Rethinking Autonomy in Entrepreneurial Orientation: Implications for MSME Growth and Sustainable Development in Kenya

Abstract

The primary objective of this research is to investigate how Entrepreneurial Orientation (EO) influences the growth of Micro, Small, and Medium Enterprises (MSMEs) in Kenya, with particular attention to the autonomy dimension. Although MSMEs contribute significantly to national employment and economic output, many still face persistent barriers that restrict their growth and sustainability. In developing economies, their expansion is often constrained by inadequate resources, institutional challenges, and managerial weaknesses. While the EO construct has been extensively examined, the autonomy aspect—defined as the freedom to make independent decisions and pursue opportunities—remains insufficiently explored within varying contextual settings. Guided by Schumpeterian entrepreneurship and risk-taking theories, this study assesses how autonomy affects MSME performance in the Kenyan context. The research adopts a sequential mixed-methods design, focusing on manufacturing and innovation-driven firms located in Nairobi City County. Using stratified random sampling, data were collected from 284 enterprises. The results indicate a significant negative relationship between autonomy and firm growth (r = 0.576; β = –0.381, p < 0.001). Although autonomy theoretically supports innovation and opportunity recognition, excessive decentralization of decision-making appears to undermine strategic focus and overall performance. The findings suggest that autonomy is a context-dependent component of EO rather than a universally beneficial driver of growth. From a practical perspective, the study emphasizes the need for calibrated autonomy—striking a balance between individual initiative and managerial control. Policy recommendations include enhancing managerial competencies and governance structures to optimize the advantages of autonomy. Overall, the study advances Sustainable Development Goal 8 by highlighting that effective MSME growth depends on integrating entrepreneurial freedom with strong strategic oversight.