SMEs In South Africa Research Articles

Racial group differences and export market access challenges in agricultural value chains and supply networks of SMEs in South Africa

ABSTRACT Although previous studies provide an insightful and categorised nature of internal and external export barriers experienced by agricultural SMEs in general; there is little, if any, strategic insights on the racial nuances in value chain barriers for most agricultural SMEs that target global export markets. This study posits that export barriers are not uniform and differ based on race and the context in which the agricultural SME is based. Hence, we specifically explore the nature of export barriers per race within the agro-value chains in South Africa and juxtapose these with the dynamic market and historical conditions of the South African market environment. In this multi-case study, we focused mainly on the differences between black and white-owned agricultural SMEs riding on their different supply networks’ capabilities to navigate the export barriers they face. The findings serve to develop seminal knowledge to enhance export capabilities and opportunities for minority groups globally and more importantly to highlight the underlying drivers for racial imbalances in agro-supply chains. Although the findings are geographically skewed to South Africa, the market dynamics are relevant across countries with similar demographic characteristics and provide a platform for future research.

Challenges in implementing corporate social responsibility: A study of SMEs in South Africa’s construction industry

Challenges in implementing corporate social responsibility: A study of SMEs in South Africa’s construction industry

The influence of technological preparedness on trust in e-commerce by South African SMEs with demographics as mediation variables

This study investigates the impact of Technological Preparedness on trust in e-commerce by SMEs in South Africa. The study examined the role of an organisation’s Technological Preparedness in influencing the use of e-commerce. A positivist research paradigm and quantitative research approach underpins this study. Demographical factors were used as control variables. A total of 497 respondents participated in the research, and the findings highlighted the significance of Technological Preparedness in influencing trust in e-commerce by SMEs in South Africa. The findings suggest that demographics such as Age, Gender, Education Level, Province of origin, Business Category, and Internet Experience had little or no influence on trust in e-commerce compared to Technological Preparedness. The technological limitations SMEs experience significantly influence their trust in e-commerce, impacting their adoption and usage of e-commerce in their businesses. This study contributes to the existing literature on the adoption of technology by SMEs in developing countries. It provides insights for policymakers to develop effective policies that support the usage of e-commerce by SMEs to facilitate growth and sustainability. Based on the findings, government policies should improve to focus more on addressing technological issues and empower SMEs to enhance their preparedness to adopt e-commerce.

Barriers to Implementation of Environmental Management Accounting in South African Small and Medium Enterprises for Sustainable Performance

The key aim of the study is to establish barriers to environmental management accounting (EMA) adoption by manufacturing small and medium enterprises (EMA) in Gauteng province, South Africa from an institutional theory standpoint. To attain the aim of the study 34 in-depth interviews were undertaken with manufacturing SME owners and managers on 34 SMEs. Thematic analysis was adopted to analyze interview transcripts and revealed that lack of government support, financial barriers, lack of incentives to adopt EMA, and absence of guidance to adopt EMA are acting as barriers of SMEs in South Africa from adopting EMA. As a result, the study proposes various incentives such as tax concessions and discounts on eco-materials to encourage SME EMA adoption. Also, the government should take center-stage in making available green training and amplifying awareness of environmental management within SMEs in South Africa. Overall, the study would help regulators and policymakers to align regulations and green strategies with factors that hinder EMA adoption in a ploy to overcome them.

Factors Affecting Small and Medium-Sized Enterprises Financial Resilience Post Covid-19 Pandemic in South Africa

This research paper aims to investigate the factors influencing the financial resilience of SMEs in South Africa in the aftermath of the COVID-19 pandemic. The study focuses on three primary factors: access to loans, the interest rates applied to these loans, and the structure of repayment plans. To achieve this purpose, a quantitative research methodology, guided by the positivism philosophical framework, was employed. The research selected 310 respondents who were SME owners representing various sectors. The data collection and analysis methods primarily involved multivariate regression analysis. The research revealed that access to loans, interest rates on loans, and the design of repayment plans exerted positive and statistically significant effects on the financial resilience of SMEs in the post-COVID-19 period. These factors displayed probability values of 0.005 and absolute values of 0.448, 0.456, and 0.432, respectively. These findings underscore the crucial role of these factors in determining the financial stability of SMEs. The study's implications are twofold. First, it suggests that financial institutions should streamline the process for SMEs to access financing, making it more accessible and accommodating. Furthermore, these institutions should tailor loan repayment options to better align with the unique needs of SMEs. Second, the research underscores the importance of offering financial education and support services to assist SMEs in enhancing their financial management skills and adaptability within the post-pandemic economic landscape.

Assessing the Factors Underlying the Adoption of E-Commerce Among B2B SMEs

This research examines the key factors of e-commerce adoption by South African and Nigerian B2B SMEs using a multi-perspective model that combines elements in the technological, organisational, and environmental contexts of the firms. Survey data for the research model were randomly collected; 700 were B2B SMEs in South Africa and Nigeria. A partial least squares structural equation model technique using the SmartPLS was applied to validate the measurement model and to assess the theorized relations. Results of the analysis showed that while some factors robustly predict the adoption of e-ecommerce by Nigerian and South African SMEs, other factors exclusively influenced either Nigerian B2B firms' adoption of e-commerce or South African B2B firms adoption of e-commerce. The findings highlight the importance of context-specific understanding of the drivers of e-commerce adoption among B2B firms in emerging African economies. It also outlines practical implications for promoting the adoption of e-commerce among B2B firms.

A Qualitative Exploration of the Marketing Challenges Faced by Small and Medium Enterprises in Gauteng, South Africa During COVID-19

Purpose: The aim of this study is to examine how the resurgence of e-commerce in South Africa during the Covid-19 pandemic impacted SMEs using e-commerce resources, and to devise strategies to assist SMEs to become more agile, resilient and better able to cope with disruptions. Theoretical framework: The coronavirus pandemic highlighted the need to investigate the challenges experienced with e-commerce by SMEs in South Africa since the pandemic disrupted business through the restriction of movement of people which accelerated the use of online shopping. The e-commerce resources and dynamic capabilities of SMEs were analysed to explore the impact they have on the growth of e-commerce. Methodology: Purposive sampling was used to identify 13 participants (SME owners/managers) for a qualitative study conducted using semi-structured interviews to gain an in-depth understanding of the challenges which impacted their business and marketing model. Thematic analysis was used to analyse the transcripts from the interviews and identify any patterns. Findings: It was ascertained that the pandemic stimulated the growth of e-commerce among SMEs that invested in unique resources and capabilities. However, those businesses that had not invested in on-line marketing resources were negatively affected and some have had to close. Practical implications: The practical implication of this research relates to how SMEs could (should) smartly digitise their business model and migrate to e-commerce more effectively and efficiently. Value: This study may assist SMEs to make more informed decisions when using e-commerce platforms. The findings may also contribute to preparing South African SMEs to adapt more easily, should a similar disruption occur in the future.

Perceptions of Generation Z towards entrepreneurial risks within the maritime SMEs in South Africa

Perceptions of Generation Z towards entrepreneurial risks within the maritime SMEs in South Africa

Perceptions of Generation Z towards entrepreneurial risks within the maritime SMEs in South Africa

Perceptions of Generation Z towards entrepreneurial risks within the maritime SMEs in South Africa

PROSPECTS FOR DIGITAL TRANSFORMATION IN RURAL SOUTH AFRICA'S SMALL AND MEDIUM-SIZED ENTERPRISES

The global wave of the coronavirus pandemic has constrained small, medium-sized enterprises to seek out ways to survive. The pandemic has propelled businesses to review their system of operation and embrace the endless benefits inherent in the digital world. However, there is a dearth of empirical studies on the propensities for digitalization in the context of rural-based SMEs in South Africa. To fix this gap, this paper explores the prospects for the digital shift among rural-based South African SMEs. A descriptive survey anchored in a quantitative research method was utilized using a Likert scale questionnaire as a tool for data collection, hence, thousand and sixty-seven (1067) SME owners operating in Ethekwini Municipality rural communities, KwaZulu-Natal province of South Africa were engaged as respondents. It was found that the major barriers to digital transformation amongst the small business owners in the rural setting include: the reluctance of SMEs owners to experiment with digital tools, the risk-aversive nature of the rural-based entrepreneurs, limited financial resources and inadequate awareness of available sector-specific digital tools. The outcome of this study further indicates that majority of rural-based South African SMEs are at risk of retrogressing due to inadequate knowledge of relevant digital tools with which they can enhance the level of competitiveness of their businesses. Thus, this paper advocates timeous succour for these SMEs in order to ensure their longevity. Recommendations and future research directions were also offered.

Understanding and predicting the determinants of blockchain technology adoption and SMEs' performance

PurposeThe success of SMEs' financial and market performance (MAP) depends on the firms' level of blockchain technology adoption (BCA) and identifying the crucial antecedents that influence SMEs' adoption. Therefore, this research attempts to develop an integrated model to understand and predict the determinants of BCA and its effect on SMEs' performance. The purpose of this paper is to address this issue.Design/methodology/approachThe theoretical foundations are the technology–organization –environment (TOE) framework and the resource-based view (RBV) perspective. The authors distributed a survey to SMEs in South Africa and received 311 responses. The covariance-based structural equation modeling (CB-SEM) followed by the artificial neural network (ANN) technique was used for the data analysis.FindingsThe SEM results showed that SMEs' relative advantage, compatibility, top management support (TMS), organizational readiness (ORD), competitive pressures (COP), external support, regulations and legislation significantly influence SMEs' BCA. However, complexity negatively impacts SMEs' BCA. The analysis results also revealed that SMEs' BCA significantly influences the financial performance of the firms, followed by MAP. Furthermore, model determinants were input to an ANN modeling. The ANN results showed that TMS is the most critical predictor of SMEs' BCA, followed by ORD, COP, external support, and regulations and legislation.Practical implicationsThe results provide valuable information for SMEs when maneuvering their adoption strategies in the scope of blockchain technology. Additionally, from the perspective of an emerging market, the study has successfully contributed the TOE framework and the RBV.Originality/valueThis study is the first work to explore the determinants of BCA in the context of SMEs from a developing country. This paper is also one pioneer in attempts to develop a causal and predictive statistical model for predicting the determinants of BCA in SMEs' performance.

Impact of Government Support, Business Style, and Entrepreneurial Sustainability on Business Location of SMEs in South Africa’s Mpumalanga Province

Finance, incubation, managerial support initiatives, and technological innovation have all been identified as major drivers of SMEs’ business location. Despite the importance of SMEs, little attention has been paid to business research regarding the impact of government support, business style, and entrepreneurial sustainability on SME activities in rural, semi-urban, and urban areas. Identifying the necessary support for SMEs in rural, semi-urban, and urban areas is critical for the government as well as stakeholders and SME owners in assessing their survival status and other goal-setting achievements. The article’s central question is whether government support, business style, and entrepreneurship sustainability affect SME operations differently depending on location (rural, semi-urban, or urban). The MANOVA technique was used for the analysis to determine whether there is a significant difference between groups on a composite dependent variable as well as the univariate results for each dependent variable separately. Because conducting a series of studies (ANOVA) reveals the possibility of an inflated Type 1 error, MANOVA is preferred. The test re-test reliability method (trustworthiness assessment of the questionnaire) and the Cronbach Alpha test (internal consistency of instrument sections) yielded satisfactory results of 0.70 and 0.875, respectively. Government support (GS), business style (BS), and entrepreneurial sustainability were used as dependent variables (SE). The independent variable was the business location. On the combined dependent variables, there was a statistically significant difference between SME location: F (3, 902) = 20.388, p = 0.001, Wilks’ Lambda = 0.88, partial eta squared = 0.06. When the results for the dependent variables were considered separately, they all reached statistical significance, using a Bonferroni adjusted alpha level of 0.017. BS: F (1, 904) = 13.29, p ≤ 001, partial eta squared = 0.03. GS: F (1, 904) = 30.28, p ≤ 0.001, partial eta squared = 0.06. SE: F (1, 904) = 8.08, p ≤ 0.001, partial eta squared = 0.02. The findings show that locational effects on government support have a knock-on effect on the business plan and long-term entrepreneurship. As a result, the government must reconsider its rural activities to ensure that support is distributed equitably across levels of location.

Supply Chain Management as a Driver of Competitiveness for Fast Moving Consumer Goods Smes in South Africa

Introduction The supply chain management strategy adoption by enterprises in the last four decades, has made enterprises more customer-centric, as they focus on product flow from source to the ultimate end-user. Consequently, the phrase ‘customer is king’ has become synonymous with good customer service. The study explored the coordinated supply chain processes as a competitive advantage for the South African small and medium-sized enterprises (SMEs) in the fast moving consumer goods (FMCGs). Methodology The study was grounded in the theory of competitive advantage and qualitative research methodology and constructivism research paradigm were used. The grocery SMEs from Gauteng province, which is the South Africa’s leading economic hub provided the sample for the study. Non-probability sampling was used in selecting the participants of the study who were the owner/managers of the SMEs. The interview covered enterprise relationship with suppliers of fast moving consumer goods (FMCGs) and third-party logistics (3PL) transportation service. The recorded interviews were transcribed, translated, coded and analysed via content analysis to determine the outcome of the study. Results The results indicated that SCM improved cost-effectiveness through savings on 3PL transportation service optimisation shared amongst the SMEs, improved customer service through supply chain collaboration and recovered value from reverse logistics management. &nbsp

Are There Gender Differences in Sustainable Entrepreneurship Indicators Amongst SMEs in South Africa? Application of MANOVA

In addition to the contributions and relevance of entrepreneurship activities to economic growth and development of countries, various factors have equally been advanced as responsible for the success stories of entrepreneurship sustainability worldwide. However, the influence of success factors on gender ownership of entrepreneurship activities is a relatively new aspect in the field of research that has not gained much academic attention in the literature especially in South Africa. This debate is so important in the face of the various agitations for equal participation of women and the inconclusive debate that women are better managers of business enterprises. In this article, using the Multivariate Analysis of Variance (MANOVA) technique, we examined the extent to which sustainable entrepreneurship indicators (finance, social and environmental) account for any disparity in gender ownership and management of business enterprises in South Africa. A stratified sampling method was adopted for the survey. Our analytical technique (MANOVA) created a new summary dependent variable, which is a linear combination of each of our original dependent variables. Confidence intervals of 95% and margins of error (3%) were used to validate the results. Findings indicate that the only difference that exists as per gender ownership disparity is around financial resources. There is therefore a need to realign programmes and policies to reduce this gendered inequality.

Assessing SME Perceptions of Using Green Social Media Marketing

The image of an enterprise in relation to the environment in which it operates is currently of increased importance (Liskova, Cudlinova, Partlova & Petr, 2016, p.64). An enterprise's brand image is a customer's perception of a brand and can help customers assemble information, discriminate brands, create positive feelings, and create a reason to purchase (Huang, Yang & Wang, 2014, p.263). Therefore, enterprises aim to create a strong positive image of their brand which can be generated through marketing programmes. Social media marketing is the application of marketing principles, tools and techniques to social media platforms to differentiate and position the brand better than competitors (Neti, 2011, p.3). Enterprises should therefore use social media to promote and communicate their green initiatives to their stakeholders because of the prominent benefits it offers. Conscious and careful use of social media is the most promising investment for furthering an enterprise's green marketing strategies and by implementing green projects as a CSR initiative SMEs can satisfy their stakeholders (Williams, Page & Petrosky, 2014, p.26). SMEs do not effectively and efficiently market their enterprises due to the lack of funding, insufficient cash flow and the need for technical assistance to market their enterprise (National Small Business Chamber, 2016). Social media is the most popular means of communication in society and provide a good solution as it allows enterprises to interact with their stakeholders through dialogue and engagement to identify and satisfy stakeholder expectations (Bibri, 2008, p.14). The implementation of marketing activities that communicate enterprises' social and environmental initiatives creates added value and enhances financial performance (Bibri, 2008, p.14). If SMEs promote their green initiatives in their marketing communications that are directed at their stakeholders, they could succeed in marketing their business effectively and as a result grow and survive in the long term. However, few SMEs in South Africa are aware that implementing green strategies can improve their profitability and their survival. Keywords: Green marketing; social media marketing; SME's

Structural Differentiation and Organisational Learning Capability s Predictors of Corporate Venturing and Business Growth among SMEs in South Africa

In this ever-changing business milieu, growth is generally perceived positively for business as it is considered a measure of success and a key driver in the creation of wealth, employment, and economic development. This paper therefore investigates the relationship between structural differentiation, organisational learning capability, co-operative venturing and business growth from the perspective of SME managers. To this end, a unique conceptual model was developed and empirically tested. The survey method was adopted where a questionnaire was administered to SME managers within the Gauteng province of South Africa. Data analysis was conducted using SPSS 25 and Smart PLS 3.0 to generate the sample profile and to test the proposed hypothesis, respectively. Organisational learning capabilities had a noticeably stronger impact on successful corporate venturing as compared to structural differentiation, suggesting that SMEs have to invest more resources toward improving employees’ knowledge of the job within their respecting roles within SMEs.

An empirical study of optimal access to external finance by small and medium enterprise start-ups

The aim of this study is to empirically examine the relationships between the determinants of start-up SME success, namely start-up awareness and management skills, and the finance suppliers. This study has proposed a framework that improves the ability of start-up SMEs to access external finance. Through descriptive and inferential statistical analyses of data from a survey of a sample of SMEs in South Africa, it was ascertained that the framework which maps the entrepreneur’s start-up awareness and requisite management skills with the finance providers’ requirements will make up a tool to assist start-up SMEs in developing optimal financing options to grow their businesses.

Significant Factors Influencing Quality Assurance Practices in Small and Medium-Sized Construction Projects in South Africa

Although implementing quality assurance (QA) processes in construction play an important role in the South African economy has been acknowledged. However, constructions SMEs are faced with difficulties in improving rural road infrastructure and high-quality roads. Additionally, past research has failed to reach consensus on the construction process and socioeconomic settings in previously disadvantaged areas in South Africa, including the factors influencing negatively the performance of such factors. This research examines what factors facilitate or inhibit the success of construction SMEs and what actions can be taken to being distressed construction SMEs under control. The study adopted a quantitative research approach in which a three-section questionnaire was administered to 160 purposively chosen road- building experts in a South African construction SMEs. The questionnaire was structured into three parts, which sought the participants’ profile, identified the quality assurance practices (QAPs) incorporated in the construction SMEs’ road building programmes, and identified the factors that negatively influence the implementation of QA processes. Data was analysed using the Statistical Package for the Social Sciences (SPSS) version 22. Furthermore, to determine the reliability of the various constructs, mean scores, descriptive statistics and standard deviations were obtained. The empirical findings established eight QAPs that were reliable and valid for implementation processes that can control or minimise their causes of poor quality in projects undertaken by construction SMEs, level of skill acquisition; project planning and control techniques; project construction design; process implementation and process improvement; financial management; organisational structures; involvement of people; and quality standards and measurements. The eight factors attained high Cronbach Alpha values above the recommended 0.70 which indicates high internal consistencies among the sub-scales. Findings from this study should be useful to managers in similar environments may use the results of this study as either diagnostic tools or as a reference benchmark for strategic interventions in solving construction projects related problems. Furthermore, the researchers also recommend that these practices are for quality assurance in construction projects undertaken by SMEs in South Africa.

Does Environmental Sustainability Impact Innovation, Ecological and Social Measures of Firm Performance of SMEs? Evidence from South Africa

This study investigated the question of whether environmental sustainability influences firm performance. Firm performance, a multidimensional construct, was researched utilizing innovation, ecological and social measures on the premises of SMEs in South Africa. Thus, the study hypothesized that environmental sustainability is positively and significantly related to innovation, ecological and social measures of firm performance. A cross-sectional research design was adopted in this study to test the abovementioned hypotheses. A total of 208 self-administered questionnaires distributed to SME owners and managers were analyzed utilizing structural equation modelling (SEM) and Amos Version 24 software. Primarily, the study established that environmental sustainability was significantly and positively correlated to all three measures of firm performance used in this study. Thus, the inferences from the findings suggest that environmental sustainability practices contribute positively towards firm innovation, ecological and social performances. The findings of this study greatly contribute towards the practice and theory of small businesses and firm performance by providing a more specific and streamlined perspective for approaching firm performance.

Bank Lending to Small and Medium Scale Enterprises (SMES) and Business Cycle in South Africa after the Global Financial Crisis

The recent financial crisis has generated interests in how business cycle affect bank lending to SMEs. However, the effect of the business cycle on lending to SMEs in South Africa after the global financial crisis of 2008 has not been extensively explored. We examine this relationship and its effect in South Africa using Vector Autoregressive modeling. This paper employs monthly data from South Africa Reserve Bank (SARB) for the period 2008 to 2014. We adopt the regulatory-driven capital crunch hypothesis employing monthly data from South African Reserve Bank (SARB). Most of the variables display a very sensitive reaction to the coincident index and capital adequacy shock. The results show strong evidence of procyclicality in SME lending in South Africa. The result shows that business cycle has a positive and significant long-run impact on SME. However, the adjustment coefficient of the business cycle is also positive and significant in the short run. Any case of asset price misalignment or excessive growth boom may ultimately amplify the business cycle. The impulse response test shows the response of bank lending to SMEs to one standard deviation shock of the business cycle is negative and persistent for over 15 quarters before steadying. This result vividly indicates some strong evidence of credit procyclicality between the business cycle and SME in South Africa. Our results have interesting implications for credit availability to SMEs. Our results have several implications. Firstly, these may lead to many banks decreasing lending in bad times when they encounter loan losses and their capitalization drops. This may affect the real economy, as SMEs, which need to finance their small enterprises, may be cut off from credit. There is also a need to promote diversification of financing options for small firms and SMEs by providing various credit supporting policies in South Africa. There is, therefore, an urgent need to boost support to SMEs credit, especially during recessionary periods.