Influence of institutions on value creation activities of micro and small enterprises in rural Tanzania

Author Biographies

Jasinta Msamula

  1. School of Business, Department of Marketing and Entrepreneurship Mzumbe University, Tanzania

Wim Vanhaverbeke

  1. Strategy & Innovation Management, Hasselt University, Belgium

Nicholaus B. Tutuba

  1. School of Business, Department of Marketing and Entrepreneurship Mzumbe University, Tanzania

Main Article Content

Jasinta Msamula

Wim Vanhaverbeke

Nicholaus B. Tutuba

Published Aug 17, 2018

Abstract




Economic development initiatives in Tanzania recognise the importance of enterprises in the country’s economy. Similarly, rural entrepreneurship has the potential to stimulate the rural economy. The promotion of rural entrepreneurship can help to fulfil that potential, with creation of value for customers as one of the promotion initiatives. Institutions govern the value creation activities of enterprises. By focusing on the wood furniture industry, this research article analyses the influence of institutions on the value creation activities of rural Micro and Small Enterprises (MSEs) in Tanzania. The institution theory and the value chain model are its theoretical bases. The Mvomero district is the study area. Interviews and discussions are the data collection methods used in this qualitative study and 14 cases are analysed. The study finds that four institutional concerns influence the value creation activities of enterprises and these are: regulations compliance; regulations enforcement; regulations knowledge; and regulatory costs. However, the study excludes informal institutions. Its findings may be beneficial to stakeholders such as policymakers, development stakeholders, researchers – as well as rural MSEs.


Key words: institutions, value creation activities, micro and small enterprises, rural areas, Tanzania





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