An Investigation of Risk Perception and its effect on Psychological Distress Experienced among Micro and Small Enterprises Owner-Managers in selected Counties, Kenya.

Abstract

This article explores psychological distress experienced by owner- managers of Micro and Small Enterprises often overlooked by business development services based on hyped perception that entrepreneurial process and business growth is full of obstacles and challenges. Authors argue that in spite of the acknowledged contributions made to the respective global economies especially in terms of employment creation, scanty studies have focused on psychological distress as well as cases of trauma associated with entrepreneurial process. The discussion is based primarily on a systematic literature review on entrepreneurial traits and an analysis of a survey finding carried out on owner-managed enterprises in the Counties of Bungoma and Trans Nzoia Kenya. The theory of firm formation by Kihlstorm and Laffont together with the model of entrepreneurial choice by Jovanovic informed the conceptual thinking in this study. Mixed methods research design was employed. The study concludes that failure rates of Micro and Small Enterprises remain alarmingly high due to psychological distress and that there is need to empower owner-managed small enterprises on risk perception and assessment together with coping skills.