The Relationship between Learning Orientation and the Performance of Small and Medium Enterprises in South Africa

Evelyn Motsepe,Olawale Fatoki

doi:10.22610/jebs.v9i3.1762

Abstract

Small and medium enterprises (SMEs) are an important vehicle in income re-distribution, poverty alleviation, employment creation and contribute to the gross domestic product of South Africa. However, SMEs in South Africa suffer from a weak level of performance and a high failure rate. The main objective of this study was to investigate the impact of learning orientation on the performance of SMEs. A quantitative approach was used, while a self-administered questionnaire was also employed during data collection process. A three- section questionnaire covering demographic information, learning orientation variables and performance variables was prepared and distributed randomly to a selected sample of 390 SME owners in Msukaligwa Local Municipality in Mpumalanga Province of South Africa. A total of 181 questionnaires were returned. Descriptive statistics, factor analysis, correlation and regression analysis were used for data analysis. The Cronbach’s alpha was used to measure reliability. The results of the study revealed a significant positive relationship between learning orientation and the performance of SMEs. Recommendations to improve the learning orientation of SMEs are suggested.

Highlights

Fatoki and Garwe (2010) point out that small and medium enterprises (SMEs) are central pillars of economic growth of most countries
The adoption of learning orientation can positively impact on the performance of SMEs (Rebelo & Gomes, 2011)
The failure rate of SMEs is very high in South Africa

Summary

Introduction

Fatoki and Garwe (2010) point out that small and medium enterprises (SMEs) are central pillars of economic growth of most countries. SMEs have been focused on by the government as a priority for job creation to reduce the high rate of unemployment estimated to be 27.1% (Statistics South Africa, 2016). Despite their contribution to employment creation and economic growth, SMEs suffer from a high failure rate with a negative impact on the South African economy. According to Van Scheers (2012:5051), some of the major challenges experienced by SMEs in South Africa are related to learning and marketing This includes high competition, lack of managerial skills and unwillingness to attend training and seminars. This results in high rate of SME failure in South Africa (Herrington & Kew, 2013)

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Conclusion