THE EFFECT OF NETWORKING ON PERFORMANCE OF MEDIUM SIZE ENTERPRISE IN ETHIOPIA

Abstract

In order to stay competitive in business and improve performance, medium size enterprise firms to understand how, when and with whom to networked to improve on their performance and increase their market share and worthiness of their firms. The general objective of this study was to evaluate the effects of networking on performance of medium size enterprise firms in Ethiopia medium size enterprise need to work in collaboration with others. It is necessary to create chain that gives value for business through networking. The purpose of this study was to test the impact of networking on the business performance of medium size enterprises in Ethiopia. The questionnaire survey method was used in this study to collect data from respondents. The data was collected from 128 samples of respondents recognized through stratified random sampling technique and the collected data was analyzed using ordered probit model: which is one of nonlinear models used for analyzing data measured on ordinal scale. This research paper identifies the relationship between enterprise and the concerned stock holder improved business networking enterprises increased their performance IN this survey study it was found that networking with financial institutions, business connection, trade linkage and quality of the relationship in network positively and significantly related with business performance of medium size enterprises. In addition to this, firm age was positively and significantly related with business performance of medium size enterprises. This was indicated with regression co-efficient of the variables the result of this study recommends the need for government and other stakeholders to improve the networking skills of medium size enterprise to significantly improve business performance