Analysis of exogenous factors associated with enterprise performance in rural areas of Vhembe District, South Africa

Abstract

Enterprises in South Africa are not thriving in the desired expectations despite the numerous support put in place by the government. This is because the nature of support being offered often does not conform with the realities of grassroots entrepreneurs. This study examined specific exogenous factors associated with enterprises' operation in the rural areas of Vhembe District Municipality that should be supported to spur performance. A sequentially exploratory mixed-method design was followed and 280 participants were drawn from 16 villages in four local municipalities of the district using snowball sampling techniques. Semistructured and structured questionnaires were used for data collection. An analysis of the qualitative data was achieved through a thematic technique using Atlas-ti v8. Descriptive statistics, Principal Component Analysis (PCA) and Multilayer Perceptron (MLP) model through SPSS v26 were exploited with the quantitative data. Analysis of the qualitative data detailed 45 issues that deter enterprise success and should be resolved. Through PCA, the data structure made up of 280 rows and 45 variables were categorised into six principal components. These include Access to Finance (AF: 14.887%), Access to Market (AM: 10.297%), Physical Capacity (PC: 8.858), Operational Cost (OC: 6.052%), Socio-cultural issues (SI: 5.628%) and Competition (Co 4.460%). The MLP model harnessed to investigate the exogenous factors based on 83 sample structure of successful enterprises revealed that Co with a coefficient of 0.191 presents the most challenge, followed by AM (0.170), OC (0.163), SI (0.162), AF(0.162) and PC (0.152). These findings differ from the literature. It is therefore recommended that enterprise support should be emphasized based on the identified factors, with competition and access to market being the top priority.