Unravelling managerial competencies and the profitability of small technology-oriented businesses: A case of public access venues in an emerging economy

Abstract

Orientation: The tweak speed of technological changes, volatility of domestic markets, shifts in consumer behaviour and homogeneity of Internet-based services are pressurising entrepreneurs operating small technology-oriented businesses such as public access venues (PAVs) (e.g. Internet cafés) to develop a compendium of managerial competencies to deal with these challenges effectively and expeditiously. Yet rigorous research on managerial competencies of Internet café business owners or managers in emerging economies such as South Africa is conspicuously missing, raising critical questions about the perceived significance of such competencies in management and entrepreneurship literature.

Research purpose: This research, therefore, examined the managerial competencies discernible among PAV or Internet café owner or managers and their implications for the profitability of their businesses.

Motivation for the study: To establish the managerial competencies of PAV or Internet café business owners or managers and their effect on the profitability of their businesses.

Research approach/design and method: Drawing on a quantitative approach and a survey design, a structured questionnaire was administered to 152 Internet café owners or managers to establish the influence of their managerial competencies on the profitability of their businesses.

Main findings: Three assortments of managerial competencies were evident among Internet café owners or managers, namely, resource management, innovation management and market management capabilities. The results of the Pearson’s correlations revealed that managerial competencies are significantly correlated to business profitability, resource management capabilities have the highest correlation with profitability (Correlation = 0.743, p = 0.000), followed by innovation management capabilities (Correlation = 0.732, p = 0.000) and lastly marketing management capabilities (Correlation = 0.695, p = 0.000).

Practical/ managerial implications: Because many businesses were very small establishments, employing less than six employees and with owners or managers who had less than 6 years of experience, it would be critical to establish if the provision of management training to owners or managers from the inception of the business would increase the growth orientation of such businesses. Because resource management capabilities have the highest correlation with firm profitability, the managerial training of small business owners or managers should concentrate more on this dimension compared to other managerial capabilities to improve their competitiveness.

Contribution/value-add: Strategic interventions to improve the profitability of these small technology-oriented businesses border on scrupulously addressing and aligning their resource management, innovation management and market management capabilities.