Chapter 2

Review of Related Literature

This chapter presents various literature reviews to give the

researcher background on the study. Likewise, related concepts and

studies that have a significant bearing on the study will also be

presented. Conceptual literature will be provided to add insights into the

entrepreneurial competencies, economic contribution, and challenges of

Micro Business Enterprises.

Conceptual Literature

Skills of Micro Business Enterprises. SMEs represent, in fact, a

significant component of the economy today. The dynamics of setting up

businesses follow a trend since more and more people want to be their

masters, have a higher standard of living, and use their creativity to

carry out activities based on their passions and talents. Some

entrepreneurs successfully transform their ideas into profitable

businesses and develop them further. In contrast, others, though making

sustained efforts, fail to reach the level of competitiveness desired, and

poor results sometimes even lead them to give up the business (Popescu

et al., 2020).

According to Kerrin et al., 2017, state that entrepreneurial skills

that proficiency in performing tasks is an output of human capital

investments and can be improved by training, practice, and

improvement. In the neoclassical approach, A human capital theory,

skills are obtained through human capital investments in education and

work experience (Becker 1964). Furthermore, the human capital theory

maintains that skills can be learned and old ones perfected while

training or performing tasks. For skills to be practical, they must be

applied to the different entrepreneurial studies. Therefore, according to

human capital theory, skills are the results of investments in their

acquisition; they can improve through training and development and

must be proficiently performed. Core business skills highlight the

internal business environment, which involves financial management,

human resource management, and technical skills (Kerrin et al., 2017).

Business management skills are essential to run the business

daily. The business management skills considered significant were

planning, problem-solving, decision-making, developing and executing a

business model, strategic competence, delegation, and business

development (Kerrin et al., 2017).

While the financial management skills are essential to managing

capital efficiently and effectively to accomplish the business's financial

obligations. The financial management skills include pricing products

(tangible or service), cash flow management, calculating costs, and

interpreting financial statements (Kerrin et al., 2017).

Marketing skills are concerned with communicating the value of

the tangible and service products to the customers for selling. Therefore,

skills under the marketing category are market research, benchmarking

competition, positioning the business in the market, and selling skills

(Kerrin et al., 2017).

In terms of human resource management skills pertain to the

ability to deal with managing people in the business, including designing

and implementing workplace policies. The skills under this category were

recruitment, employees' skills assessment, defining job specs,

performance management, and payment of salaries (Kerrin et al., 2017).

Meanwhile, Kuratko (2016) states that entrepreneurship is one of

the most essential and inexhaustible resources of all human societies_ a

source that goes back to the ability of human resources of any

organization. On the one hand, it is cheap, and it is precious and

inexhaustible, on the other hand. Any manager who can implement the

knowledge management culture in their organization, s/he has made

use of these resources appropriately. Formal law and accountability can

be critical dimensions for supporting and shaping entrepreneurship in

any country.

By neglecting entrepreneurship in an organization and relying only

on previous resources, the organization will soon become obsolete and

give way to rival and entrepreneurial organizations. Additionally,

individuals must be equipped with entrepreneurial skills to improve job

security and meet social and economic needs. Further, the skills that

need the person to possess to become an entrepreneur are personal,

managerial, and technical skills (Kuratko, 2016).

Research Literature

Skills of Micro Business Enterprises. In Romania,

entrepreneurial success was analyzed in a survey by Rasca (2016).

Responses showed that the primary skills that helped them overcome

difficulties, develop their businesses, and have a competitive advantage

were the ability to identify opportunities, the capacity to be visionary

and to influence the others, the possibility to be able to control

themselves in uncertain situations;

Ngugi (2014) revealed that entrepreneurs' technical, managerial,

and personal skills were the key factors determining the performance of

the Micro and small Petroleum Enterprises. The results showed a

positive correlation between entrepreneurial skills and MSE growth.

Another study by Aschalew Mulugeta et al. (2016) analyzed the

entrepreneurial, technical, interpersonal, and business skills possessed

by the entrepreneurs in Ethiopia. The study pointed out that the ability

to use network technology in the business and updating technological

skills were below level.

Likewise, the study of Namrata and Niladri (2016) identified five

essential skills; leadership, communication, human relation, technical,

and inborn aptitude skill, which acted as driving agents for measuring

entrepreneurial performance and success in the Jharkhand region. The

study showed that, in contrast to the literature studied; technical skill

did not affect the success of the enterprises still in their nascent age of

development.

Further, a quantitative study was conducted on 173 Malay micro-

enterprise owners (MEOs), and 58 Malay failed micro-enterprise owners

(FMEOs) involved in all ranges of businesses throughout the state of

Perak, Malaysia. Among them are food stall and burger stall operators,

night market hawkers, grocery store operators, and construction and

small service activities. The results revealed that the MEOs had strong

motivations and better marketing approaches than FMEOs. The FMEOs

failed in their business ventures mainly due to a lack of sales, marketing,

and management skills and poor competitive abilities to keep up with

rivals (Abu et al., 2012).

Synthesis 

Related literature reviewed by the researcher bear relevance to the

present study. Similarities can be gleaned from the fact that the

literature and studies reviewed dealt with topics that were also the

concern of the present study. In the same manner, some of the impact of

jeepney modernized on traditional jeepney drivers were the concerns of

the studies reviewed and of the present one. Some of the methodologies

used in the studies and present study were similar.