Managerial interpersonal competencies and the performance of family- and non-family-owned small and medium-sized enterprises in Zimbabwe and South Africa

Nhamo Mashavira,Dennis Y Dzansi,Crispen Chipunza

doi:10.4102/sajhrm.v17i0.1130

Abstract

Orientation: Regardless of the contribution done by small and medium-sized enterprises (SMEs) in modern economies, and the critical role managerial interpersonal competencies play in sustaining these enterprises, no known comparative study has been conducted in SMEs in developing economies.Research purpose: This study purposed to establish the impact of managerial interpersonal competencies on SME performance as measured by innovation and return on investment (ROI) in both family-owned SMEs (FOSMEs) and non-family-owned SMEs (NFOSMEs) in Zimbabwe and South Africa.Motivations for the study: Efforts at understanding managerial competencies and firm performance among SMEs have taken a holistic approach, using all known managerial competencies; yet, recently, there is acknowledgement that interpersonal competencies are more effective in business sustainability than other competencies. With this observation, the need to extent this finding in other contexts among FOSMEs and NFOSMEs in developing countries becomes apparent.Research approach/design and method: The study whose design was a descriptive comparative case study adopted a quantitative approach.Main findings: The study found a positive and significant relationship between managerial interpersonal competencies and firm performance as measured by innovation and ROI in FOSMEs in both countries.Practical/managerial implications: NFOSMEs may need to focus their training on interpersonal competencies for managers in order to be sustainable. For FOSMEs, continuous enhancement of managerial interpersonal competencies is important as it promotes innovation and business sustainability.Contribution/value-add: The study helps fill the lacuna between research and practice with respect to managerial interpersonal competencies in FOSMEs and NFOSMEs in the two countries.

Highlights

Small and medium-sized enterprises (SMEs) dominate the global business stage (Ayyagari, Demirgüç-Kunt, & Maksimovic, 2011; Ramukumba, 2014)
A publication following a meeting of the Organisation for Economic Cooperation and Development (OECD) Council at Ministerial Level (2017) suggests that in developing countries, small and medium-sized enterprises (SMEs) are the largest forms of businesses contributing approximately to 60% of the countries’ gross domestic products (GDPs), employing about 70% of the population, and are major players in value beneficiation – creating between 50% and 60% of it
The assumption emanating from a resource-based view that participation by family members in both business and family relationships in their personal and professional lives, increases their complexity and generates a unique context for human capital that could lead to better performance when compared to their non-family counterparts could not be sustained by the current study

Summary

Introduction

Small and medium-sized enterprises (SMEs) dominate the global business stage (Ayyagari, Demirgüç-Kunt, & Maksimovic, 2011; Ramukumba, 2014). Like in Zimbabwe, in South Africa, SMEs account for about 91% of the formal business entities, contributing to about 51% to 57% of the GDP and providing almost 60% of employment (Cant & Wiid, 2013; Kongolo, 2010). In spite of their prominence, it is deplorable to note that South African small businesses do not make it past the second year of trading with failure rates as high as 63% (Cant & Wiid, 2013). About 60% of SMEs in Zimbabwe do not perform well and usually fail in their first year, while 25% fail within the first 3 years (Mudavanhu, Bindu, Chigusiwa, & Muchabaiwa, 2011; Small Enterprises Development Corporation [SEDCO], 2004)

Objectives

Methods

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Discussion

Conclusion