Business practices as an implication for SMEs growth

[摘要] English: With the current bleak state of the economy, both in South Africa and globally,resulting in high unemployment and poverty levels, citizens of countries have had toresort to entrepreneurship as a means to generate an income and in turn create jobs.As a result of the quest of financial freedom stemming from entrepreneurship, manysmall and medium-sized enterprises (SMEs) are established. However, SMEs arefaced with high failure rates. This is witnessed in the number of SMEs that rarely makeit past the second year of trading, with failure rates as high as 63 percent. As a meansto cope with these challenges, scholars have often looked to business practices as aninitiative to enhance SME growth. It is as a result that this study purposed to determinewhich business practices can enhance SME growth. The population used to examinethis primary objective consisted of SMEs in the Kimberley, Northern Cape area.There is an increasing consensus that SME owners and managers should play apivotal role in nurturing entrepreneurial activity in SMEs so as to compete successfully.Subsequently, corporate entrepreneurship (CE) - a concept that describes theentrepreneurial behaviour inside an established organisation- has received muchattention in literature as a means to curb the challenge of SME failure and enhanceSME growth. As such, the secondary objectives aimed to evaluate prior studies onbusiness practices, assess theoretical studies on SME growth in South Africa, reviewtheoretical studies on CE, determine which business practices SMEs engage in,empirically identify the determinants of SME growth, determine which dimensions ofCE SMEs engage in, determine which key business practices can enhance CE andestablish a conceptual framework identifying the relationship between businesspractices and CE as initiatives to enhance SME growth.The population of the study consisted of SMEs in the Kimberley, Northern Cape areaand a statistical methodology was implemented to address the primary objective andthe secondary objectives. The findings revealed that a positive and significantrelationship exists between all of the selected business practices selected for thepurpose of this study (Human Resource Management practices, PerformanceManagement practices, Change Management practices, Risk Management practices,Marketing practices and Networking practices) and SME growth. Furthermore, thefindings reiterated scholars' argument that the implementation of business practices in SMEs can help increase the level of innovation, creativity and entrepreneurialbehaviour, which in essence refers to CE.A number of recommendations were made at the end of this study that could serve asa guide to formulating and implementing strategies to address the challenges in thestudy. The emphasis is placed primarily on educational institutions to incorporate thecollective implementation of business practices and CE as a means to enhance SMEgrowth in their curriculum; and SME owners and managers to invest in acquiring theright skills set necessary to operate their businesses successfully.

[发布机构] University of the Free State