Organisational agility, business best practices and the performance of small to medium enterprises in South Africa

Sithembiso Govuzela,Chengedzai Mafini

doi:10.4102/sajbm.v50i1.1417

Abstract

Background: Only one in 10 newly established business enterprises survives for longer than 10 years in the South African business environment. The primary reasons behind the demise of these small enterprises include the lack of access to financing, lack of financial and managerial skills, lack of expertise, as well as economic factors such as poor sales and weak growth prospects. The new norm in industrial markets is that business organisations must possess a remarkable amount of agility to survive and succeed. Success is important for South African small- and medium-sized enterprises (SMEs) given their significant contributions to the national economy.Objectives: This study investigated the connection between organisational agility, business best practices and the performance of SMEs in South Africa.Method: A quantitative approach using the cross-sectional survey research design was employed in which a structured questionnaire was administered to 564 randomly selected owner-managers of SMEs. Hypotheses were tested using the structural equation modelling procedure, which was conducted after implementing a confirmatory factor analysis to test the psychometric properties of the measurement scales.Results: Hypotheses tests indicated that the four business best practices, namely, technology capability, collaborative innovation, organisational learning and internal alignment, exerted a significant positive influence on organisational agility. Also, organisational agility exerted a significant positive influence on business performance.Conclusion: The study demonstrates that the performance of SMEs can be improved significantly through a proper alignment between the four business best practices considered in this study. Improving the level of organisational agility in SMEs is also important in stimulating their performance. The results of the study can be applied to assist SMEs to survive and flourish in turbulent and dynamic markets, where agile organisational abilities are a requirement for success.

Highlights

Introduction and backgroundSmall and medium enterprises (SMEs) play a strategic role in the economic performance of any country
Hypotheses tests indicated that the four business best practices, namely, technology capability, collaborative innovation, organisational learning and internal alignment, exerted a significant positive influence on organisational agility
This study investigated the connection between organisational agility (OA), business best practices and performance in South African small- and medium-sized enterprises (SMEs)

Summary

Introduction

Introduction and backgroundSmall and medium enterprises (SMEs) play a strategic role in the economic performance of any country. SMEs are viewed as a means to reduce the levels of economic inequality and to decrease the backlog of the previously disadvantaged (Edom, Inah, & Emori, 2015; Kongolo, 2010; Mamman, Kanu, Alharbi, & Baydoun, 2015). They can perform an essential role within the economy of a country by introducing disruptive products and services, thereby improving the standard of living for most http://www.sajbm.org. Success is important for South African small- and medium-sized enterprises (SMEs) given their significant contributions to the national economy

Objectives

Discussion

Conclusion