African Journal of Hospitality, Tourism and Leisure (Jul 2019)
The effect of entrepreneurial orientation on the performance of immigrant-owned SMMEs in the Eastern Cape Province of South Africa
Abstract
Small, micro and medium enterprises (SMMEs) contribute significantly to the economy of developing countries including South Africa. These enterprises face a number of challenges and it is reported that the majority of SMMEs fail within a short period of time in South Africa. A high failure rate of SMMEs is also attributed to the lack of entrepreneurial orientation among SMME owners and managers. The objective of this study was to investigate the effect of entrepreneurial orientation (i.e. risk taking, innovativeness and proactiveness) on the performance of immigrant-owned small, micro and medium enterprises (SMMEs) in the Eastern Cape Province of South Africa. Although entrepreneurial performance can be defined in various ways, this study defined performance through measuring tangible elements such as firm growth, profitability, personal wealth creation, growth in employment, turnover, and sustainability. A quantitative research design was adopted. Data was collected from 400 immigrant entrepreneurs who were selected using snowball and purposive sampling techniques. Correlation and regression analysis were used to test the hypothesis. It was found that entrepreneurial orientation has a positive effect on the performance of immigrant-owned SMMEs. Thus, risk taking, innovativeness and proactiveness have an effect on the performance of immigrant-owned SMMEs operating in South Africa. This study recommends that entrepreneurs should strive to improve their entrepreneurial orientation (risk-taking skills, innovativeness, and proactiveness) to improve the performance of their businesses; the government should show support for immigrant entrepreneurship in order to eliminate negative perceptions from communities where immigrants operate and financial institutions should develop products for immigrant entrepreneurs in South Africa as they are a growing and promising market.
