Assessing the influence of culture on enterprise (SMEs) establishment and development: a case study of the Ntonso craft village

Enterprises are regarded as the engine of growth in the developing economies, and thus efforts are made by governments, researchers and other professionals within the development circles towards understanding the factors that influence the establishment and development of enterprises. Previous works on enterprise development have revealed that factors influencing enterprise development vary from economic, political, environmental, cultural, among others. There is however few studies globally and non on the cultural factors that affect enterprise establishment and development in Ghana (particulalry craft or cultural industries), despite the existence of the National Culture Policy. The study to sought explore and assess the influence of cultural factors (culture and values) on the kinds of enterprises that exist in the Ntonso Craft Village in the Kwabre East District. The study interviewed 198 SMEs/SMIs, the Kwabre East District Assembly, Traditional leaders, and the Business Adivsory Council (BAC) for primary data to supplement secondary data from literature. The institutions were purposively sampled whereas the SMEs/SMIs were sampled using the simple random technique. The study revealed the textile industry to be the dominant industry at the Village. Other industries identified were the metal and wood-based industries. It was further revealed that these industries were small-scale with average labour strength of 4. The study revealed festivals, respect for traditional leaders, funeral celebrations, symbols/identity, folklore, customary law and traditional customs and political inclination as the cultural factors that have influenced the kinds of enterprises at the Village. A multiple correlation coefficient (R) of 0.838 was derived which indicates a strong positive significant correlation between kind of enterprises and the predictor variables The multiple regression model produced R² of 0.702, thus, illustrating that 70% of the variation in the kind of enterprises has been accounted for through the linear effects of the predictor variables. It was also obtained that the independent variables can reliably be used to statistically predict the dependent variable within the study area, since the p value of 0.036 was less than the F value of 3.245. Hence, the overall equation was found to be statistically significant (F=3.245, p<0.036). The study further revealed that none of the enterprises were registered. Enterprises recorded an average montly revenue of GH¢1,408.06 and monthly expenditure of GH¢1,166.01. Findings from the study revealed the major challenge confronting businesses to be access to credit facilities or financial support. Similarly, enterprises were also confronted with the challenge of weak institutional support. The study revealed that the District Assembly had weak institutional support and capacity to promote the cultural industry. Based on the challenges, the study recommended that there should be investment resources and creation of enabling environment to promote entrepreneurship and create employment through Support for R&D of Cultural Industries. Additionally, the study recommended responsible institutions to simplify and improve the administrative and regulatory framework for businesses so that cultural industries can flourish. Lastly, the District Assembly in conjunction with the BAC should improve its IGF base by encouraging registry of all the enterprises and educating owners on sound financial management practices.

Source: KNUST