Browsing by Subject "SMEs"

Now showing 1 - 8 of 8
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    Open Access
    Evaluating the value of e-business in small and medium-sized enterprises: a model and analysis in Southern Africa
    (2019) Tsumake, Meduduetso; Kyobe, Michael
    The implementation of electronic business (e-business) in organisations has led to a major improvement in business performance in both developed and developing countries. This improvement as well as market forces have put pressure on Small and Medium-sized Enterprises (SMEs) to adopt e-business. However, the e-business models adopted by SMEs are often abstruse and poorly represented, which leads to time consumption and miscommunication between the stakeholders involved, the business operations and Information Technology (IT) functions. These unclear e-business models make it difficult to evaluate its value. This research examines the elements necessary for this e-business value creation and draws from different disciplines and theories to create a comprehensive model for e-business evaluation in Southern African SMEs. Most studies done on e-business in Southern Africa have been found to be on challenges of technology, a lack of resources such as financial and user capabilities and challenges in business processes. Some gaps in the e-business literature have been found to exist on issues of alignment of business mission and strategy, entrepreneurial drive and management capabilities. The study adopted Gerbner’s theory of communication exchange for the data collection strategy and process, which posits that by studying the events of the communication exchange, one can infer about the state of the systems engaged in the exchange and their relationships. Consequently quantitative website content analysis of 100 Southern African SMEs was conducted to determine their e-business value. The results revealed that an SME that comprises of a properly aligned business mission and strategy, business processes that are enabled by e-business, an entrepreneurship orientation, management capabilities and employees as well as technology integration will achieve ebusiness value. This was seen by a positive influence of 68% on e-business value from these elements. Conversely 32% of this influence is from external elements, and future studies could explore more elements that influence e-business value. Also, a small employee size was found to not be a hindrance of e-business value. Lastly, overall infrastructural e-readiness is the same in Botswana and South Africa, which refutes claims that e-readiness is higher in South Africa than the rest of the Southern African countries. However, SMEs in Botswana lag behind when it comes to technological aspects such as technology equipment, successfully integrating their systems within the businesses; and their IT in their entire businesses and networks, forming technology interdependencies of processes with external businesses, and using online means to transfer information to clients/customers. The developed model (EBVE model) could help (1) stakeholders investigate, communicate and make appropriate decisions and (2) aid SMEs to successfully integrate e-business in their business processes and practices.
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    Examining the factors impacting small and medium enterprises (SMEs) in accessing development debt finance in the kingdom of Eswatini
    (2020) Dlamini, Zanele F; Dhlamini, Xolisa
    SMEs are conduits for the transformation of economies because they act as catalysts for private sector development. However, they face several constraints to accessing finances for their growth and development. Hence, by using a secondary dataset from the Central Bank of Eswatini that comprises 1,390 loan applicants, an empirical analysis was done using a binary logistic regression analysis to assess credit rationing factors preventing SMEs in the Kingdom of Eswatini to access DFIs loans for their growth and development. Thus, the objectives of the study are to examine the relationships between credit rationing factors and their effects on accessing DFI loans in the Kingdom of Eswatini. Descriptive analysis provided an explanation as to how these factors influence the financing of SMEs in the Kingdom of Eswatini. Pearson's correlation coefficient was, therefore, employed to determine the relationships between credit rationing factors and binary logistic regression analysis to examine the effect of these factors on DFIs loans accessibility. This method was used to determine the strength of the relationship between loan access and credit rationing factors. The findings show that the age of SMEs and loan amounts are some of the major negative factors impacting access to DFIs loans in the Kingdom of Eswatini. A mature SME is less constrained to access DFIs loan compared to start-ups and growing SMEs. Furthermore, SMEs that apply for sustainable loans are less constrained to access DFIs loans than those that apply for unsustainable and very high amounts. It is, therefore, concluded that DFIs in the Kingdom of Eswatini apply credit rationing in dispersing loans to SMEs. DFIs should link their loan amount to demands and to the period of existence, as only well established and matured SMEs have an added advantage in accessing DFIs loans. For these reasons, it is recommended that economic policy makers should devise loan access policies that suit start-ups and growing SME for their conducive development and growth. This policy is vital because SMEs have a pivotal role to play in the overall economic growth of the Kingdom of Eswatini.
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    Explaining the Big Data adoption decision in Small and Medium Sized Enterprises: Cape Town case studies
    (2022) Matross, Lonwabo; Seymour, Lisa
    Problem Statement: Small and Medium-Sized Enterprises (SMEs) play an integral role in the economy of developed and developing countries. SMEs are constantly searching for innovative technologies that will not only reduce their overhead costs but also improve product development, customer relations and profitability. Literature has revealed that some SMEs around the world have incorporated a fairly new technology called Big Data to achieve higher levels of operational efficiency. Therefore, it is interesting to observe the reasons why some organizations in developing countries such as South Africa are not adopting this technology as compared to other developed countries. A large portion of the available literature revealed that there isa general lack of in-depth information and understanding of Big Data amongst SMEs in developing countries such as South Africa. The main objective of this study is to explain the factors that SMEs consider during the Big Data decision process. Purpose of the study: This research study aimed to identify the factors that South African SMEs consider as important in their decision-making process when it comes to the adoption of BigData. The researcher used the conceptual framework proposed by Frambach and Schillewaert to derive an updated and adapted conceptual framework that explained the factors that SMEs consider when adopting Big Data. Research methodology: SMEs located in the Western Province of South Africa were chosen as the case studies. The interpretive research philosophy formed the basis of this research. Additionally, the nature of the phenomenon being investigated deemed it appropriate that the qualitative research method and research design be applied to this thesis. Due to constraints such as limited time and financial resources this was a cross-sectional study. The research strategy in this study was multiple in-depth case studies. The qualitative approach was deemed appropriate for this study. The researcher used two methods to collect data, namely, the primary research method and the secondary research method. The primary research method enabled the researcher to obtain rich data that could assist in answering the primary research questions, whilst the secondary research method included documents which supplemented the primary data collected. Data was analyzed using the NVivo software provided by the University of Cape Town. Key Findings: The findings suggest that the process that influences the decision to adopt Big Data by SMEs follows a three-step approach namely: 1.) Awareness, 2.) Consideration, 3.) Intention. This indicates that for Big Data to be adopted by SMEs there must be organizational readiness to go through the process. This study identified the main intention for SMEs to adopt Big Data is to ensure operational stability. Improved operational efficiency was identified as the supporting sub-theme. This study has raised awareness about the process that SMEs, academic researchers, IT practitioners and government need to place emphasis on to improve the adoption of Big Data by SMEs. Furthermore, this study has raised awareness about the opportunities and challenges that SMEs, academic researchers, IT practitioners and government need to place emphasis on to improve the adoption of Big Data by SMEs. Value of the study: The study adds value in both academia and the business industry as it provides more insight into the factors that SMEs consider in the Big Data adoption decision.
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    Internationalization of SMEs: A Developing Country Perspective
    (2023-07-28) Islam, Md. Touhidul; Islam, Md. Aminul; Hossain, Muhammad Muazzem; Olalere, Oluwaseyi Ebenezer
    Internationalization has become increasingly important to the competitiveness of firms of all sizes, including small and medium-sized enterprises (SMEs). SMEs play a crucial role in the development of lower-income countries. In Bangladesh, SMEs account for between 80 and 85 percent of industrial employment and 23 percent of total employment and are critical to economic growth. Though the literature on firm internationalization is well established, the internationalization process of SMEs from developing countries, such as Bangladesh, remains relatively under-explored. The main aim of this study is to explore factors that hinder the internationalization of SMEs in a developing country, with Bangladesh serving as the context of the investigation. Qualitative research methods were adopted, comprising semi-structured interviews with leaders of 16 SMEs in Bangladesh. Six major themes were identified as hindrances to the firms’ internationalization: (1) lack of market knowledge, (2) lack of family support, (3) the proliferation of ‘scammer buyers’, (4) the (negative) involvement of third parties, (5) mismanagement of domestic ports, and (6) unregulated local market. Regarding positive factors, only one theme emerged from the data, the strong support from the local government, which provides considerable backing for local SMEs with international ambitions. This study’s primary contribution and originality lie in the context of the investigation, with Bangladesh primarily overlooked in the international business literature. Therefore, the study presents several novel insights into the internationalization process of SMEs.
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    Private Equity Financing in Zambia: Determinants and Constraints
    (2019) Lumbala, Malasa; Chelwa, Grieve
    Growth and development of small and medium-sized enterprises (SMEs) are the key drivers of economic growth and development in Africa. While this has become a widely accepted idea, access to financing for growth remains a stumbling block for many enterprises in Zambia. Traditional lenders (i.e. banks) are risk averse because they may not understand the SME market and have been negatively impacted by information asymmetry that is often associated with these ventures. As a result, they tend to charge exorbitant interest rates that are unsustainable for long-term growth. The existing focus of many microfinance institutions in Zambia is typically directed towards salaried employees which crowds out lending to SMEs. Private equity financing, on the other hand, presents an alternative solution to the long-term financing dilemma faced by enterprises. The Zambian private equity market is itself in a nascent space but shows much potential. This dissertation seeks to determine what drives private equity financing in Zambia and what constrains it. The dissertation adopts a qualitative research approach relying on the interviews of various Fund Managers who are familiar with investing in Zambia. The paper finds that private equity investment in Zambia is determined and catalysed broadly by business attractiveness and the business environment. Business attractiveness is underpinned by management capacity, the business track record, exits and returns, impact potential and business scalability. The business environment is driven by political stability, GDP growth and population growth. The sector is however, constrained by a less developed private equity culture, limited opportunities to invest and currency risk.
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    The effect of technological opportunism on the performance of SMES: A dynamic capabilities perspective
    (2019) Tjipueja, Roline; Brown, Irwin
    In today’s fast changing business environment, small and medium-sized enterprises (SMEs) need to seize the technological opportunities that this environment provides, by developing dynamic capabilities to build and attain high performance. This dissertation looks at the effect that technological opportunism has on the performance of SMEs in Namibia. In addition, the dissertation looks at the mediating role of dynamic capabilities on the relationship between technological opportunism and SMEs. The study draws from the dynamic capabilities view for theoretical context. The literature reviewed enabled the development of a conceptual model, which further contributes to theory. Data is drawn from a random sample of 209 SMEs located in Namibia. Results from the regression analysis suggest that the effect of technological opportunism on the performance of SMEs is partially mediated by dynamic capabilities. For the three capabilities assessed, the learning and integrative capabilities have a partial mediating effect on the link between technological opportunism and performance, while the transformative capability does not mediate this relationship. The study offers important academic and business implications, and also points out future research directions. The findings serve as a guide to best improve the work done in this sector, with an emphasis on how to best develop SMEs’ capabilities with regard to new technology initiatives, aimed at improving SMEs. SME owners are encouraged to build capacity, embrace partnerships and develop capabilities that results in better performance.
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    The Impact of Section 12J Venture Capital Companies' Regime on Small and Medium Enterprises in South Africa
    (2020) Makhalemele, Moeketsi; Biekpe, Nicholas; Makoni, Patricia
    This study sought to examine whether the use of tax incentives to boost investment into the SME sector is an effective policy for economic development. More specifically, the study focused on the Section 12J tax incentive of the Income Tax Act of South Africa, which underpins the current venture capital companies' (VCC) regime for this country. This VCC regime is aimed at addressing the challenge of lack of access to finance by SMEs, and it does so by incentivising venture capital investors to provide equity capital to qualifying SMEs. These SMEs are, in turn, expected to grow and help reduce the economic challenges of poverty and unemployment in South Africa. A mixed methods research approach was adopted for this study. It was also inductive in nature, based on primary data collected from a survey of various stakeholders of the VCC regime using a convenience sampling method. The data variables of the study were based on factors relating to the impact that the VCC regime has had on SMEs in terms of financial performance and creation of decent employment. The study concludes that the VCC regime has had a positive impact on the South African SME sector in terms of financial performance and creation of decent employment. As a result, the VCC regime has shown to be an effective tool for addressing various economic challenges, such as: lack of access to finance faced by SMEs, high failure rate of SME businesses, and poverty alleviation through provision of decent employment by SMEs. Thus, the resultant recommendation submitted in the study is that the VCC regime should as such be extended beyond its current sunset date in order to ensure the South African economy continues to enjoy the benefits that the regime has to offer.
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    Towards a grounded theory of why and how coopetition emerges among SMEs: revisiting intentionality and unintentionality
    (2024) Kauami, Ngunoue Cynthia; Samuelsson, Mikael
    Over the past three decades, there has been growing research interest in coopetition. Coopetition is an intricate network of interdependencies among firms, where intentional and unintentional cooperation and competition occur concurrently. This occurs towards the achievement of diverse yet mutually advantageous recurring economic and/or altruistic objectives, endorsing a paradoxical relationship. While research has advanced, little remains known about the fundamentals of the emergence of coopetition. This study uses strategy-as practice and processual lenses to consider why and how coopetition emerges, delving into the lived experiences of tourism business owners/managers to allow for a micro-foundational view of emergence. Using a qualitative constructivist grounded theory approach, data were collected among small and medium enterprises (SMEs) and analysed over a period of one year at the tourism destinations of Swakopmund and Walvis Bay in Namibia. Theoretical saturation was attained at 89 episodes of emergence, since emergence was adopted as the level analysis. The study found three typologies of coopetition emergence: economic, altruistic, and habitual coopetition. Economic coopetition emergence, underlined by resource deficiency, alliance and diversification logics is confirmed in extant literature and has been considered as the dominant reason for competitors engaging collaboratively. This typology emerges both intentionally and unintentionally. Altruistic coopetition emergence, that is driven by solidarity and identity logics confirms and extends recent studies which maintain that there are non-economic reasons for coopetition emergence. This typology was found to emerge unintentionally. Economic and altruistic emergence have recurring patterns over time, which give rise to habitual coopetition emergence. This coopetition type is indicative of practices that become embedded and implicitly institutionalised as modus operandi with consistent reciprocal recurrence driven by economic and altruistic logics, albeit mutually exclusively. Emergence is a process that unfolds in four overarching phases: the selection, negotiation, delivery, and review phases, which are foundational expressions of how the three typologies manifest, confirming its episodic nature which can be deemed to go through “life cycles”. The study contributes to the coopetition literature in general, and specifically to the formation stage by strengthening the non-economic rationale of emergence through presenting care ethics, considered in psychology and social neurosciences. Furthermore, habitual emergence advances path dependence, trust and reciprocity literature and the significant role of time in coopetition intent. From a practical perspective, the study contributes to increased managerial insights into the best ways to structure coopetition, considering the different typologies and emergence processes for enhanced financial and non-financial benefits. In addition, it furthers the idea of sustained coopetitive relationships among firms in general, and among small and medium enterprises (SMEs) specifically.