Market Orientation and Performance of Small Businesses in South Africa

Edem Korku Agbobli,Olabanji Oni,Olawale Fatoki

doi:10.22610/jebs.v9i5.1915

Abstract

The study focused on identifying the relationship between market orientation and performance of small businesses in Vryburg region of South Africa. It aimed to achieve the following objectives, (1) To determine the level of market orientation among small businesses in Vryburg region of South Africa, (2) To establish if there is any relationship between market orientation and performance of small businesses in Vryburg region of South Africa. The study was exploratory in nature and utilised the quantitative research method with a descriptive research design. 268 questionnaires were distributed to small businesses owners/managers in the Vryburg region of South Africa. 207 questionnaires were returned, 9 questionnaires out of the 207 returned were incorrectly filled. Simple random sampling, a probability sampling technique was used in the study. Data analysis included descriptive statistics, correlation and regression analysis. The Cronbach’s Alpha co-efficient was used to measure reliability. The findings revealed that the majority of small businesses in Vryburg region of South Africa are market oriented. The findings further show that there is a positive relationship between market orientation and the performance of small business in the Vrburg region of South Africa. The study proposed the formalisation of small businesses, the development of strategic cultures as well as entrepreneurship and business management training for small business owners and managers.

Highlights

In South Africa, small businesses are firms with a maximum of 200 employees (National Small Business Act (NSBA), Act 102 of 1996, as amended in 2003 and 2004)
The findings of extant studies were inconclusive on the level of market orientation among small businesses and on the relationship between market orientation and small business performance
It was demonstrated in the literature review that market oriented small firms tend to be more successful than firms that were less focussed on the market

Summary

Introduction

In South Africa, small businesses are firms with a maximum of 200 employees (National Small Business Act (NSBA), Act 102 of 1996, as amended in 2003 and 2004). In South Africa as in the EU, small businesses are referred to as small, micro and medium enterprises (SMMEs) (NSBA, 1996, 2004; EC, 2009). The importance of small businesses to national economies has been sufficiently demonstrated. The relative importance of the small business sector in other economies has been reported. The sector accounts for 99.7% of employment in the USA (Small Business Agency of the USA (SBA) (2006). In the Organisation for Economic Co-operation and Development (OECD) member countries, small businesses represent more than 95% of all enterprises and employ more than half of the workforce in the private sector (Savlovschi & Robu, 2011). Savlovschi and Robu (2011) claim that the small business sector accounts for two-thirds of all new jobs. The foregoing illustrates the global economic importance of small businesses

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