The influence of entrepreneurial and market orientations on small scale agricultural enterprises in the Vryburg region

Abstract

A major concern for developing countries including South Africa is the high levels of unemployment, poverty and inequity. Developing countries have accordingly been pre-occupied with finding solutions to these problems. Drawing on the success of small, micro and medium enterprises (SMMEs) from the developed countries such as the US and the UK, developing nations have embraced the idea of promoting development through SMMEs. But the overall performance of the small business sector in most developing countries has rather been dismal and as such have not been able to contribute optimally to the development agenda. Adopting a strategic management perspective, this study hypothesised that an integration of entrepreneurial orientation (EO) and market orientations (MO) glued together by innovativeness (INNO) would yield superior outcomes than the stand-alone effects of these strategic postures. To test the hypothesis, a sample of 198 small scale agricultural enterprises (SSAEs) in the Vryburg region was surveyed. Descriptive and inferential statistical analyses were performed on the data generated. The empirical findings showed that EO + MO + INNO interactively exhibited positive and significant correlation with the performance (sales growth and profitability) of SSAEs in the Vryburg region. However, the inter-correlations of EO + MO + INNO with business performance were practically moderate. The moderate correlations create opportunities for strengthening the entrepreneurial and market orientations and innovativeness of SSAES and in fact small businesses in general. An intensive and co-ordinated intervention of government and NGOs in transforming the small business sector into the real engine of growth of the economy is imperative. The study also attempted to predict firm performance holding EO + EO + INNO as predictor variables. Multi linear regression and multinomial logistic regression analysis however did not yield significant predictions of performance of SSAEs. This outcome provides a launch pad for further research into the proposed model in different settings because this study was mainly exploratory and executed in a rural and agricultural environments. Notwithstanding, the study made important contributions to the literature. It showed that it was possible to integrate EO + MO + INNO (previously viewed by many authors as exclusive constructs) into a single business model for the synergic enhancement of small business performance. It is hoped this would stimulate economic growth and development especially in developing countries.