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An investigation into causes of success and failure in small businesses within the Department of Social Development in the Eastern Cape
- Authors: Petrus, Henry George
- Date: 2009
- Subjects: South Africa -- Dept. of Social Development , South Africa -- Dept. of Trade and Industry , Small business -- South Africa -- Eastern Cape , Small business -- South Africa -- Eastern Cape -- Growth , Business enterprises -- Economic aspects -- South Africa -- Eastern Cape , Economic development -- South Africa -- Eastern Cape , Job creation -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:791 , http://hdl.handle.net/10962/d1003942
- Description: The failure rate of small business initiatives in South Africa is phenomenal, and much is needed to unravel the causes contributing to such failures. Yet small businesses are playing a vital part in our global economy and in particular in terms of job creation and poverty eradication. There are internal as well as external factors that play a significant role in determining the success of these small businesses. In South Africa much emphasis is placed by national, provincial and local governments on small and medium enterprises (SMEs) to drive wealth creation and black economic empowerment. Therefore, an investigation into the factors contributing to the success and failure of SMEs is of vital importance. The South African government’s poverty eradication strategy, which is driven by the Department of Trade and Industry (DTI), allocated funds for job creation programmes as a method to combat poverty and more importantly, to develop young entrepreneurs. Among the seven departments mandated by DTI was the Department of Social Development. Since the birth of the new democracy, this department has transformed from offering a traditional remedial method of service delivery to an integrated developmental approach. This approach included extensive community work, which includes job creation and economic empowerment through the establishment of small businesses. Given the availability of funding, the inability to spend fiscal budgets as per allocation as well as the charity element of receiving involved, it is important to explore whether factors contributing to the success of these SMEs are any different to the traditional business strategies. In this study, the researcher gave special consideration to the social capital element and its contribution in the context of community support as well as the ability of SMEs to become sustainable business ventures over time. The research study aims to highlight unique factors contributing to the success and failures of SMEs established by the Department of Social Development and in doing so hopes to manifest an improved understanding of the management of these SMEs. In chapter one, the researcher gives a brief description of the activities of the Department of Social Development and its mandate to establish SMEs for job creation. A brief explanation regarding the context of the problem that was investigated is also given. Chapter two provides a detailed theoretical overview of the study, focusing in particular on factors contributing to the success and failure of small businesses. In chapter three, the research design and the various instruments used are discussed. Here, emphasis is placed on procedural issues and ethical considerations. The validity and reliability of the research is strongly motivated. In chapter four the research results are discussed. Chapter five aims to discuss the findings of the research with reference to the theoretical overview outlined in chapter two. Lastly, chapter six makes recommendations to the various stakeholders who may benefit from this research. These recommendations are the most important objectives of the research and should add value with regards to the management of SMEs in future, with special reference to the Department of Social Development in the Eastern Cape.
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An investigation into problems facing small-to-medium sized enterprises in achieving growth in the Eastern Cape : enhancing the strategy for developing small 'growth potential' firms in the Eastern Cape
- Authors: Sha, Shafeek
- Date: 2006
- Subjects: Small business -- Management , Small business -- South Africa -- Eastern Cape , Small business -- South Africa -- Eastern Cape -- Growth , Business enterprises -- Economic aspects -- South Africa -- Eastern Cape , Economic development -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1173 , http://hdl.handle.net/10962/d1002789 , Small business -- Management , Small business -- South Africa -- Eastern Cape , Small business -- South Africa -- Eastern Cape -- Growth , Business enterprises -- Economic aspects -- South Africa -- Eastern Cape , Economic development -- South Africa -- Eastern Cape
- Description: As the world economy continues to move towards increased integration, some of the greatest opportunities for Small-to-Medium Sized Enterprises (SMEs) will derive from their ability to participate in the global marketplace. It is generally accepted that SMEs are becoming increasingly important in terms of employment, wealth creation, and the development of innovation. However, there are considerable doubts about the quality of management in this sector with policy-makers suggesting that there are particular weaknesses in innovation, a lack of financial acumen, marketing, entrepreneurial flair, practical knowledge, and human resource management. As a result, many firms do not reach their full potential and fail to grow. According to organisational life cycle models, the introductory phase is particularly important since it is generally known and accepted that there is a high mortality rate of SMEs within the first two years. Given this high failure rate, it becomes vital to research the factors/characteristics/management abilities that are required to enable the SME to survive and indeed progress to the growth phase of the organizational life cycle. This research seeks to investigate the internal and external factors that are consistent in the success of SMEs who have reached the growth phase. A significant contribution to the enhancement of the growth potential of a firm will be made through the understanding of these factors.
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Constraints to the implementation of a market development approach to the delivery of business Development Services within the Makana municipal area
- Authors: Van Heerden, Garth William
- Date: 2012
- Subjects: Makana Municipality , Local government -- South Africa -- Eastern Cape , Small business -- South Africa -- Eastern Cape , Small business -- South Africa -- Eastern Cape -- Growth , Small business -- South Africa -- Eastern Cape -- Public opinion , Small business marketing -- South Africa -- Eastern Cape , Economic development -- South Africa -- Eastern Cape , Unemployment -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:814 , http://hdl.handle.net/10962/d1007746
- Description: South Africa's biggest challenge remains the high rate of unemployment especially among the country's youth. Small, medium and micro enterprises (SMMEs) have been shown to be instrumental in many third world economies as a sustainable means not only to address unemployment but also to contribute significantly to economic growth. Despite government's good intentions and support, the South African SMME sector is not growing as expected and this is impacting negatively on unemployment creation in the country. Good business development services (BDS) is necessary to support SMMEs and specifically the Market Development Approach to the provision of BDS, where subsidies are replaced by private payment for services. Makana municipal area provided scope for analysing the constraints to the implementation of such business development services. Analysing the scope and magnitude of the constraints in this setting would contribute to understanding the constraints also in other parts of the country and help officials in local economic development make better informed decisions regarding support to SMMEs. Authors like Rogerson (2011), UNDP (2004), Miehlbradt and McVay, (2003), the Committee of Donor Agencies for SME Development (Blue book) (2001) and Bear et al., (2001) Gibson (2001), propose that the key to sustainable BDS is the implementation of the Market Development approach which focusses on for-profit activities in the provision of BDS to SMMEs. The aim of this study was to examine perceptions of key stakeholders towards SMME support and development, to identify the constraints to the implementation of a Market Development approach to the provision of business development services to SMMEs in the Makana area and to make recommendations to the Makana LED office of possible intervention strategies to address identified constraints. Purposive sampling was used to identify key stakeholders in SMME support in the Makana area in the categories of, big institutional buyers, public and private BDS providers as well the municipal LED office. Semi-structured interviews were conducted with each stakeholder using questions shown in appendixes A to D. Perceptions of all key stakeholders were very positive with good intentions to support SMMEs. However, this was not consistent with procurement practice at the big institutional buyers. Constraints are summarized in the following five themes: Theme 1. Inconsistent practice in dealing with SMMEs across the organisation. Theme 2. Absence of a cooperative body or Chamber of Commerce. Theme 3. Fragmented Business Development Services. Theme 4. A lack of a culture of cost recovery. Theme 5. Limited awareness of BDS in the Makana area. A number of recommendations were suggested. Big institutional buyers like Rhodes University and Makana municipality need to take a longer term view and move the focus from employment creation to enterprise support which is a more sustainable and empowering source of employment (ILO, 2009). The Grahamstown Chamber of Commerce should become more representative and big institutional buyers also need to be convinced of the value of private BDS. Stakeholders should work together to combine resources to offer a comprehensive one-stop BDS for the Makana area (Chetty, 2009) and this comprehensive BDS should be provided according to the Market Development approach focusing on those services that lend themselves better to this approach whilst using subsidies only for those services with a low potential for cost recovery (UNDP, 2004).
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