Fostering Entrepreneurial Orientation in Rural SMEs: “Insights from eThekwini Region”

Small and Medium Enterprises (SMEs) have been acknowledged globally as important employers, contributors to economic growth, and the foundation of successful businesses in rural areas. This study investigated the effect of entrepreneurial orientation (EO) which is a strategic method that explains how businesses act, decide, and develop strategies in an entrepreneurial way, on the performance of SMEs in rural eThekwini areas. The procedures, methods, and decision-making approaches of businesses that behave in an entrepreneurial manner are referred to as EO. A general lack of understanding is found by policymakers and other relevant stakeholders of the factors that could hinder EO as a tool for the survival and growth of SMEs, particularly in the rural areas of eThekwini. The features of rural entrepreneurial resources that influence EO for SME survival and expansion in rural areas of eThekwini and the personal attitudes that affect EO for SME owner-managers do not represent typical entrepreneurial businesses and leave much to be desired. This leads to the continuous failure of SMEs to survive and grow, resulting in this study, with the aim to address this research gap, by investigating critical factors affecting the EO growth of rural SMEs. A quantitative research approach was used to collect and analyse data for the study, with primary data collected through a questionnaire, which the researcher personally administered to 309 entrepreneurs from five rural eThekwini areas. It was found that the majority of rural SMEs neither seek advice from business development agencies nor do they employ seasoned workers with prior work experience in other organisations; this indicates why they are not entrepreneurially oriented. According to personal experiences of SME owners-managers, the majority indicate spending time on business administration, building customer relationships, and developing sales strategies to boost profitability were important to EO, and their survival and growth. It was discovered more than 80% of rural SMEs, both on personal and firm levels, have positive sentiments towards EO. The results of the study indicated that there is a positive relationship between EO and business performance. The empirical results showed that EO significantly influences the survival and growth of rural eThekwini enterprises.

It is recommended for SMEs to achieve sustainable growth, they must use the services of business development and support agencies such as the Small Enterprises Development Agency, Black Business Council, Umsobomvu, Khula Enterprise and others, for support through financing, skills development and advisory purposes. The paper will benefit current and prospective rural entrepreneurs, entrepreneurial marketing managers, business consultants, and policymakers, as well as financial institutions, government agencies, and all associated stakeholders, by introducing a new understanding of risks and various critical factors contributing to the EO growth of business in a rural economy. The findings of this study are envisaged to assist in ensuring the survival and growth of rural SMEs in order to encourage economic growth, employment creation and sustainable development of rural economies of South Africa.