Business Networks Associated with Sustainability of SMEs in Uganda

Abstract

This research was carried out with an intention of establishing association between business networks and sustainability of SMEs in Uganda. A total of 384 SMEs were sampled for this purpose. From each SME, one respondent was considered. This respondent was either the owner or the manager. Survey method with specific focus on the use of closed ended questionnaire was employed in the study. Based on the factor analysis conducted on the data collected, three important components of business networks were established namely; quality of suppliers, operations of business associations and SACCOs as well as existence of loyal customers. To test the association, correlation and regression analyses were conducted. Results indicated that all components of business networks had significant association with SME sustainability in Uganda. Out of the three, quality of suppliers had the highest degree of association while operations of business associations and SACCOs had the lowest association. The same trend was reflected in the results from regression analysis with the exception of operations of business associations and SACCOs which did not have significant influence onto SME sustainability. Based on these results, it was concluded that quality of suppliers and existence of loyal customers had significant influence onto SME sustainability in Uganda. It was recommended that SMEs in Uganda need to focus on quality of suppliers as well as loyal customers in order to realize sustainability. These two types of business networks are therefore crucial to the sustainability of SMEs in Uganda. Though they did not have significant influence, business associations and SACCOs need not be ignored considering that they too had a significant association with SME sustainability.