TRUST AND GOODWILL AS DRIVERS OF SMALL ENTERPRISE SUCCESS: EVIDENCE FROM KENYAN SERVICE SECTOR INTELLECTUAL CAPITAL PERSPECTIVE (Published)
Entrepreneurial trust and goodwill play an important role in the success of Small and Micro enterprises. Wicks and Berman (2004) emphasized the important idea that trust is a costly governance mechanism, to be deployed only when necessary. They suggest that the greater the degree of interdependence between the parties to the exchange, the greater will be the need for trust. According to Yusuf (1995) the most critical factors contributing to business success consist of good management skills, access to financing, personal qualities, and satisfactory government support. Goodwill cannot be felt if it is an intangible asset which can be earned through a name or reputation of the organization (Claessens et al., 2000). Most entrepreneurial effective group and organization are those with the highest level of trust and norms. Goodwill from various stake holders like family, friends and other people contribute to entrepreneurial success. The main objective of the study was to examine Trust and goodwill as drivers of small enterprise success. The study utilized exploratory survey design. Specific objectives were: To assess the influence of trust on enterprise success and to examine the relationship of good will on enterprise success. Small and Micro business owners in the service industry were divided using simple random technique to obtain a sample size of 240 SMEs in the service sector drawn from a target population of 600 registered SMEs in the service sector, Eldoret Town, Uasin Gishu County. The study was guided by Relational Theory of Social Networks. The study employed both qualitative and quantitative methods of data collection. Data was sorted coded and analyzed using inferential statistics namely, Pearson’s product moment correlation, Chi-Square methods and Analysis of variance (ANOVA) and multiple regressions. The study found out that, there was a strong positive relationship between trust [r=.907], and good will [r=.833] on entrepreneurial success. This indicated that an increase in trust and goodwil will lead to greator entrepreneurial success.The study findings will contribute great to the academic debate.