An analysis of the influence of entrepreneurial orientation on business success in selected small and medium–sized enterprises

Abstract

Entrepreneurial orientation (EO) contributes to performance with an outlook on business growth as well as business development and improvement. It is predicted that the failure rate of small, medium and micro enterprises in South Africa is between 70% and 80%. Millions of rands are being lost on new venture creations because of mistakes and problems that could have been avoided. The survival rate of SMME's in South Africa is relatively low indicating that less than half of newly established businesses survive beyond five years. There are a number of similar undesired events surrounding entrepreneurs. These events called for a study on entrepreneurial orientation with the aim to improve on the current situation. The South African government Gazette (2009) indicates that small and medium-sized enterprises contribute positively to the South African GDP and it is essential to help these businesses to grow and to develop. The primary objective of this study is to investigate entrepreneurial orientation in small and medium-sized businesses in South Africa and to assess the awareness and application of the five EO-dimensions, in order to ultimately promote entrepreneurial orientation in the entrepreneurial environment so that businesses can be successful and sustainable. The field of study is entrepreneurship with reference to the impact of entrepreneurial orientation on business managers and entrepreneurs, managing and creating South African SMME's. The private sector with specifically regard to micro, small and medium sized-enterprises in South Africa is under investigation. The study was carried out on selected product and service suppliers in the region of the North-West and the Gauteng provinces. Only businesses older than one year was considered during the research process due to the fact that most businesses that have not yet reached the first year is still under establishment.