitator also oversees and monitors the implementation process.
Forms of Social Media
There are different forms and categories of Social Media that can be used in business as introduced by Fridolf and Arnautovic (2011). The categories include to name bit a few: Blogs which are ideas posted online journals by firms, media images and copied links to various web pages; Social networks or groups are sites where individuals with similar ideas or concerns join together and develop one another through creation of online relationships; Content communities plan and organize information which is accessed and then shared by other people on the website: bulletin boards are those types of information that educate people on certain topics of interest and in process they allow people to exchange ideas on particular interest. Examples of social media sites commonly used by people both individually and for business purposes include: Facebook, watsup, MySpace, LinkedIn, Flickr and Instagram (Drury, 2008).
Social networks are accessed for various purposes among them: finding friends, conducting business, selling, purchasing products, exchanging ideas among others. For example LinkedIn connects with people in business and in the same profession and finding business partners. MySpace connects people in music and classmates can connect through classmates.com. For purposes of charting and creating friendships online, people use Facebook; while some people communicate through the use of twitter to pass messages (Flink, 2011). However, all channels have been turned to marketing channels with time
Social Media as a Marketing Tool for Business Growth
Business people desire to belong to groups that will enhance their business and improve profits. The world has become a global village where people are now able to communicate easily, faster, widely concerning many aspects of life as well as connect to conduct businesses through online platforms (Lewis, 2010). Most organizations and individuals have realized the importance of this communication and network connection channel that enables sharing and bringing business opportunities to the firms. As a result, any business person is keen on ways of connecting with the other person or market to grow their networks, therefore using social media to create more business opportunities. Social networking has therefore become an important business reaching idea for both profit making and non-profit making organizations. However, as Lewis (2010) explains, despite this involvement, there is limited understanding of how social media can be well utilized to draw purchases and choices of users. It is with this understanding in mind that, the study will enable us to find out how effective this tool is and what else can be done to ensure it well utilized to bring growth to entrepreneurs. For this reason the company and individual has to choose wisely which social media channel to use to in order to carry out advertising campaigns or marketing of products (Kaplan & Haenlein, 2010).
Social media can be used as an advertising tool because it enables companies to communicate directly with customers about their products and with one another. The manager or business owner may however not be able to control communication between individuals and who are on the forum for example on ‘watsup’ or on ‘facebook’; it is usually beyond the control of the firm. The individuals may decide to communicate at odd hours and the frequency cannot be predetermined. This is contrary to the traditional methods of advertising and integrated marketing where business owners and entrepreneurs are able to direct communication and shape its flow (Bond, 2010).
Social media use has several advantages such as: it enables customers to engage in information sharing in a timely manner; it is affordable and comes at a fair cost, hence more efficient than the traditional methods of advertising. Small firms as well as large firms can both befit from social media at low costs. Most companies have a regular website but will from time to time turn to social media to advertise their products or gets customer feedback concerning their services. This use of social media enables people and firms to reach many people and as fast as possible within a very short time as explained by Halligan & Shah (2010) in his study on in bound marketing and social media usage. Customers are able to use social media channels to communicate with one another about a product or service and therefore creating a lot of influence on a product, which could lead to purchase or rejection. Another advantage of social media usage is the freedom that consumers are able to enjoy through the ability to make their own choices and not stick to brands which do not add them value. This means that the customers/consumers are able to control the information they get from organizations by blocking those they do not need and respond to information that they need. They later on learn to trust social media channels than the actual firms. For this reason, firms have to post information that should work to their advantage and respond quickly to those that can damage reputation. Consumers are able to share information of all types across networks and people end up engaging in debates concerning the firm’s products which could then lead to purchase or shift as described by Keller (2009). Social media use can therefore be very challenging to the company because the customer has a free choice and free will. It is therefore up to the firm/organization to manage the information sent and received.
Social media being a strong marketing tool, it is not free from challenges that may discourage users such as: Negative posts on the Facebook concerning a product, exaggerated information, bias among others. These mentioned factors can cause consumers to lose trust in products offered by the firm or negative reactions can be generated from customers by information that is purely meant to push for sales. Another challenge is lack of time to make the company site attractive or update consumers. Lack of an updated website could lead to lose of sells due to customers withdrawing from the site. Return of investment on use of social media may also not be accurately measured due to lack of knowhow and uncertainty on investment, and lack of adequate knowledge on how to use social media for marketing purposes (Ghali, 2011)
For a firm to make to actively make use of social media in a way that will generate sales, then the form has to remain open and sensitive to customer requirements. The products should be ‘’pushed’’ gently while at the same time avoiding aggressive selling that could lead to conflict. Kingsland (2007) in his studies on finding business opportunities through use of social media advices that a firm has to understand that, most people who participate on social networks are not purchasing but are doing so mainly for purposes of creating relationships. He explains that customer opinions should be valued and the firm sensitive to changing trends. This approach ensures that customers are not pushed through aggressive marketing and made to purchase products that do not suit them. Gruber (2004) agrees that customers should not purchase a product due to coercion, since it will lead to dissonance and hence failure of repeat purchases. The customers should be well managed by engaging them through feedback forms and getting their opinions and suggestions.
Entrepreneurial Education and Training
There is general agreement by researchers in the field of entrepreneurship that emphasis should be placed on entrepreneurship education and training. The Consortium for Entrepreneurship Education (2004) points out that entrepreneurship education is a life-long learning process and consists of five stages: basics, competency awareness, creative applications, start-up, and growth. For this reason, continuous training and learning are important tools that are enable organizations to adjust well to the market and environmental changes taking place. Organizations are now becoming learning environments with managers taking the teaching role; employees the students.
Entrepreneurs require different skills and abilities that help them to achieve success in promoting innovation and creating business enterprise. They should predict the future and the changes that may occur in the ability of firms in justification and approval of establishing a business. This ability requires an understanding of the ever changing business environment and development strategies of markets and other new skills in the market so as to grow their businesses (Zahra, 2006). This training can be at three levels: business formation stage, performing stage and development should begin as early as the business formation level and end with exit. This type of training focuses areas such as: favorable business planning, selecting target markets, future profitability, financial planning, identifying competitors, designing new products and receiving rewards for success in business. Business performing training deals with general knowledge for business operations as described by Keller (2009). It includes measures such as financial planning, development of markets, maintaining current markets, understanding expected functions and transferring knowledge from entrepreneurs to managers. Personal development training should also be encouraged so as to foster confidence, leadership skills and critical thinking throughout the organization.
Measures of Business Growth
The category of success/performance is set as a dependent variable primarily in relation to management practice and the volume of management activities in small businesses in order to explain connections and possible influences in the direction of improving business results. Therefore, it becomes necessary to precisely understand and restrict the notions of success and performances that are usually used as synonyms. It is also necessary to define criteria which really measure success of small businesses. Success is a specific aspect of performance or is identified with high performance and increase in profits (Thiel, 2014). Some of them recognize success in growth and profitability, but this aspect has significant shortcomings in the field of small businesses where goals do not coincide, comparison and a real success statement are difficult to be presented, hence the need to look at other aspects of growth such as increase in number of staff employed, increase in stock, reduced customer complaints and diversification of businesses among others as described by Toivanen and Vaananen (2010).
Financial indicators are simple for success definition and statement, but they can ignore the possibilities of alternative criteria for success definition, based mainly on personal goals of owners/entrepreneurs/managers. The optimal level of performance regarding growth and development is therefore broad and should include other parameters and measures (Phelps, Adams & Bessant, 2007). However, it is noticeable for small businesses that personal success is identified with business success, while in other cases nonfinancial criteria and the lifestyle are far more significant. Besides usual and most used measures for the performance of profitability and growth (number of employees and amount of profit), some authors use business period as a practical measure of individual business satisfaction and personal success.
In a detailed analysis of success/failure of the small enterprise, business period and length of years in business can be a reliable indicator of success only if a small enterprise is closed down or business project is cancelled non-voluntarily, i.e. if it is a forced collapse (OECD, 2011). The forced closing down or business collapse happens after some period when it is impossible to continue with the business. This form of closure of business is explained as collapse or bankruptcy. On the other hand, business can be a voluntarily closed down (transition from self-employment to employment or unemployment) because of the lack of readiness or motivation. Generally, we can talk about voluntary and forced closure of own business, while survival as a measure of success of small business implies the period of doing business that will be ended by some forms of business closure without a new form of self-employment (to be self-employed in some period). Therefore, the measure of success of small business is determined by business period, which will be ended exclusively by forced and non-voluntary leaving of own business. Consequently, we can conclude that in case of the research on the sample of active small businesses, i.e. by researching the current owners/entrepreneurs/managers we can notice that the small enterprise with longer period of existence is more successful than the others as indicated by Thiel (2014). We can definitely agree that, due to problems of measuring success, especially in the early stages of small business, then other measures of growth are taken into account.
Conceptual Framework
The conceptual framework below represents the use of designed social media innovative training programs to enhance business growth. This conceptual framework indicates that a training program has to be in place for a successful measure of growth and outcome. As mentioned, facilitators used training methods and programs that allowed for implementation of acquired knowledge. Growth was measured by the following outcomes increase in profits, expansion of business, increased stock and diversification of business activities.
Figure 16: Conceptual framework
Methodology
The study adopted a descriptive survey design which aims at determining the role of entrepreneurship training on business growth. Leedy and Ormrod (2005) explains that a descriptive survey design is appropriate because it is seen as an efficient method of collecting original data from many respondents a wide range of respondents given a short time.Target population as defined by Mugenda and Mugenda (2003) is a group of items or objects where a sample is drawn because of the similar characteristics. The target population for this research was all members of the self help group who were 48 in number. Thus a census population of 48 respondents was taken to increase the representativeness of the sample, minimize sampling errors. A research questionnaire was issued to the respondents to collect data and allow the researcher to reach a wide population of respondents. The questionnaire had both open ended questions and closed ended questions.Data was analyzed using quantitative means by use of Statistical Package for Social Sciences (SPSS).The hypothesis was structured to ascertain the extent to which social media training programs affect business growth in the study.
Results and Discussion
All the 48 questionnaires were returned duly filled; giving the study a response rate of 100%.
Demographic information
Age of respondents
Majority of respondents were between the ages of 31 and 40 years represented by 50%, as indicated on table 1 below, while those between 41 and 50 years old were represented by 43.8%. Only 6.3% of the respondents were over 50 years of age. It showed a mature population in business
Table 1 Age of respondents
|
Frequency |
Percent |
Cumulative Percent |
|
|
31 years to 40 |
24 |
50.0 |
50.0 |
41 to 50 |
21 |
43.8 |
93.8 |
|
Above 50 |
3 |
6.3 |
100.0 |
|
Total |
48 |
100.0 |
|
Marital status and Sex of respondents
Majority of respondents were married as represented by 60.4% as shown on table 4.2 below. Single people were represented by 22.9%, divorced were 12.5%, while widowed were 2%. We can assume that there was support in business operations from spouses.
Majority of respondents were females represented by 64.6% while the males were represented by 35.4%; meaning females in business were more than the males by 29.2%
Table 2: Marital status of respondents
|
Frequency |
Percent |
Cumulative Percent |
|
|
Single |
11 |
22.9 |
22.9 |
Married |
29 |
60.4 |
83.3 |
|
divorced |
6 |
12.5 |
95.8 |
|
Widowed |
2 |
4.2 |
100.0 |
|
Total |
48 |
100.0 |
|
Educational level of respondents
The study sought to find out the educational status of respondents and it established that majority were well educated business people with 72.9% having tertiary education and hence the training type would be well understood and comprehended. Those with ‘O’ level education were 16.7% and 10.4% did not indicate their level of education.
Table 3: Education level of respondents
|
Frequency |
Percent |
Cumulative Percent |
|
|
O level |
8 |
16.7 |
16.7 |
Tertiary |
35 |
72.9 |
89.6 |
|
Not indicated |
5 |
10.4 |
100.0 |
|
Total |
48 |
100.0 |
|
Businesses owned by respondents
The study established that the respondents sampled by the study carried out various business operations. According to the results, majority of the respondents were in agribusiness represented by 27.1%; followed by majority in general shop and retail outlets represented by 22.9%, catering / baking and hotel management were 14.6%, Clothing/ uniforms/boutique (12.5%), Salon and hair accessories (10.4%), Business consultancy (4.2%) and other business operations were represented by 4.2% in that order.
Table 4: Types of businesses
|
Frequency |
Percent |
Cumulative Percent |
|
|
Catering |
7 |
14.6 |
14.6 |
General shop |
11 |
22.9 |
37.5 |
|
Grocery |
2 |
4.2 |
41.7 |
|
Agri business |
13 |
27.1 |
68.8 |
|
Consultancy |
2 |
4.2 |
72.9 |
|
Clothing |
6 |
12.5 |
85.4 |
|
Salon |
5 |
10.4 |
95.8 |
|
Other |
2 |
4.2 |
100.0 |
|
Total |
48 |
100.0 |
|
Forms of business ownership
The study established that most businesses were owned by sole proprietors represented by 62.5% and family owned businesses were represented by 27.1%. The study also established that partnership owned businesses were 2.1% while 8.3% of respondents had registered their businesses as company limited.
Table 5: Forms of business ownership
|
Frequency |
Percent |
Cumulative Percent |
|
|
Self proprietor |
30 |
62.5 |
62.5 |
Family |
13 |
27.1 |
89.6 |
|
Partnership |
1 |
2.1 |
91.7 |
|
Company limited |
4 |
8.3 |
100.0 |
|
Total |
48 |
100.0 |
|
Use of social media in transacting business operations after training
The study sought to find out from respondents on how often they used social media to transact businesses after training. The findings are illustrated on table 4.6 below as follows: 45.8% of respondents use social media to a moderate extent, while 41.7% use it to great extent and 12.5% to a less extent. The study can therefore conclude that the number of respondents who used social media to engage in business activities after training was quite high giving a total of 87.5%.
Table 6: Use of social media in business transactions
|
Frequency |
Percent |
Cumulative Percent |
|
|
Little extent |
6 |
12.5 |
12.5 |
Moderate extent |
22 |
45.8 |
58.3 |
|
Great extent |
20 |
41.7 |
100.0 |
|
Total |
48 |
100.0 |
|
Type of social media channel commonly used
The study sought to find out the type of social media that was commonly used or preferred and the respondents indicated their preferences. Watsup 37.5%, those who used different combinations was 39.6%, Instagram was 16.7% while Facebook users were represented by 6.3%.
Table 7 Type of social media channel commonly used
|
Frequency |
Percent |
Cumulative Percent |
|
|
|
3 |
6.3 |
6.3 |
Watsup |
18 |
37.5 |
43.8 |
|
|
8 |
16.7 |
60.4 |
|
Combination |
19 |
39.6 |
100.0 |
|
Total |
48 |
100.0 |
|
The role of social media on business growth
The study sought to establish the respondents’ level of agreement on whether social media training and usage had improved their businesses in terms of growth, increase in profits, and increase in number of customers among other parameters. Respondents agreed as indicated on table 8 below that there was improved profits represented by a mean 3.79; influence of social media on business growth with a mean of 3.23 and reported improvements after training represented by a mean of 3.50. According to the results displayed on the table 4.9 below majority of the respondents were in agreement that they have managed to post improved profits as represented by 22.9%; the number of customers had increased (29.2%); complaints had reduced since training as represented by 4.2% of respondents; 16.7% of respondents said they had increased stock levels and 22.9% had noticed growth represented by a combination of factors. Service had also improved as represented by 4.2% because customer complaints were handled early and suggestions made by customers had been implemented or addressed.
Table 8: Descriptive statistics on the role of social media on business growth
|
N |
Minimum |
Maximum |
Mean |
Std. Deviation |
Improved profits |
48 |
3 |
4 |
3.79 |
.410 |
influence of use of social media on business growth |
48 |
2 |
4 |
3.23 |
.857 |
Improvements after training on social media usage |
48 |
2 |
4 |
3.50 |
.619 |
Valid N (listwise) |
48 |
|
|
|
|
Table 9: Specific Improvements after use of social media
|
Frequency |
Percent |
Cumulative Percent |
|
|
Increased profits |
11 |
22.9 |
22.9 |
Number of customers |
14 |
29.2 |
52.1 |
|
Improved service |
2 |
4.2 |
56.3 |
|
Reduced customer complaints |
2 |
4.2 |
60.4 |
|
Increased stock |
8 |
16.7 |
77.1 |
|
Combination of growth factors |
11 |
22.9 |
100.0 |
|
Total |
48 |
100.0 |
|
Statistical Analysis
Correlation matrix of social media training on business growth
The result on table 10 below indicates the correlation matrix between social media usage and business growth is slightly positive in nature at 0.146. According to the result, there is a positive influence of magnitude but the relationship of influence is weak since the magnitude of influence is low at 0.146.
Table 10: Correlation matrix of industry size on adoption of system |
|||
|
Improved growth |
Use of social media |
|
Improved growth |
Pearson Correlation |
1 |
.146 |
Sig. (2-tailed) |
|
.324 |
|
N |
48 |
48 |
|
Use of social media |
Pearson Correlation |
.146 |
1 |
Sig. (2-tailed) |
.324 |
|
|
N |
48 |
48 |
Regression Analysis of social media training and business growth
The study conducted regression analysis to establish the relationship between the study variables which were: influence of social media use on business growth. The information on table 11 below indicates that adjusted R square of 0.000 means that the variables studied contribute to 0% of the factors that influence growth of business and hence other factors contribute to 100% of the growth. Since the R is 0.021, a conclusion can be made that innovative training is positively correlated with the growth in business but the relationship is very weak since R is close to 0.
Table 11: Model summary
Model Summary |
||||
Model |
R |
R Square |
Adjusted R Square |
Std. Error of the Estimate |
1 |
.146a |
.021 |
.000 |
.410 |
a. Predictors: (Constant), Use of social media |
ANOVA results
From the ANOVA results on table 12 below, the p-value is 0.324 greater than significance level of .05; meaning the level of influence of social media and business growth is not significant; hence we accept the null hypothesis that there is no significant influence in business growth reported by entrepreneurs of the business group before and after social media training program
Table 12 ANOVA results of social media training on business growth
ANOVAa |
||||||
Model |
Sum of Squares |
df |
Mean Square |
F |
Sig. |
|
1 |
Regression |
.168 |
1 |
.168 |
.995 |
.324b |
Residual |
7.749 |
46 |
.168 |
|
|
|
Total |
7.917 |
47 |
|
|
|
|
a. Dependent Variable: Improved growth |
||||||
b. Predictors: (Constant), Use of social media |
Regression Coefficients of social media on business growth
The data findings presented on table 13 below indicate that taking all other independent variables at zero, a unit increase in use of social media leads to a 0.087 increase in business growth; the increase is quite minimal in nature not indicating significant change in the training given.
Table 13 Regression coefficients of social media training on business growth
Coefficientsa |
||||||
Model |
Unstandardized Coefficients |
Standardized Coefficients |
t |
Sig. |
||
B |
Std. Error |
Beta |
||||
|
(Constant) |
3.504 |
.295 |
|
11.893 |
.000 |
Use of social media |
.087 |
.088 |
.146 |
.998 |
.324 |
|
a. Dependent Variable: Improved growth |
Conclusions and Recommendations
The study concludes that social media training programs are responsible for the business growth among members of the self help group. The study concludes that the innovative social media training program (related to business formation, business development, business performance) influences business growth to a little extent. The hypothesis test was however not significant which led to acceptance of the null hypothesis that there was no significant influence of social media on business growth as represented by a p-value of 0.324 which is bigger than level of significance. Various roles of the influence of training programs were established which were profitability, customers increase, reduced customer complaints, increased business stock and diversification of business approaches. The study also concluded that there was general consensus to promote social media training and usage at all levels of business. Entrepreneurship education and training can make a positive contribution to employee morale and productivity, hence enhancing business growth.
The study recommends that there is need for the members to adopt and equip themselves with more innovative entrepreneurial programs other than social media usage since social media is cheaper and has a positive impact towards business growth. Under the theme entrepreneurial process, the following aspects should be covered in the training programs: how to create jobs, dealing with unemployment; tax returns; personal and financial management; industry knowledge; new business idea development, e.g. searching for innovative business ideas; creativity and innovation. This helps them understand on the issues and the way to handle them.
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