A Values-based Perspective on Entrepreneurship:
The Case of Successful Black Urban South African Entrepreneurs
A Research Report
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presented to
The Graduate School of Business
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University of Cape Town
in partial fulfilment
of the requirements for the
by
Chris Whales
and
Isabel Gwebu
December 2000
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Master of Business Administration Degree
Supervisors
Professor Michael H Morris
and
Dr Minet Schindehutte
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This report is not confidential. It may be used freely by the Graduate School of Business.
We wish to thank our supervisors, Dr Minet Schindehutte and Professor Mike Morris, for
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their invaluable assistance and guidance; Associate Professor Trevor Wegner for his
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advice on statistical analysis; the various SMME support structures for guidance in
making contact with entrepreneurs; and the entrepreneurs interviewed during the process
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of writing this research report for their co-operation and patience.
We certify that this report is our own work and that all references used are accurately
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reported.
Signed:
CHRIS WHALES
UCT GRADUATE SCHOOL OF BUSINESS
ISABEL GWEBU
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A VALUES-BASED PERSPECTIVE ON ENTREPRENEURSHIP:
THE CASE OF SUCCESSFUL BLACK URBAN
SOUTH AFRICAN ENTREPRENEURS
ABSTRACT
This study identifies values particular to successful, black, urban entrepreneurs, and
evaluates how these values manifest in or influence entrepreneurial behaviour. The study
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then evaluates these values against those known to be conducive to entrepreneurial
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behaviour as identified from the literature on the subject, and draws conclusions on the
role of values in small, medium and micro enterprises (SMMEs) in South Africa.
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Interviews were conducted among the target group from which it was found that common
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values included family, quality of life, my business, hard work, warm relationships with
others, and desire to serve the community. These values were found to in turn influence
the entrepreneur’s enterprise, causing a focus on customer service, customer friendliness
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(relationship-building) and social responsibility, including the betterment of their staff,
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which in turn promotes the success of the businesses.
KEYWORDS: Values, entrepreneurship, culture, beliefs, community, SMMEs (small,
medium and micro enterprises), South Africa, black business
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Contents
Contents .............................................................................................................................4
Figures and Tables .............................................................................................................7
I. Introduction ................................................................................................................. 9
Thesis..............................................................................................................................9
The purpose of the research............................................................................................9
Background and issue addressed ....................................................................................9
The approach taken.......................................................................................................11
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Constraints on the study ...............................................................................................11
II. The Nature of Entrepreneurship............................................................................ 13
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The process of entrepreneurship...................................................................................13
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Entrepreneurship as a behavioural phenomenon..........................................................14
Strategic orientation......................................................................................................15
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Perspectives on the nature of entrepreneurship ............................................................16
III. Entrepreneurship, SMMEs and South Africa..................................................... 20
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National Small Business Enabling Act.........................................................................22
Other support structures ...............................................................................................24
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Other legislation ...........................................................................................................24
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The state of small business in South Africa .................................................................25
Small business in the Western Cape.............................................................................27
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IV. What is known about the Characteristics of Entrepreneurs.............................. 28
V. Personal Values: Definition and types ................................................................... 31
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VI. Values, Attitudes and Behavior............................................................................. 33
VII. Values and Black Cultures in South Africa........................................................ 38
Family...........................................................................................................................39
Community ...................................................................................................................39
Ubuntu ..........................................................................................................................41
View Of time ................................................................................................................42
Locus of control............................................................................................................42
African religion and ancestors......................................................................................43
VIII. Values and Entrepreneurial Behavior............................................................... 44
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Achievement motivation...............................................................................................46
Need for control............................................................................................................46
Risk acceptance ............................................................................................................47
IX. The Research Model............................................................................................... 48
X. Hypotheses ................................................................................................................ 49
XI. Methodology............................................................................................................ 50
Scope of the study ........................................................................................................50
The Qualitative Research Method ................................................................................51
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Method of analysis .......................................................................................................51
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The sample....................................................................................................................52
The questionnaire .........................................................................................................53
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The interviews ..............................................................................................................55
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XII. Results and Descriptive Statistics........................................................................ 57
The background and culture of the entrepreneurs ........................................................57
The personal values and beliefs of the entrepreneurs...................................................60
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Values expressed in the businesses ..............................................................................65
The type of business and the characteristics of the business........................................69
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The objectives for the business and how it is run.........................................................72
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The future success or failure of the business................................................................75
XIII. Discussion and Analysis ...................................................................................... 77
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Statistical Analysis .......................................................................................................77
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Hypothesis 1 .................................................................................................................77
Hypothesis 2 .................................................................................................................79
Hypothesis 3 .................................................................................................................82
Hypothesis 4 .................................................................................................................83
Hypothesis 5 .................................................................................................................83
Hypothesis 6 .................................................................................................................84
XIV. Conclusion and Implications .............................................................................. 87
Western values versus African values ..........................................................................87
Values, black culture and entrepreneurship..................................................................88
Background characteristics, culture and entrepreneurship...........................................89
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Values and entrepreneurial success ..............................................................................90
Development of entrepreneurship in South Africa.......................................................91
Summary.......................................................................................................................91
Implications ..................................................................................................................92
XV. Suggestions for Further Research ....................................................................... 96
Gender differences........................................................................................................96
The age factor ...............................................................................................................96
Further statistical analysis ............................................................................................96
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Use of a control group ..................................................................................................97
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XVI. Appendices ........................................................................................................... 98
Appendix 1: Database of entrepreneurs interviewed....................................................98
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Appendix 2: Questionnaire.........................................................................................100
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Appendix 3: Coding for questionnaire .......................................................................104
Appendix 4: Results of Interviews with Entrepreneurs..............................................107
Appendix 5: Frequency Tables for Variables.............................................................110
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Appendix 6: Statistical Test Results...........................................................................115
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XVII. References ......................................................................................................... 119
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Figures and Tables
Figure 1: The dimensions of business practice................................................................15
Figure 2: The nature of entrepreneurship ........................................................................18
Figure 3: Quantitative criteria for qualification as an SMME.........................................23
Figure 3: Research Model................................................................................................48
Table 1: African and Western values...............................................................................54
Table 2: Level of education .............................................................................................57
Table 3: Ages of entrepreneurs ........................................................................................58
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Table 4: Language spoken by entrepreneurs ...................................................................58
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Table 5: Country and region of origin of entrepreneurs ..................................................59
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Table 6: Years living in the township..............................................................................59
Table 7: Marital status of entrepreneurs ..........................................................................60
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Figure 4: Personal value No 1..........................................................................................61
Figure 5: Personal value No 2..........................................................................................61
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Figure 6: Personal value No 3..........................................................................................62
Table 8: Overall ranking of personal values....................................................................62
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Figure 7: Responsibility as a citizen of South Africa ......................................................63
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Table 9: Ranking of “Words I most identify with”..........................................................64
Figure 8: Aspects of business that conflict with values...................................................66
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Table 10: Overall ranking of core business values ..........................................................66
Figure 9: Sharing profits with the community.................................................................68
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Figure 10: Type of business.............................................................................................69
Figure 11: Qualities of a “good” business .......................................................................71
Figure 12: Qualities of a “bad” business .........................................................................72
Figure 13: Reason for going into business.......................................................................72
Figure 14: Considerations for having a successful business............................................73
Figure 15: What my business stands for ..........................................................................74
Figure 16: Characteristics of employees..........................................................................74
Figure 17: More important values ...................................................................................75
Figure 18: Less important values.....................................................................................75
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Figure 19: The future of the business ..............................................................................76
Figure 20: Age versus business value No 1.....................................................................80
Figure 21: Years in township versus business value No 1 ..............................................80
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Figure 22: Years in business versus business value No 1................................................81
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I. Introduction
Thesis
What personal values are found among successful urban South African black
entrepreneurs, how are these values shaped by the culture and background of the
entrepreneurs, and how do these personal values manifest themselves in the businesses of
the entrepreneurs, influence the way in which entrepreneurial ventures are selected,
started up and run, and affect the future success or failure of the business?
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The purpose of the research
This research report aims to explore the following:
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x To identify the core values found among successful, black urban entrepreneurs in
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the Western Cape.
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x To investigate how the background and culture of the entrepreneurs shapes these
personal values.
of the entrepreneurs.
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x To determine whether these personal values manifest themselves in the businesses
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x To determine how these personal values affect the type of business selected by the
entrepreneurs, and the way in which the businesses are run.
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x To evaluate the personal values of the entrepreneurs against core Western values
as well as the values identified in the literature as being conducive to
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entrepreneurial success.
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x To determine whether these values impact upon the future success or failure of
the businesses, and draw conclusions about the role of values in SMMEs in South
Africa.
Background and issue addressed
In 1994, following South Africa’s first democratic elections, the new government,
recognising the urgent need to prioritise the reform of small business support, launched a
campaign to design and develop a national institutional framework to drive the
implementation of programmes aimed at the small business sector. In May 1995, the
National Small Business Enabling Act was drafted, envisaged as a building block to the
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government’s strategy to create a more enabling environment for small business in South
Africa. However, South Africa’s unemployment crisis continued to deepen throughout
the latter half of the Nineties, culminating in a Jobs Summit in late 1998. Nkem-Abonta.
and Rajaratnam (1998) note that formal sector employment has been on a downward
trend since 1990, absorbing less than 5% of new entrants into the job market each year.
What has become clear is that job creation in the future cannot be left to large
corporations – the answer must lie in small business ventures and the encouragement of
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entrepreneurship.
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It has been observed that culture, beliefs and values can influence entrepreneurship. Dana
(2000) describes how historical factors, including the caste system, British occupation,
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cultural values and government regulations limited innovative entrepreneurship in India,
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while Shapero (1984) concluded that culture was an explanatory variable for
entrepreneurial activity or the lack of it, and he also noted that some cultures value
entrepreneurship more than do others. Min (1987) also described culture as an
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explanatory variable for entrepreneurship, observing that some minority groups had
cultural characteristics that were conducive to small business development. Closer to
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home, Dana (1997) described how the culture in Lesotho encourages entrepreneurship in
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as much as it values the accumulation of wealth, although the same culture hinders some
aspects of entrepreneurial activity through its perceptions of property, as described in
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more detail in Section VIII: Values and Entrepreneurial Behaviour.
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Clearly culture and values play an important role in either encouraging or discouraging
entrepreneurship. Dana (1995) describes how social values may cause entrepreneurs to be
looked up to, or down upon, depending on the beliefs of a people and their prominent
moral code of behaviour. However, Dana (2000) also describes how efforts by the
government in India to change the cultural mindset with a view to shifting the barriers to
the development of entrepreneurship, and giving youth the self-confidence to become
high achievers, have met with success. Dana also points out that while Western culture
encourages the drive to achieve that is crucial to entrepreneurial success, other cultures,
such as that found in India, run counter to entrepreneurship. This highlights the need,
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when developing a system to encourage small business and entrepreneurship in South
Africa, to understand the particular culture and values of black South African
entrepreneurs and how these affect entrepreneurship. This is particularly significant given
that the urban black South African entrepreneur exists in an environment that combines
both the first world and third world. These entrepreneurs have a third world background
and view, but operate in a first world business environment. This highlights the need to
compare and understand African (third world) and Western (first world) values.
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The approach taken
The research report first reviews the current literature and theory on the nature of
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entrepreneurship; the characteristics of entrepreneurs; the definition and types of personal
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values; the relationship between values, attitudes and behaviour; how values relate to
black cultures in South Africa; and how values affect entrepreneurial behaviour. The
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history and current status of entrepreneurship and SMMEs in South Africa were also
investigated. The target group of the study was identified as successful, urban, black
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entrepreneurs based in and around Cape Town.
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A research model was then formulated and hypotheses were put forward. The method of
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study used involved the use of a formal research technique via a structured questionnaire,
with face-to-face interviews being conducted with members of the study target group.
The results of the interviews were then coded and analysed using both Excell (for
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descriptive statistics) and Statistica (for tests of association, with a view to testing the
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hypotheses). Conclusions were drawn and the implications of the results were put
forward. Finally, areas for future research that came to light during the research process
were suggested. A database of interviewees (Appendix 1), the questionnaire used
(Appendix 2), the coding for the questions (Appendix 3), the full results of all interviews
(Appendix 4), and the results of the statistical analyses (Appendix 5) are contained in this
document.
Constraints on the study
A total of 35 entrepreneurs were interviewed by the authors during the research process,
with time constraints preventing further interviews from taking place. While this
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provided a considerable amount of information and insight, this sample size is smaller
than would be ideal to obtain significant results from statistical analysis. In addition, only
entrepreneurs based in and around Cape Town were interviewed, the majority of whom
were found to be Xhosa speaking and a large proportion of whom had been born and bred
in the region. This has led to particular cultural influences among the entrepreneurs,
which may differ in other regions where different tribes, or a more diverse mix of tribal
origins, predominate. A further constraint that was encountered was the lack of recorded
information on small, black-owned businesses in the region. While the authors struggled
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to gather such information from sources such as business organisations, regular visits to
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the townships revealed that entrepreneurship was in fact thriving. However, these
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enterprises do not form part of conventional business databases and records.
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II. The Nature of Entrepreneurship
What is entrepreneurship? As a subject, entrepreneurship has been studied since the
beginning of the 20th century and is still developing today, drawing considerable interest
from academics, business leaders, governments and society at large. From the literature
reviewed in this research report, it is apparent that there is no agreement among
entrepreneurship scholars as to a common definition of the subject. What is clear,
however, is that entrepreneurship is viewed as a process that can be learnt, and not a
personality trait that one is born with. There is agreement that socialisation and
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experience can contribute towards making some people more entrepreneurial than others.
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In his book ‘Entrepreneurial Intensity’, Morris (1997) concludes that everyone has some
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element of entrepreneurship, in varying degrees – and that some people manifest more
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entrepreneurship than others.
Particular characteristics and patterns of behaviour are observable in entrepreneurs,
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which has led to a view of entrepreneurship as a behavioural phenomenon. In the various
definitions of entrepreneurship given by different authors, there is a common view on the
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nature of entrepreneurship – that its outcomes are associated with the generation of
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wealth through innovation, employment, or the development of new products or services
to meet a need identified in the environment, and that this generation of wealth involves
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the putting together of resources, and the development of an organisational context for
exploiting the opportunity. We will now explore further the process of entrepreneurship,
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entrepreneurship as a behavioural phenomenon, and the nature of entrepreneurship.
The process of entrepreneurship
Stevenson H., Roberts, J. and Grousberk, H.I. (1993) describe entrepreneurship as a
process that involves the pulling together of a unique package of resources to pursue an
opportunity. This process is described as having the following stages:
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The first phase of the entrepreneurial process is concerned with the identification of
opportunities in the environment. These opportunities may come about through changes
that occur, be they political, business, technological, social, etc. After an opportunity has
been identified, a business concept is developed to exploit the opportunity. The next step
involves an assessment of the resources required to bring the concept to fruition, and the
necessary resources are then acquired. The concept is then implemented and managed.
The venture comes into existence, wealth is created through the venture, and a method of
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harvesting this value is put in place.
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Morris (1997) defines entrepreneurship as a process through which individuals and teams
create value by bringing together unique packages of resource inputs to exploit
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opportunities in the environment. It can occur in any organisational context and results in
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a variety of possible outcomes, including new ventures, products, services, markets and
technologies. Morris describes three key dimensions underlying entrepreneurship,
namely innovativeness, pro-activeness and risk-taking. Innovativeness is concerned with
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how much an entrepreneurial concept represents a departure from what is currently in
existence; pro-activeness is concerned with acting on, rather than reacting to the
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environment; while risk-taking involves a willingness to pursue opportunities that have a
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reasonable likelihood of producing losses or significant performance discrepancies.
Entrepreneurial Intensity (EI) captures the combined effect of frequency of
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entrepreneurship and the degree of entrepreneurship. The degree of entrepreneurship
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captures the extent to which entrepreneurial events are innovative, risky and pro-active.
Entrepreneurial Intensity therefore highlights the variable nature of entrepreneurship.
Entrepreneurship as a behavioural phenomenon
Stevenson et al (1993) share the perspective that entrepreneurship is an approach to
management, and define it as “the pursuit of opportunity without regard to resources
currently held”. This definition of entrepreneurial behaviour can be refined by an
examination of the six critical dimensions of business practice. These dimensions are best
viewed in the form of a continuum, ranging from the ‘promoter’ which, at one extreme, is
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more entrepreneurially inclined, to the ‘trustee’ which, at the other extreme, emphasises
the efficient utilisation of existing resources. These dimensions are as follows:
Figure 1: The dimensions of business practice
Promoter
Dimension
Trustee
Driven by perception of
Driven by resources
Strategic orientation
opportunity
currently controlled
Commitment to
Evolutionary of long
duration
opportunity
duration
Multistage with minimal
Commitment of resources
Single staged with
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Revolutionary with short
complete commitment
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exposure at each stage
upon decision
Control of resources
required resources
of required resources
Formalised hierarchy
Security driven, resource
based, promotion oriented
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based, team oriented
Reward philosophy
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Value driven, performance
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Flat with multiple informal Management structure
networks
Ownership or employment
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Episodic use or rent of
Adapted from Stevenson et al (1993: Figure 1-7; p14-15)
Figure 1 summarises the strategic orientation of the ‘promoter’, which is characterised by
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the perception of opportunity existing in the environment and the pursuit of this
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opportunity without regard to resources currently held. The opportunity is exploited
while the window of opportunity lasts, hence the short duration of commitment to the
opportunity. Resources are acquired as needed at each stage, and there is little tendency
to own the resources as they can be rented for the duration of the period for which they
are required. Because the resources are non-controlled or even outsourced, there is a need
to network and co-ordinate the resources. To facilitate flexibility, flat and informal
management structures are characteristic of entrepreneurially-driven organisations.
Reward structures are generally value-driven and team-based.
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The ‘trustee’ presents a strategic orientation that recognises first the resources that are
available to determine where to look for an opportunity, and whether or not to pursue it.
The lengthy negotiation and decision process that usually follows such decisions makes
the exploitation of the opportunity evolutionary and of a long duration. Once a decision
has been made to pursue the opportunity, there is an upfront commitment of resources,
and usually there is ownership of such resources. Clearly-defined authority and
responsibility makes the management structure formalised and hierarchic, with a reward
philosophy designed to protect positions and create security, and a promotion-oriented
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reward structure.
These entrepreneurial and administrative management behaviour patterns apply to both
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well-established corporates and start-up companies. However, the situational factors that
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define a start-up situation do much to encourage entrepreneurship (Stevenson et al,
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1993).
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Perspectives on the nature of entrepreneurship
Morris (1997) mentions seven perspectives on the nature of entrepreneurship. These
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perspectives will be used as the basis for the diagnosis of the nature of entrepreneurship,
taking into consideration other authors’ definitions and views.
Creation of wealth
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This involves assuming the risks associated with the facilitation of production in
exchange for profit.
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Creation of enterprise
This entails the founding of a new business venture where none existed before. It
is apparent that every big business today was started by an entrepreneur.
Corporate entrepreneurs sustain the continued growth of these companies.
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Creation of innovation
This is concerned with the unique combinations of resources that make existing
methods of production obsolete.
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Creation of change
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This involves creating change by adjusting, adapting and modifying one’s
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personal repertoire, approaches and skills to meet different opportunities available
in the environment.
Creation of employment
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This is concerned with employing, managing and developing the factors of
production, including the labour force
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Creation of value
Creation of growth
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This is defined as a strong and positive orientation towards growth in sales,
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income, assets and employment.
The above perspectives can be explained by looking at the outcomes of Morris’
integrative model of entrepreneurship. The model first looks at the inputs to the
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opportunities
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This is a process of creating value for customers by exploiting untapped
entrepreneurial
process,
namely
the
opportunities,
entrepreneurial
individuals,
organisational context, unique business concepts and resources. The outcomes is
Entrepreneurial Intensity, which highlights the fact that the process can result in any
number of entrepreneurial events, varying in terms of how entrepreneurial they are. The
final outcome may be a venture, value creation, new products or services, new processes,
new technologies, profits and/or personal benefits, employment, or asset and revenue
growth. A simplified model showing the nature of entrepreneurship is shown in Figure 2
below:
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Figure 2: The nature of entrepreneurship
Process
Inputs
x
x
x
x
x
x
Opportunities
Entrepreneurs
Organisation
Business
concept
Resources
x
x
x
New venture
Value creation
New products or services
New technologies
New processes
Profits and/or personal benefits
Employment
Asset and revenue growth
Opportunity
identification
Develop business
concept
Assess required
resources
Acquire necessary
resources
Manage the venture
Harvest value
EI
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x
x
Outputs
Wealth creation in entrepreneurship fits the definition of entrepreneurship by Ronstadt
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(1985) which describes the “dynamic process of creating incremental wealth. This wealth
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is created by individuals who assume the major risks in terms of equity, time and/or
career commitment, of providing value for some product or service. The product or
service itself may or may not be new or unique, but value must somehow be infused by
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the entrepreneur by securing or allocating the necessary skills or resources”. The focus on
addition of value makes a distinction between entrepreneurship and small business start-
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ups that simply copy existing concepts and do not add value or show meaningful growth.
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This implies that a start-up business is not necessarily entrepreneurial.
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Dana (2000) describes how entrepreneurial ventures can contribute to other economic
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and social objectives for development, employment, the balancing of inequalities,
distributive justice and the deepening of the feeling of dignity among individuals.
Business entrepreneurs, through the creation of wealth, employment, enterprise,
technology, value, etc, act as instruments to uplift society at large by making a
contribution to economic well-being. Thompson (1999) expresses the view that
entrepreneurship extends beyond the business owner-manager sector (business
entrepreneurs), and he gives the example of entrepreneurs who are involved in social and
civic entrepreneurship, championing local initiatives which provide value to the
community.
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Having explored the nature of entrepreneurship, we will now examine the history and
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current state of entrepreneurship and small business in South Africa.
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III. Entrepreneurship, SMMEs and South Africa
Kench (2000) describes how the South African economy had been in a state of steady
decline for over two decades prior to the country’s first democratic elections on 27 April
1994. The system of apartheid entrenched by the Nationalist government had not only
excluded the majority of the country’s population from meaningful participation in the
economy, but had also engendered a culture which discouraged entrepreneurship and
rather favoured “white collar” employment. In a study on small business in South Africa,
Nkem-Abonta et al (1998) outline how the refusal for many decades of the white
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minority government to harness and encourage the entrepreneurial potential of the largest
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section of the country’s population served to discourage the development of a dynamic
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small business sector. The apartheid era resulted in a gross under-representation of the
country’s black population in entrepreneurial activity. Denied access to quality
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education, capital and other resources, and hampered by restrictive legislation, black
people for many decades lacked the means and liberty to deploy their entrepreneurial
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energy.
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Nkem-Abonta et al (1998) describe the results of a survey of formal and informal
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enterprises in South Africa’s black townships conducted in 1990 which put the enterprise
density at 36 per 1000 people, as compared to other figures for comparable urban centres
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in sub-Saharan Africa of 75 per 1000 people. Estimates made in 1996 suggested a
national average of 20 per 1000 people for South Africa, with other countries showing
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considerably better figures: Lesotho (30), Swaziland (41), Zimbabwe (41) and Italy (59).
The number of newly-registered closed corporations (mostly small enterprises) rose
121% from 1993 to 1996, with a further increase of 18% from 1996 to 1998 (NkemAbonta et al, 1998). These statistics are covered in more detail in Section III:
Entrepreneurship, SMMEs and South Africa (The state of small business in South
Africa).
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Parallels can be drawn with the situation in India, as described by Dana (2000), who
outlines how historical factors, which include British occupation and government
regulations, have limited entrepreneurship. Dana describes how, during the 1800s, the
British discriminated against those communities that competed against English
entrepreneurs, forcing many Indian entrepreneurs out of the business realm. This is one
of the factors that led to a lack of indigenous entrepreneurship in India. Additional
barriers were created after independence from the British when, in 1950, the new
constitution indicated that the state would play the major role in extending the national
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economy, rather than entrepreneurs from the private sector. However, Indian leaders have
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recognised the need to reduce the barriers to the development of entrepreneurship and
several programmes have been introduced to satisfy this need. Among the more
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successful of these initiatives are the National Institute for Entrepreneurship and Small
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Business Development (NIESBUD) which offers training and support to entrepreneurs;
the Progress Harmony Development (PHD) Chamber of Commerce and Industry which
aims to promote entrepreneurship and has 1600 direct members and 80 associates serving
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over 22 000 small enterprises; the PHD Rural Development Foundation which focuses
specifically on rural development; and the Entrepreneurship Development Institute of
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India (EDII) which focuses on creating entrepreneurial personalities among the youth of
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India, following the belief that entrepreneurs are not necessarily born but can be
developed. The successful implementation of measures to encourage entrepreneurship in
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India could provide valuable lessons for the South African government which has
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identified the encouragement of small business and the development of a national smallbusiness strategy as a priority.
The Government of National Unity formed in South Africa in 1994 was faced with an
economy in which only two percent of the population were entrepreneurs, compared to
an average of 10 percent elsewhere in the developed world (Kench, 2000), and it
recognised the urgent need to prioritise the reform of small business support. As a result,
by mid-1994, the Minister of Trade and Industry, Trevor Manuel, had appointed a special
advisor for small business support and his efforts culminated in the presentation to
parliament of the White Paper on National Strategy for the Development and Promotion
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of Small Business in South Africa. In the months that followed, the newly established
Centre for Small Business Promotion within the Department of Trade and Industry
launched a campaign to design and develop a national institutional framework to drive
the implementation of programmes aimed at the small business sector. In May 1995, the
National Small Business Enabling Act was drafted, envisaged as a building block to the
government’s strategy to create a more enabling environment for small business in South
Africa.
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National Small Business Enabling Act
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The National Small Business Enabling Act of 1995 was created to serve several
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purposes. It recognised the need for a clear definition of SMMEs in South Africa, given
the diverse size and nature of SMMEs and lack of reliable statistics on this sector.
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International definitions use both qualitative and quantitative factors, although it was
recognised that qualitative factors have limited use in distinguishing between small,
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medium and micro enterprises, but can be used to distinguish between large and small
businesses. Qualitative criteria commonly used are independent management, owner-
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management, small market share, lack of access to finance, a limited range of products,
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simple production methods and a use of local raw materials.
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The Act describes one qualitative criterion which is compulsory for classification as an
SMME: “The enterprise must be privately, and independently or co-operatively owned
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and managed, and must not form part of an enterprise which exceeds the quantitative
criteria referred to in Item 2, but may have more than one branch.” (The quantitative
criteria referred to in Item 2 are presented in Figure 3 below.) The Act further provides
three quantitative criteria, two of which must be met to be classified as an SMME,
namely total annual turnover, total asset value (excluding fixed property) and total
number of full-time employees. The figures vary depending on the sector in which the
company falls:
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Figure 3: Quantitative criteria for qualification as an SMME
Group A (agriculture, forestry and fishing, transport, storage and communication,
financing, insurance, real estate and business services, community, social and
personal services)
Total asset value
Total full-time staff
Medium
R15-million
R3-million
51 – 100
Small
R2,5-million
R500 000
5 - 50
Micro
R500 000
R100 000
1-4
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Total annual turnover
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Group B (mining and quarrying, manufacturing, electricity, gas and water,
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construction, wholesale and retail trade, catering and accommodation services)
Total asset value
Total full time staff
Medium
R25-million
R5-million
51-200
Small
R5-million
R1-million
5-50
Micro
R1,25-million
R250 000
1-4
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Total annual turnover
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While the Act recognises that these criteria may need to be reviewed to take into account
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inflation, macro-economic shifts, new laws and other changes, there is no doubt that a
clear definition of SMMEs in South Africa is vital in clarifying and implementing the
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necessary support structures for small business.
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The Act also recognised the provincial government’s role in SMME promotion, and
allowed for the ongoing assessment of the effect of legislation on SMMEs. The Act also
created several institutions which were envisaged as interacting with certain existing
institutions with a view to creating an enabling environment for small business in South
Africa. The institutions created by the Act are the National Small Business Council
which aimed to create, together with the nine provincial councils, a voice for SMMEs, a
means to reach the public sector as well as big business; and the Ntsika Enterprise
Promotion Agency, which aimed to facilitate support policies for SMMEs although
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actual implementation was to be left to national, provincial and local agencies, including
NGOs.
Other support structures
A host of other support structures for SMMEs have also been established. These tend to
fall into two categories - those who have funds at their disposal to distribute, and those
established to provide moral support, business advice and technical advice. These include
the National African Chamber of Commerce (NAFCOC) which assists emerging black
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businesspeople to set up their companies. The Foundation for African Business and
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Consumer Services (FABCOS) was launched as far back as 1988 with a view to
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providing training, marketing expertise, research skills, management services and
opportunities to its members, and to entrepreneurs in the informal sector. Khula
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Enterprise Finance Ltd provides financial support services in the form of loans to
SMMEs through Retail Finance Intermediaries. The Black Management Forum (BMF)
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is an independent, non-governmental organisation with the stated aim of putting black
managers on an equal footing with managers from other backgrounds and environments,
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and of cultivating attitudes in both black and white managers conducive to the growth of
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the economy. Trevor Herbert of the BMF office at the Graduate School of Business at
Breakwater Lodge in Cape Town, describes how the organisation is currently, in
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collaboration with the government and other organisations, addressing the dearth of
comprehensive statistical information on black-owned businesses in South Africa by
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compiling a national list of small, medium and large black-owned businesses.
Other legislation
Steps have been taken in the private sector to collectivise SMMEs into sub-contractors of
state-awarded tenders, while the Labour Relations Act (1995) encourages companies to
outsource through independent contractors, establishing employees in their own
businesses. However, while this move is encouraging, the state is a notoriously slow
payer and Kench (2000) describes how many small black businesses have gone bankrupt
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waiting for their money. The government also reduced the company tax rate from 35% to
30% in the 1999/2000 budget with a view to encouraging enterprise development.
The state of small business in South Africa
Nkem-Abonta et al (1998) describe how black entrepreneurial activity has increased
considerably since 1994, with the number of newly-registered closed corporations
(mostly small enterprises) rising sharply from 28 000 in 1993 to 62 000 in 1996 (an
increase of 121%) and 73 000 in 1998 (a further increase of 18%). In 1997, small and
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medium-sized enterprises accounted for approximately 50% of total employment of the
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combined group (small, medium and large but excluding micro) and about 41% of the
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country’s formal sector gross national product. Of the total employed people in 1997 (6
364 214) 36% were employed in small businesses and 14% in medium businesses,
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emphasising the important role played by these enterprises in the economy. NkemAbonta et al (1998) also note that formal sector employment has been on a downward
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trend since 1990, absorbing less than 5% of new entrants into the job market each year.
Although data on micro enterprises (mostly informal) is poor, Statistics South Africa
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estimates that in 1997, 18.8% of the economically active population was engaged in
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informal sector activities, an increase of 8.2% from 1996, indicating that this is a
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considerable and growing portion of the nation’s economically active population.
However, unemployment rates remain extremely high, with the 1996 census estimating
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an unemployment rate of 37.6% for the country. The rate among blacks (Africans) is
particularly high at 43%, which translates into many millions of unemployed people. The
1996 census figures show a total of population of 40.58-million people, of which 77% are
black. Of these black people, 13% are unemployed, with 15% employed in the formal
sector and 3% in the informal sector; the remainder, 69%, are not economically active.
Data from various enterprise registrars (UIF, Registrar of Companies and Receiver of
Revenue) as at January 1999 indicate a total of 474 400 enterprises registered for VAT,
of which approximately 57% exceeded the then VAT limit of R150 000 with the rest
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having registered voluntarily. Nkem-Abonta et al (1998) give a distribution of private
sector enterprises based on size-class, with small, medium and micro enterprises
(excluding survivalist businesses) accounting for 79% of all 906 700 enterprises. The
disparities in employment between different population groups is pronounced. According
to Nkem-Abonta et al (1998) about 18% of whites are self-employed, as compared to
6.3% of blacks, with blacks concentrated at the lower end of the SMME spectrum. The
enterprise density among the black population in turn shows a decline from informal
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settlements (3%) to metropolitan areas (2%) and rural areas (1%).
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Small business in the Western Cape
The 1996 census revealed that unemployment rates vary considerably by province, with
the Western Cape showing the lowest levels (17.9%), as compared to the highest level of
48.5% in the Eastern Cape, a possible explanatory factor for the considerable migration
trend from the Eastern to the Western Cape. In addition, the Western Cape has the second
highest enterprise density (3.2% or 126 900 self-employed in a total population of 3 956
900) after Gauteng (3.5%), as compared to the lowest enterprise density of 1,1% in the
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Eastern Cape, reflecting the higher degree of urbanisation in these regions. The Western
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Cape, together with Gauteng and KwaZulu-Natal, also showed a greater prevalence of
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large, medium and small enterprises, while provinces with poor infrastructure such as the
Eastern Cape reflected a greater prevalence of enterprises at the lower end of the SMME
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spectrum.
We will now investigate the characteristics of entrepreneurs, followed by a definition of
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personal values, a look at how these values shape attitudes and behaviour, with a view to
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describing the relationship between values and black culture in South Africa.
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IV. What is known about the Characteristics of Entrepreneurs
Who are entrepreneurs and what are they like? Bird (1989) describes entrepreneurs as
individuals who set the process of entrepreneurship in motion and who direct the early
stages of new ventures. Entrepreneurs have the ability to identify opportunities and
acquire the necessary resources to exploit the opportunities, carrying the risk associated
with venturing into the unknown. Research has identified certain characteristics found in
such individuals, and this section of the report will attempt to describe these, with a view
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to gaining a better understanding of entrepreneurs.
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Entrepreneurs play a crucial role in the entrepreneurial process, and can take the
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following roles: leader, visionary, driver of the entrepreneurial process, adaptor to
change, adopter of a ‘promoter’ managerial style, one who perseveres, resource
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assembler and leverager, net-worker or risk-taker (Morris, 1997). Morris also identifies
psychological characteristics found in entrepreneurs, a topic on which there is agreement
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by other researchers. These psychological characteristics are achievement orientation,
internal locus of control, calculated risk taking, tolerance for ambiguity, independence
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and perseverance, persistency and tenacity.
Achievement is one of the primary factors that motivates entrepreneurs. The opportunity
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to achieve something and see it succeed is important to entrepreneurs. Entrepreneurs
believe they are in control of their situations and act as change agents. They believe there
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are no outside influences that determine what happens around them, but rather that they
have the ability to change their environments. Calculated risk taking is defined as the
pursuit of a course of action that has a reasonable chance of costly failure, one in which
there could be a significant negative difference between anticipated and actual results.
Entrepreneurs attempt to estimate the likelihood and magnitude of the risks involved,
rather than merely having a propensity to take risks. They believe that things do not have
to be precise, and the are comfortable in situations of ambiguity. They need to be given
space to exercise some degree of autonomy. A sense of having room to maneouvre and
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the ability to shape their own destiny is valued. Entrepreneurs display a significant level
of perseverance, with the ability to learn from past mistakes (Morris, 1997).
There are other characteristics over which there is less agreement, namely self-versatility,
persuasiveness, creativity, well-organised, hard-working and competitiveness (the need
to win). Morris (1997) adds to this list self-confidence, initiative/energy, resourcefulness,
perceptiveness, assertiveness and persuasiveness.
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Miner (1996) states that there is not a single type of entrepreneur, but rather that there are
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four different types, each with a distinct personality, and that each type of entrepreneur
must follow a distinct career route to succeed, and each must relate to the business in a
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different way. These are the personal achiever, the super-salesperson, the real manager
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and the expert idea generator. An entrepreneur can possess all or some of these types of
behaviors. It is, however, important to identify the type of entrepreneur one is, so as to
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maximize on one’s strengths.
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The Personal Achiever
These are classic entrepreneurs, who add considerable energy to the organisation. They
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are driven by their need to achieve, and feedback is important to them. They are also
driven by their own personal initiative and guided by their own goals. Personal achievers
believe that one person can make a difference. For a personal achiever to succeed in
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entrepreneurship, he or she should be energetic, develop a learning attitude, plan well, be
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flexible and be a problem solver.
The Super-Salesperson
This type of entrepreneur considers selling to be essential to their company. They possess
a great feeling for other people and are helpful. Relationships are important to them and
they like social situations and groups. To succeed, Super-Salespeople should be able to
learn to sell and learn about the product. They should stick to selling, and allow others to
handle other aspects of the business, for example, the management of the business.
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The Real Manager
This type of entrepreneur likes to take charge. They do well in corporate leadership; they
are competitive, decisive, positively disposed to those with authority, enjoy power and
taking part. Their strength is in managing ventures into major growth. A real manager
can succeed as an entrepreneur if they have an environment that allows management of
staff and also the managing of people outside the organisation into buying products and
services offered.
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The Expert Idea Generator
This type of entrepreneur invents new products, finds new niches, develops new
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processes and generally finds a way to out-think the competition. They are strongly
drawn to a world of ideas. To succeed, an expert idea generator needs sufficient
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knowledge to be an expert, needs the freedom to innovate and implement ideas, needs
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skills or access to skills that complement those of the expert idea generator.
Thompson (1999) puts forward an interesting suggestion. He asserts that despite all of the
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characteristics that have been identified and that are associated with entrepreneurs, this
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does not mean that someone who has them will become an entrepreneur. He says that
circumstances may restrain the ambitions that people have, or that they may be motivated
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to do other things. People with such potential need to be identified and any
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entrepreneurial talent should then be identified and exploited.
We will now attempt to provide a definition of values and investigate how they vary
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among different cultures.
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V. Personal Values: Definition and types
Values have been defined by Rokeach (1973) as, “an enduring belief that a specific mode
of conduct or end-state of existence is personally or socially preferable to an opposite or
converse mode of conduct or end-state of existence”. Various types of values have been
identified, including personal values (Rokeach, 1973) cultural values (Hofstede, 1980),
organisational values (Kabanoff, Waldersee & Cohen, 1995), work values (George &
Jones, 1997) and consumption values (Antil, 1984). The context within which values
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occur defines the nature of the values and, within each context, values offer guiding
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principles.
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Personal values are defined by Senge, Kleiner, Roberts & Ross (1999) as deeply held
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views of what people hold as worthwhile. They state that these values arise from various
sources – parents, religion, peers, people they admire, and culture. The authors draw a
distinction between values people profess to believe in, and values which actually guide
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people’s behaviour. The later values are built into people’s minds at a fundamental level.
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Senge et al (1999) see beliefs as being assumptions we have about the world and how it
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works, and about the cause and effects of relationships. Mental models are the images,
assumptions and stories we carry in our minds of ourselves, other people, institutions and
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every aspect of the world. Beliefs map our mental models and mental models determine
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how we act or behave, existing below the level of awareness, in which case we rarely
bring them to the surface or question them.
Hofstede (1980) describes the existence of “mental programs” in people, intangible
“constructs” that manifest themselves in behaviour, words or deeds. He describes three
levels of uniqueness in mental programs: universal level which is common to all
mankind; the collective level, which is common to people belonging to a certain group or
category; and the individual level, the level of unique individual personality. Further to
this, he says values and culture are the key constructs for describing mental programs,
values being an attribute of individuals as well as collectives.
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Hofstede (1980, p23) defines “a value” as “a broad tendency to prefer certain states of
affairs over others”. In order to measure the constructs that describe mental programs,
there is a need to operationalise them. This is done by provoking them by way of
interviews, for example. Hofstede defines three types of values: those dealing with our
relationships with other people, with things, for example the non-human environment,
and with our own inner selves and God.
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Values can vary with culture. Boon (1996) lists generally accepted Western ethics and
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values as honesty, majority rule, democracy, hard work, cleanliness, good manners, care,
environmental concern, respect, justice, human rights, tolerance strong democratic
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governments. He identifies several African values, including morality, humaneness,
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compassion, care, understanding and empathy, sharing, hospitality, honesty and humility,
discipline, warrior, self-control, tenacity, moral weight, influence and prestige. Boon also
examines Japanese values, which are listed as warrior, discipline, efficiency,
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significantly different values.
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effectiveness, trust, respect and co-operation. It is clear that different societies have
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We will now explore the way in which values shape attitudes and behaviour.
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VI. Values, Attitudes and Behavior
Having defined what values are, the focus now shifts to how values influence behaviour.
Scholars have speculated that there is a link between values and attitudes, values being
cited as the source of ambivalent attitudes at times (Eagly & Chaiken, 1993).
Attitude is defined as “a psychological tendency that is expressed by evaluating a
particular entity with some degree of favour or disfavour”. (Eagly & Chaiken, 1993).
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According to Rokeach (1968), the distinction between values and attitudes is that values
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are maintained at all times, surpassing specific entities and circumstances, whereas
attitudes centre around specific situations. Attitude influences behaviour and has been
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shown to be a predictor of behaviour (Eagly & Chaiken, 1993).
Personal values are important in understanding the attitude-behaviour relationship. The
influence of personal values on behaviour may be indirect through abstract mediation
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factors such as attitudes (Kahle, 1980). The value-attitude-behaviour hierachical model
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implies that the influence of values on behaviour should theoretically flow from abstract
values to mid-range attitudes to specific behaviours (Homer & Kahle, 1988). Findings in
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a study by Homer and Kahle (1988), in a retail context, revealed that values were
strongly related to attitudes but not to behaviour, from which it was concluded that
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behaviour is probably cognitively distant from values and may be influenced only
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through attitudes, and that attitudes play a mediating role between values and behaviour.
Boon (1996) describes how shared values determine the culture of a society, setting
parameters for proper and improper behaviour. The behaviour of each individual in the
society is determined by the individual’s attitude towards the society’s shared values. Our
culture guides us in how to behave and it is an expression of our values and beliefs.
Beliefs and values contribute significantly to the development and content of attitudes.
Attitudes are learnt, as are beliefs and values, in a specific cultural setting (Steyn and
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Motshabi, 1996). Similar attitudes, like concurrent beliefs and values, provide
communities with a feeling of solidarity and comfort.
A national culture is best embodied in the values its people hold and cultural values
shape people’s beliefs and attitudes and guide their behaviour. For example, there is only
one set of core values in the Chinese national culture, despite all the differences among
these people and their societies (Fan, 2000). The contemporary Chinese culture consists
of three major elements: traditional culture, communist ideology and, more recently,
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Western values. Confucianism is undisputedly the most influential school of thought and
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norms of Chinese interpersonal behaviour.
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forms the foundation of the Chinese cultural tradition and still provides the basis for the
Hofstede (1980) identified four national cultural values that were analysed through
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various research studies in relation to the skills of managers, management practices and
industrial and entrepreneurial development in Western cultures. These values are:
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orientation towards authority, uncertainty avoidance, individualism-collectivism, and
masculinity-femininity. The equilibrium for power distance (orientation towards
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authority, where the “boss” tries to maintain the distance between self and the
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subordinate, and the subordinate tries to reduce the power distance) is societally
determined. Inequality, reflected in power distance in society, can occur in a variety of
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areas, for example physical and mental characteristics, social status and prestige, wealth,
power; laws, rights, and rules. On uncertainty avoidance, Hofstede states that different
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societies adapt to uncertainty in different ways. These differences are found between
traditional and modern societies, and even among modern societies themselves. Ways of
coping with uncertainty belong to the cultural heritage of societies and are transferred
and reinforced through basic institutions like the family, the school and the state. The
relationship between the individual and the collective nature in human society is
intimately linked with societal norms. It affects people’s mental programming and the
structure and functioning of many other types of institutions besides the family, for
example religious, political, and utilitarian. Self-concept is the central element in our
mental programming involved in such a case. Every society recognises certain behaviors
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as more suitable to females or to males; however, these represent relatively arbitrary
choices, mediated by cultural norms and traditions. Socialisation in families, schools,
peer groups and the media, transfers the sex role distribution common in a particular
society. The predominant socialisation pattern is for men to be more assertive and for
women to be more nurturing.
Personal values and business
Personal values play an important role in the way businesses are run. Kotey & Meredith
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(1997) studied the effects of the personal values of owner-managers on their businesses,
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and found that certain types of personal values corresponded with particular strategic
orientations. An association was also found between business strategy and enterprise
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performance. O’Farrell & Hitchins (1988) and Bamberger (1983) suggested that
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personality, in particular the values and goals of owner-managers are indistinguishable
from the goals of their businesses, while Miller (1983) noted that managers have greater
influence on business strategy in small firms, where the manager is also the owner, than
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in large organisations. The power and impact of owner-managers results from their direct
control over the business and their personal contact with employees. Personal values are
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at the core of personality and influence characteristics such as attitude, evaluations,
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judgements, decisions and commitments (Feather, 1988). Personal values can be grouped
to form a personal value type (Kotey & Meredith, 1997). Successful owner-managers
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have been identified as having a personal value type referred to as entrepreneurial
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(Rokeach, 1973). These entrepreneurs place a high value on ambition, achievement,
reliability, responsibility, hardwork, competence, optimism, innovation, aggressiveness,
honesty, creativity, social recognition and growth. On the other hand, conservative
owner-managers rate low on the above values but high on values of equality, affection,
compassion and social protection (Rokeach, 1973, and England, 1975). These value types
may manifest as combinations in an entrepreneur’s life, for example an entrepreneur may
be highly entrepreneurial in some aspects and conservative in others.
Kotey & Meredith (1997) showed that the personal values, business strategies and
enterprise performance of owner-managers are empirically related. Their research also
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demonstrated that high performers are proactive in strategic orientation and exhibit
entrepreneurial personal values. In contrast, below average performers were found to be
reactive in strategic orientation and exhibit conservative personal values. This means that
variable combinations of these two extremes exist, giving rise to a combination of
proactive and reactive strategies resulting in average performance. This study concludes
that more note should be taken of personal values when planning the development of
small enterprise sectors.
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Personal values also affect behaviour within an organisation. Corporate culture can be
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defined as a pattern of collectively held values, beliefs, and attributes which shape
corporate behaviour and which is expressed in the physical outputs of the organisation.
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Culture is underpinned by shared values, and is a manifestation of core values that are
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commonly held within an organisation. Corporate culture determines how people respond
to situations they encounter in the workplace. It provides predictability and a common
frame of reference. It also has a social function in that it provides a sense of belonging
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and therefore generates loyalty to the organisation.
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Value-driven organisations believe that the company’s values are crucial for competitive
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success. However, because company values differ from company to company, and also
because people join these organisations with different personal values, it becomes crucial
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for success that personal values and business values are aligned. For a value-driven
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organisation to succeed, it is necessary for the conflicts between personal values and
organisational values to be resolved in order to gain the worker’s commitment to
company goals. A company that commits to defining and leveraging its employees’
values is developing its strength and capability to meet future challenges. Personal values
provide an important bridge to organisational values that everyone can commit to. Jaffe
& Scott (1998) cite the following elements that values help address in an organisation:
values can be a motivating factor in that employees find meaning and purpose in their
work, and care about what their company is doing and link their individual efforts to
those of the entire company; values offer a set of guiding principles in complex decisionmaking; values provide a language and way of understanding individual differences,
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opening the door for non-judgmental acceptance of different ways of doing things; and
values represent an organising principle for people’s lives, as well as for the organisation.
Personal values change over time, just as organisational values need to. This is because
the environment in which people live and work is changing, and because values adapt to
change.
South Africa presents an interesting juxtaposition of African and Western cultures and
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values. We will now investigate values and black culture in South Africa.
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VII. Values and Black Cultures in South Africa
Culture is defined by Mazrui (1986) as a system of inter-related values, active enough to
influence and condition perception judgement, communication and behaviour in a given
society, who goes on to describe the phenomenon of culture contact, where two systems
of values – after being introduced to each other – begin to be aware of each other’s
peculiarities. This is usually followed by a culture conflict if there are areas of
incompatibility. Certain patterns of behaviour begin to emerge, one of which could be
culture conquest, in which one legacy establishes a clear ascendancy and compels a more
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vulnerable culture to surrender. This may be followed by culture confusion in which the
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conquered culture does not know whether to surrender and be alienated or try to stay and
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revive itself. Culture integration is the fusion of two cultures in a new mixed legacy. The
contact of cultures described above can lead to a conflict of values within an individual,
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and this conflict of values can lead to psychological and moral bewilderment.
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Values are not static – they change all the time as new information is gained. Although
mental models can change, behavioral change takes time because de-programming of
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deeply rooted beliefs must first take place – hence the bewilderment that can accompany
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a situation in which there is a conflict of values. An example is provided by African
values and the value of Ubuntu which describes humaneness and sharing. This may mean
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sharing what has been acquired in order to uplift the community. However, while
someone may have an excellent position in an organisation, they may not be able to share
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that with their extended family. The community, on the other hand, expects upliftment,
and this may mean requests for jobs etc, which, in an organisational context, cannot be
fulfilled. All over Africa, people are no longer sure where traditional appreciation and
sharing ends and bribery and corruption begins. It seems that one culture’s bribery is
another’s mutual goodwill. The new institutions of business have given Africans more
than one standard of conduct, more than one code of behaviour. These standards and
codes are often in conflict, and the continent is no longer at ease morally, no longer sure
what is the correct behaviour (Mazrui, 1986).
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Every person has a set of values to measure ideas, objects and people in his or her social
environment. Personal values may overlap with cultural values, which are of great
importance in intercultural situations. Cultural values provide a person from a particular
culture with information on what is good and bad, right and wrong, true and false,
positive and negative. These values are learnt, and they differ from culture to culture
(Steyn et al, 1996). We will now explore certain cultural values common among black
Africans.
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Family
The best model for human community as understood in African thought is the family.
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The family has no function outside itself. It is a means of growth for its members, and the
interaction, the companionship and conversation between the growing and the fully-
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grown members is also an end in itself. African society is known for its notion of the
“extended family”, capable of expansion to include anyone, not only those related by
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blood, kinship or marriage. Ultimately, humanity itself is conceived of as a family, a
family that one joins at birth but does not leave by dying. Because of this, no-one is a
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stranger (Steyn et al, 1996).
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Community
An emphasis on community among Africans is typical of pre-scientific cultures, but the
African emphasis is unique. The African view of community can be approached by
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distinguishing it from both individualism and collectivism. Menkiti (1979) sees the
African idea of community as “an organic dimension to the relationship between the
component individuals”, as distinguished from the view that sees community simply as
the “aggregated sum of individuals”. Senghor (1996), quoted in Steyn et al (1996),
speaks of black society as being, “based both on the community and on the person and in
which, because it was founded on dialogue and reciprocity, the group had priority over
the individual without crushing him, but allowing him to blossom as a person”. Mulago
(1971) described the way individuals are seen as belonging to the group as follows:
“Participation is the element of connection which unites different beings as beings, as
UCT GRADUATE SCHOOL OF BUSINESS
39
substances, without confusing them. It is the pivot of relationships between members of
the same community, the link which binds together individuals and groups, the ultimate
meaning not only of the unity which is personal to each man (person) but of that unity in
multiplicity, that totality that concentric and harmonic unity of the visible and the
invisible worlds”.
These are just some examples of attempts at understanding the difference between the
European views on collectivism, and the African views on community. There is,
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however, one European school of thought, identified by Steyn et al (1996), that seems to
best give philosophical expression to the African viewpoint: it is that of Aristotle,
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developed further by Thomas Aquinas in the 13th century and by others such as Karl
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Rahner. Rahner held the view that it is our capacity for rational activity and action that
H
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makes us persons. As rational beings, then, persons transcend the material realm that
science deals with. He says that as persons we are self-aware and self-determining, and
this involves us having an internal relationship to ourselves. In our thinking and deciding
IG
we make up our own minds and bring ourselves to act, thus constructing our own
character and personal identity. This internal relation to oneself is what makes one
R
conscious and free, radically different from both animals and machines. On the other
PY
hand, we also exist in an external relationship to what is other than self. We are equally
dependent on our natural and social environment (including actual other persons) for all
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that we are and do. This dependence on what is other than oneself in order to be oneself
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is clear in the relationships with other persons.
The above work by Rahner presents a justification of the African view that community of
a genuinely personal kind is no enemy to individual freedom. Personal freedom and
personal community stand in a relation of direct and not inverse proportion to each other.
(Steyn et al (1996).
UCT GRADUATE SCHOOL OF BUSINESS
40
Ubuntu
“Umuntu ngumuntu ngabantu” (in Zulu or Xhosa) means “a person is only a person
because of other people”, and it encapsulates the philosophy of Ubuntu. From this, the
spirit of community also flows (Boon, 1996). Many more expressions in the African
languages express this same spirit. There is an expression in the Xhosa language which
says “Izandla ziyagezana”, which, translated literally, means “The hands wash each
other”. In other words, people are interdependent, and without each other they cannot
achieve anything. Sotho says “Ntja pedi hae hlohwe he sebata”, which means “It is better
to do things as a group than as an individual”. Xhosa, again, says, “Intaka yokha
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ngentsiba lenye intaka”, which means “A bird builds its house with another bird’s
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feather”, while Pedi says “Go fa ke fega”, meaning “Giving is to dish out for oneself”.
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These proverbs provide a good illustration of the philosophy of ubuntu, which is easily
H
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expressed in African languages.
Materialism suggests valuing money and the things it can buy above everything else. It is
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based on the idea that only science gives us true knowledge of reality, and hence
recognises only what is observable and measurable as real (Steyn et al, 1996). This
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applies to people too. As applied to people, materialism takes two main forms:
PY
individualist and collectivist. Individualism refers to a situation in which people are seen
as an analogy for atoms i.e. distinct, separate units that can be welded together into social
O
wholes. Each person is in competition with every other for the resources available. This
is the conception of people that underlies liberal theories of society and capitalist
C
economics. Collectivistism describes a situation in which people are seen as inseparable
parts of the body of society. They only have value in terms of the function they fulfill in
this society. Any rights they have are given to them by society and can be taken away by
society too. This is the conception of persons that underlies socialist theories of society
and communist economics. Materialism is the dominant ‘European’ philosophy of our
times. Individualism affirms the freedom of the individual, both as a fact and as a value,
but understands freedom simply as independence. Collectivism asserts our dependence
on society for all we are and have, and fails to recognise in human individuals the
distinctive quality that makes society itself possible. The paradoxical truth about human
UCT GRADUATE SCHOOL OF BUSINESS
41
beings is that we are both free and dependent on others! The Zulu (or Xhosa) expression
“Umuntu ngumuntu ngabantu” reveals a peculiar interdependence of people on others. In
European philosophy, there is a sharp distinction between self and the world, i.e. a self
that controls and changes the world and is in some sense ‘above’ it, whereas in African
philosophy, self and world are united and intermingle in a web of reciprocal relations.
This relationship has been described as “I think , therefore I am” being replaced by “I
participate, therefore I am” (Steyn et al, 1996).
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The African attitude towards the earth can perhaps be captured by the following
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expression from Steyn et al (1996, p31):
U
“The world is our common home, the earth the property of all. Since human
life only exists by being shared, all that is necessary for that life, for living
H
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and living well, is shared by the human family as a whole.”
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Augustine Shutte in Steyn et al (1996).
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View Of time
Boon (1996) describes differences in the concept of time. He states that African and
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Western perceptions of time are diametrically opposed, describing the Western view of
time as linear, focusing on the future with planning and scheduling, and forgetting about
the past, consigning it to history, while African culture on the other hand views time as
C
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circular, with the past more important than the future.
Locus of control
The Western view accepts that there is an internal locus of control, and that one can
determine the future, while the traditional African view says there are forces operating in
every person’s life over which they have no control. The external locus of control is
apparent from the structure of the languages. For example, English says “I missed the
bus”, while Zulu says “Ngishiywe yibhasi”, or “The bus left me”. This shifts locus of
control to the bus as opposed to the individual who missed the bus. This can lead to a
UCT GRADUATE SCHOOL OF BUSINESS
42
tendency of looking elsewhere for solutions, with the view that one has no control over
situations (Boon, 1996).
African religion and ancestors
Traditional African religion has been dynamic, adapting to political, economic and
geographical changes. Many Africans who practice this religion refer to it as “our
beliefs”. There is not much distinction between the religion and culture, as these are
practiced together in daily life. It is a way of life. The word ancestor in African religion
T
means a person from whom one is descended, and ancestors also have religious powers.
C
Death is therefore not viewed as the end of life; rather, life continues after death, and
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depending on the deceased’s position in society, they will still have an influence on the
lives of the living relatives. The ancestors are viewed as an intermediary between the
C
O
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R
IG
H
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creator and the living relatives (Steyn et al, 1996).
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VIII. Values and Entrepreneurial Behavior
Value systems and cultural norms affect the acceptability and perceived utility of
entrepreneurial activity. Whereas Western culture tends to encourage the drive to
achieve, which McClelland (1961) found to be a key aspect of the entrepreneurial
personality, some cultural values hinder it. The native Indian culture, for example,
consists of a network of beliefs that in many ways run counter to entrepreneurship.
Indians believe that being passive and content with the status quo is healthier for the
inner soul than striving to improve one’s situation. They believe that peace of mind can
T
be achieved from spiritual calm, rather than from materialism. When a culture is such
C
that people are conditioned to believe in an external locus of control, self-efficacy may be
U
low, resulting in low levels of entrepreneurial effort. In India, an external locus of control
has been reinforced by the caste system, which has impeded class mobility for centuries
H
T
(Dana, 2000). A parallel can be drawn with African culture, which shows an external
IG
locus of control.
Members of collectivist cultures tend to describe themselves in very specific and
R
contextualised ways and to experience relatedness with others as a fundamental part of
PY
themselves, to the extent that the self is defined very specifically (i.e. concretely) and
uniquely within each social relationship. Individualist cultures, on the other hand, stress
the inner, stable and self-determining (i.e. abstract) nature of the self. Eaton et al (2000)
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found that the members of the collectivist African (South African) cultures associated
C
independence with abstractness and interdependence with concreteness more strongly
than did their individualist counterparts. This is the opposite of the pattern found in
testing on Korean collectivists and Anglo-American individualists. Most entrepreneurs
show individualistic behaviour as opposed to collectivism. This further highlights the
issue discussed above on community in the South African context, that it is not a purely
collectivist society as defined in the Western terms, but is a unique collectivism.
Social values may cause entrepreneurs to be looked up to, or down upon, depending on
the beliefs of a people and their prominent moral code of behavior. Weber (1905-
UCT GRADUATE SCHOOL OF BUSINESS
44
6,1920,1930) argues that entrepreneurial behavior is culturally influenced by values,
beliefs and disbeliefs. He states that religion, the caste system and the family system
affected the emergence of entrepreneurship in India. In his research, he found that culture
was an explanatory variable, which predisposed some people towards entrepreneurial
activity while other people tended to refrain from new ventures. The Japanese have been
described as a non-Protestant group succeeding in entrepreneurship because of hard
work, diligence and frugality inspired by Confucianism (Petersen, 1971). To be
ethnically Japanese, according to Devos (1973), is to have an achievement-oriented
T
culture, and it is this culture which helps entrepreneurs persist until they succeed. Min
C
and Jaret (1985) linked cultural characteristics to entrepreneurial success among Koreans
H
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cultural values of frugality and work ethic.
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in Atlanta. They found strong positive correlation between success and adherence to the
Reflecting on Basotho cultural values, Dana (1997) says socialism occurs voluntarily in
the economic system of Lesotho. The socialist concepts originate from within the culture
IG
and have survived until today. In Lesotho, there is a distinction between assets for
personal use (which are transferable) and property with social value, which, although
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maintained privately, cannot be freely sold. This has contributed to a unique small
PY
business sector, as the culture encourages entrepreneurship in as much as it values the
accumulation of wealth; however, the same culture hinders some aspects of
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entrepreneurial activity through its perceptions of property. For example, property for
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personal consumption, such as grain, milk, chickens and pigs, can be sold for cash at
market value. However, grazing animals such as cattle, and real estate, i.e. land is
considered of social value and therefore cannot be sold for cash. Members of society
would interpret this as an act of hostility, as the cattle can be lent to other members of
society to help plough the land for agriculture. In contrast to Western society, in Lesotho
it is possible to be very poor and very rich simultaneously. You may not have food to eat,
but have a lot of cattle, which you cannot sell for cash because they are of social value.
However, some entrepreneurs own many animals, hire people to look after them, and
prepare the mohair and wool for export. This is acceptable and is of high social value.
These entrepreneurs have been raising cows, goats and sheep since the 1800s.
UCT GRADUATE SCHOOL OF BUSINESS
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There exists a theory of values that distinguishes terminal values from instrumental
values. Entrepreneurial values that are classified as instrumental values include a value
for excitement (Bird, 1983), independence and freedom of action, and creativity (Kao,
1985). Terminal values of entrepreneurship include traditional rewards such as wealth
and financial security, fame and new-age outcomes such as community, transcendence,
charity and social justice (Kao, 1985). Some entrepreneurs use their position in their
organisations to implement personally important operating values, some professional and
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some social.
Now we turn to the values that add energy to and direct one’s abilities. The important
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motivating factors in an entrepreneur’s life can lead to certain types of behaviour.
IG
Achievement motivation
This is an underlying behavioural tendency to choose and persist at activities that involve
a standard of excellence, a challenging task (one with moderate probability of success)
R
and that require personal skill and responsibility for success. Underlying this is the
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motive to do things better. Entrepreneurs who have high achievement motivation have a
need for or place a greater value on performance feedback. They are also more innovative
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and are more likely to cheat (Bird, 1989).
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McClelland (1985) states that entrepreneurs high in achievement motivation tend to
acquire the reputation of being dishonest or tricky. They are fixated on getting to the goal
and they may not be too particular about the means they use to reach it (Bird, 1989).
Need for control
A defining behavioural competency of entrepreneurs is to be able to make something
happen. Research suggests that entrepreneurs have an unflagging optimism and a ‘can
do’ attitude. The ‘can do’ belief is related to other beliefs, namely beliefs about control: a
UCT GRADUATE SCHOOL OF BUSINESS
46
need for control over important life and business situations. Taking personal
responsibility for venture outcomes, results in greater activity and creativity (Bird, 1989).
Risk acceptance
Whereas entrepreneurs are perceived to be risk-oriented or risk-seeking, research has
shown that they rather make calculated risks. Risk has the following determinants:
x Lack of control due to natural forces, other people and insufficient resources,
information and time.
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x Lack of information where it is incomplete, unreliable, unfamiliar or
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unpredictable.
hand (MacCrimmon and Wehrung, 1986).
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x Lack of time when one must decide before sufficient information or control is at
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Entrepreneurs face uncertainty and possible loss, financial, social and familial, emotional
and physical (health and well-being), career and future employability, and organisational
IG
(in terms of growth prospects). They also face uncertainty, and it is the tolerance of this
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ambiguity which is also crucial for their success (Bird, 1989).
PY
Having explored the nature of entrepreneurship, the characteristics of entrepreneurs and
the current state of entrepreneurship and small business in South Africa, followed by an
investigation into personal values, how these shape attitudes and behaviour, the values
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particular to African cultures, and how values affect entrepreneurial behaviour
C
specifically, we now turn to the proposed research model to be used.
UCT GRADUATE SCHOOL OF BUSINESS
47
IX. The Research Model
The review of the above literature on values and entrepreneurship revealed that there is a
relationship between personal values, culture and entrepreneurial activity. In order to
investigate this relationship further, and to determine whether this relationship can
influence the success of business ventures, a research model was developed.
Seven key variables were identified and the possible relationship between these variables,
T
as expressed in the research model presented below in Figure 3 was investigated. The
C
variables - personal values and beliefs, background characteristics and culture, values
expressed in entrepreneurial ventures, the nature of the business, the objectives for the
U
business, the manner in which it is run, and the outlook for future success or failure –
H
T
change from independent to more dependent from left to right across the model.
Personal values and beliefs are the things people view as worthwhile or desirable.
IG
Background characteristics and culture involve the entrepreneur’s upbringing, family and
community influences, tribal influences, and the way values and beliefs are expressed
R
and manifest themselves in behaviour. This research model proposes that personal values
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and beliefs, as well as background characteristics and culture, manifest themselves as
values in the business - things that the business regards as worthwhile or desirable. These
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values may manifest themselves in the type of business selected by the entrepreneur and
C
may also influence the objectives for running the business. These variables may in turn
affect the future of the business, influencing the likelihood of success or failure.
Figure 3: Research Model
Background
characteristics and
culture
Type of business/
characteristics
Future success or
failure
Values in business
Personal values and
beliefs
UCT GRADUATE SCHOOL OF BUSINESS
Objectives for
business and how
it is run
48
X. Hypotheses
This research model will aim to verify the six hypotheses proposed below.
1. Successful black, urban South African entrepreneurs have common values or value
sets that manifest themselves in the businesses of these entrepreneurs.
2. The background characteristics and culture of the entrepreneurs shape values
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exhibited in the business.
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3. Personal values and culture influence the type of business selected by black, urban
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South African entrepreneurs.
4. Personal values and culture influence the objectives of black, urban South African
H
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entrepreneurs for running a business.
5. Personal values and culture influence the manner in which businesses of black, urban
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South African entrepreneurs are run.
6. The manner in which personal values and culture manifest themselves in business
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ventures of black South African entrepreneurs affects the prospects for future success
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or failure of the businesses.
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XI. Methodology
Scope of the study
The research focused on successful, urban, black entrepreneurs of South African origin or
who were resident in South Africa. The entrepreneurs were defined as “successful” if
they had been operating their current businesses for a minimum of two years (with the
exception of a limited number of businesses that had been through the Graduate School
of Business’ SEE [Support Emerging Enterprises] Programme which allowed additional
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background checking and greater insight into the viability of the business, in which case
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businesses of a minimum of one year old were accepted). The study included only
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entrepreneurs living in Cape Town and the surrounding townships. Only “black”
entrepreneurs were included in the study (ie of African origin and excluding Coloureds
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and Indians), although no distinction was made by tribal origin or home language. Both
male and female entrepreneurs were interviewed. No distinction was made on level of
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education of the entrepreneurs. The study was limited to the owners of small, medium
and micro enterprises (SMMEs) as defined by the National Small Business Enabling Act
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of 1995 and summarised above in the section “III. Entrepreneurship, SMMEs and South
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Africa”.
It is necessary to highlight the fact that the entrepreneurs interviewed were all based in
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Cape Town. The initial selection of interviewees was sourced through the GSB’s SEE
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Programme database and through referrals from personal friends, whereafter several
interviewees were sourced through a snowball technique via referrals from the other
entrepreneurs. Thereafter, the researchers visited the townships and randomly
interviewed entrepreneurs. The sample is therefore not strictly random. Due to time
constraints, the sample size is small and restricted only to the Western Cape, so caution
should be exercised when applying the findings to black communities outside the
Western Cape. The findings presented in this report should therefore be seen as
exploratory.
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50
The Qualitative Research Method
The method of research that has been adopted in this study is qualitative. Van Maanen
(quoted in Easterby-Smith, Thorpe and Lowe, 1991, p71) defines qualitative methods as
“an array of interpretive techniques which seek to describe, decode, translate and
otherwise come to terms with the meaning, not frequency, of certain more or less
naturally occurring phenomena in the social world”. Easterby-Smith et al (1991, p73)
further elaborate, saying “a qualitative interview can take a broad range of different types
of interview, from those that are supposedly non-directive or open to those where the
interviewer takes to the interview a prepared list of questions which she/he is determined
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to ask, come what may.” The latter style is the one that was adopted in this study. A list
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of questions were prepared and taken into the interview, and all questions had to be
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answered, which often required further probing and explanations of the questions. The
main reason for conducting interviews is to “understand how individuals construct the
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meaning and significance of their situations, from the complex personal framework of
beliefs and values, which they have developed over their lives in order to help explain
IG
and predict events in their world” (Easterby-Smith et al, 1991, p73). A structured
interview approach was adopted in this study. According to Easterby-Smith et al (1991),
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this is necessary to understand the constructs that the interviewee uses as a basis for
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his/her opinions and beliefs about the particular matter, and also to develop an
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understanding of the respondent’s world.
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Method of analysis
Easterby-Smith et al (1991, p104) state that if a researcher is conducting research from a
social constructionist perspective, there should be avoidance of drawing a distinction
between the collection of data and its analysis and interpretation. The nature of the
research will dictate the relationship of the research process, and exploratory research,
which is the nature of this study, places an emphasis on specifying research objectives,
and the testing of hypotheses will place emphasis on data collection. There are two basic
ways of analysing qualitative data. One is ‘content’ analysis, and the other is ‘grounded
theory’. In grounded theory, the researcher goes by feel and intuition, aiming to produce
UCT GRADUATE SCHOOL OF BUSINESS
51
common or contradictory themes and patterns from the data which can be used as the
basis for interpretation. In content analysis, the researcher goes by numbers and
frequency. The analysis in the research report has adopted the content analysis method,
which works well with the structured interview approach adopted in the collection of
data. The implication of this approach is that it allowed the testing of hypothesis,
deductive and frequency based interpretation of data. Therefore in some of the questions,
where descriptive answers were given, certain key phrases or words were extracted
(based on the first keyword mentioned) and put in categories, in which the rest could be
T
fitted. These words were given codes, which were used for the frequency, Chi-squared
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C
and analysis of variance tests conducted.
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The sample
An initial list of entrepreneurs was compiled using various sources, including the
database of the SEE Programme, Impumelelo: South Africa’s Top 300 Black
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Empowerment Companies (Kench, 2000), which included a limited listing of blackowned SMMEs, the Cape Town branch of NAFCOC, the Cape Town office of the Black
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Management Forum, as well personal trips to the townships of Philippi, Gugulethu,
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Langa and Khayelitsha by the authors. All entrepreneurs were first contacted by
telephone for a screening process which ensured that:
1. The entrepreneur was the owner of the business.
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2. The business had been in operation for a minimum time period of two years.
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3. The entrepreneur was “black” as defined in Scope, above.
4. The entrepreneur was willing to be interviewed.
The entrepreneurs’ details were entered onto a database and an appointment was
scheduled for an interview. A total of 35 entrepreneurs were interviewed (see Appendix
1), which was considered to be a sufficiently representative sample of successful, urban,
black entrepreneurs for the purposes of this research report.
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The questionnaire
The questionnaire was compiled with a view to investigating each of the factors and links
in the Research Model defined above. (The full questionnaire is shown in Appendix 2.)
The questionnaire contained both open-ended and closed-ended (or fixed response)
questions. Various types of data were sourced, including qualitative and quantitative data.
Opening questions were aimed at recording the basic contact details of the entrepreneur
(full name, name of business, physical address of business, business telephone and fax,
and entrepreneur’s cellphone number). Subsequent questions were aimed at obtaining
information relating to each of the six hypotheses put forward in Hypotheses above and
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between these categories. The following questions were asked:
T
focused on the various factors outlined in the Research Model and the links postulated
H
T
Background characteristics and culture of the entrepreneurs
Certain categorical and numeric information was sourced to gain insight into the
background and culture of each entrepreneur. Three variables were used to gain insight
into the background of the entrepreneurs: their age, the number of years they had been
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living in the township, and their level of education. Variables that were used to describe
R
the culture of the entrepreneurs were their native language (as an indication of their tribal
origin), the country and town or region of origin (which is particularly applicable given
PY
the migration of black people from rural to urban areas, and particularly from other parts
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of South Africa to the Western Cape) and their marital status.
C
The personal values and beliefs of the entrepreneurs
To gain insight into the personal values and beliefs of the entrepreneurs, two of which
were open-ended and one closed-ended questions were asked. These questions probed the
things most important to the entrepreneurs (their values), their views on their greatest
responsibility as a citizen of South Africa with a view to give a sense of the things they
value in a broader sense. The entrepreneurs were then presented with a list of 26 values,
both Western and African, from which they were asked to mark the five that they most
identified with. The table below shows these values:
UCT GRADUATE SCHOOL OF BUSINESS
53
Table 1: African and Western values
Western values
being secure (persona l security)
individualism
wealth (power & status)
democracy
achievement (sense of accomplishment)
human rights
excellence
discipline
freedom
fun & enjoyment
competitiveness
hard work
H
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C
T
African values
warm relationships with others
tradition/history
being well-respected
humanity (compassion)
community responsibility
respect for earth
ancestors & rituals
extended family
generosity
hospitality
tolerance (of others)
consensus (harmony)
dignity (honor)
gratitude
Values expressed in the businesses
To gain insight into the values expressed in the businesses of the entrepreneurs, the
IG
entrepreneurs were asked to name the three core values of the business. They were asked
to give examples of things they did in their businesses that reflected their values. The aim
R
here was to see how personal values manifested themselves in the business, and whether
PY
they felt that people in business should share profits with the community, with a view to
investigating how background and culture shape the values expressed in the business.
O
The entrepreneurs were also asked about aspects of business they felt uncomfortable
C
with, in order to identify values which run contrary to business practices.
The type of business and the characteristics of the business
Some details were recorded concerning the business itself, namely the type of business or
principal product, the number of years it had been in operation, and the level of annual
turnover and start-up funds used, to gain insight into the type of business selected by the
entrepreneurs. Various characteristics of the business were explored through questions
focusing on the number of family and non-family employees, and the qualities associated
with “good” and “bad” businesses, with a view to establishing whether the personal
values and culture influence the characteristics of the businesses.
UCT GRADUATE SCHOOL OF BUSINESS
54
The objectives for the business and how it is run
Questions were asked to gain insight into the objectives behind the decision to start the
business, and into the way the business is run, with a view to determining whether these
factors are influenced by the personal values and culture of the entrepreneurs. The
entrepreneurs were asked to answer a closed-ended question offering five motivating
factors for going into business. The entrepreneurs were also asked a closed-ended
question in which they asked to select the primary consideration for having a successful
business, and an open-ended question asking them to sum up what their business stands
for in one word, and to name the most important characteristic they look for in an
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employee.
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The future success or failure of the business
To investigate the prospects for the future success or failure of the business, and the way
H
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in which personal values influence this, the entrepreneurs were asked open-ended
questions on which values had become more and less important to them since starting the
business (to determine signs of adaptation, learning and progress), and on how they saw
R
IG
their business in five years’ time if it was successful.
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The interviews
All 34 entrepreneurs were interviewed by the authors on a face-to-face basis. The
majority of the interviews were conducted at the business premises of the entrepreneurs.
O
Interviews were conducted in English as this is the common business language in South
C
Africa. However, one of the authors was familiar with the common South African
languages encountered among the target group, which allowed translations to be made
when necessary. The face-to-face nature of the interviews also allowed language barriers
to be overcome through the careful explanation of each question. The entrepreneurs’
responses were recorded by hand on a hard copy of the questionnaire by the authors, with
the exception of question 15, which was completed by the entrepreneurs themselves
during the interview. The length of each interview varied between 20 minutes and 60
minutes depending on the level of education and understanding of each entrepreneur. It is
estimated each interview required a total input time by the authors of three hours,
including making the first contact, asking screening questions and arranging an
UCT GRADUATE SCHOOL OF BUSINESS
55
interview, travelling to the scheduled meeting (which were frequently postponed or
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O
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H
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U
C
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missed by the entrepreneurs) and the interview itself.
UCT GRADUATE SCHOOL OF BUSINESS
56
XII. Results and Descriptive Statistics
The interview responses were coded (see Appendix 3) and various descriptive statistics
were performed on the data. (A full record of results of each interview is available in
Appendix 4.) Frequency counts were run on each variable using a statistical package
(Statistica) and the full results of frequency counts are in Appendix 5. The summarised
results are presented below:
The background and culture of the entrepreneurs
C
T
Level of education
The entrepreneurs were divided into four categories on the basis of level of education,
U
namely: those that did some high school, those that completed high school (matriculation
grade), those with some tertiary education and those that completed tertiary education.
H
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Table 2 lists the level of education and the percentage representation of the entrepreneurs
in each category.
IG
Table 2: Level of education
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R
Level
Completed tertiary
Some high school
Completed matric
Some tertiary
Count
15
10
8
1
%
44.1
29.4
23.5
2.9
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It was found that 44.1% had completed some form of tertiary education, 29.4% had some
C
high school education but had not completed it, and 23.5% had matriculated. Only one
respondent failed to complete tertiary education. It was observed that respondents with
lower levels of education tended to be older, with all respondents who had not completed
high school aged 39 or over. This probably reflects the unfavourable state of the
education system and the level of unrest under apartheid South Africa in which these
respondents grew up.
UCT GRADUATE SCHOOL OF BUSINESS
57
Age
The ages of the entrepreneurs were divided into six categories, from age 20 to over 70.
The national average percentage of entrepreneurs below 25 years of age is 7%, which is
quite comparable to this study, in which 8.8% of the respondents were in their twenties
(See Table 3). The bulk of the entrepreneurs (58.8%) were aged between 30 and 49,
while 32.3% were above 50 years of age.
Table 3: Ages of entrepreneurs
C
T
%
8.8
29.4
29.4
17.6
11.8
2.9
found using a snowball technique
H
T
U
Range of ages Count
20-29
3
30-39
10
40-49
10
50-59
6
60-69
4
>70
1
A point to note is that some of the entrepreneurs were
and this representation of ages may not match a purely randomly sampled group.
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Home language
The predominant native language among the entrepreneurs was Xhosa (67.6 %) probably
R
reflecting the migration of black people from the Eastern Cape to the Western Cape in
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search of employment. Other languages encountered were Sotho, English (Kenya), Twi
(Ghana), Zulu, Tswana, Swazi (Swaziland), Ndebele (Zimbabwe) and Shona
(Zimbabwe). Table 4 lists the languages and the percentage number of entrepreneurs
C
O
found in each language group.
Table 4: Language spoken by entrepreneurs
Language
Xhosa
Sotho
Other
English
Zulu
Tswana
Count
23
4
4
1
1
1
%
67.6
11.8
11.8
2.9
2.9
2.9
Country and region of origin
A total of 85.3% of respondents were South African with 14.7% originally from other
African countries, but currently living and working in South Africa. Among the South
UCT GRADUATE SCHOOL OF BUSINESS
58
Africans interviewed, 38.2% of the respondents were born and bred in the Western Cape.
Of those born and bred in the Western Cape, 92% were Xhosa speakers, reflecting that
the migration of tribes other than the Xhosa to the Western Cape may be a more recent
phenomenon. Among those entrepreneurs that did not originate from the Western Cape,
the largest number originated from the Eastern Cape, followed by foreigners, and then
Gauteng, and lastly, those from other parts of South Africa. Table 5 shows the country
and region of origin of the entrepreneurs and the percentages from each region.
Table 5: Country and region of origin of entrepreneurs
Count
13
10
5
3
3
T
Region
Western Cape
Eastern Cape
Foreign
Gauteng
Other areas in South
Africa
C
%
85.3
14.7
%
38.2
29.4
14.7
8.8
8.8
H
T
U
Country
Count
South Africa 29
Other
5
IG
Number of years living in the townships
It was found that 23.5% of the respondents had lived in the townships for less than 10
years, while 17.6% had lived there for between 10 and 20 years, and 47.1% for over 20
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years. (Note that respondents living in other parts of Cape Town, including the Southern
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and Northern Suburbs, were allocated a value of zero.) Table 6 lists the range of years
and percentages of entrepreneurs that lived in the township falling into each category.
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Table 6: Years living in the township
C
Range of years
0
1-9
10-19
20-29
30-39
40-49
50-59
>60
About 65% of the entrepreneurs had lived in
Count %
4
11.8
8
23.5
6
17.6
3
8.8
3
8.8
7
20.6
1
2.9
2
5.9
the townships for more than 10 years. This
means that most of the values that the entrepreneurs have, were probably shaped by the
environment in which they grew up, i.e. their community.
UCT GRADUATE SCHOOL OF BUSINESS
59
Marital Status
Table 7 shows the marital status of the entrepreneurs: 58.8% were married and 29.4%
single, while 11.8 % were either divorced or widowed. This may be a reflection of strong
family values among these entrepreneurs. The family may also be a source of strength
and encouragement (support) for entrepreneurs, and a breakdown of the family could be
detrimental to the success of the business. This could also be a source of conflict between
the family value the entrepreneur upholds and the demands of the business, which may
leave no time for the family. Striking a balance between the two may therefore be crucial.
C
%
58.8
29.4
5.9
5.9
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Count
20
10
2
2
H
T
Marital status
Married
Single
Divorced
Widowed
T
Table 7: Marital status of entrepreneurs
IG
The personal values and beliefs of the entrepreneurs
The respondents were asked to list the three things in life that were most important to
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them personally (Question 1 of the questionnaire). Each respondent therefore had three
value answers, written in order of importance in their lives. The approach taken to
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analyse these values was to split the question into three parts, question 1a, 1b and 1c and
O
analyse them separately.
C
Most important values
Figure 4 below shows the personal values that were listed as the most important (1a). The
value of highest importance was clearly “Family”, quality of life coming a distant second.
UCT GRADUATE SCHOOL OF BUSINESS
60
Figure 4: Personal value No 1
14
12
10
Number of
respondent
s
8
6
4
2
0
1
2
3
4
5
6
7
8
9 10 11 12
Personal value
C
T
1=Health, 2=Family, 3=Business, 4=Quality of life, 5= Wealth,
6=Happiness & success, 7= Spiritual life, 8= Freedom and independence,
9= Community, 10= Personal growth, 11= Education of children, 12= Other
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Figure 5 below analyses the value that was listed as the second most important (1b). This
value is clearly “Quality of life”, which incorporated such factors as a better life for
H
T
children through education, and personal security. Quality of life also came second in
value number one. In this instance, the family value came a close second to quality of
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life. An examination of the data showed that most who listed quality of life as a first
value listed family as a second value, including those who had not mentioned quality of
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life as a first value. This shows the strength of the family value amongst the
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entrepreneurs.
Figure 5: Personal value No 2
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O
9
8
7
6
Number of
5
respondent
4
s
3
2
1
0
1
2
3
4
5
6
7
8
9 10 11 12
Personal value
1=Health, 2=Family, 3=Business, 4=Quality of life, 5= Wealth,
6=Happiness & success, 7= Spiritual life, 8= Freedom and independence,
9= Community, 10= Personal growth, 11= Education of children, 12= Other
Figure 6 deals with the third value listed by the entrepreneurs (1c). The third value listed
was “My business” reflecting the ambitious nature of the entrepreneurs. Their business is
UCT GRADUATE SCHOOL OF BUSINESS
61
definitely an important aspect of their lives. However, the purpose of the business is to
enable the fulfilment of the first two values of family and quality of life. Quality of life
was also a strong second value, followed by freedom and independence, and health.
Figure 6: Personal value No 3
8
7
6
Number of 5
respondent 4
s
3
T
2
0
1
2
3
4
5
6
7
8
9 10 11 12
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Personal value
C
1
H
T
1=Health, 2=Family, 3=Business, 4=Quality of life, 5= Wealth,
6=Happiness & success, 7= Spiritual life, 8= Freedom and independence,
9= Community, 10= Personal growth, 11= Education of children, 12= Other
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Having looked at the top three values listed by the entrepreneurs, a consolidated table
(Table 8) was produced to reveal which values were mentioned the most by the
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entrepreneurs as being one of their top three.
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Table 8: Overall ranking of personal values
(Combined for parts a, b and c of question 1)
C
O
Value
My family
Quality of life, security, education
My business
My health
Wealth (money)
Happiness and success
Freedom and independence
Spiritual life
Community
Personal growth
Education of children
Other
UCT GRADUATE SCHOOL OF BUSINESS
Count
20
18
14
8
6
4
4
2
2
2
2
13
%
21.1
18.9
14.7
8.4
6.3
4.2
4.2
2.1
2.1
2.1
2.1
13.2
62
This created the following list of personal values, in order of priority, found among the
target group:
1) Family
2) Quality of life
3) My business
4) Other important values included: health, wealth, happiness and success, spiritual
life, freedom and independence, community, personal growth, and education of
children.
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The consolidated list produced the same result as that of the responses analysed
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separately above reflected in figures 4 to 6.
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National responsibility
An open-ended question (question 16) focusing on the entrepreneurs’ single greatest
H
T
responsibility as a citizen of South Africa today gave the following results shown on
Figure 7. Job creation and crime reduction received the highest response. The second
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highest was community upliftment, followed closely by education and awareness.
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Figure 7: Responsibility as a citizen of South Africa
C
O
PY
14
12
10
Number of 8
responses 6
4
2
0
1
2
3
4
5
6
7
Responsibility
1=Job creation and reducing crime, 2= Education and awareness,
3= Community upliftment, 4= Role model, 5= Relationship building,
6= Support family, 7= Other
The responses to this question showed a strong community focus among the
entrepreneurs, through such common answers as job creation and reducing crime,
education and awareness, and community upliftment.
UCT GRADUATE SCHOOL OF BUSINESS
63
Words I most identify with
The closed-ended question (question 17) requiring the entrepreneurs to choose five words
they most identified with produced the following results shown in Table 9:
Table 9: Ranking of “Words I most identify with”
T
“Words I most identify with”
Ancestors and rituals
Tolerance (of others)
Competitiveness
Fun and enjoyment
Consensus (harmony)
Hospitality
Democracy
Tradition/history
Generosity
Respect for earth
Extended family
Gratitude
Individualism
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%
12.4
9.3
9.3
8.2
8.2
6.5
5.3
5.3
4.7
4.7
4.1
3.5
3.5
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No
21
16
16
14
14
11
9
9
8
8
7
6
6
H
T
“Words I most identify with”
Hard work
Warm relationship with others
Community responsibility
Discipline
Achievement (accomplishment)
Human rights
Being secure (personal security)
Humanity (compassion)
Excellence
Being well respected
Freedom
Wealth (power and status)
Dignity (honour)
No
4
3
2
2
2
2
2
2
2
2
1
1
0
%
2.4
1.8
1.2
1.2
1.2
1.2
1.2
1.2
1.2
1.2
0.6
0.6
0
community
responsibility,
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Responses selected by over 10 entrepreneurs were warm relationship with others,
human
rights,
discipline,
achievement
(sense
of
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accomplishment), and hard work. Hard work scored the highest number (21
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entrepreneurs) followed by warm relationships with others (16) and community
responsibility (16). This emphasised the community focus of the entrepreneurs, the
importance attached to relationship building, and drive and ambition associated with
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people who value their businesses highly.
UCT GRADUATE SCHOOL OF BUSINESS
64
Values expressed in the businesses
Conflicts between personal and environmental business values
A total of 82% of the respondents confirmed that certain aspects of business made them
feel uncomfortable or conflicted with their values and beliefs. The aspects mentioned
included the following:
“Sometimes products may be harmful to people, but you need the money from the sales
(eg bending the rules for prescriptions) - this goes against my values and I wouldn't have
done it before.” (Pharmacist)
T
“One has to be ruthless at times. I don't like this behaviour in business. Business is quite
C
a rat race - lots of back-stabbing. This is against my values and beliefs.” (Caterer)
“Sucking up on other people - trying to get things from people by pretence. Agreeing with
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them just for what you can gain from them.” (Lawyer)
“I have to be biased about products I sell.” (Hairdresser)
H
T
“If you have employed someone you sometimes have to retrench them because of
money reasons which is necessary but not pleasant.” (Service station owner)
“I sell items that I don't like, for example, cigarettes, which are destructive or bad for
IG
people - it is exploitation.” (Bakery owner)
“When people owe you money for products they have bought, I have to struggle to get
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the money from them.” (Service station owner)
“I have to make many sacrifices - of my time, which takes me away from my family. I
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work 15 hours a day.” (Owner of fast food outlet)
“I don’t like cliques or groupings in doing business. There is a lack of transparency and a
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tendency for business still to be biased towards whites.” (Media liaison and event
C
manager)
The reasons cited for this conflict with values included a dislike of dishonest people,
unreliable or unethical behaviour found in other businesses; the difficulty in competing
with large, established companies; dealing with staff issues such as theft and
retrenchment; time spent away from family; financial issues such as trying to raise funds
for the business, collecting debts and refusing credit to customers; having to be biased
towards certain products; and needing to bend the rules to survive. The figure below
(Figure 8) shows that the primary conflicts arise from the competitive nature of business
and through encountering dishonesty or deception.
UCT GRADUATE SCHOOL OF BUSINESS
65
Figure 8: Aspects of business that conflict with values
7
6
5
Number of 4
respondents 3
2
1
0
1
2
3
4
5
6
7
8
9
Aspects of business
C
T
1= Competitiveness, 2= Dishonesty/deception, 3= Concerns about products sold,
4= The need to bend the rules, 5= Time away from family,
6= Dealing with money issues, 7= Problems with staff, 8= Other, 9= None
U
Business values
The question focusing on the three core values of the business produced the results
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T
shown below. The values were listed for question 5a, 5b and 5c. However, these were not
in any order of priority. Table 10 shows a consolidated list of the business values listed
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by the entrepreneurs:
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Table 10: Overall ranking of core business values
(combines the responses of parts a, b and c of question 5)
C
O
PY
Value
Customer friendliness
Service/product excellence
Staff treatment
Honesty
Community service
Cleanliness/good environment
Reliability and diligence
Knowledge, networking and
learning
Low prices
Other
Count
22
17
11
8
7
5
5
3
%
24.7
19.1
12.4
8.9
7.9
5.6
5.6
3.4
2
9
2.3
10.1
Customer friendliness (24.7%), followed by service/product excellence (19.1%) and
treatment of staff (12.4%) came out as the top business values. These were followed by
honesty and community service.
UCT GRADUATE SCHOOL OF BUSINESS
66
Expression of personal values in the business
The question “Can you provide an example of things you do in your business that reflect
or capture the values that are most important to you?” produced a wide variety of
business specific responses, including the following:
“I do tests such as blood pressure for free, and give free advice even if people are not
buying. I look at a long-term relationship.” (Pharmacist)
“I help creches and old people's homes by supplying veggies, sometimes for free.” (Fruit
and vegetable store owner)
“We are honest – for example, we return money from client's pockets when we find it.”
(Dry-cleaner)
T
“I respect my customers, I have a polite way of dealing with them, and I always smile.”
C
(Butcher)
U
“I'm on first name terms with many of my customers - an example of customer service.”
(Fast food outlet owner)
H
T
“I transport an old lady (a customer) to her house after she has had her hair cut.”
(Hairdresser)
“Community involvement - I help with the development of youngsters, for example I am
IG
putting up an Internet facility for them.” (Florist/funeral services)
“I allow people to pay at the end of the month when they have more money.”
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(Hairdresser)
“I keep the business very clean and neat which is how I am personally.” (Baker)
PY
“I make the effort to visit customers (elderly people) and if it's hot we take them home
from the shop.” (Pharmacist)
“I have custom-made tours. Customers get collected and dropped off where they want. I
O
also make an effort to create a pleasant environment among the clients, a good
C
atmosphere. We make an effort to answer in detail any questions we are asked.”
(Township tour operator)
Values that were strongly expressed in the way things were done in the business
included: community focus, friendliness and hospitality, honesty, and relationship
building.
Community support by business
When asked whether they thought that people in business should share their profits with
others in their community, all (100%) of the entrepreneurs said that they did believe that
they had a responsibility to put something back into the community in some way, as it is
UCT GRADUATE SCHOOL OF BUSINESS
67
the community that supports the business, and it should also share in the business’s
success. The ways in which this should take place were varied as shown in Figure 9.
Figure 9: Sharing profits with the community
1
2
3
4
5
6
C
Ways of sharing profits
T
8
7
6
5
Number of
4
respondents
3
2
1
0
H
T
U
1=Donations to charity, 2= Help to the needy, poor, elderly,
3= Creating value for the community, 4= Creating opportunities for staff,
5= Helping schools, education, 6=Sponsorships, sport
The responses fell primarily into three categories, reflected in Figure 9 as donating to
IG
charity (the Red Cross in particular was named on several occasions), providing help to
the needy, poor and elderly (for example by selling products at cost or offering free
R
services), and creating value for the community (for example through job creation). Other
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ways that were also mentioned, although to a lesser degree, were creating opportunities
for staff (for example via profit sharing), helping schools and education (for example by
providing study bursaries), and sponsorships and involvement in sport (for example by
C
O
sponsoring a soccer team).
What came across strongly was that social responsibility was an accepted and expected
part of the culture. One elderly entrepreneur mentioned that while he had put back into
the community when he was younger, he was now on the receiving end of community
support. Actual responses received included the following:
“Yes - I used to do it [put something back into the community] in my younger days. I tried
to help children, providing food and catering. I was involved in sports sponsorship too.
Nowadays, the community helps me, for example with lifts back to Queenstown [his
hometown].” (Provider of funeral services, aged 72)
UCT GRADUATE SCHOOL OF BUSINESS
68
“Yes - we contribute to things happening in the community, for example schools, funerals
- that's our way of living in the townships. We also donate to churches, old age homes, to
the disabled.” (General food store owner)
“Yes - if you can, by giving to charities, for example football clubs that are raising money
for kids. This also lifts the view people have of the business – it is putting something back
into the community and not just taking.” (Pharmacist)
“Yes - even though I'm small, I do it. I give 10% of what is paid to me (together with the
Backpackers Lodge) and we sponsor a creche. We also try to bring black and white kids
together - we transport them and give them food. I also visit family hostels in Langa and
try to raise donations of clothes which I deliver to them.” (Township tour operator)
T
“Yes - by making donations to Red Cross and community projects - it's a moral
obligation. Plus we create job opportunities.” (Owner of market research company)
C
“Yes - we offer donations to schools, sports clubs donations and churches - this tells us
U
as a team that we are involved in community responsibility. It's part of our culture. “
(Baker)
H
T
“You should plough things back into the community in the way of sponsorships, for
example, I sponsor the Gugulethu Pirates football club. People demand it.” (Service
IG
station owner)
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The type of business and the characteristics of the business
Type of business
The types of businesses run by the entrepreneurs were found to fall into the following
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O
categories shown in figure 10.
Figure 10: Type of business
7
6
5
Number of 4
respondents 3
2
1
0
1
2
3
4
5
6
7
8
9
Type of business
1= Food retail services, 2= Food takeaways, 3= Hair services,
4= Funeral services, 5= Technology and business services,
6= Building, construction, manufacturing, 7= General services,
UCT GRADUATE SCHOOL OF BUSINESS
69
8= Healthcare, 9= Tourism
With one exception (a potter), all the businesses chosen were service businesses which
fulfilled the basic needs of the community in which they were located, with food-related
businesses (both food retail and fast food) predominant.
Years in business
An investigation into the years in which the business had been in operation produced the
following results: 88% of the businesses had been in operation for 10 years or less. In
fact, during the course of the research, the authors encountered a large number of
T
businesses which had been in operation for less than one year (although these were
C
excluded from the study). This could indicate that entrepreneurship among the target
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group is a relatively recent phenomenon as a result of the suppression of entrepreneurial
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T
tendencies among blacks as described in Entrepreneurs, SMMEs and South Africa above.
Annual turnover
In terms of annual turnover, 15% of the businesses surveyed had an annual turnover of
IG
less than R100 000, while 54% of businesses had a turnover of between R100 000 and
R500 000, with 31% having a turnover of over R500 000, reflecting the high level of
R
success many of these entrepreneurs have achieved. The funding used to start the
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businesses varied from zero in many instances to several hundred thousand rand.
Particular stories of success include the following:
O
Pamela Mandindi is a single mother of 33 and a qualified pharmacist. Pamela received
the Young Achiever of the Year award in 1997. She could have opened a pharmacy in far
C
more profitable locations, but she elected to run her business in the heart of her
community, Gugulethu, where she plans to serve the community despite the difficulties,
such as crime, associated with the area. She used R300 000 to start her business and
has a turnover of R720 000 a year, and she employs five staff, including her mother and
brother.
Arthur Mzozoyana, 56, left his job six years ago, despite being a widower with three
children to support, to start his own market research business in Mowbray with nothing
more that a desk and a computer donated by his previous employer. Today his business
turns over between R3-million and R5-million a year. He makes a particular point of hiring
blacks wherever possible as he recognises the lack of opportunity many black people
UCT GRADUATE SCHOOL OF BUSINESS
70
have experienced and wants to make a contribution towards a more racially equitable
society.
Buti Matsasa opened his hair salon in Gugulethu with R45 000 and his blend of quality
service and trendy, friendly atmosphere brought instant success. After three years, his
business turns over R480 000 a year and employs six people. He is on the verge of
launching a second venture, a shop which will provide business services (telephones,
fax, typing, photocopying, CV editing, etc) to the community.
Family members employed
A total of 53% of the entrepreneurs employed family members in their businesses (some
T
as many as five, six and seven family members), indicating the strong family focus
C
among the target group. In addition, some of the entrepreneurs indicated that they had
U
inherited the businesses from their parents.
H
T
Qualities of “good” and “bad” businesses
When questioned on the qualities of “good” and “bad” businesses, the entrepreneurs gave
the responses shown in Figure 11 which gives the list of “good” business qualities.
R
12
IG
Figure 11: Qualities of a “good” business
10
PY
8
Number of
respondents
6
C
O
4
2
0
1
2
3
4
5
6
Qualities
1= Profitability, 2= Customer satisfaction, 3= Happy staff,
4= Quality product/service, 5= Honesty, 6= Serving the community
UCT GRADUATE SCHOOL OF BUSINESS
71
Figure 12 shows responses given for qualities of a “bad” business.
Figure 12: Qualities of a “bad” business
16
14
12
10
Number of
8
respondents
6
4
2
0
1
2
3
4
5
T
Qualities
U
C
1= Unprofitable, 2= Poor service or product quality,
3= Poor management,
4= Dishonesty, 5= Poor customer service
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T
Characteristics that the entrepreneurs admired in a business were most importantly
customer satisfaction, profitability and a quality product or service, while the
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characteristic not respected in a business was first and foremost poor customer service.
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The objectives for the business and how it is run
Reason for going into business
The closed-ended question focusing on the reasons why the entrepreneurs went into
O
business for themselves produced the following results, shown in Figure 13.
C
Figure 13: Reason for going into business
20
15
Number of
respondent 10
s
5
0
1
2
3
4
5
6
Reasons chosen
1= Ambition, 2= Wealth, 3= Independence, 4= Needed a job,
5= Serve the community, 6= Other
UCT GRADUATE SCHOOL OF BUSINESS
72
What was clear from the results was that very few of the entrepreneurs started their
businesses out of need (ie they were not jobless). The predominant reasons given were
the desire to serve the community, a desire for independence, ambition, and a desire for
wealth.
Most important consideration for success
When asked a closed-ended question focusing on the most important consideration for
having a successful business, the following was found, shown in Figure 14.
U
H
T
IG
16
14
12
10
Number of
8
respondents
6
4
2
0
C
T
Figure 14: Considerations for having a successful business
1
2
3
4
5
6
R
Considerations
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1= Product/service quality, 2= Pleasing the customer,
3= Motivating employees, 4= Having efficient, low-cost operation,
5= Maintaining good relations with the community, 6= Other
O
The entrepreneurs showed a strong emphasis on the quality of the product or service,
C
with a secondary emphasis on pleasing the customer, clearly driving forces behind the
way their businesses are run.
When the entrepreneurs were asked to describe what their businesses stood for in a single
word, the following responses were obtained, shown in Figure 15.
UCT GRADUATE SCHOOL OF BUSINESS
73
Figure 15: What my business stands for
9
8
7
6
Number of 5
respondents 4
3
2
1
0
1
2
3
4
5
6
T
Words chosen
C
1= Service, 2= Community/development, 3= Professionalism,
4= Independence/empowerment, 5= Satisfaction, 6= Success
U
The words Service, Community/development and Satisfaction were the most commonly
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T
chosen, reflecting the service orientation and community focus of the entrepreneurs.
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Employee characteristics
When asked to describe the most important characteristics they looked for in an
employee, the entrepreneurs produced the following responses, shown in Figure 16.
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Figure 16: Characteristics of employees
PY
14
12
10
C
O
Number of
respondent
s
8
6
4
2
0
1
2
3
4
5
6
7
Characteristic
1= Cleanliness and presentation, 2= Honesty, 3= Attitude/communication/personality,
4= Potential to learn, 5= Hard working, 6= Other
The characteristic most sought-after among new employees was their attitude, personality
and ability to communicate (with customers), reflecting the strong emphasis on customer
satisfaction among the entrepreneurs.
UCT GRADUATE SCHOOL OF BUSINESS
74
The future success or failure of the business
Values for success
The question asking entrepreneurs to name values that had become more important and
less important between when they started their business and today reflected the
entrepreneurs’ ability to learn and adapt and improve their chances of success. It also
highlights the fact that values are not static, but change over time. Figure 17 shows those
values that have become more important to the entrepreneurs.
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Figure 17: More important values
C
10
U
8
Number of
respondent
s
6
4
H
T
2
0
1
2
3
4
5
6
7
8
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Values
R
1= Customer service, 2= Value of the trade, 3= Good management,
4= Business growth, 5= Quality of product or service, 6= Community focus,
7= Other, 8= Nothing has changed
PY
Customer service and good management, followed by business growth have clearly
become more important to the entrepreneurs. These new values will play an important
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role in increasing chances of success of the businesses. Figure 18 shows the values that
C
have become less important to the entrepreneurs.
Figure 18: Less important values
12
10
Number of
respondent
s
8
6
4
2
0
1
2
3
4
5
Values
1= Desire for success, 2= Money, 3= Education, 4= Other, 5= Nothing has changed
UCT GRADUATE SCHOOL OF BUSINESS
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These results show a changing emphasis in the values of the entrepreneurs, from being
driven by money and desire for success, to the awareness of the importance of customer
service and good management.
The future
When asked to describe how their businesses would appear in five years’ time if they
were successful, the entrepreneurs produced the following responses, shown in Figure 19.
Figure 19: The future of the business
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The future of the business
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C
14
12
Number of 10
8
respondent
6
s
4
2
0
2
3
4
H
T
1
5
Evidence of success
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1= Growth and diversification, 2= Job creation,
3= Improvement of product or facilities, 4= Improvement of staff, 5= Other
R
The entrepreneurs showed a strong focus on expansion and growth, as well as
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diversification which would enable them to provide a wider variety of services/products
to their customers, plus an emphasis on the improvement of the product or facilities,
O
reflecting the strong ambitions of the entrepreneurs. Increased job creation and improved
C
conditions for staff were also mentioned.
These results will now be further analysed using the statistics package, Statistica, and the
results of these analyses will be discussed.
UCT GRADUATE SCHOOL OF BUSINESS
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XIII. Discussion and Analysis
Statistical Analysis
Statistical analysis was performed on the data collected, with a view to testing the
hypotheses put forward. This took three forms:
1) Analysis of variance (Anova) tests were run on the numeric data from Section B
of the questionnaire (age, years living in the township, years current business has
been operating, annual turnover, number of family members employed, number of
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other employees, start-up funds) and the nominal data from Section A of the
C
questionnaire (see Appendix 2).
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2) Chi-squared tests were run on nominal data from Section B (level of education,
native language, marital status, region of origin, type of business) and nominal
H
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data from Section A.
3) Chi-squared tests were run on nominal data from Section A against other nominal
data from Section B.
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data from Section A, and on nominal data from Section B against other nominal
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The results of the statistical tests are given in Appendix 6 (parts 1, 2 and 3) in the form
of tables showing resulting ‘p’ values, which indicate a significant relationship when
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values are lower that 0.05.
Following each statistical test, observations were made of trends in the data that showed
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significant levels of association. Where possible (when analysing nominal against
C
numeric data) box-and-whisker charts were drawn to illustrate trends.
Hypothesis 1
“Successful black, urban South African entrepreneurs have common values or value sets
that manifest themselves in the businesses of these entrepreneurs.”
The personal values of the entrepreneurs were identified using questions 1, 14 and 15:
x My family, quality of life, my business (question 1)
x Job creation and reducing crime, education and awareness, community upliftment
(question 14)
UCT GRADUATE SCHOOL OF BUSINESS
77
x Warm relationship with others, community responsibility, hard work (question
15).
From the results of these three questions, a common value set among the entrepreneurs
was compiled: family, quality of life, business, hard work, community, and relationships.
Core business values were identified using questions 3, 5 and 13:
x Aspects
of
business
that
conflict
with
values
were
competitiveness,
dishonesty/deception, and problems with staff (question 3)
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x Core business values identified were service/product excellence, customer
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friendliness, and treatment of staff (question 5)
x The question relating to sharing profits with community emphasised donations to
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charity, help to the needy, and creating value for the community (question 13).
H
T
From this, a list of core business values was compiled: honesty, employee welfare,
product/service quality, customer relationships, and community focus.
IG
The personal value sets identified among the entrepreneurs were tested against the
R
business value sets using Chi-squared tests (See Appendix 6, Section 3 for table of pvalues), and the following results were obtained: a significant association was found
PY
between the primary core value of the business and the secondary personal value
(p=0.0458). Observations of the data showed that entrepreneurs who listed their
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secondary personal value as quality of life placed an emphasis on honesty in their
C
businesses, followed by product/service excellence and customer friendliness. Those
entrepreneurs who listed family as their secondary personal value named service/product
excellence and customer friendliness as their primary core business value. The statistical
analysis shows that certain personal values of the entrepreneurs manifest themselves as
values in the business. This hypothesis is therefore supported by the results of the
research.
UCT GRADUATE SCHOOL OF BUSINESS
78
Hypothesis 2
“The background characteristics and culture of the entrepreneurs shape values exhibited
in the business.”
The background characteristics and culture of the entrepreneurs were determined from
personal data which was collected, namely level of education, age, marital status, native
language, years living in the township, and country and place of origin. This data was
tested against the business values of the entrepreneurs, as described in Hypothesis 1.
First, analysis of variance tests were conducted on numeric background information
T
against the business values (see Appendix 6, Section 1 for table of p-values from Anova
C
tests). These tests produced p-values of lower than 0.05 (indicating a significant level of
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association between the variables) for answers given to question 5a (the primary core
value of the business) when tested against the background characteristics of age
H
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(p=0.0218), years in the township (0.0490) and years in business (0.0244). This reveals
that there is a significant association between an entrepreneur’s age, the number of years
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exhibited in the business.
IG
spent in the township, and the number of years they have been in business, and the values
PY
Observations of this data revealed that younger entrepreneurs (in their twenties, thirties
and forties) tended to focus on the core business values of product/service excellence and
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customer friendliness, while older entrepreneurs (fifties, sixties and seventies) focused on
community service, and entrepreneurs in the middle range (thirties, forties and fifties)
C
focused on honesty, as shown in Figure 20 below.
UCT GRADUATE SCHOOL OF BUSINESS
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Figure 20: Age versus business value No 1
Box & Whisker Plot: Age vs Business value No 1
75
70
65
60
Age
55
50
45
40
35
±1.96*Std. Err.
±1.00*Std. Err.
Mean
30
2
3
4
5
6
7
8
9
10
T
1
Business value No 1
U
C
1 = Service/product excellence, 2 = Honesty,
3 = Community service, 4 = Customer friendliness, 10 = Other
The entrepreneurs that had lived in the township for fewer years (less than 10) tended to
H
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focus on service/product excellence and customer friendliness, while those who had lived
in the township for a longer period (over 10 years, and particularly over 40 years)
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emphasised honesty and customer friendliness, as shown below in Figure 21.
Figure 21: Years in township versus business value No 1
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Box & Whisker Plot: Years in township vs Business value No 1
80
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70
60
40
O
Years in township
50
30
C
20
10
0
-10
1
2
3
4
5
6
7
8
9
10
±1.96*Std. Err.
±1.00*Std. Err.
Mean
Business value No 1
1 = Service/product excellence, 2 = Honesty,
3 = Community service, 4 = Customer friendliness, 10 = Other
Entrepreneurs who had been in business for a shorter time period (less than five years)
listed service/product excellence and customer friendliness as dominant values, while
UCT GRADUATE SCHOOL OF BUSINESS
80
those who had been in business for longer (over 10 years) listed community service,
honesty and customer friendliness, as shown below in Figure 22.
Figure 22: Years in business versus business value No 1
Box & Whisker Plot: Years in business vs Business value No 1
40
35
30
20
15
10
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Years in business
25
0
-5
2
3
4
5
6
7
Business value No 1
8
9
10
U
1
C
5
±1.96*Std. Err.
±1.00*Std. Err.
Mean
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1 = Service/product excellence, 2 = Honesty,
3 = Community service, 4 = Customer friendliness, 10 = Other
IG
Chi-squared tests were conducted on the nominal background and cultural data (level of
education, marital status, native language and place of origin) against the values
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expressed in the business. (See Appendix 6, Section 2 for table of p-values from Chisquared tests.) This revealed a significant association between native language and the
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responses to question 3, which focused on aspects of business that conflicted with values
(p=0.0487), in particular dishonesty/deception and competitiveness. A significant
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association was also found between language and the second core value of the business
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as expressed in question 5b (p=0.0135). Observation of the data showed an association
between Xhosa-speakers and core business values of product/service excellence,
treatment of staff and customer friendliness, whereas Sotho speakers showed an emphasis
on reliability and diligence.
To conclude, the statistical analysis shows that certain background and cultural
characteristics of the entrepreneurs do influence the values exhibited in the business.
Therefore this hypothesis appears to be supported by the results of the research.
UCT GRADUATE SCHOOL OF BUSINESS
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Hypothesis 3
“Personal values and culture influence the type of business selected by black, urban
South African entrepreneurs.”
Chi-squared tests were run on the following nominal data (See Appendix 6, Section 3 for
results and p-values): the personal values of the entrepreneurs derived from questions 1
(a, b and c) and 14, against the types of businesses selected by the entrepreneurs. The
types of business that were prevalent in the survey were food and retail services, hair
services, technology and business services, building, construction and manufacturing,
and general services. The test revealed a significant association between the primary
C
T
personal value of the entrepreneurs (question 1a) and type of business (p=0.0006).
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It was observed from the data that the type of businesses that correlated strongly with the
personal value of family (listed by the majority of entrepreneurs) were personal services
H
T
(hair services, funeral services and healthcare). In addition, entrepreneurs who listed
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wealth as a primary personal value tended to favour general service industries.
To conclude, the statistical analysis shows that certain personal values do influence the
R
type of businesses selected by the entrepreneurs. Therefore this hypothesis appears to be
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supported by the results of the research.
O
Chi-squared tests were also run on cultural data (marital status, native language and place
of origin) against type of business selected by the entrepreneurs (See Appendix 6,
C
Section 3 for results and p-values). A significant association was found between place of
origin and type of business (p=0.0220).
Observations of the data showed a predominance towards food retail service and general
service businesses among entrepreneurs from the Western Cape, while entrepreneurs
from the Eastern Cape favoured food takeaway and general service businesses. In
addition, hair services tended to be run predominantly by foreigners (possibly reflecting
the sought-after skills in plaiting and other hair effects that were pioneered in northern
Africa). Entrepreneurs originally from Gauteng favoured businesses focused around
UCT GRADUATE SCHOOL OF BUSINESS
82
technological and business services, possibly reflecting the business orientation of that
region.
Hypothesis 4
“Personal values and culture influence the objectives of black, urban South African
entrepreneurs for running a business.”
The predominant reasons for going into business given by the entrepreneurs in question 2
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were, first, the desire to serve the community, followed by a desire for independence,
U
C
ambition and a desire to create something, and also a desire for wealth.
Chi-squared tests were conducted on the nominal data of reasons for going into business
H
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(from question 2, which required two non-ranked responses, the responses were
classified into 12 categories of response combinations), against the personal values
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(questions 1a, 1b, 1c and 14), and cultural factors (marital status, native language and
region of origin). No significant association was found. However, the sample size may
PY
pairs of responses.
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not have been sufficiently large to accommodate the grouping of data into categories of
On exploring further, Chi-squared tests were conducted between business values and
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objectives for running a business. A significant association was found between reason for
C
going into business and native language (p=0.0006), which implies a cultural influence
on the objectives of the entrepreneurs for going into business.
Hypothesis 5
“Personal values and culture influence the manner in which businesses of black, urban
South African entrepreneurs are run.”
The manner in which businesses are run is given by data from questions 4 (consideration
for having a successful business), 6 (what the business stands for), and 7 (characteristic
UCT GRADUATE SCHOOL OF BUSINESS
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of employee). These nominal variables were tested against personal values (questions 1a,
1b, 1c and 14) and cultural variables (language, marital status and region of origin).
A significant level of association was found between personal value No 3 and the
response to question 4 (consideration for a successful business) (p=0.0220). An
observation of the data revealed that people who selected ‘pleasing the customer’ and
‘maintaining good relations with the community’ as considerations for a successful
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business tended to name business as a third-choice personal value.
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A significant level of association was also found between important characteristics of
employees and marital status (p=0.0211). Observations of the data revealed that single
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people tended to name attitude and ability to communicate, followed by hard work and
H
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potential as important characteristics, while married people also named attitude and
ability to communicate, followed by honesty.
IG
To conclude, the statistical analysis showed that certain personal values and cultural
R
factors do influence the way in which businesses are run.
PY
Additional observations noted that the emphasis on family as a primary personal value is
expressed in the high percentage (53%) of entrepreneurs that employed family members
C
O
in their businesses.
Hypothesis 6
“The manner in which personal values and culture manifest themselves in business
ventures of black South African entrepreneurs affects the prospects for future success or
failure of the businesses.”
The nominal data of personal values (questions 1a, b, c, and 14) and cultural variables
(language, marital status and region of origin) were tested against the nominal data
indicating likelihood of future success, namely questions 9a and 9b (more important and
UCT GRADUATE SCHOOL OF BUSINESS
84
less important values since starting the business), and question 12 (indications of success
in five years’ time). No significant levels of association were found.
The nominal data of core values of the business (questions 3, 5a, b and c, and 13) were
tested against the nominal data indicating the likelihood of future success, namely
questions 9a, 9b and 12. Significant levels of association were found between business
value No 2 (question 5b) and indications of future success (question 12) (p=0.0041), as
well as between orientation to sharing profit with the community (question 13) and
C
T
indications of future success (question 12) (p=0.0009).
Observations of the data revealed that people who see the future of their businesses as
U
involving growth and diversification have business values of customer friendliness
H
T
followed by reliability and diligence. Those who see the future as job creation emphasise
customer friendliness, while those who saw improved products or facilities in the future
emphasised staff treatment and honesty, and those who planned improved staff
R
as core business value No 2.
IG
conditions in the future emphasised both cleanliness and environment, and staff treatment
PY
Observations also showed that people who chose improvement of staff as a future goal,
emphasised creating opportunities for staff and assisting education as ways of
O
contributing to the community, while those who emphasised a future involving growth
C
and diversification, as well as improvement of product/facilities, tended to favour
donations to charities, followed by helping the needy and creating value for the
community.
When asked to look at the future of their businesses, the entrepreneurs placed a strong
emphasis on expansion and growth, as well as diversification, plus an emphasis on the
improvement of the product or facilities.
An examination of the changing values of the entrepreneurs since starting their
businesses showed a shift away from money and desire for success, to the awareness of
UCT GRADUATE SCHOOL OF BUSINESS
85
the importance of customer service and good management. This reflects the way in which
the personal values and culture of the entrepreneurs have influenced the businesses,
causing a change in attitude from inward-focus to customer-focus, a vital ingredient for
C
O
PY
R
IG
H
T
U
C
T
the success of a business.
UCT GRADUATE SCHOOL OF BUSINESS
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XIV. Conclusion and Implications
Western values versus African values
When the entrepreneurs were asked to choose five words they most identified with from
a list of 26 African and Western values (question 15 on the questionnaire), the results
showed that the highest ranked value was hard work (21%), which was classified as a
Western value, followed by warm relationships with others and community responsibility
(both 16%), which were both classified as African values, and achievement and
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discipline (both 14%), which were both classified as Western values. The next two values
C
chosen, human rights and security, were also Western values. This indicates that the
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entrepreneurs focused on in this study have business values that are similar to Western
business values, while still emphasising the African values of warm relationships with
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others and community responsibility. The literature has shown that Western business
values such as hard work, achievement and discipline contribute to business success; this
IG
may imply that the presence of Western business values in African entrepreneurs can
influence the success of their enterprises. The literature describes how entrepreneurs have
R
common values that promote success; the results of this study may indicate that similar
O
entrepreneurs.
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business value sets are found among successful African entrepreneurs and Western
C
The black South African entrepreneur of the Western Cape
Miner (1996) describes four types of entrepreneurs: the personal achiever, the supersalesperson, the real manager and the expert idea generator. The super-salesperson
exhibits characteristics closest to those of black entrepreneurs targeted in this study: a
great feeling for other people, someone who values relationships with other people, and
to whom groups are important. Miner (1996) advises these entrepreneurs that, in order to
succeed, they should have the capacity to learn to sell and to learn about the product.
Their success lies in selling, and they should aim to provide themselves with back-up to
handle other aspects of the business such as management, specialised skills, etc.
UCT GRADUATE SCHOOL OF BUSINESS
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Although not all entrepreneurs necessarily fit this model, the business values found
among the black entrepreneurs interviewed (product/service excellence and customer
friendliness) and the personal values of warm relationships with others and community
focus, are close to the characteristics of the super-salesperson. The majority of the
businesses studied were retail or sales orientated. This could be the area in which black
entrepreneurs have the best chance of success.
Values, black culture and entrepreneurship
T
The predominant personal values among the entrepreneurs were family, quality of life,
C
business, hard work, relationships, and community focus. Certain of these values were
U
found to be reflected in the businesses of the entrepreneurs, as described under
Hypothesis 1 above. But do these values relate to any of the personal values identified in
IG
success for entrepreneurial ventures?
H
T
past studies as being significant in influencing entrepreneurship and the prospects for
Family was named as the most important value among the entrepreneurs, and Bird (1989)
R
described how the family offers support to the entrepreneur and can provide security in
PY
times of trouble. Morris (1997) names hard work as being a value or characteristic found
among entrepreneurs, and it was clear from the results of this research that hard work is
O
an important value to the entrepreneurs. Achievement and hard work have been identified
as Western values, and these values were found to be strong among the black
C
entrepreneurs, together with some African values. It appears that the entrepreneurs
studied have more values in common with other entrepreneurs, than with the black
African population in general, although they still retain certain African values.
Quality of life was identified by most entrepreneurs as the second most important
personal value. The research showed that entrepreneurs who listed their secondary
personal value as quality of life placed an emphasis on honesty, product/service
excellence and customer friendliness in their businesses (see Hypothesis 1). Freedom and
independence were also named as important personal values, and studies have shown that
UCT GRADUATE SCHOOL OF BUSINESS
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most entrepreneurs start ventures because they are attracted by the freedom to express
themselves, to adapt to changes in the environment, and to be innovative.
The entrepreneurs studied showed a strong community focus. There was a strong desire
to serve the community, with all entrepreneurs sharing profits with the community in
various ways. The success of the business is measured also by the degree to which it
contributes to the community rather than just the satisfaction of self. Many of the
entrepreneurs named the greatest responsibility as a citizen of South Africa as creating
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employment and reducing crime. This leads to the issue of the collectivist nature of
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community centric societies. Black African communities show differences to the
generally accepted view of collectivist societies (Steyn et al, 1996). The African view of
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community is distinguished from both individualism and collectivism and Menkiti (1979)
H
T
describes the African version of community as “an organic dimension to the relationship
between the component individuals”, as compared to the view that sees community
simply as the “aggregated sum of individuals”. However, this community focus could
IG
also be viewed as a limiting factor to the success of entrepreneurial ventures, as studies
on Western entrepreneurs have found them to be individualist in nature, with this aspect
R
contributing to the success of the enterprise. The strong business value of customer
PY
friendliness among the entrepreneurs could be attributed to the community culture, which
O
emphasises warm relationships, or it could result from a business motivation.
C
Background characteristics, culture and entrepreneurship
Most of the entrepreneurs studied had a high school qualification, with 44% having
completed tertiary education. Ronstadt (1985) stated that educational qualifications (such
as an MBA) can have a tendency to foster conformity, which is contrary to
entrepreneurial spirit. On the other hand, evidence has shown that entrepreneurial success
can be encouraged by certain competencies acquired through learning and in the USA,
the level of education has risen among entrepreneurs. So business education is crucial for
success, but can also hinder success.
UCT GRADUATE SCHOOL OF BUSINESS
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Bird (1989) describes “age effects” on the behaviour of entrepreneurs. A significant
difference was found between older and younger entrepreneurs with respect to the
characteristics they seek in employees. Younger entrepreneurs look for good attitude,
potential, and hard work, while older entrepreneurs look for attitude and honesty. Bird
(1989) also examined the effects of race, gender and ethnic background and found that
these do not differentiate entrepreneurial types, but differences appear in the context and
resources that the entrepreneurs choose, and influence the type of industry entered, and
the success of the venture. The research conducted showed that entrepreneurs from the
T
Western Cape went into food and retail businesses, while those from the Eastern Cape
U
technology services, and foreigners on hair services.
C
focused predominantly on food take-away services, those from Gauteng on business and
H
T
Values and entrepreneurial success
The research showed a significant association between the personal value of quality of
IG
life, which manifests itself in business as an emphasis on honesty, product/service
excellence and customer friendliness (see Hypothesis 1). It was also found that there was
R
a significant association between the business values of customer friendliness and
PY
community support, and indications as to the future success of the business (see
Hypothesis 6). The entrepreneurs named competitiveness and dishonesty/deception as
aspects of business that conflicted with their values or made them feel uncomfortable.
O
The latter is an ethical issue, but the former could indicate an averseness to competition.
C
It was stated in several interviews that the entrepreneurs operating from the townships
had not had significant competition from the external environment in the past. However,
there has, of late, been a move by big supermarkets into the townships, and these are
viewed as a threat. However, in the business world, competition is a reality. If the South
African taxi industry1 is any indication of how black entrepreneurs deal with competition,
this issue could be a hindrance to entrepreneurship.
1
The South African taxi industry has, in recent months, been engulfed in violence aimed at eliminating competition.
UCT GRADUATE SCHOOL OF BUSINESS
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Development of entrepreneurship in South Africa
The single most important responsibility as a citizen of South Africa named by the
entrepreneurs was job creation and the reduction of crime. This indicates that the
entrepreneurs see themselves as part of the solution to unemployment and escalating
crime. Job creation has been described as an outcome of entrepreneurship by Morris
(1997).
T
Summary
This study has identified a common value set among the target group of successful black
C
South African entrepreneurs. Furthermore, the study has shown that the background
characteristics and culture of the target group of entrepreneurs, as well as the personal
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values of the entrepreneurs, shape the values exhibited in the businesses. The personal
H
T
values, characteristics and culture of the entrepreneurs influence the type of businesses
chosen, the characteristics of the businesses and the way in which they are run. In turn,
C
O
PY
R
future success of the businesses.
IG
the way in which personal values and culture manifest in the businesses influence the
UCT GRADUATE SCHOOL OF BUSINESS
91
Implications
The small business sector can play a major role in creating jobs in any economy. Policy
efforts in this area have focused on developing the small business sector, primarily with a
view to enhancing its potential to create jobs. The situation in the South African context
is desperate, and can be summed up by the following quotation:
South African society is unquestionably very unequal. Among its black majority,
unemployment hovers around dangerous levels, skills are scarce, illiteracy is rife, and the
T
crime rate is very high. Backlogs of basic needs are enormous and largely unmet. The
C
AIDS epidemic has dug in, and rural poverty remains grinding. Policy makers, with an
eye on the potential of small business sector to generate economic growth, have shown
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courage and remained largely optimistic. (Nkem-Abonta et al, 1998, p14)
H
T
The White Paper on National Strategy for the Development and Promotion of Small
Business in South Africa (1995) states that all over the world it has been recognised that
IG
the small business sector plays an important if not critical role in the economic and social
development of a country, and that this also applies in South Africa where the small
R
business sector was neglected during much of the 20th century following the discovery of
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diamonds and gold and the establishment of a modern, capitalist society with almost
exclusive white control. The Paper goes on to emphasise that the labour absorptive
O
capacity of the small business sector is high, and that the average capital cost per job
created is usually lower than in big business. It is recognised that the small business
C
sector is an important force for the generation of employment and more equitable income
distribution. The Paper also points out that in the past, black people have been able to
make far greater progress in the micro and small-enterprise segments of the economy and
that the SMME sector has proven to be a highly significant vehicle for black economic
empowerment.
Unemployment is a serious problem in South Africa, rising from 29.2% in 1995 to 37.6%
in 1997, reaching its highest level in 16 years (Labour Input to Presidential Jobs Summit,
1998). Viewed by population group, the statistics show a dismal picture of racial
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inequality. The unemployment rate among black Africans is almost 43%, and only 4.6%
for whites. For Asians and Coloureds, the figures are 12% and 21% respectively.
Statistics South Africa records show that the economy lost more than half a million jobs
in the last five years, and that the formal sector absorbs less than 5% of new entrants into
the job market each year. Unable to find employment in the formal sector, many new
entrants are forced into taking up survivalist activities in the informal sector, and this
often leads to criminal activities (Nkem-Abonta et al, 1998).
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The potential of small business in South Africa to create employment has been noticed by
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policy makers. Small businesses are labour intensive, source much of their input from
South Africa, face lower wage and salary costs, and have little capital needs. Through the
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development of the small business sector, the South African economy stands to gain in
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T
the long run in alleviating unemployment problems. The 43% unemployment rate among
blacks accounts for millions of people, highlighting the fact that small business in the
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black communities is of particular importance (Nkem-Abonta et al, 1998).
Having studied the values of successful, black, urban entrepreneurs in the Western Cape,
R
and having assessed how their background characteristics, culture and personal values
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manifest themselves in their businesses, and how these in turn influence the success or
failure of the businesses, this study concluded that these entrepreneurs’ business values
O
appear closer to Western values than to general African values. These entrepreneurs
appear to have similar values to other entrepreneurs in the Western world. The
C
implications of this are that South Africa can use methods of encouraging and promoting
entrepreneurship employed in other parts of the Western world. South Africa can gain
experience from the developed world in terms of policies and initiatives to grow the
small business sector.
At the beginning of the interview process, many databases of small businesses were
scanned for black entrepreneurs, but these were simply not recorded. However, in the
townships themselves, there were entrepreneurs in abundance, from medical practitioners
and pharmacists, to hairdressers, undertakers, food retailers and many more. As
UCT GRADUATE SCHOOL OF BUSINESS
93
successful as these entrepreneurs may be, they are not recognised as mainstream
businesses and they don’t feature in small business databases, from where funds and
professional assistance are channelled through to uplift the small business sector. The
government and business are channelling considerable capital into SMME development
through venture capital funds and other programmes, but this assistance will not reach
these entrepreneurs. Their lack of interaction with mainstream business also robs the
entrepreneurs of learning from others through networking with people outside their own
T
communities.
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Shamil Israel, director of Greenfields Venture Capital in Cape Town, states (Israel, 2001)
that the peculiarity of South Africa’s history will require the country to come up with
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unique solutions for the society’s unique problems, and that the SMME sector needs a
H
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South African-specific model to reach its full potential. Israel stresses that one of the
fundamental problems facing SMMEs in South Africa is a lack of capital as private
investors are understandably reluctant to invest in low-return, high-risk opportunities. A
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better understanding of the entrepreneurs being targeted for support and of the factors
that affect small business success or failure would undoubtedly contribute to lowering the
PY
R
risk of investing in SMMEs.
The research of Kotey & Meredith (1997) focused on the personal values of the
O
entrepreneur, and how these values influence the strategies adopted for the business, and
C
thereby the success of the business. Entrepreneurs are said to place a high value on
ambition, achievement, reliability, responsibility, hard work, competence, optimism,
innovation, aggressiveness, honesty, creativity, social recognition and growth, while
conservative owner-managers rate low on the above values but highly on values of
equality, affection, compassion and social protection (Rokeach, 1973, and England,
1975). The black South African entrepreneurs interviewed in this study show an
emphasis on certain values: family, quality of life, business, hard work, community, and
relationships. O’Farrel & Hitchins (1988) stated that values and goals of an entrepreneur
are indistinguishable from the goals of their businesses. The entrepreneurs interviewed in
UCT GRADUATE SCHOOL OF BUSINESS
94
this study showed business values of honesty, employee welfare, product/service quality,
customer relationships, and community focus.
South Africa’s policy-makers should consider the personal values of entrepreneurs when
setting up development programmes to encourage small business and entrepreneurship.
These programmes can then be tailored to suit the personal value types of the
entrepreneurs. The personal values of the entrepreneurs can affect the type of support
offered; for example, it would be futile to expect a “conservative personal value” owner-
T
manager to embark on a high-growth/high-risk strategy. Management consultants should
C
take into account differences in personal values when dealing with their clients.
U
The White Paper on National Strategy for the Development and Promotion of Small
H
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Business in South Africa (1995) points out that small businesses face a wider range of
constraints and problems and are less able to address the problems on their own, and that
these problems relate particularly to the legal and regulatory environment confronting
IG
SMMEs, which emphasises the need for policy-makers to be better informed on the
R
factors that affect the success of small businesses.
PY
The Paper also emphasises that, while during recent years research on the trends,
problems and needs of small enterprises among South African universities, technikons
O
and other research centres has increased significantly, the volume of research with a
C
practical orientation and with policy relevance is still limited, compared to the needs of
the country and the overall research capacity. This study has undoubtedly formed a
valuable addition to the body of knowledge through its use of primary research on the
subject of values of the entrepreneurs, which have been described in the literature as
playing a vital role in the success or failure of small businesses. In addition, this study
has focused specifically on black South African entrepreneurs – this is the largest portion
of the population and also the section with the highest rate of unemployment, making it a
key area of concern for today’s policy-makers.
UCT GRADUATE SCHOOL OF BUSINESS
95
XV. Suggestions for Further Research
Gender differences
While the gender of the entrepreneurs interviewed for this research study was recorded
(29% of the entrepreneurs were female), this was not a variable considered in the
analysis. Nkem-Abonta et al (1998) point out that women have historically suffered
discrimination and exclusion which has hampered their contribution to the economy, and
that they tended to be concentrated in the homecrafts, trade and hawking, personal
services and retail sector. The White Paper on National Strategy for the Development and
T
Promotion of Small Business in South Africa (1995) identifies female business owners as
C
a suggested target group for support. The influence of gender on entrepreneurial activity
U
could provide an area of future research.
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The age factor
It was observed that the vast majority (91%) of the entrepreneurs interviewed were aged
IG
30 or over, and that 58% of the entrepreneurs were in their thirties or forties. Only 9%
were in their twenties. Nkem-Abonta et al (1998) observed that only 7% of entrepreneurs
R
in South Africa were under the age of 25, and that in 1996 most of the total of 59 000
unemployed people below the age of 25 were driven into self-employment because of
PY
unemployment, but that 80% of these self-employed were in the survivalist sector of the
range of SMMEs. As the future economic success of South Africa will rely on new
O
generations of entrepreneurs, the growth of entrepreneurship among the country’s youth
C
should be a priority. Dana (2000) describes the introduction of policies in India aimed at
promoting entrepreneurial personalities among the youth, which could provide guidelines
for South Africa’s policymakers. This is a possible area for future research.
Further statistical analysis
Associate Professor Trevor Wegner suggested, after studying the data compiled from the
research conducted, that Structural Equation Modelling could be carried out and may
provide useful insight into the strength of the relationships found between variables, as a
supplement to the tests of association.
UCT GRADUATE SCHOOL OF BUSINESS
96
Use of a control group
The use of a control group of urban blacks, employed in regular jobs, for similar research
could provide valuable insights into the values found among these blacks and whether the
values found among the target group in this research report are in fact associated with
C
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entrepreneurial nature.
UCT GRADUATE SCHOOL OF BUSINESS
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XVI. Appendices
Appendix 1: Database of entrepreneurs interviewed
Name
Business
Address
Contact
Mamasedi Maliba
Itsose Public Relations
32 Parliament Street, Cape
Town
2
3
Pauline Munemo
Themba Ncube
Pees Garments
Ndizani Information
Technologies
4
Zakuthini Ndletyana
Lovo Paving Contractors
45 Mydrecht Street, Bothasig
7th Floor , Southern Life
centre, 8 Riebeeck Street, Cape
Town
M701 Site B Khayelitsha
5
Khosi Tsita
T. & I. Hair Salon
Tel: 761 9556
082 990 6323
Fax: 761 9556
Tel: 558 1027
Tel: 400 7545
082 374 8832
Fax: 425 4959
Tel: 361 3464
083 420 3533
Tel: 689 1807
6
Themba Mofokeng
Eyethu Pharmacy
7
David Plaatjie
8
9
Mxolisi Norman
Maputuma
William Khanzi
KwaMangwana Fruit &
Veg
Eyodidi Dry Cleaners
10
Vukile Njana
11
Liwa Gunguluza
12
Andrew Ntunja
Gugulethu Roadhouse
13
Mary Amoateng
Continental Hair Stylists
14
Lucy Matthews
15
Pumeza Mapukata
Emthonjeni Caterers
16
Kenneth Sonwabo
Mgojo
Mashiya Service Station
Corner of NY1 and NY35,
Gugulethu
17
18
Mapompo Hlatuka
David Taliwe
Shop No 11, NY50, Gugulethu
Shop No 8, NY50, Gugulethu
19
20
21
Andrena Njobe
Ntandazo Notho
Buti Matsasa
Madlamini Hairdressers
Gugulethu Floral
Fantasy & Funeral
Directors
Ikhaya Butchery
Thole Take Aways
Fingertips Hair Salon
T
N
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1
Tiba's Fish and
Takeaway
Kwano Khaya Butchery
Shop No M6, Eyona Centre,
NY1, Gugulethu
Shop No 2, NY6, Gugulethu
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Khanzi's Funeral &
Insurance Services
11 Embassy Court, Main Road,
Mowbray
Shop No 3, Logpay House,
Polka Square, Town Centre,
Mitchell’s Plain
Shop No M5, Market Square
Eyona Centre, NY1, Gugulethu
Shop No M14, Market Square
Eyona Centre, NY1, Gugulethu
Shop 100, NY78, Newcross
Roads, Nyanga
Braids Sensation
UCT GRADUATE SCHOOL OF BUSINESS
Shop No 17, Eyona Centre,
NY1, Gugulethu
36 Victoria Road, Mowbray
4 Upper Durban Road,
Mowbray
No C12, Philippi Small
Business Centre, Philippi
Shop No 7, NY3A, Gugulethu
Shop No 7, NY 50, Gugulethu
Shop No 1, NY3A, Gugulethu
Tel: 392 0114
Fax: 392 0621
Tel: 638 4265
Tel: 385 0753
082 215 2509
Fax: 385 0010
Tel: 699 1125
Tel: 637 8244
083 764 3581
Tel: 638 7224
Fax: 638 7224
Tel: 689 7483
Fax: 531 8413
Tel: 689 7914
Tel: 372 6456
082 258 0797
Fax: 372 6456
Tel: 633 7516
082 728 3799
Fax: 633 7516
083 743 7046
Tel: 638 5487
Fax: 638 5487
Tel: 637 5498
082 990 9784
Tel: 633 9177
083 717 7301
Fax: 633 9177
98
23
Cecil Bennetto
24
Arthur Mzozoyana
Bawobaxolela Funeral
Undertakers
Roots Research SA
25
Kululani Melane
Masakhane Painters
26
Shadrack Kakaza
TV Doctor
27
Sam Ntimba
Sam's Cultural Tours
28
Hazel Monakali
Amahlubi
Station
29
Pamela Mandindi
Gugulethu Pharmacy
30
Shirley Sigasana
Shirley's Kitchen
31
Nana Masande
32
33
34
Vuyani Ngalwana
Sonwabo Dunywa
Bulelwa Socikwa
Masande Food and
Catering
Legal Practice
Uncedo Potteries
Surgery
[email protected]
Shop No 12, NY50, Gugulethu
1st Floor, Standard Bank
Building, Main Road,
Mowbray
[email protected]
1 Kings Road, Brooklyn
Container No 4, Eyona Centre,
NY1, Gugulethu
No 1 Dumbarton House,
Corner Church and Adderley
Streets, Cape Town
Corner NY1 and NY3A,
Gugulethu
Shop No 6, NY3A, Gugulethu
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Service
Shop No 10, NY50, Gugulethu
Tel: 638 5603
082 394 8811
Fax: 638 5603
Tel: 633 2471
Tel: 689 7982
082 411 7684
Fax: 686 9493
Tel: 511 4157
083 457 0589
Fax: 511 4829
Tel: 426 4644
082 970 0564
Fax: 423 5417
Tel: 633 7504
083 658 1457
Fax: 638 0697
Tel: 637 1675
082 403 7347
Fax: 637 1675
Tel: 637 8470
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iGugulethu Bakery
C
Frank Mzwondile
Gum
U
22
Tel: 371 5104
Tel: 633 5461
Tel: 638 7665
C
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Corner NY1 and NY6,
Gugulethu
Private Bag X2, Crossroads,
Cape Town
56 Keerom Street, Cape Town
Sivuyile Complex, Gugulethu
Shop No 16 NY 50, Gugulethu
UCT GRADUATE SCHOOL OF BUSINESS
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Appendix 2: Questionnaire
Values and Entrepreneurship Survey
Instructions to the interviewer. This survey is to be personally administered to the
entrepreneur. Take time to make sure the entrepreneur understands what you are asking.
The interviewer should fill in answers to each question in as much detail as possible
given the time constraints. Questionnaires that are not completely filled out cannot be
used.
A. Values and Beliefs
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1. What are the things that are most important to you personally in life? Please list
three of them in order of importance:
a. _____________________________________
b. _____________________________________
c. ____________________________________
__)
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2. Why did you go into business for yourself? Please indicate the TWO most
important reasons:
a. I am ambitious, and wanted to create something
b. I wanted to build wealth for myself
c. I wanted my own independence
d. I needed a job
e. I wanted to serve the community
f. Other (please list:___________________
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3. When you think about what it takes to be successful in business today, are there any
aspects of business that you are uncomfortable with, or that conflict with your
values and beliefs?
4. While all of the following might be important, which of the following is the MOST
important consideration for having a successful business (select only one):
a. product/service quality
b. pleasing the customer
c. motivating employees
d. having efficient, low cost operations
e. maintaining good relations with the community
_)
f. other (please list: ____________________
5. When you think about your business, what would you say are its core values, or the
values that most guide how things are done?
UCT GRADUATE SCHOOL OF BUSINESS
100
a. _____________________________________
b. _____________________________________
c. _____________________________________
6. If you had to describe what your business stands for in a single word, what would
that word be?
U
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7. When you hire someone, what is the most important trait or characteristic that you
would look for?
IG
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8. Can you provide an example of things you do in your business that reflect or
capture the values that are most important to you?
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9. If you compare when you first started your business to today, have any values
become more important to you, and have any values become less important?
PY
10. more important values:
C
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11. less important values:
12. What are the qualities of a “good” business, or one that you admire a lot?
13. What are the qualities of a “bad” business, or one you do not have respect for?
14. If your business is successful five years from now, what will be the signs or evidence
of that success?
UCT GRADUATE SCHOOL OF BUSINESS
101
15. Do you think that people in business should share the profits of their business with
others in their community? Please explain your thoughts about this.
16. What do you think is your single greatest responsibility as a citizen of South Africa
today?
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17. See the page with the title “Words I Identify with most”. This page containing 26
words of which you have to select the 5 words that you most identify with i.e. these
words would be what you believe in and that describes what you believe in.
(Instructions for interviewer: Give the attached page to the entrepreneur. Ask the
entrepreneur to circle the five words (only 5) that he/she chooses or circle the one he/she
points out to you.)
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B. Personal Information on the Entrepreneur
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a. Level of education ____________________________________
b. Age ____
c. Native language ______________________________
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d. Marital status _______________________
e. Years living in the township _________________________
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Where from originally:
country: _________________________
city/town/area: ________________________
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f.
g. Years current business has been operating _______________________
h. Type of business or principal product _________________________
Current level of annual turnover in the business ____________________
j.
Number of employees:
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i.
family members ____
non-family members ____
k. How much money did the entrepreneur start the business with? _____________________
UCT GRADUATE SCHOOL OF BUSINESS
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“WORDS I MOST IDENTIFY WITH”
Pick five (5) words or phrases from the list below that best capture who you are and
what you believe in. Obviously you might identify with more than five, but please
ONLY select five.
tradition/history
being secure (personal security)
being well-respected
individualism
wealth (power & status)
humanity (compassion)
democracy
community responsibility
achievement (sense of accomplishment)
U
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extended family
IG
respect for earth
C
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warm relationships with others
PY
human rights
R
ancestors and rituals
O
generosity
C
excellence
hospitality
consensus (harmony)
freedom
fun & enjoyment
tolerance (of others)
competitiveness
discipline
hard work
dignity (honor)
gratitude
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Appendix 3: Coding for questionnaire
Question 1a, b, c
1 My health
2 My family
3 My business
4 Quality of life, security, education
5 Wealth (money)
6 Happiness and success
T
Question 4
1 = selected, 0 = not selected
1 = selected, 0 = not selected
1 = selected, 0 = not selected
1 = selected, 0 = not selected
1 = selected, 0 = not selected
1 = selected, 0 = not selected
C
Question 3
1=Competitiveness
2=Dishonesty/deception
3=Bias about products
4=Need to bend the rules
5=Time away from family
6=Dealing with money issues
7=Dealing with staff
8=Other
9=No
Question 6
PY
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Question 5a,b, c
1 Service/product excellence
2 Honesty
3 Community service
4 Customer friendliness
5 Staff treatment
6 Cleanliness/good environment
7 Reliability and diligence
8 Knowledge, networking and learning
9 Low prices
10 Other
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a
b
c
d
e
f
Question 2
1 = selected, 0 = not selected
1 = selected, 0 = not selected
1 = selected, 0 = not selected
1 = selected, 0 = not selected
1 = selected, 0 = not selected
1 = selected, 0 = not selected
7 Spiritual life
8 Freedom and independence
9 Community
10 Personal growth
11 Education of children
12 Other
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Question 8
(These answers will be used in
1 Service
Cleanliness and presentation
the
2 Community/development
Honesty
analysis as each example was
different for each entrepreneur
3 Professionalism
Attitude/communication/personality and
responses were business
4 Independence and empowerment Potential
specific)
5 Satisfaction
Reliability
6 Success
Hard working
7
Other
C
Question 7
UCT GRADUATE SCHOOL OF BUSINESS
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Question 9a
1 Customer service
2 Value of the trade
3 Good management
4 Business growth
5 Quality of product or service
6 Community focus
7 Other
8 Nothing has changed
Question 9b
Desire for success
Money
Education
Other
Nothing has changed
Question 11
1 Unprofitable
2 Poor service or product quality
3 Poor management
4 Dishonesty
5 Poor customer service
6
Question 12
Question 13
Growth and diversification
Donations to charity
Job creation
Help to the needy, poor, elderly
Improvement of product or facilities Creating value for the community
Improvement of staff
Creating opportunities for staff
Other
Helping schools, education
Sponsorships, sport
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Question 14
1 Job creation and reducing crime
2 Education and awareness
3 Community upliftment
4 Role model
5 Relationship building
6 Support family
7 Other
Question 10
Profitability
Customer satisfaction
Happy staff
Quality product/service
Honesty
Serving the community
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Question 15
Warm relationship with others
Being secure (personal security)
Individualism
Humanity (compassion)
Community responsibility
Respect for earth
Ancestors and rituals
Human rights
Generosity
Excellence
Tolerance (of others)
Discipline
Dignity (honour)
C
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
UCT GRADUATE SCHOOL OF BUSINESS
1 = selected, 0 = not selected
Tradition/history
Being well respected
Wealth (power and status)
Democracy
Achievement (sense of accomplishment)
Extended family
Hospitality
Consensus (harmony)
Freedom
Fun and enjoyment
Competitiveness
Hard work
Gratitude
105
Town of origin (region)
Western Cape
Eastern Cape
Gauteng
Other South Africa
Foreign
Type of business
Food retail services
Food takeaways
Hair services
Funeral services
Technology and business services
Building, construction, manufacturing
General services
Healthcare
Tourism
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Marital status
Single
Married
Divorced
Widowed
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Country of origin
1 1 = South Africa
2 0 = Other
3
4
5
6
7
8
9
Native language
Xhosa
English
Zulu
Tswana
Sotho
Other
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Section B
Level of education
1 Some high school
2 Matric
3 Some tertiary education
4 Finished tertiary education
5
6
UCT GRADUATE SCHOOL OF BUSINESS
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Appendix 4: Results of Interviews with Entrepreneurs
Section B
Background details of entrepreneurs
Level of
education
Age Native
language
Marita
l status
Origin:
country
Origin:
town
1
2
3
4
Degree
'O' Level
Degree
Std 6
34
38
33
40
Sotho
Shona
Ndebele
Xhosa
Single
Married
Single
Married
SA
Zimbabwe
Zimbabwe
SA
5
28
Lesotho
Married
SA
67
Southern
Sotho
Southern
Sotho
Xhosa
Single
7
Diploma in
Building Science
B Pharm; B
Comm
Std 4
Gauteng
Harare
Bulawayo
Molteno,
E Cape
Maseru
Married
SA
8
9
Matric
Std 7
56
51
Xhosa
Xhosa
Married
Married
SA
SA
10
11
Matric
Teachers
Diploma, BA
Hons (UCT)
Masters degree in
arts and education
Diploma
Matric
National Diploma
in Catering
Management
Std 6
Std 9
Bcomm
(Honours)
Std 8 & Teacher's
Diploma
Std 8
64
48
Xhosa
Xhosa
45
Xhosa
38
31
25
19
20
21
22
23
24
25
26
Matric
Matric (plus two
years at Fort Hare
University)
Std 6
Matric
Std 9
Std 9
C
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Married
SA
Twi
English
Xhosa
Married
Married
Single
Ghana
Kenya
SA
51
42
44
Xhosa
Xhosa
Xhosa
Married
Married
Married
SA
SA
SA
Cape Town
Gugulethu
Cape Town
61
Zulu
Widow
SA
Cape Town
59
33
46
Xhosa
Divorced
SA
Queenstown
Tswana
Xhosa
Single
Married
SA
SA
Bloemfontein
Langa
72
56
39
45
Xhosa
Xhosa
Xhosa
Xhosa
Married
Widower
Married
Married
SA
SA
SA
SA
Queenstown
Johannesburg
Gugulethu
Port
Elizabeth
R
SA
SA
IG
16
17
18
Bethlehem,
Free State
Burgersdorp,
Free State
Cape Town
Indwe,
E Cape
East London
Cape Town
Married
Married
PY
13
14
15
40
O
12
C
6
T
No
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Butterworth,
E Cape
Kumasi
Nairobi
Stutteheim,
E Cape
107
28
29
30
31
32
33
27
Swazi
Single
SA
Nelspruit
39
Xhosa
Single
SA
B Pharm degree
(UWC)
Matric
Nursing Diploma
Master of Law
(LLB)
Std 4
M.B.,Ch.B.
(Medical doctor)
33
Xhosa
Single
SA
Madatiele,
E Cape
Gugulethu
56
63
33
Xhosa
Xhosa
Xhosa
Married
Divorced
Single
SA
SA
SA
Langa
Langa
Cape Town
43
41
Sotho
Xhosa
Married
Single
SA
SA
Cape Town
Umtata,
E Cape
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34
Matric, Small
Business
Management
Diploma at
Peninsula
Technikon
Matric
T
27
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Business details
2
4
4
10
1
10
16
12
10
2
3
2
4
5
3
8
3
3
35
7
3
2.5
30
6
5
3
2
3
6
10
1
32
33
34
4
4
8
Media liaison, event managing
Clothing
Information technology
Paving
Hair salon
Pharmacy
Fruit and vegetables
Dry cleaner, key cutter
Funeral services
Fast food and takeaway
Butchery
Fast food
Hair salon
Hair salon
Catering
Service station
Hairdresser
Flowers and funeral directing
Butchery
Take away (food)
Hair salon
Bakery
Funeral undertakers
Market research
Painting contractor
Repair of electric appliances
Township tours
Service station
Pharmacy
General food store
Hospitality (catering and food)
Legal practice
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Pottery
Health care
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Empl:
family
Empl:
other
0
0
0
0
0
0
2
3
2
2
6
0
0
0
2
2
1
5
1
3
0
1
0
1
0
1
0
7
2
1
0
5
1
105
5
11
2
0
3
5
3
3
6
7
3
4
9
1
0
2
7
6
11
1
5
0
0
2
12
3
0
4
Startup
funds
(Rands)
1 500
1 000
0
0
12 5000
65 000
0
136 000
11 000
5 000
200 000
200 000
20 000
25 000
500
100 000
0
2 000
0
5 000
45 000
20 000
0
0
5 000
325
0
200 000
300 000
0
140 000
0
8
4
25 000
15 000
30 000
T
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Annual
Turnover
(Rands)
360 000
120 000
20 000 000
210 000
360 000
400 000
36 000
120 000
144 000
240 000
1 200 000
700 000
300 000
96 000
120 000
4 800 000
96 000
150 000
50 000
672 000
4 800 000
120 000
144 000
5 000 000
120 000
42 000
216 000
7 200 000
720 000
108 000
240 000
C
Type of business
U
Years
in bus
H
T
No
450 000
250 000
600 000
0
1
0
109
Appendix 5: Frequency Tables for Variables
Question 3
No Count
1
5
2
7
3
2
4
2
5
2
6
4
7
2
8
4
9
6
T
C
U
Question 4
No Count
a
15
b
8
c
2
d
3
e
5
f
1
H
T
%
20.6
16.2
22.1
7.4
27.8
5.9
Question 1c
No Count %
1
3
4.4
2
1
1.5
3
8
11.8
4
5
7.4
5
1
1.5
6
0
0
7
0
0
8
4
5.9
9
2
2.9
10 2
2.9
11 2
2.9
12 6
8.8
%
14.7
20.6
5.9
5.9
5.9
11.8
5.9
11.8
17.6
IG
Question 2
No Count
a
14
b
11
c
15
d
5
e
19
f
4
%
4.4
8.8
5.9
13.2
2.9
2.9
2.9
0
0
0
0
8.8
R
%
2.9
20.6
4.4
7.4
4.4
4.4
0
0
0
0
0
5.9
Question 1b
No Count
1
3
2
6
3
4
4
9
5
2
6
2
7
2
8
0
9
0
10 0
11 0
12 6
%
44.1
23.5
5.8
8.8
14.7
2.9
C
O
PY
Section A
Question 1a
No Count
1
2
2
14
3
3
4
5
5
3
6
3
7
0
8
0
9
0
10 0
11 0
12 4
UCT GRADUATE SCHOOL OF BUSINESS
110
%
29.4
8.8
14.7
11.8
8.8
5.9
5.9
14.7
Question 9b
No Count
1
7
2
8
3
2
4
5
5
12
T
%
4.4
2.9
4.4
8.8
5.9
4.4
2.9
4.4
2.9
8.8
U
C
%
8.6
14.3
37.1
11.4
14.3
8.6
5.7
H
T
Count
3
5
13
4
5
3
2
Question 5c
No Count
1
3
2
2
3
3
4
6
5
4
6
3
7
2
8
3
9
2
10 6
IG
Question 7
No
%
23.5
1
26.5
2
14.7
3
5.9
4
23.5
5
5.9
6
7
%
7.4
2.9
0
16.2
10.3
2.9
5.9
0
0
4.4
%
20.6
23.5
5.9
14.7
35.3
Question 10
No Count
1
7
2
12
3
3
4
9
5
1
6
2
%
20.9
35.3
8.8
26.5
2.9
5.9
C
O
Question 9a
No Count
1
10
2
3
3
5
4
4
5
3
6
2
7
2
8
5
Question 5b
No Count
1
5
2
2
3
0
4
11
5
7
6
2
7
4
8
0
9
0
10 3
R
Question 6
No Count
1
8
2
9
3
5
4
2
5
8
6
2
%
16.2
7.4
5.9
16.2
0
0
0
0
0
4.4
PY
Question 5a
No Count
1
11
2
5
3
4
4
11
5
0
6
0
7
0
8
0
9
0
10 3
UCT GRADUATE SCHOOL OF BUSINESS
111
%
1.2
4.7
3.5
1.2
8.2
0.6
1.2
1.2
4.1
1.2
1.2
12.4
0.6
T
No
14
15
16
17
18
19
20
21
22
23
24
25
26
C
%
9.3
5.3
0
5.3
9.3
1.2
2.4
6.5
1.2
4.7
1.8
8.2
3.5
O
C
%
27.3
21.2
24.2
9.1
9.1
9.1
U
Question 15
No Count
1
16
2
9
3
0
4
9
5
16
6
2
7
4
8
11
9
2
10 8
11 3
12 14
13 6
Question 13
No Count
1
9
2
7
3
8
4
3
5
3
6
63
Count
2
8
6
2
14
1
2
2
7
2
2
21
1
H
T
%
38.2
14.7
20.6
5.9
5.9
5.9
8.8
%
42.4
9.1
27.3
9.1
12.1
IG
Question 14
No Count
1
13
2
5
3
7
4
2
5
2
6
2
7
3
Question 12
No Count
1
14
2
3
3
9
4
3
5
4
R
%
17.6
11.8
11.8
14.7
44.1
PY
Question 11
No Count
1
6
2
4
3
4
4
5
5
15
Section B
UCT GRADUATE SCHOOL OF BUSINESS
112
Count
3
10
10
6
4
1
%
8.8
29.4
29.4
17.6
11.8
2.9
e. Years in township
Range Count %
0
4
11.8
1-9
8
23.5
10-19 6
17.6
20-29 3
8.8
30-39 3
8.8
40-49 7
20.6
50-59 1
2.9
>60
2
5.9
f. Region of origin
No Count %
1
13
38.2
2
10
29.4
3
3
8.8
4
3
8.8
5
5
14.7
g. Years in business
Range Count %
<3
14
41.2
4-6
9
26.5
7-9
3
8.8
10-12 5
14.7
>13
3
8.8
%
67.6
2.9
2.9
2.9
11.8
11.8
f. Country of origin
No Count %
1
29
85.3
0
5
14.7
h. Type of business
No Count %
1
7
20.9
2
3
8.8
3
5
14.7
4
3
8.8
5
4
11.8
6
4
11.8
7
4
11.8
8
3
8.8
9
1
2.9
C
O
PY
R
IG
H
T
d. Marital Status
No Count %
1
10
29.4
2
20
58.8
3
2
5.9
4
2
5.9
c. Language
No Count
1
23
2
1
3
1
4
1
5
4
6
4
T
b. Age
Range
20-29
30-39
40-49
50-59
60-69
>70
C
%
29.4
23.5
2.9
44.1
U
a. Education
No Count
1
10
2
8
3
1
4
15
UCT GRADUATE SCHOOL OF BUSINESS
113
i. Annual turnover
Range
<100 000
100 001-200 000
200 001-300 000
300 001-400 000
400 001-500 000
500 001-600000
600 001-700 000
700 001-800 000
>800 000
Count
5
9
6
3
1
1
2
1
6
j. Family employees
%
14.7
26.5
17.6
8.8
2.9
2.9
17.6
2.9
17.6
No
0
1
2
3
>3
Count
16
7
6
2
3
%
47.1
20.6
17.6
5.9
8.8
j. Other employees
No
0
1
2
3
4
5
6
7
>7
Count
6
3
3
5
3
4
2
2
6
%
17.6
8.8
8.8
14.7
8.8
11.8
5.9
5.9
17.6
C
U
%
26.5
35.3
8.8
2.9
2.9
2.9
20.7
H
T
Count
9
12
3
1
1
1
7
C
O
PY
R
IG
Range
0
<20 000
20 001-40 000
40 001-60 000
60 001-80 000
80 001-100 000
>100001
T
k. Startup funds
UCT GRADUATE SCHOOL OF BUSINESS
114
Appendix 6: Statistical Test Results
1) Results of Analysis of Variance (Anova) tests (p-values)
Section A questions tested against Section B numeric variables.
(Marked values of p<0.05 are significant.)
Variable
Q1a
Q1b
Q3
Q3
Q5a
Q5b
Q5c
Q6
Age
.129277
.133448
.866531
.394158
.021872
.122159
.129629
.040884
Years in
.057539
.439924
.504818
.631070
.049028
.199366
.604470
.236855
.000000
.550989
.728780
.494193
.024469
.486087
.818234
.451332
.537464
.545017
.256212
.123210
.606784
.629036
.725152
.178404
.079080
.405162
.855923
.381929
.663089
.402057
.387935
.766169
Startup
funds
.878319
.013230
.318972
.088017
.577046
Variable
Q7
Q9a
Q9b
Q10
Q11
Q12
Q13
Q14
Age
.356332
.949127
.483686
.489915
.022752
.462388
.487657
Years in
.640379
Years in
T
township
Annual
Empl
Annual
.259073
.898270
.841336
.909160
.679054
.484414
.242201
.335297
R
.373446
.493815
.198606
.050371
.414167
.486546
.814653
.430103
.426232
.895800
.000008
.544386
.362260
C
business
.572929
.159936
.986066
O
Years in
PY
township
IG
(other)
.662579
.570594
H
T
(family)
Empl
.717442
U
turnover
C
business
.406427
.843783
.801586
.985694
.875984
.937262
.227269
.844028
.744161
.194867
.203379
.784035
.716071
.641313
.748673
.403499
.410500
.984439
.605117
.966651
.893862
.815956
.130690
.709732
.439776
.312100
.643674
.307965
.309065
.752682
.329330
.159641
turnover
Empl
(family)
Empl
(other)
Startup
funds
UCT GRADUATE SCHOOL OF BUSINESS
115
2) Results of Chi-squared tests (p-values)
Section A question responses tested against Section B nominal variables.
(Marked values of p<0.05 are significant.)
Variables
Q1a
Q1b
Q3
Q3
Q5a
Q5b
Q5c
Q6
Education
0.6996
0.6164
0.4089
0.1793
0.9559
0.0971
0.2297
0.7108
Language
0.2397
0.2583
0.5536
0.0487
0.5462
0.0135
0.5573
0.8933
Marital
0.7345
0.0806
0.2652
0.2574
0.0601
0.4006
0.3255
0.0675
0.5413
0.6478
0.9950
0.4457
0.5827
0.1191
0.3448
0.5509
0.0006
0.2327
0.1572
0.2820
0.6106
0.8596
0.1128
Variables
Q7
Q9a
Q9b
Q10
Q11
Education
0.0614
0.5983
0.5431
0.1974
0.6336
Language
0.8584
0.6587
0.1148
0.0003
0.8489
Marital
0.0211
0.8105
0.6358
0.9631
0.5173
0.4151
0.7644
0.4883
0.8608
0.4586
status
Region of
Type of
Q14
0.3856
0.1350
0.2217
0.7598
0.9459
0.9142
0.3896
0.4673
0.3682
0.1956
0.1527
0.6744
0.8140
0.2028
0.1608
0.8639
0.1288
IG
H
T
Q13
0.5048
0.2916
C
O
business
Q12
PY
origin
0.1910
R
status
Region of
0.0335
C
business
U
Type of
T
origin
UCT GRADUATE SCHOOL OF BUSINESS
116
3) Results of Chi-squared tests (p values)
x Chi-squared tests: Section B nominal data (culture) tested against Section B nominal
data (type of business).
(Marked values of p<0.05 are significant.)
Variables
Languag
Marital status
Place of origin
0.3574
0.0220
e
Type of
0.6816
business
T
x Chi-squared tests: Section A nominal data (personal values) tested against Section A
C
nominal data (business values).
Q3
Q5a
Q5b
Q5c
Q13
Q1a
0.7258
0.1882
0.6163
0.8191
0.5284
Q1b
0.2065
0.0458
0.5574
0.1654
0.5786
Q1c
0.3399
0.2905
0.2015
0.1375
0.7732
Q14
0.2046
0.2022
0.5905
0.4497
0.4957
IG
H
T
Variables
U
(Marked values of p<0.05 are significant.)
R
x Chi-squared tests: reasons for going into business against personal values and culture
Variables
PY
(Marked values of p<0.05 are significant.)
Q14
0.938
0.971
8
2
1
Q1a
0.336
0.169
O
Combined
Q1b
2
Marital
Region
status
origin
0.7391
0.1022
of
Language
0.0006
C
variable (Q2)
Q1c
x Chi-squared tests: personal values and culture against how the business is run
(Marked values of p<0.05 are significant.)
Variables
Q1a
Q1b
Q1c
Q14
Language
Marital
Region of
status
origin
Q4
0.5426
0.7278
0.0220
0.8876
0.8169
0.9480
0.8193
Q6
0.3506
0.3968
0.3327
0.2212
0.8933
0.0675
0.5509
Q7
0.7908
0.0589
0.5382
0.7216
0.8584
0.0211
0.4151
UCT GRADUATE SCHOOL OF BUSINESS
117
x Chi-squared tests: personal values and culture against future success
(Marked values of p<0.05 are significant.)
Variables
Q1a
Q1b
Q1c
Q14
Language
Marital
Region of
status
origin
Q9a
0.5454
0.8608
0.1637
0.5165
0.6587
0.8105
0.7644
Q9b
0.5712
0.9455
0.3184
0.1028
0.1148
0.6358
0.4883
Q12
0.4394
0.2149
0.0861
0.8726
0.7598
0.3896
0.1527
x Chi-squared tests: business values against future success
Q5b
Q5c
13
Q9a
0.3240
0.9638
0.3520
0.2328
0.8420
Q9b
0.4639
0.9904
0.6377
0.3130
0.8200
Q12
0.4575
0.4567
0.0041
0.4076
0.0009
C
Q5a
U
Q3
C
O
PY
R
IG
H
T
Variables
T
(Marked values of p<0.05 are significant.)
UCT GRADUATE SCHOOL OF BUSINESS
118
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Nkem-Abonta, E. and Rajaratnam, Bala (1998). State of Small Business in South Africa.
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Pretoria, Ntsika Enterprise Promotion Agency.
O’Farrell, PN, and Hitchins, DWN (1988). Alternative Theories of Small Firm Growth:
A Critical Review. Environment and Planning 20, 13651382.
Petersen W (1971) Oppression and Success. New York, Random House.
Rokeach, M (1973) The Nature of Human Values. New York: Free Press.
Ronstadt, Robert (1985) Entrepreneurship: Text, Cases and Notes. Second Edition.
Dover, Massachusetts, Lord Publishing.
Senge, Peter; Ross, Richard; Smith, Bryan; Roberts, Charlotte; Kleiner, Art. 1999. The
Fifth Discipline Fieldbook. London, Nicholas Brealey Publishing.
Senghor L. (1996) Negritude. Optima, p16.
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Shapero,
Albert
(1984)
The
Entrepreneurial
Event.
The
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for
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Strands of Africa and Europe. Knowledge Resources, p27.
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Thompson, J. (1999) The World of the Entrepreneur – a new perspective. Journal of
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Underhill, Les, and Bradfield, Dave (1998) Introstat. Cape Town, Juta & Co, Ltd.
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Wesgro (2001) Western Cape Overview. www.wesgro.co.za/wcape/capeoverview
White Paper on National Strategy for the Development and Promotion of Small Business
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in South Africa (20 March 1995), Notice 213 of 1995..
UCT GRADUATE SCHOOL OF BUSINESS
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Client 2: Pauline Munemo
a. family
Client 3: Themba Ncube
personal growth and development
b. Personal & professional relationships
b. reach higher standard of life
making a difference
c. Excellence in whatever I do
c. to help others - making a difference
financial independence
c
b
b
f (flexibility to do what I want as I please)
e
c
Cliques/groupings in doing business; Lack of
transparency; Tendering for business still
biased towards Whites
Dishonesty
The pursuit of short term profit versus long
term growth & sustainable competitive
advantage. Social contract of long term
expectation to make a difference & value in
ling term growth
a
b
honesty
respect for the individual
time keeping
putting the customer first
c. Up to date with current affairs
hardworking
improvement
Customer-value
togetherness
goodwill
a. Diligence ; not easily irritable
honesty
6. If you had to describe what your
business stands for in a single word,
what would that word be?
7. When you hire someone, what is the
most important trait or characteristic
that you would look for?
potential to be developed supported by the
right attitude
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a
4. While all of the following might be
important, which of the following is the
MOST important consideration for
having a successful business (select
only one):
5. When you think about your business, a. Service excellence
what would you say
are its core values, or the values that
b. Doing things right the first time
most guide how things are done ?
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2. Why did you go into business for
yourself?
Please indicate the TWO most important
reasons:
3. When you think about what it takes to
be successful in business today, are
there any aspects of business that you
are uncomfortable with, or that conflict
with your values and beliefs?
Responses to Interview Questions
Client 1: Mamasedi Maliba
a. Personal fulfillment
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Values and Beliefs
1. What are things that are most
important to you personally in life?
Please list three of them in order of
importance.
Fixed prices for all clients irrespective of who
they are; producing good quality products
open door policy to ensure people get fair
treatment; teaching all staff to put the
customer first; trying to continually improve our
business processes by learning from our
partners, competitors & customers
9. If you compare when you first started a. personal fulfillment
your business to today, have any values
become more important to you, and
have any values become less
important?
Less important
b. seeking money
don't give up, persistency; creativity for new
products
short term profitability; putting the customer
first ; value ordinary people
competition
economic empowerment (due to
disillusionment)
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8. Can you provide an example of things selection of staff, someone who can fit in with
you do in your business that reflect or
company values
capture the values that are most
important to you?
One that is focused on creating value for
stakeholders before chasing success for itself,
e.g. Pick 'n Pay socially focused but still
successful
One that produces good quality products in a
clean environment
Good customer service ; Ability to attract &
retain good staff; learning organisation
11. What are the qualities of a “bad”
business, or one you do not have
respect for?
Chasing the bottom line issues without care for
the customer
Business Built on lies and cheating
in-ward looking ; people are not valued
12. If your business is successful five
Offices all around S.A. and even international
years from now, what will be the signs or
evidence of that success?
More clients
customer retention; profitability; organic
growth
13. Do you think that people in business Why should I? I can donate to a charity. There
has to be a compelling reason
should share the profits of their
business with others in their
community? Please explain your
thoughts about this.
I would not share with them but would offer help
for those in need
Businesses create value which can be shared
with communities in many ways, including job
creation; Companies can also make other
contributions e.g. internships
14. What do you think is your single
greatest responsibility as a citizen of
South Africa today?
Helping those who do not know how to do
business
Create a viable business that will make a
difference to the lives of many today & for
generations to come, including my own
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10. What are the qualities of a “good”
business, or one that you admire a lot?
Changing the attitude of White business,
especially in Cape Town, towards black
business
Page 1 of 9
Client 4: Zakuthini Ndletyana
education of children
Client 5: Khosi Tsita
family
Client 6: Themba Mofokeng
Security for self & family
Client 7: David Plaatjie
Family
security & home
my well-being, including business
To be able to afford to provide
healthcare
try to reduce crime among children in the
community
moral values
To create a better future for children
own business
d
a
c
c
e
e
Have to be biased about products I sell
f (can push career & earn remuneration
accordingly)
Sometimes have to bend the rules e.g. have
to give out pills without prescription- look the
other way sometimes. Need to because of
strong competition e.g. doctors. Clicks
e
The difficulty in getting work and competing
with the big companies
e
a
d
e
honesty
Poverty is a major problem & therefore we
keep prices low.
Loyalty to both customers and employees
Honesty
taking care of customers
self discipline which is reflected by a discipline
instilled in the business
Try hard to help customers (sick people)
merchandising
quality of work
fairness in treatment of clients (not
overcharging) & employees (paying properly) motivates both
empowerment
lower prices
Hardworking; honesty
personality; expertise & professionalism
Honesty, someone who can work with people;
someone who can be taught & motivated & go
forward with the business; 'lives' the business
Cleanliness & honesty & love for people
Do a quality job; Ensure no municipal
environment damage
Hospitality, calmness, class
Do tests such as blood pressure for free, give
free advice even if people are not buying;
look at a long term relationship
Helping creche and old people's home by
supplying veggies, sometimes for free
Time management & controls
Value of my trade, my business
Make customers feel important, attitude
towards customers ; build an open
relationship
Nothing has changed
None
making money, getting rich quickly
Improving owner's and community's goals
profitability & moralistic values
Able to provide for the customers' needs; to
go the extra mile. We are here for the
customers' needs not ourselves, then they will
support you.
Progress in bringing in money & growth
Poor controls over quality, no money controls
No control, no certainty about profitability; no
secure base, security
Cheating customers, taking them for a ride
e.g. not giving referral advice to someone
else I.e. priority of making money over
customer's welfare
Businesses that sell 2nd hand clothing - there
is no money there & therefore no business
sense
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Help (to the community)
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Eyethu means 'Ours' - The community's
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community service
Development
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My own needs
Own office, secretary, paymaster to ensure
salaries; sponsor a soccer team
Expansion in this field ( to do with hair but
different e.g. cosmetics wholesaler in
Lesotho)
Take more students after hors to help them
financially, & motivate them. Support
community activities e.g. soccer
Plenty of money
Take a small percentage to try to help people
in the community who do not have money
Profits are not just money - but the community
should get benefits from business
It is the duty of businesses to have that social
responsibility. The people we serve had not
had opportunities I have had.
I can't share my money with people who are
not part of my business, but I can assist the
community builders & support charities
Increase awareness of the people education, what is the Government doing?
To make the next person (anyone) feel
comfortable with yourself & what you're doing
To work with Government to uplift the
standard of life of the communities we are
serving. -will be step forward for investment in
the country & reduce crime
To try and change wrongdoers & help them
overcome their criminal ways
Page 2 of 9
Client 8: Mxolisi Norman Maputuma
Wealth
Client 9: William Khanzi
To be able to work to support family
Client 10: Vukile Njana
a. Success
Client 11: Liwa Gunguluza
a. To lead a normal life
Health
to have a family: proud to have one
b. Education of my children
b. To raise my family
Independence
Religion - to be a church member
c. My health
c. To be successful
c
a
b
c
e
e
d
e
No - I believe in being honest, although many
other businesses are dishonest. But I adhere
to my ethics - that's why I'm not so rich
No
No
No
a
a
a
a
Providing good service to clients
a. Customer service
Having a good rapport with my customers
faithful to your customers
guiding staff
b. Happy and content staff
Good communication with my staff
transparency - which inspires customer
confidence
learning
c. Cleanliness
Community service
Service
Help (community)
Success
To serve
Trustworthy & honest; willing to learn,
dedicated, reliable
Someone who deals with people
(sympathetic personality)
The ability to communicate well with customers
Honesty - return money from client's pockets;
lead by example to the staff e.g. way we
communicate with customers
Introducing embalming with a view to
providing an additional service much needed
by customers; Respect - customers treated
with respect by staff
Being friendly to customers
I respect my customers, I have a polite way of
dealing with my customers, and I always smile
dealing with customers properly
Improved service
Serving the community
Good management
desire for success & more business
None
Whatever product or service you have must be
good; must be focused, goal oriented; providing
more value to customers, good attitude
Satisfying customers
Bad product, poor customer service, bad
attitude; staff aren't taught how to treat
customers
E.g. Taxi business - don't respect clients,
other drivers or the law
C
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honesty
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The ability to communicate with customers
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Making a living
Education
Profitability and serving the community
Sound administration, efficiency, good
customer service
Running at a loss, doesn't serve the interests
of the community
Poor quality product, service and administration
Expanding, opening more branches
Grow and have my own cold-room facility
Improvements, enlarging the business,
diversifying the product range
Improvements to the building, an expansion of
the current store (but not opening more stores)
Yes, must put something back into community pay to advertise, contribute to charities, allow
small losses e.g. people using phone
Yes, e.g. I put money into Red Cross each
month
Yes, if the business is successful, by for
example helping the elderly of making donations
to schools
Not sharing of profits, but I do believe in social
responsibility such as contributing to old age
homes, or sponsoring a soccer team
Try to address unemployment which leads to
crime - want to attract investments into
community programmes
To try to be yourself, don't allow yourself to
be corrupted, be fruitful
To contribute wherever possible to reducing
crime
To be a good citizen and a role model
Page 3 of 9
Client 12: Andrew Ntunja
Success
Client 13: Mary Amoateng
My children and family
Client 14: Lucy Matthews
My family
Client 15: Pumeza Mapukata
Success
To have the income to support my children
My business
My spiritual life
Happiness
To be free to do what I want
My health
My career
Being able to afford my needs
b
a
a
a
e
c
f (creativity, building relationships)
c
I have to make many sacrifices - of my time,
which takes me away from my family. I work
15 hours a day
Sometimes people ask for credit, but from a
business point of view you have to be strong
and say no, even if you want to give it to them
I deal with clients which is demanding on my
time, taking me away from my family. Products
increase in cost rapidly and these costs have
to be passed on to the customers - even
those who are very loyal supporters
Sometimes in business you have to be
dishonest
d
b
a
a
Honesty
The desire to give quality service
Be true to your customers (don't give a raw
deal)
Sincerity
Striving to be the best at what we do
Punctuality and reliability
Communication
Service (and excellence)
Satisfaction (satisfying the need for black
youth to go into business and not crime, and
satisfying the need for jobs)
A hard worker, flexibility
Fairness to customers
Honesty
Atmosphere
Efficiency
Service
C
Fairness to staff
T
To provide hospitality
Skills and appearance, personality is
important - I judge this by the way they
answer my questions
Responsibility, reliability, willingness to learn
(don't have to have experience)
I'm on first name terms with many of my
customers - an example of customer service
Hospitality - I transport an old lady (a
customer to her house), and if people haven't
been for a while I make enquiries why
Honesty - I treat my customers with honesty
as I like to be treated by businesses.
Reliability - always being there for the
customer
Success - to ensure that my business is
successful, I am very selective in choosing
staff - learning to satisfy customers is more
important that experience
No
I have learned to support others like myself in
business
Striving to deliver better service, building
relationships with the customers
The business must be growing and moving
forwards
No
I don't worry how my employees view me as a
boss
My ambition to make money - this is no longer
a big issue
I used to think that money comes first - but
this is no longer important
Profitability, good service
Financial success, they must understand and
be able to satisfy customer needs
O
Not making a profit, not well received by the
community
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Must be customer orientated (the customer is
king)
Honest, responsible staff, the presentation
Good management, good staff relations, good
product or service
Poor service, raw deals, the way customers
are treated
Bad customer service, disorganized
No financial success, cannot fulfill customer need
Improved service quality, renovated facilities,
Offer a broader range of services apart from
explored new business opportunities
hair e.g. a beauty parlor. Expansion
C
Expansion, opening of more branches
Proper facilities - a well-developed kitchen, an
ongoing tender providing steady business
Yes, this is very important - things such as
study bursaries, contributions to community
events and needs (for example I donated a
Shield of Excellence to the high school
Yes - in the form of donations to charity, or to
help children
Yes, for example, by selling at cost price to
poor customers
Yes, for example, providing a stake in the
business to staff - another way of sharing the
success
Do unto others… (in other words, ubuntu)
To take care of myself and my family, to earn
my daily bread
To try to improve and grow and create jobs
To create a good working environment to my
employees and to offer future benefits (such
as a pension fund)
Page 4 of 9
Client 17: Mapompo Hlatuka
My business
Client 18: David Taliwe
Family
Client 19: Andrena Njobe
Health
My ownership of the business premises - land
in my own township
I'd like my kids to go to school, to receive a
better education and to further themselves
My family
My business
Work (in order to make a living)
To further my learning
Sport
Finance - Money in order to fulfill my needs
and my family's needs
a
a
b
c
e
e
c
e
When people owe you money for products
they have bought, I have to struggle to get the
money from them
I don't have enough money in the business
and I have to try to borrow and raise money to
put into the business which I don't enjoy
None
Crime is a problem. We cannot do business
freely - They break in & people are scared to
come and buy in the townships
e
b
a
b
The community must see you involved and
running the business
Good service to the customers
To provide the best service to ensure that
customers come back
Keep prices down to suit the customer base don't overcharge
Relationship with customers
Family relationships
Service quality
Networking & learning from other business
people
Always be friendly so people feel closer to you
even though you're the boss
To offer products and services to satisfy
customer needs
Community Relations
good financial management
Independence
Community
Excellence
Service
Their personality - they must be respectful,
friendly, neat and clean
A "good" person - one who is trustworthy
enough to run the business when I'm not here
Potential - because that person can be
developed
I work alongside my workers - I spend time
with them, I talk to them if they make mistakes
and I show them how to do it right. I'm not a
"big boss"
The way I talk to my customers - they come
back because they believe in me and my
service. We have good communication
Community involvement - I provide them with
the best service . I help with the development
of youngsters e.g. I am putting up an internet
facility for them
Rendering extra service for the community
e.g. chopping up a beast for a funeral or
special occasions
Creating goals and targets for the business
Expansion of services to increase customer
satisfaction
Customer relationships & service orientation
Continuation of the business & its success duration
I socialize less with friends so I can
concentrate more on the business in order to
achieve something good out of it
No
None
A diversity of products and services to fulfill
the needs of more customers. The staff are
well-dressed and polite
The quality of the product or service, the
prices must be reasonable, the service must
be good
Business that provides a friendly & efficient
service
Good service & punctuality - people need to
rely on you that you will keep your word
Bad service - no-one to come and help you
when you arrive at the business, no respectful
approach - the customers will leave
The first thing is bad service - I won't go there
again. If prices are not competitive, I won't
return
People who do not spend time with their
businesses. People who care about profits
more than people
When you have a product or service to offer
& when customers come and they cannot
get what they expect to get
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Client 16: Kenneth Sonwabo Mgojo
To have money to live a better life
U
H
T
IG
R
PY
O
C
Someone who can learn and adjust to learn
new ways of doing things. Discipline &
cleanliness
Work no more important. I'm looking forward
to retirement and resting
I would have a car wash and a shop with more
staff to be able to serve the customers
The structure of the shop would be improved.
It would have better security
Expanding my business & plowing back to the
community
Continuation of the business - Pick'n Pay
and Free Market infrastructure is too close
to my business Threat of market loss
No, but AE27
Yes - to help young people, to give them
activities to do - sponsorships and such
Yes - Your success is because people
around you. It also empowers people, adding
value to the community
We have got to donate money or anything
we can offer to support old age homes, or
underprivileged people
To look after my family - providing them with
whatever they demand of me as the "pillar" of
the family (they depend on me). To be a good
father
To try to create more jobs which will reduce
crime (crime is so high because people are
not working)
Job creation for people - for development
Educate society or people to enable them to
improve their own lives
Page 5 of 9
Client 22: Frank Mzwondile Gum
My family
Client 23: Cecil Bennetto
My health (I'm getting quite old)
To be able to live a decent life
My wife and family
My business
My business and its future
a
e
a
a
c
f (To give employees a good deal, to pay
people properly, to create jobs)
Being in business causes a lot of headaches I treat my staff really well but they still steal
from me - I don't know why and I have to deal
with it and discipline them which is unpleasant
c
c
I don't like the way businesses are run in the
townships. We rent & we don't have the
plots to build even if we have money. The
structures we do business in are not good.
I sell items that I don't like, for example,
cigarettes, which are destructive or bad for
people - it is exploitation
People you deal with in the business often
don't do the things they say they will - it is a
problem to deal with them, although you have
to because you need their services
e
e
a
b
Friendship with employees - they are part of
the business
Good relationships with customers
The client is always right - always please the
customer, respect them
You must be trustworthy and honest to your
clients
Striving for consistent quality
To provide a service to the community
A healthy and clean environment
To treat people the "right way" - don't rush
them
cleanliness
To treat my staff well and pay them properly
Good customer service
Success
Community
To be customer friendly - don't underestimate
people's judgment as they also shop at Pick 'n
Pay
Service
Appearance - cleanliness is very important;
Speech - how they communicate because
they will be talking to customers - Clear
communication is important; One should not
misunderstand customers all the time
First, they must have skills and experience they must be careful and not do careless jobs.
I also don't want people who drink in work
hours. They must be presentable, clean and
sociable
A willingness to make a commitment to this
type of business which has unusual hours,
early in the morning and on weekends.
Dedication is important
We clean up our premises before we open
for customers. We set up the shelves
neatly, for good appearance
I offer a money-back guarantee if people are
not happy. AP10 I have insurance to cover
claims for damaged hair to protect my staff
and business
I keep the business very clean and neat which
is how I am personally
To service the customer well, I have "tags"
that say "Thank You" which I distribute to
people attending the customer's funeral
Nothing has changed
No
A passion for business and product. A focus
on the quality of the product, improving it.
Making the business more cost-effective.
Improving the skills of my staff
A love of the business and a desire for
independence
Nothing has changed
No
The need to circulate outside the business,
making deliveries and contacts. Making money
Money - if I've got my health, I'm alright.
Money will not make me healthy
People inflow into the business. Business
that listens to customer's comments
recommendations
Discipline, being friendly to their workers who
are taught how to deal with customers
Well-managed - the costs, the staff (with
whom they have a good relationship). Quality
products. They instill in their staff that they
must be of service to their customers (this
comes after making money)
The service, the respect shown to the
customers
Low takings - money you take in for the day
The business is not properly maintained. The
owner moves around and does not spend time
in the business
Poor service, dirty, no respect for the
customers, mismanaged
A business that does a bad job - poor service,
one that does not treat its customers well
C
Service
They must be very reliable. Their presentation
is also important
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Work (My business)
R
Religion (Staunch Church member)
T
Client 21: Buti Matsasa
My business - because you have to have
money to be able to do anything
My family - I need the business to maintain my
family
Buying my own house and my other
businesses
PY
Client 20: Ntandazo Notho
Family
Expanded business & renovated premises
A bigger business with higher turnover and
bigger premises (not with more than three
stores as you can't manage more stores than
that). I will diversify products to offer more
services - for which I need more space
My staff will have gained and become
educated with more skills. An increased asset
base
I would take on a younger partner, who
respects me, and who will run the business
with me, as I am getting old
Yes they should, he must plough back to the
community which supported him. E.g. sports,
cleaning up the area
Yes - I don't mind helping the community, for
example through charities
Yes - in our situation, in the form of business,
we offer schools and sports clubs to make
donations, also to churches - this tells us as a
team that we are involved in community
responsibility. It's part of our culture
Yes - I used to do it in my younger days. I
tried to help children - providing food and
catering. I was involved in sports sponsorship
too. Nowadays, the community helps me - for
example with lifts back to Queenstown
Support or work with the community to fight
crime & provide jobs for those able to work
To try to create jobs with a view to reducing
crime
Job creation and fighting crime - and loyalty to
our nation
To show respect, to encourage respect
among the youth, to encourage them to work,
to get jobs
Page 6 of 9
To be able to support my family
My business
To grow my business
Financial independence
a
a
b
a
b
e
e
c
Running your own business is romanticized you think you will make lots of money, but
there are big risks involved and money can be
short. I am risk averse as I am the only
breadwinner in the family with nothing to fall
back on
a
No, nothing
We get some very difficult customers who are
loud and rude - but we have to be polite to
them because I need the business, so we just
keep quiet
Yes, for example, I am running a business in
South Africa in the tourism industry that has
been dominated by whites. You survive because
of who you know not the product or service you
offer (there is no free competition)
b
b
a
Ensuring that we deliver according to the
client's needs
Going the extra mile beyond what is expected
Reliability for customers
Keeping the staff happy
Doing a good job and then receiving customer
support
Providing good customer service
The unique nature of the service we offer the
customers
Satisfying customers, including punctuality
Honesty towards clients
Pleasing customers with superior service
Reliability and speed
Flexibility according to the customers' needs
Professionalism
Community (job creation)
Satisfaction (of customers)
Life (that's what my customers experience and
are exposed to)
Capable, intelligence to understand what we're
doing. Also race - I give first preference to
blacks to make a contribution to a multiracial
society
Friendly person with the ability to
communicate well with customers particularly,
as well as get on with the other staff
Happy and helpful to the customers.
Education and the ability to do the job
When we conduct a search, we ensure that
the people we recruit are what the client
expects, not just friends and relatives. We
ensure professionalism in our report-writing
Always be prepared to adapt to try to satisfy
the customers and make them happy. My staff
- I try not to come to work moody and I'm
always friendly towards them
If a customer comes in for a rush job, I will do
it quickly for him. Also, I take unusual makes
and models of appliances even if I have to
search for the parts. I also lend customers
appliances to use while I repair theirs
Professionalism - we are always striving for it
Always checking the quality of the work we do
Customer service and the need to be flexible
Money (I have realized that it doesn't just
come easily)
No - nothing
Profitable, should offer job opportunities, gets
repeat business from existing clients, has a
happy staff
The business's ability to communicate with its
customers, and the quality of its products or
services
Good prices, good quality product or service
Unprofessional, sloppy, unpredictable,
inconsistent
Poor productivity from staff due to poor
treatment or communication. Quality slips and
they don't get repeat business. Don't follow up
with clients
Bad service, for example closing early which
is inconvenient to customers. Plus some
businesses are disruptive to the
neighborhood, for example shebeens and
taverns
C
T
Money so that I can feed my family
Client 27: Sam Ntimba
To live the life I want and to make my dreams
come true
Happiness
C
Patience mainly, plus people skills. Education is
important but not vital - more important is that
they must be able to communicate with the
customers
U
H
T
R
Knowledge of the job - I've realized that this is
not enough to guarantee success
O
My health - I want to live long enough to see
my kids grow up
To live a good life and be able to afford the
things I want
Client 26: Shadrack Kakaza
Money - that's why I'm in business
IG
Client 25: Kululani Melane
My family comes first
PY
Client 24: Arthur Mzozoyana
My family (my children as I'm a widower)
I have custom-made tours. Customers get
collected and dropped off where they want. I also
make an effort to create a pleasant environment
among the clients, a good atmosphere. We make
an effort to answer in detail any questions we
are asked.
The personal interactive nature of the clients'
needs during the township tours - I've realized
that clients want more than a drive-through tour they want to interact
The nature of the tour - historical completeness
is not so important, for example, clients don't
want to see the Bo-Kaap. So I have realized that
I must adapt the tour route to the clients' needs
rather than trying to be comprehensive
A good business makes the customer the most
important person. It must serve the needs of the
customers, provide satisfaction, improve its
services continuously, raise its standards to
maintain competitiveness, and have new ideas
that add value and improve the product or
service
One that doesn't care. For example, about
customer comfort and satisfaction. It doesn't do
follow-up to address customers' unsatisfied
needs - to see if they were happy and find out
why not if that is the case
Hiring more staff, making a contribution to the
disadvantaged community. Plus selfenrichment
Progress, for example higher salaries for the
staff. Introduce a Christmas party for the staff
I will have proper premises (a shop, not a
container). I will also sell new products (not
just do repairs) and offer a wide range of
products
I will get more people employed, have more
financial reward, and try to spend less time
personally in the business
Yes - by making donations to Red Cross and
community projects - it's a moral obligation.
Plus we create job opportunities
Yes - particularly in the form of a profit-share
with the staff. This boosts the company. Also
we sponsor community projects such as Red
Cross and creches
Yes - I help the community by helping people
with small jobs if they can't afford to pay
Yes - even though I'm small, I do it. I give 10% of
what is paid to me (together with the
Backpackers Lodge) and we sponsor a creche.
We also try to bring black and white kids
together - we transport them and give them food.
I also visit family hostels in Langa and try to
raise donations of clothes which I deliver to them
Creating job opportunities - this is the most
meaningful contribution I can make. Being a
role model to youngsters to show them what is
achievable
To build the country by creating jobs,
employing more people and lowering crime
To try to live a decent life and to reduce crime
- this will bring in investment and job creation
from overseas
To contribute something to my government,
instead of always demanding from the
government, for example, don't expect a job,
rather expect them to create an environment in
which people can run businesses
Page 7 of 9
Client 30: Shirley Sigasana
To work and own my own property
Money
Financial security
To help people, to empower them
Improving the community life status
The education of my children
Emotional and physical well-being
To create something for the community, to
serve
Improving myself in my business
b
a
d
d
c
e
e
e
If you have employed someone you
sometimes have to retrench them because of
money reasons which is necessary but not
pleasant
Yes - it's a cut-throat business. Sometimes
products may be harmful to people, but you
need the money from the sales (e.g. bending
the rules for prescriptions) - this goes against
my values and I wouldn't have done it before
We as a small business cannot compete with
the giant companies - we created the
realization that our people needed to be
served and then it was easy for them
One has to be ruthless at times. I don't like this
behavior in business. Business is quite a rat
race - lots of back-stabbing. This is against my
values and beliefs
c
a
f (Ownership of the property and business)
b
Good service to the customers
Putting the customer first, matching the
product to the customer
Having staff that are efficient
Satisfying community demand
Involvement in the community
Ensuring that we have the right stock (daily
use items for households)
Customer service
Maintaining a good relationship with the staff
Pleasant to customers who may be depressed
- we can lift their mood
Reasonable prices even though we don't have
the power to buy in bulk
Participating in Xhosa culture and its promotion
Satisfaction (of staff and customers)
Community
Satisfy (needs)
Honesty - because they're dealing with cash.
Neatness and appearance. Education (must
be literate)
Their personality and ability to work with
people - they must be very patient
Honesty and personality. I get to know their
family
Reliability
My relationship with my staff - I ensure that,
even if money is tight, they are paid on time
every week. We also reward staff with gifts
for good service or neatness (incentives)
I make the effort to visit customers (elderly
people) and if it's hot we take them home from
the shop. I do AIDS work such as providing
information and posters
I try to create an attractive environment for
the customer. We also have phones for
people to use
High professional standards - try to maintain
this at Masande (we don't want clients to see
the business as a shebeen - the way I welcome
people and relate to them, telling stories about
African culture
To look after and manage the business hands
on and to spend time in the business
Community focus and family - my values have
shifted
Service, get to know your customers well,
ownership of property
The standard of business
No - nothing
Ambition, to be on top of the world, I was
driven, won awards, wanted to expand and
make money
A vision to provide a service to the people
(nowadays many people are doing it)
Nothing has changed
Sell a wide range of products to satisfy
customers. Reliable and always have stock
The layout and structure of the business - it
must look nice. The efficiency of the staff who
are also pleasant. Deliver excellent quality
service in pleasant surroundings. Designed
and improve business for the benefit of the
customer
Good prices offered to customers - this is the
most important thing. They stock everything
the customer needs
Professional approach, good customer service
Unreliable, untrustworthy, don't reveal all the
facts and are not honest. They don't do their
books right and overcharge customers
Staff don't have time for you, shabby
surroundings, unethical behavior
Overcharging customers and not in touch with
the community
Shoddy and careless work, poor presentation
IG
H
T
U
C
Hospitality
R
C
O
A clean environment
Client 31: Nana Masande
Maintaining the level of my standard of life
T
Client 29: Pamela Mandindi
My family
PY
Client 28: Hazel Monakali
My family is first
More incentives for staff (I rent the premises
so I can't alter that). More money/income
Bigger premises, more stock, more staff
I would own the property on which the
business stands - this will give me strength
Expansion of the business
Yes - if the business is making money (by
donations to charities)
Yes - if you can. They should give to charities
e.g. football clubs raising money for kids - this
also lifts the view people have of the business
- putting something back into the community
not just taking
Yes - we contribute to things happening in the
community - e.g. at schools, funerals - that's
our way of living in the townships. We donate
to churches, old age homes, to the disabled
Definitely - this happens at Masande. Although
we're not big, we give what we can. The items
in the restaurant (handmade) are displayed at
Masande for tourists to buy
To help people by employing them and
creating more jobs
To make a positive contribution in my
community in my small way despite setbacks
and hardships such as crime
To create jobs, to see people working and
escaping poverty and crime
Community building (an unsung hero who is
trying to do this)
Page 8 of 9
Client 32: Vuyani Ngalwana
Excellence in my profession
Client 33: Sonwabo Dunywa
Work
Client 34: Bulelwa Socikwa
Family
Client 35: Sharif Pandor
Family
family
Honesty
My business
my health
Being precise
my friends
Adding value to people's lives - making a
difference
Wealth creation - self & associates
b
d
c
b
e
e
c
Yes - sucking up on other people - trying to
get things from people by pretence. Agreeing
with them just for what you can gain from
them. Hates pretence
Drugs, stealing and dishonesty
I work in a low income community and I still
have to deliver the best service I can & still
make a profit. I still have to charge for my
services despite their poverty
Lots - by nature the practice of business is
very greedy & inhumane - Link up with big
business & sometimes are very ruthless Profit motive can be inhumane
a
c
d
a
Customer satisfaction
availability of resources
making sure clients are happy (good service)
Professionalism
Looking after the employees
motivating employees
Staff development & satisfaction
getting things done-just do it
Livelihood
customer needs (satisfaction)
making a clean profit
Excellence
Decoration
patient-satisfaction
Efficiency - so that we can get things done someone I can rely on. Dependable person
Respect for others
Someone eager to learn
I work very hard & very smartly. Appearance
is important in my profession therefore I look
smart (clean) always & our environment
shows this
Commitment, honesty
The way I receive my patients - the patients
are warmly received to the point they see the
doctor. I spend some time talking to the
patient & I listen to patients.
Business is done mostly with communities sometimes we create a fund for community
development
Nothing has changed
To be famous with my products wanted
worldwide. Communicating well with workers
trying to satisfy my patients & getting to know
them better
More community upliftment - they appreciate
our help
Nothing has changed
Being rough with workers
original drive to make money
Nothing
A business that shows excellence &
efficiency. Paying attention to detail
Access to capital for expansion,
professionalism
Those that satisfy their customer's needs
Mark Shuttleworth sold his company & gave
workers R1million each & created a
development trust from which he funds
community initiatives - I admire that
Lazy workers, lack of customer care &
attention to detail
Drunkenness, pompous, discrimination of
customers based on status
It doesn't matter what business, but dishonest
business practices - I don't like
Dishonesty & bribery
T
Excellence & quality
H
T
c
C
black-empowerment
C
O
PY
R
IG
U
commitment & efficiency
Consultation by colleagues means attention.
Success in my profession is determined by
being awarded silk status (senior council) &
getting closer to this level will mean success.
Expectation by senior council to do work for
them
Sharing is a strong word - corporate
responsibility to plough back to community that
support the business is very good
Big orders, demand
Bigger to operate from with more services
towards my patients
Value for shareholders ; better life for staff &
communities
Yes, if I can afford it, I would like to help people
in need of basic housing etc
Yes, it's important to plough back into the
community that supports you. E.g. Offer free
services to old age home & preventative
lectures to teenagers
Yes, those are people who support our
business - we put back into the community
through normal structures e.g. pre-schools
Fighting stereotypes in general & particularly
with respect to racism & sexism.
To be a skills trainer, to create jobs
To alleviate poverty because the majority of
S.A is still poor
Job creation
Page 9 of 9