ENTREPRENEURSHIP AND SMALL BUSINESS

Get Complete Project Material File(s) Now! »

THE MEANING OF DEVELOPMENT

Williams (2003:1) posed the puzzling question, what is it that we are studying when we study development? In other words, what constitutes ‘development problem’? While it is common in the literature to come across continents, countries, regions, and communities being described as developed, developing, or underdeveloped, determining what exactly constitutes development or the lack of it continues to prove elusive. However, the main criteria used for this distinction seem to centre around level of industrialisation in a particular area thus sometimes, the terms industrialised and less industrialised are used instead of developed and underdeveloped/developing. Irrespective of the terminology, these so-called underdeveloped/developing areas also seem to be characterised by high levels of poverty, unemployment and inequality. Thus, there is little reference to development without simultaneous reference to these three issues. Not surprisingly, the level of development in an area has also come to be associated with the severity (or the lack thereof) of unemployment, poverty and inequality, issues that according to Hopkins (2001) have the potential of leading to social instability in any country.

The New View of Development

By the mid-sixties, calls had begun to emerge for the inclusion of social indicators in the assessment of the levels of development. In the US for example, Anderson (1971) observed: “Since 1966 when the then American president Johnson directed the Secretary of Health, Education and Welfare to improve America’s ability to chart its social progress, social indicators became popular”. Todaro and Smith (2003:14) analysing trends in development theory argue against the traditional view. They regard it as inadequate, complaining that the principal economic measures of development have only been supplemented by casual reference to non-economic social indicators such as gains in literacy, schooling, health conditions, and services. The implication is that development seen in pure economic terms whilst neglecting or relegating problems of poverty, unemployment and income distribution to secondary importance is inadequate.

MAJOR DEVELOPMENT ISSUES FACING SOUTH AFRICA

The previous section identified poverty, unemployment, and inequality, as some key characteristics of places regarded as not developed. In South Africa, the Department of Trade and Industries (DTI)’s 2001/2002 annual report indicated that the levels of poverty and unemployment are unsustainable over the long term (DTI, 2003). This calls for economic policies and strategies to address these problems. Meanwhile, SMME growth and development has become a priority for most governments in third world countries because it is touted as a major if not the most potent way of bringing about sustainable development through reducing unemployment, and its concomitants, poverty and inequality. But to understand this link it is first necessary to have a clear understanding of these three indicators (or manifestations?) of underdevelopment.

SMME ISSUES

The point has earlier been made that in order to fully understand the link between SMMEs and development (particularly their role in job/employment creation and possibly to overcome some of the difficulties encountered in promoting a vibrant SMME sector), there is the need to first explore their nature. In addition, there is the need to explore existing definitions in order to develop a working definition for SMMEs so as to eliminate ambiguities since a plethora of definitions exist for this sector. Also, it has been argued that if SMMEs are to fulfil their role in socio economic development, they need to prosper. This requires that barriers they face be eliminated or at least reduced while environment conducive to SMME growth and development are established. Exploring these issues would highlight the barriers and enabling environment issues that need attention.

SMME ENABLING ENVIRONMENT

Any studies on SMMEs without a discussion of the enabling environment will be incomplete for at least two reasons. Firstly, SMMEs need an enabling environment to survive and grow because according to the United Nations Development Programme (UNDP) (1999:1), in countries where the policy environment has been restrictive, SMME development is slow. Secondly as people who found SMMEs, entrepreneurs need an incubating and enabling environment in order to develop their natural entrepreneurial predisposition behaviour (Richards, 1999:4). Therefore, both entrepreneurs and the enterprises they found need a conducive and enabling environment.

SMMES AND DEVELOPMENT

A number of strategies, action plans, and programmes have been suggested for improving the well being (development) of communities. And in recent times the general question of the role of SMMEs in the socio-economic development whether at local, regional or national level has been dominating social and economic agenda of both public policy makers and researchers all over the world. The works of experts such as Murphy (1996:5); Longenecker et al. (2000:3); and Smallbone and Welter (2001:63), just to mention a few indicate a general consensus that notwithstanding difficulties in promoting a vibrant SMME sector, the best way to bring about sustainable socio economic development is through SMMEs. UNIDO (2002:2) confirms this observation by pointing out that SMMEs offer the best way of overcoming poverty and inequality.

EVIDENCE FROM INDUSTRIALISED COUNTRIES

Arzeni (1998:18) notes that in Canada, an important proportion of all new employment growth in the first five years of the 1990s came from self-employment and micro-enterprises. The same source indicates that in the USA, small firms created about 35% of the jobs in 1995. Birch (1979; 1987) as quoted by Kesper (2000:1), found that small firms created most of the new jobs in the USA. The same trend has been reported at regional level in the USA. For example, the Chicagoland Chamber of commerce (CCC) (2002) in acknowledging the crucial role of SMMEs in strengthening the Chicago region’s economy reported that in 2001 alone, there were more than 41000 new small business starts in the six counties that make up the Chicago Metropolitan area. This is a clear indication of the extent to which SMMEs have helped in accelerating development in disadvantaged rural communities despite some differences in the definition of SMMEs for the USA Webb (1998) also observed that in the last few years, third world characteristics have been recognised in both urban and rural parts of the USA. As a response, micro-enterprise development programs have been used to stimulate and reduce poverty in these areas of the USA with much success. Not surprisingly, SMMEs now form an important component of the USA economy, a further attestation to the SMME sector’s role in development.

TABLE OF CONTENTS :

• Dedications
• Acknowledgements
• Abstract
• Chapter Contents
• List Of Tables
• List If Figures
• CHAPTER 1: INTRODUCTION
  • 1.1 Background
  • 1.2 Importance/Justification For The Study
  • 1.3 Problem Statement
  • 1.4 Objectives
  • 1.5 Definition Of Key Concepts
  • 1.6 Limitations
  • 1.7 Organisation Of The Study
• CHAPTER 2: SMMES AND DEVELOPMENT
  • 2.1 Introduction
  • 2.2 The Meaning Of Development
  • 2.2.1 Defining Development
  • 2.2.2 Major Development Issues Facing South Africa
    • 2.2.2.1 Unemployment
    • 2.2.2.2 Poverty
    • 2.2.2.3 Inequality
  • 2.3 SMME Issues
  • 2.3.1 Nature Of SMMEs
  • 2.3.2 Defining SMMEs
  • 2.3.3 General Barriers/Problems Facing SMMEs
  • 2.3.4 SMME Enabling Environment
  • 2.4 SMMEs And Development
  • 2.4.1 Evidence From Industrialised Countries
  • 2.4.2 Evidence From Developing Countries
  • 2.5 SMMEs, Development, And BSR
  • 2.6 Summary And Conclusions
• CHAPTER 3: BUSINESS SOCIAL RESPONSIBILITY
  • 3.1 Introduction
  • 3.2 Theoretical Foundations Of BSR
  • 3.2.1 Stakeholders And Their Influence
  • 3.2.2 Ethics As A Foundation Of BSR
    • 3.2.2.1 Meaning Of Ethics
    • 3.2.2.2 Business Ethics
  • 3.3 Defining BSR
  • 3.4 Elements/Measurement Of BSR
  • 3.5 The BSR/SMME Interface
  • 3.5.1 Drivers Of BSR
  • 3.5.2 Opportunities (Benefits)
  • 3.5.2.1 The Business Case
    • 3.5.2.2 Benefits To The Community
    • 3.5.2.3 Environmental Benefits
  • 3.5.3 Threats To BSR
  • 3.5.4 Barriers/Challenges To BSR
  • 3.6 Summary And Conclusions
• CHAPTER 4: ENTREPRENEURSHIP AND SMALL BUSINESS
  • 4.1 Introduction
  • 4.2 What Is Entrepreneurship?
  • 4.3 Entrepreneurship Defined
  • 4.4 Approaches To Entrepreneurship
  • 4.4.1 Entrepreneurial Schools Of Thought
  • 4.4.1.1 The Macro View
  • 4.4.1.2 The Micro View
  • 4.4.2 Process Approach
  • 4.5 Types Of Entrepreneurship
  • 4.5.1 Necessity Entrepreneurship
  • 4.5.2 Opportunity Entrepreneurship
  • 4.6 Why Entrepreneurship Is Important In South Africa
  • 4.7 Promoting Entrepreneurship In South Africa
  • 4.8 Level Of Entrepreneurship In South Africa
  • 4.9 Entrepreneurial Versus Small Business
  • 4.10 Entrepreneurship, Development And BSR
  • 4.11 Conclusion
• CHAPTER 5: MANAGING SMMES
  • 5.1 Introduction
  • 5.2 Defining Management
  • 5.3 Classical Managerial Functions
  • 5.3.1 Planning Within SMMEs
  • 5.3.1.1 Importance Of Lanning In SMMEs
  • 5.3.1.2 The Extent Of Planning Within SMMEs
  • 5.3.1.3 Formalising Planning In SMMEs
  • 5.3.1.4 Planning For BSR
  • 5.3.2 Organising Within SMMEs
    • 5.3.2.1 Importance Of Organising
    • 5.3.2.2 Symptoms Of Poor Organising
    • 5.3.2.3 Extent Of Organising Within SMMEs
    • 5.3.2.4 Organising For BSR
  • 5.3.3 Leading
  • 5.3.3.1 Types Of Leaders
  • 5.3.3.2 Importance Of Leading
  • 5.3.3.3 Leading SMMEs
  • 5.3.3.4 Leading The BSR Process
  • 5.3.4 Controlling In SMMEs
  • 5.3.4.1 Defining Control
  • 5.3.4.2 Importance Of Control
  • 5.3.4.3 Controlling The BSR Process
  • 5.3.5 Mintzberg’s Managerial Roles
  • 5.3.5.1 Interpersonal Roles
  • 5.3.5.2 Informational Roles
  • 5.3.5.3 Decision Related Roles
  • 5.3.5.4 SMME Managers’ BSR Roles
  • 5.4 Requisite Managerial Roles
  • 5.5 Sustaining Managerial Roles
  • 5.6 Summary And Conclusion
• CHAPTER 6:RESEARCH METHODOLOGY
  • 6.1 Introduction
  • 6.2 Elements Of The Research Process
  • 6.3 Problem Statement
  • 6.4 Objectives
  • 6.5 Hypotheses Guiding The Research Process
  • 6.6 Methodology To Test Hypotheses (Design)
  • 6.6.1 Unit Of Study
  • 6.6.2 The Population (Universe)
  • 6.6.3 The Sample Frame
  • 6.6.4 Sampling Technique Used
  • 6.6.5 Sample Size
  • 6.6.6 Data Collection Method
  • 6.6.6.1 Measuring BSR
  • 6.6.6.2 Style Of The Questionnaire
  • 6.6.6.3 Items Included In The Questionnaire
  • 6.6.6.4 Testing The Questionnaire
  • 6.6.6.5 Data Preparation
  • 6.6.7 Statistical Procedures And Treatment For Analysis
  • 6.6.7.1 Descriptive Statistics
  • 6.6.7.2 Inferential (Confirmatory) Statistics
  • 6.7 Summary And Conclusion
• CHAPTER 7: RESULTS
  • 7.1 Introduction
  • 7.2 Empirical Findings
  • 7.2.1 Response Rate
  • 7.2.2 Demographics
  • 7.2.3 Factor Analysis
  • 7.2.4 Multiway Analysis Of Variance
  • 7.2.5 Discriminant Analysis
  • 7.3 Summary
• CHAPTER 8: DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
  • 8.1 Introduction
  • 8.2 SMMEs And Socio Economic Development (Chapter 2)
  • 8.3 Business Social Responsibility (Chapter 3)
  • 8.4 Small Versus Entrepreneurial Venture (Chapter 4)
  • 8.5 Managing SMMEs (Chapter 5)
  • 8.6 Empirical Results
  • 8.7 Policy Implications And Recommendations
  • 8.8 Recommendations For Further Research
  • 8.9 Final Conclusion And Recommendations
  • 8.9.1 Final Conclusion
  • 8.9.2 Final Recommendations
  • Bibliography
  • Annexure A

GET THE COMPLETE PROJECT
Social responsibility of SMMEs in rural communities