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Smes) GROWTH TAXONOMY in Ethekwini MUNICIPALITY- (IN SOUTH AFRICA) by ALFRED TAPIWA CHIBARO MOYO 216071081

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Smes) GROWTH TAXONOMY in Ethekwini MUNICIPALITY- (IN SOUTH AFRICA) by ALFRED TAPIWA CHIBARO MOYO 216071081 SMALL AND MEDIUM ENTERPRISES (SMEs) GROWTH TAXONOMY IN eTHEKWINI MUNICIPALITY- (IN SOUTH AFRICA) BY ALFRED TAPIWA CHIBARO MOYO 216071081 Thesis submitted in fulfilment of the requirements for the degree of Doctor of Business Administration (DBA) Supervisor: Professor Theuns Pelser Graduate School of Business and Leadership Faculty of Management Studies 2019 DECLARATION I, Alfred Tapiwa Chibaro Moyo, declare that: (i) The research reported in this thesis, except where otherwise indicated, is my original research. (ii) This thesis has not been submitted for any degree or examination at any other University. (iii) This thesis does not contain other persons’ data, picture, graphs or other information unless specifically acknowledged as being sourced from other persons. (iv) This thesis does not contain other persons’ writing, unless specifically acknowledged as being sourced from other researchers. Where other written sources have been quoted, then: (a) Their words have been re-written but the general information attributed to them has been referenced; (b) Where their exact words have been used, their writing has been placed inside quotation marks, and referenced. (v) Where I have reproduced a publication of which I am author, co-author or editor, I have indicated in detail which part of the publication was actually written by myself alone and have fully referenced such publications. (vi) This thesis does not contain text, graphics or tables copied and pasted from the Internet, unless specifically acknowledged and the source being detailed in the thesis and in the References section. Signed.................................................. Date............................... Alfred Tapiwa Chibaro Moyo (i) DEDICATION To my late wife, Gloria Moyo and my late mother Elder Hove, the two ladies who have shaped my life-MYSRIP. Thank you for all you have meant to me. Your memories will live on forever. (ii) ACKNOWLEDGEMENTS A project of this size and magnitude could not have been completed through my own efforts. It was a long and arduous road only guided by the words of Isaiah 43:2 “When thou passest through the waters, I will be with thee; and through the rivers, they shall not overflow thee: when thou walkest through the fire, thou shalt not be burned; neither shall the flame kindle upon thee.” Praise goes to the Lord Almighty for the strength to walk, persevere and stay on when odds defined otherwise. My Supervisor, Professor Theuns Pelser gladly accepted all the persistent enquiries e-mails and sometimes phone-calls. Thank you for the invaluable contribution. My three adult children; Dr Gwinyai Masukume and Dr Rumbidzai Masukume for the Financial assistance which was handy for the ‘the old man.’ Farirai Masukume (CA) for coming in to assist mainini in your small way-, to take care of the home, I really appreciate. My three sisters, for keeping in touch. It made all the difference. I thank you all. (iii) ABSTRACT Small and Medium Enterprises (SMEs) are considered to be the engine of growth for many economies. Their contribution to GDP and employment creation is significant in both developed and developing countries. The study sought to develop a growth taxonomy for SMEs in eThekwini Municipality Area. The main research instrument was a questionnaire aided by semi-structured interviews. Respondents ranked a number of variables and established that eight of these variables constitute the taxonomy. These variables are, namely: Innovation, The Business Plan, Training, Culture and Employees, Networking, Religious Beliefs, Relationships with Banks and Corruption. In addition, included in the taxonomy are Chinese companies and others which include Market Exposure, Sharing Information and Negotiation Skills. Measures of SME growth which are impacted upon by the mentioned eight variables are Sales Growth, Net Profit Growth and Employment creation. The study found out that both Chinese Public companies and SMEs make capital investments in Africa and do not intend to leave. Further, Chinese companies employ about 44 percent of local indigenous people in management positions. A major deterrent to SME growth in eThekwini is the high crime rate which needs to be curbed by both the Municipality and the South African government. The study further established that there is a positive correlation between the number of employees and sales turnover. In addition, there is also a positive correlation between the number of years in business and sales turnover, pointing to the learning curve effect. The more the number of years an entrepreneur spends in business the more the increase in the following year’s sales turnover. In conclusion, a number of recommendations and suggestions among which the following stand out; that South African universities should expedite commercialisation of patents in order to promote SME development and growth and the need to improve relationships between banks and SMEs regarding funding and collateral security. The study further noted that South Africa lags behind many other countries in supporting and encouraging women entrepreneurs and revealed the need for both the South African government and eThekwini Municipality to find ways of encouraging women participation in entrepreneurship and SME development. (iv) CONTENTS Declaration..............................................................................................................................(i) Dedication.............................................................................................................................. (ii) Acknowledgements................................................................................................................(iii) Abstract..................................................................................................................................(iv) CHAPTER ONE: INTRODUCTION AND BACKGROUND 1.0 INTRODUCTION..............................................................................................1 1.1 Background the study..........................................................................................................6 1.2 The Municipality of eThekwini’s Demographic Statistics.....................................................7 1.3 Problem Statement..............................................................................................................8 1.4 Aim and objectives of study.............................................................................................. 12 1.4.1 Study’s Aim.................................................................................................................... 12 1.4.2 Objectives...................................................................................................................... 12 1.4.3 Research Questions...................................................................................................... 13 1.5 Delimitations and assumption of the study.......................................................................13 1.6 Justification of the study....................................................................................................13 1.7 Who will benefit from the study....................................................................................... 14 1.8 Application of theory ....................................................................................................... 15 CONCLUSION.................................................................................................... 16 CHAPTER TWO: LITERATURE REVIEW 2.0 INTRODUCTION ................................................................................... .........18 2.1 The Review-Global and African Perspectives.....................................................................18 2.1.1 Factors impeding SME growth in Africa and some African countries............................19 2.2 Global impact of Chinese businesses on SME growth with particular reference to South Africa.....................................................................................................................22 2.3 Competitive Small and Medium Enterprises-The World Bank’s perspective.....................26 2.4 Entrepreneurial Push and Pull Factors in eThekwini..........................................................28 2.5 The Business Model as a business starting point for SMEs................................................29 (v) 2.6 Risk-taking and challenging for the SME entrepreneur.....................................................30 2.7 Impact of culture on SME business growth.......................................................................31 2.8 The effect of Religion on Entrepreneurship......................................................................33 2.9 Impact of corruption on SME entrepreneurship development........................................34 2.10 The Importance of innovative SMEs and entrepreneurship on job creation and growth.........................................................................................................35 2.11 The Importance of provision of Finance for the growth of SMEs...................................36 2.12 Access to Finance for women entrepreneurs in South Africa: challenges and opportunities.....................................................................................37 2.13 The need for Training and Development for growth of SMEs.....................................37 2.14 Networking a critical requirement for SME growth and development........................39
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