ABSTRACT
This study focused on the impact of corporate entrepreneurship on organizational performance of Selected SMEs in Ebonyi State. The study sought to examine the impact of innovation on organizational output of Selected SMEs in Ebonyi State, assess the impact of risk-taking on organizational efficiency of Selected SMEs in Ebonyi State, determine the impact of proactiveness on organizational profitability of Selected SMEs in Ebonyi State and determine the impact of competitive aggressiveness on organizational effectiveness of Selected SMEs in Ebonyi State. The study adopted survey design. The study made use of primary and secondary source of data collection. The population of 200 comprise of some selected small and medium enterprise in Ebonyi State Nigeria. These SMEs include Jack Engineering And Resource Company Limited, Kinglion Works Limited, Kumandy's World, Miracle Business Venture and Aplombtainment Media. The sample size of 133 was derived from Taro Yamane formula. A total of one hundred and thirty-three (133) questionnaires were distributed to the selected SMES in Ebonyi state, twenty-two (22) questionnaires with 16.6% were lost, one hundred and one (111) questionnaires were recovered with the percentage ration of 83.4%. A stratified sampling method was adopted and it gave the staff an equal chance of being selected in the study. The study employed regression model to test the relationship between the dependent variables and the independents variables. The study found out that Innovation has a significant effect on organizational output of Selected SMEs in Ebonyi State p-value=.009< .05% significance level. The study found out that Competitive aggressiveness has a significant impact on organizational effectiveness of Selected SMEs in Ebonyi State p-value =.005<.05% significance level. The study recommended that The small and medium enterprise should endeavour to boost their innovation outlook and infrastructure to enable them stimulate their organization growth. The SMEs should streamline their competitive aggressiveness in order to enhance their competitive advantage capacity.
TABLE
OF CONTENTS
Cover Page i
Title Page ii
Declaration iii
Certification iv
Dedication v
Acknowledgements vi
Table of Contents vii
List of Tables viii
Abstract ix
CHAPTER
1: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Objectives of the Study 5
1.4 Research Questions 5
1.5 Research Hypotheses 5
1.6 Significance of the Study 6
1.7 Scope of the Study 7
1.8 Limitations of the Study 7
1.9 Brief History of the Organization Under
Study 7
1.10 Operational Definition of Terms 9
CHAPTER
2: REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework 10
2.1.1 Entrepreneurship 10
2.1.2 Corporate
entrepreneurship 12
2.1.3
Component of corporate entrepreneurship 15
2.1.4 Critical aspects related to
corporate entrepreneurship strategy 16
2.1.5
Limitations
of corporate entrepreneurship 17
2.1.6
Some of the major problems of corporate
entrepreneurship 19
2.1.7
Necessity for corporate
entrepreneurship 20
2.1.8
Growth diagnostics 21
2.1.9
Small and medium scale enterprises
(SMEs) 22
2.1.10 Technological
innovation 23
2.1.11 Organizational
innovation 24
2.1.12 Product innovation 25
2.1.13 Processes
innovation 26
2.1.14 Factors affecting technology innovation 27
2.1.15 Technology innovation and organization
performance 28
2.1.16 Risk-taking 30
2.1.17 Entrepreneurial risk- taking propensity 31
2.1.18 Relationship between risk-taking and business
performance of SMEs 33
2.1.19 Proactiveness 33
2.1.20 Entrepreneurial Pro-activeness 35
2.1.21 Organizational performance 36
2.2 Theoretical Framework 39
2.2.1. Theory
of Business Growth by Gibrat (1931) 39
2.2.2 Dependency
Theory by Paul A. Baran in (1957) 39
2.2.3 Innovation Theory (IT) by Joseph A.
Schumpeter 41
2.3 Empirical Review 42
2.4 Gap in Literature 54
2.5 Summary of Reviewed Related Literature 55
CHAPTER
3:
METHODOLOGY
3.1 Research Design 56
3.2 Sources of Data 56
3.3 Population of the Study 56
3.4 Sample Size Determination 57
3.5 Sampling Technique 57
3.6 Description of the Research Instrument 58
3.7 Validity of the Research Instrument 58
3.8 Reliability of the Research Instrument 59
3.9 Method of Data Analysis 59
3.10 Model Specification 59
CHAPTER
4: DATA PRESENTATION AND ANALYSIS
4.1 Return of Questionnaire 61
4.2 Data Presentation 63
4.3 Testing of Hypotheses 67
4.4 Discussion of Results 70
CHAPTER
5: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings 72
5.2 Conclusion 72
5.3 Recommendations 73
5.4 Areas of Further Studies 73
References
Questionnaire
Appendices
LIST OF FIGURES
Figure page
1:
Corporate Entrepreneurship Variables 38
LIST OF TABLES
Table
Page
3.1 Population
Distribution Table 57
3.2:
Population Table 58
4.1: Return of
Questionnaire 61
4.2: Gender of the respondents 61
4.3:
Years of experience 61
4.4: Age of the respondents 62
4.5: Educational Background 62
4.6: Marital
Status 62
4.7: Examine
the effect of innovation on
organizational output of
63
Selected SMEs in Ebonyi State.
4.8:
Assess the impact of risk-taking on
organizational efficiency of
Selected SMEs 64
in
Ebonyi State
4.9
Determine the impact of proactiveness on
organizational profitability of Selected 65
SMEs in Ebonyi State
4.10: Determine the impact of competitive aggressiveness on
organizational 66
effectiveness of Selected SMEs in
Ebonyi State
4.11: Regression analysis on Innovation/ based intent on
organizational output 67
4.12: Regression analysis on Risk-taking
on
organizational efficiency 68
4.13: Regression
analysis on Proactiveness on
organizational profitability 69
4.14: Regression
analysis on Competitive
aggressiveness on organizational 70
effectiveness
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In
today’s business environment characterized by intensified global competition,
dynamic change and increasing uncertainty, the need for organizations to become
more innovative in order to survive and grow is increasing rapidly. This makes
it imperative for small and medium scale enterprise to believe in the power of
corporate entrepreneurship in order to achieve their aim, goals and objectives
towards improving organizational performance. Consequently, corporate
entrepreneurship is considered a vehicle to move a traditional hierarchical
business to a point where sustainable entrepreneurship becomes a meaningful and
important component of the business (Zahra, 2011).
According
to Christensen (2010) corporate entrepreneurship is seen as the process whereby
an individual or a group of individuals, in association with an existing
business creates a new business or instigates renewal or innovation within the
organisation. This mean that with corporate entrepreneurship SMEs with the
innate zeal and passion to grow their own business is avail the opportunities
to not only provide jobs for themselves but to create employment opportunities
for the unemployed and invariably meets the needs of the entire consumers to
enhance sales volume and profitability (Barrett, 2000).
Recently
the roles of corporate entrepreneurship in organizational growth is universally
changing the face of small and medium businesses and the growth of the economy
at large as it not only allows for the creation of new business ventures, but
also permit innovative activities such as development of new products,
services, technologies, administrative techniques, attitude, strategies and
competitive postures. Furthermore, corporate entrepreneurship is a key factor for
sustainability and competitiveness of any small and medium scale enterprise; it
is importance both in the country and corporate organizations cannot be over
stated as it enables individuals (entrepreneurs) creates wealth, enterprises,
innovation, change, employment, value and growth as these serves as the
essential element towards the growth and development of SMEs in the country (Adeyemi,
& Aremu, 201).
Also, today’s business environment
growth in small and medium scale enterprise is a function of the
entrepreneurial skills, innovation, risk taking, proactive, competitive
aggressiveness, persistence, hard work, diligent, tenacity of purpose and zeal
as these component makes such an individual to overcome all challenges and
adversity that might lead to business failure and promotes organizational
performance, also it monitor the success rate of other renowned businesses and
adopt similar business strategies in other to overturn or prevent the business
from unplanned liquidation in the nearest future. In addition, the importance
of corporate entrepreneurship has help to shaping the skilled and knowledge
workforce of entrepreneurial to be more innovative and proactive in order to
stand amongst competitors. Corporate entrepreneurial aids top leaders in
organisations, business men and women, entrepreneurial to better have an
insights in promoting small and medium scale enterprise in Ebonyi State amongst
individuals and maximizing their work performance to positively increase
organizational growth and survival in the long run (Arinaitwe,
2006).
Furthermore, the pursuit of corporate entrepreneurship requires
established companies to strike a fragile balance between engaging in
activities that make use of existing knowledge, while at the same time
challenging themselves to embark upon new adventures, new production packages,
seeking new knowledge and opportunities to rejuvenate themselves (Ferreira, 2001).
Emmanuel (2021) Radical or breakthrough innovations often lie at the core of
corporate entrepreneurial traits; However, engaging in radical innovation as a
periodical divergence from firm strategy in order to pursue corporate
entrepreneurship may involve such a degree of unfamiliarity and risk that firms
experience great difficulties in doing so, and consequently explore, manage and
exploit the innovation poorly. Focusing on this problematic aspect, a perspective
has recently emerged within the field of entrepreneurship, calling for the
integration of competitive advantage-seeking and entrepreneurial
opportunity-seeking behaviour. Corporate entrepreneurship should be interpreted
as an on-going strategic consideration of entrepreneurial opportunities rather
than as an isolated activity diverging from strategy, and this way as the
‘locus of contact’ between the fields of corporate entrepreneurship and
organizational growth (Slater, &
Narver, 2000).
Small
business owners need to understand the Strength Weakness Opportunity and Threat
(SWOT analysis) of competitors in the market. These understanding will enable
entrepreneurial managers to know the nature of job or work environment and they
recognize the type of competitors in the environment towards gaining a
competitive edge (Trueman & Larsen, 2006).
One of the characters that make an entrepreneur
differ from others is strategies adopted, which can be expressed as a fondness
for innovation, risk taking and pro-activeness and change in what another
entrepreneur are earlier doing. The extent SMEs could grow is likely to count
on the extent dedication, commitment, fund, willingness, or readiness to take
on challenges that can bring some new or idea on board for business
development. SMEs operators need to derive their
business with positive strategies tagged as “passion” and “commitment” (Olaniran,
2016). Inefficiency of government bureaucracy and a change in the attitude of
entrepreneurs about the nature of government have urged governments to seek collaborative
management, downsizing government, reengineering, continuous improvement,
increasing quality standards for services empowering employees, changing the
attitude of entrepreneurs, customer orientation and tendency toward
entrepreneurship and privatization (Stokes, 2000). Corporate entrepreneurship is not necessarily
aimed at financial benefits as it may pursue non-fiscal goals too. Corporate entrepreneurship
in SMEs performance is more than just profit-making. The study seeks therefore to investigate
the impact of corporate entrepreneurship on organizational performance of Selected
SMEs in Ebonyi State.
1.2
STATEMENT OF THE PROBLEM
A
research carried out by Nigerian authors, Okpara and Wynn (2007), on small
business development showed that the rate of SMEs failure in developing
countries are higher than in developed countries. Carter and Jones-Evans (2006)
stated that the strategic problems of entrepreneurs include lack of financial
resources, marketing problems and customer concentration, management and human
resources, lack of systems and controls, and technology skills. There are few
studies on corporate
entrepreneurship and SMEs especially in Nigeria where most of the
entrepreneurial firms are very small and run in informal sector (Kiggundu, 2002).
In Nigeria entrepreneurs experience difficulties in developing and sustaining
effective SMEs especially as the business moves from the informal to the formal
sector when it faces external threats like new technology and, fluctuation in
the political and macroeconomic environment, during succession or when facing
regional or global competition. In Nigeria, Okpara and Wyn (2007), Arinaitwe
(2002) wrote that scholars have pointed out that setting up a business
enterprise is uncertain and cautioned that the probability of small-business
owners to succeed it past the five years is not certain. Arinaitwe (2002) wrote
that entrepreneurs will be faced with the risks of lacking satisfactory
managerial skills, technical know-how and legislature to back up against market
competition, lack of capital and in-accessibility of loan to run the business.
In Nigeria, the policies guiding loans in some financial institution are not
favorable to entrepreneurs, they are now left with the only option of getting
loans with high interest rate thereby putting their business at the risk of
breaking down, adding to other problems they encounter in their businesses.
Nobert (2001), quoting Okpara and Wynn wrote that Nigeria entrepreneurs and
small medium enterprises are faced with the risk of lacking management skills,
financial resources, bad location, laws and regulations, poor economic
conditions, etc. They make wrong decision as a result of poor information
system, lack of formality, incompetence in using or assessing and affording new
technological development that brings innovations. The problem accordingly is
to arrive at how Entrepreneurs in Nigeria can be optimistic about being
successful and sustainable in entrepreneurship comparing them with
Entrepreneurs in developed countries.
Furthermore, management
problem tops the list of these challenges. Entrepreneurs in Nigeria receive
insufficient fund and lack of support from government. Thus, there is poor understanding and application
of product innovation, services or
technologies, proactiveness and
risk-taking even competitive aggressiveness have contributing to the slow performance
rate of small and medium enterprise. Most individuals who venture into SMEs
have either liquidated within the first five years because of inexperience, poor
strategies, reactiveness, poor business plan and insufficient fund. Another
problem is that some entrepreneurial have remain rigid to change according to
the changing business environment and still find it hard to adjust to the
modern trend of business which invariably continue to affect the growth and
survival of small and medium scale enterprises.
Presently, small and medium scale enterprises in
Nigeria are faced with problems that hamper the growth and development of these
enterprises. In, addition, high cost of running SMEs has and is still a
trending issues still militating against the success of small scale business in
Nigeria. Also, some of these challenges can be attributed to poor state of
infrastructure which had made our foreign based investors to overlooked Nigeria
because of its poor capital state as such these had affected the growth of
small and medium scale business in Nigeria. Furthermore, multiple taxation has
impeded the growth of small and medium scale business as its allows enterprise
takes investment decisions based on long run returns on capital thereby leading
to reduction in the size of stock up capital, and aggregate output which in
turn discourage investment. Moreover, high cost of legal document of credit facilities
at both state land registries and the corporate affairs commission (CAC) land
use charge has been a major issues for small scale enterprise as a result of
this; it has discourage some many investors in the private sector of the
economy. More so, some other major problems faced by small and medium scale
enterprise is the issue of continuity, this may be as a result of death of
ownership, lack of ownership interest or financial bankruptcy which may warrant
the enterprise to liquidate within a short period of time. The study seeks to investigate the impact
of corporate entrepreneurship on organizational performance of Selected SMEs in
Ebonyi State.
1.3 OBJECTIVES
OF THE STUDY
The
broad objective of the study is to determine the impact of corporate entrepreneurship on organizational
performance of Selected SMEs in Ebonyi State. The specific
objectives were to;
i.
examine the impact of innovation on organizational output of Selected SMEs in Ebonyi State.
ii.
assess the impact of risk-taking on
organizational efficiency of
Selected SMEs in Ebonyi State.
iii.
determine the impact of proactiveness on organizational
profitability of Selected SMEs in Ebonyi State.
iv.
determine
the impact of competitive aggressiveness on organizational effectiveness of
Selected SMEs in Ebonyi State.
1.4 RESEARCH
QUESTIONS
i.
What is the impact of innovation on organizational output of Selected SMEs in Ebonyi State?
ii.
What is the impact of risk-taking on
organizational efficiency of
Selected SMEs in Ebonyi State?
iii.
What is the impact of proactiveness on
organizational profitability of Selected SMEs in Ebonyi State?
iv.
What
is the impact of competitive aggressiveness on organizational effectiveness of
Selected SMEs in Ebonyi State?
1.5 RESEARCH
HYPOTHESES
H01: Innovation
has no significant impact on organizational output of Selected SMEs in Ebonyi State
H02: Risk-taking
has no significant impact on
organizational efficiency of
Selected SMEs in Ebonyi State
H03: Proactiveness has no significant impact on
organizational profitability of Selected SMEs in Ebonyi State
H04:
Competitive aggressiveness has no significant impact on organizational effectiveness of Selected SMEs in Ebonyi
State
1.6 SIGNIFICANCE OF THE STUDY
Researchers: It
is also important for further research by other researchers for further studies
on corporate entrepreneurship.
SMEs: This
study was of tremendous help to SMES to focus on effective entrepreneurship to
achieve their goals and objectives.
Government: This study shall give an
insight on how job opportunities can be created and how poverty rate can be
drastically reduced in the country.
Policy makers: This
research work provided useful information for policy makers to formulate
effective policies that enhanced both institutional and policy frame work of
SMEs in the country.
1.7 SCOPE OF THE STUDY
This
scope of the study is discussed from three perspectives; the content scope,
unit scope and geographical scope.
Unit Scope
The
involve the entire employees of Jack Engineering and
Resource Company Limited Abakaliki, Kinglion Works Limited,
kumandy's World
Abakaliki, Miracle Business Venture
Abakaliki and Aplombtainment Media
Abakaliki was reached to elicit
information for the study.
Content Scope
The
study was designed to determine impact of corporate entrepreneurship on organizational
performance (A Study of Selected SMEs in Ebonyi State). It
attempted to examine the examine the impact of innovation on organizational output of Selected SMEs in Ebonyi State, assess
the impact of risk-taking on organizational efficiency of Selected SMEs in Ebonyi State, determine
the impact of proactiveness on
organizational profitability of Selected SMEs in Ebonyi State and
determine the impact of competitive aggressiveness on organizational
effectiveness of Selected SMEs in Ebonyi State.
Geographical
location of Jack Engineering
And Resource Company Limited is located at 60,
Nkaliki Road, Abakaliki, Ebonyi,
Kinglion Works Limited
is at M8A, Unity Estate, Abakaliki, Ebonyi,
Kumandy's World
is at N0 3 Nna Street, close to FMC, Abakaliki, Abakaliki, Ebonyi which deals in all kinds
of foreign textiles, fabrics, makeups, cloth materials, fashion designer. Miracle Business Venture
is at No 17, Onogolu Street, Abakaliki, Ebonyi,
while Aplombtainment Media
is situated 4 Calabar Street, Off Waterworks Road, Abakaliki, Ebonyi.
Time
scope of the primary data of this study ranged from 2019 to 2020, while the
secondary data time scope was within the first and second quarter of the year
2021.
1.8 LIMITATIONS OF THE STUDY
The
major challenge this study faced was finance and dearth in assessing
information, since the study selected more than one firm. The researcher finds
it very difficult to travel from one firm to the another to distribute and
retrieve the questionnaire from the respondents. The SMEs were not able to give
out appropriate information about the study and they have limited resources,
thus, the researcher utilized judiciously the little information provided. The
study was also limited by the fact that it was sensitive to the respondents’
feelings and some responses could not be verified. Data collection was also a
key limitation since the studied firms were private companies and obtaining
information was not easy.
1.9 BRIEF
HISTORY OF ORGANIZATIONS UNDER THE STUDY
Jack
Engineering And Resource Company Limited is located at 60,
Nkaliki Road, Abakaliki, Ebonyi,
Jack engineering and Resource Company limited was founded in the year 2000, it
is family owned structural fabrication and project Installation Company. In the
year 2012 the company was registered under cooperate Affair commission (C.A.C)
at Abuja office and was qualified to operate on the country as a registered
company. The company started with 4(four) staff whom are permanent workers but
currently they have same Four permanent staff and 40 contract staff. The
company mainly into building contractor, construction companies, offering
security gadget, electrical construction, cctv installation and maintenance.
Hospital equipment installation. The company started at Awka, Anambra state but
due to fast development in Ebonyi state, they have to relocate to Ebonyi state
in the year 2014.
Kinglion
Works Limited is at M8A, Unity Estate, Abakaliki, Ebonyi,
Kinglion works limited is an Indian company founded in the year 1996 that
exports products to Darshana industries pvt. Ltd. The relocated or opened a
branch office in Nigeria situated at M8A, unity
estate ,Abakaliki Ebonyi State in the year 2014. They have employees of
up to 20 or more in numbers and they deal on pressure Tanks, whole plant
equipment and Accessories, spraying machines and equipment, air spray guns.
Kinglion have focused on solving spraying problem for decades, they design and
produce many kinds of spraying equipment for wood, metal, leather and plastic
industrial use. Their experience in this area has made them one source
specialist in the spraying field, they also supply customers with accurate and
comprehensive spraying technical support in a wide varieties of industries.
Kumandy's
World is at N0 3 Nna Street, close to FMC, Abakaliki, Abakaliki, Ebonyi
which deals in all kinds of foreign textiles, fabrics, makeups, cloth
materials, fashion designer. At Akumandy's World Nig Ltd. we are ready to serve
our customers. Akumandy’s World Nig Ltd
was founded in the year 2017 by joyce Akuamia. The company was created with the
motive of solving designing problem in the country (Nigeria) it is located at
no 3 Nna sreet, close to FMC, Abakaliki which is in the capital of Ebonyi
State. The company specialized on all kinds of foreign
textiles,fabrics,makeups,cloth materials and fashion designer. They work from
from Monday-Saturday from 8am-6pm.with their website as www.akumandy.com
Miracle
Business Venture is at No 17, Onogolu Street, Abakaliki, Ebonyi.
Is a Top Guide4Click Blog That Presents
Everything You Need To Live The Internet Lifestyle For A Click. Our Focus Is To
Guide With Powerful Tools And Strategies. You Need To Make Money. The
company was founded on 2017 at No 121, ogoja road, Abakaliki, Ebonyi state and
was relocated to No17 Orogolu street Abakaliki, ebonyi in 2019 due to their
fast growth and development. It is being managed by engr Miracle Azubuike and
it has 1-20 employees with it’s website as www.adsenserview.com
They
are online resources centre that focuses to equip with the latest information
and powerful tools that educate entrepreneurs and manage their affiliation
program using digital marketing strategies. They help marketers, entrepreneurs
or internet(blogging) business owners on how to run effective google adsense
Campaigns that generate more traffic, revenue, and profit best of all. They
have their working hours from Mondays to Sundays, 8am-4pm but on Sundays
3:30pm- 5:00pm.
Aplombtainment
Media is situated 4 Calabar Street, Off Waterworks
Road, Abakaliki, Ebonyi,
tainment Media is a Multimedia company based
here in Ebonyi state, Nigeria. We are a brand that proposes to provide a wide
range of multimedia and entertainment services. It was founded in the
year 2012 and it is situated at No 4, Calabar street, water works road,
opposite ekoh drugs, pharmacy, Abakaliki, Ebonyi State. It is a multimedia
outfit registered and trade marketed (TM) with cooperate Affaire Commission,
they are into even management, cinematography, mentorship programs, website
development and graphics, consultations and business branding.
They
are a brand that proposes to provide a wide range of multimedia and
entertainment services. The company hopes to achieve this by offering high
quality services base on various media at highly competitive prices and
ensuring that this price is passed, the company hopes to develop a wide range
of multimedia services offered as packages that will meet customers needs. The
range of services will cover the domains of web development and hosting,
digital video and Audio production, graphic and interactive design, publishing,
social media marketing, branding and image creation, events management, sales
and rental of multimedia equipment, consultation and training services, they
also look forward to owing their own theatre, music and movie school, and most
of all establishing a movie house where people can use the vast to school
movies and as location sites, just the way we have Hollywood. Their services
cut across every individual in the society, while also promoting national and
cultural values. They have their company manager as Godson Osreal O. with
company website as follow www.aplombtainmentmedia.co.uk
1.10 OPERATIONAL DEFINITION OF TERMS
Corporate
Entrepreneurship: refer to the development
of new ideas and opportunities within large or established businesses, directly
leading to the improvement of organizational profitability and an enhancement
of competitive position.
Innovation
is the practical implementation of ideas that result in the introduction of new
goods or services or improvement in offering goods or services.
Risk-Taking
is the act or fact of doing something that involves danger or risk in
order to achieve a goal.
Proactive
behavior refers to self-initiated behavior that endeavours to solve a problem
before it has occurred. Proactive behavior involves acting in advance of a
future situation, rather than reacting.
Competitive aggressiveness
is the tendency to intensely and directly challenge competitors rather
than trying to avoid them. Aggressive moves can include price-cutting and
increasing spending on marketing, quality, and production capacity.
Organizational effectiveness measures
how successful organizations are in reaching their goals. Organizational
effectiveness is a concept that measures how thoroughly and efficiently a
company achieves its business goals.
organization's
actual output or outcomes in comparison to its expected outputs (or goals and
objectives).
Profitability
is a measure of an organization's profit relative to its expenses.
Organizations that are more efficient will realize more profit as a percentage
of its expenses than a less-efficient organization, which must spend more to
generate the same profit.
Organizational efficiency: Process
of using fewer resources, as well as less time and less money, to achieve the
same goal.
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