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.
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.
To establish the managerial competencies of PAV or Internet café business owners or managers and their effect on the profitability of their businesses.
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.
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,
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.
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.
Small, micro and medium enterprises (SMME) in emerging economies such as South Africa are confronted with momentous 21st-century challenges with a strong bearing on their managerial competencies and capacities. These challenges include the global supremacy of information and communication technologies (ICTs) in the provision of products and services (Jerald,
While the SMME owners or managers’ possession of managerial competencies is generally considered as critical to the creation, growth and longevity of small businesses (Nkosi et al.,
Which managerial competencies are discernible among owners or managers operating small technology businesses (i.e. Internet cafés) in the Free State province?
What is the relationship between managerial competencies of owners or managers of small Internet businesses (i.e. Internet cafés) and the profitability of their businesses?
Which managerial competencies of owners or managers have the greatest impact on the profitability of Internet cafés in the Free State province?
The need to explore the managerial capabilities of owners or managers of PAVs such as Internet cafés should be conceived in light of limited digital competencies and skills of some Internet café users and the uniqueness of Internet café services. These issues are discussed in subsequent sections.
Internet cafés in South Africa render a wide spectrum of services and digital competencies to users such as the downloading and uploading of documents, browsing websites, emailing and document processing. For example, Internet café employees normally provide valuable services and support in computer use and information access to inexperienced users (Furuholt & Kristiansen,
The demands for sophisticated managerial competencies among Internet café owners or managers stem from the emporium of services provided by these small firms. Makhalemele (
For Wijaya and Polina (
Studies on Internet access via Internet cafés have emphasised their utilisation for job searches and applications (Dammert et al.,
The concept of managerial competencies cannot be sufficiently comprehended without grasping competencies. For Jauhari (
Managerial competencies have generally been described differently depending on different disciplinary, functional, industrial and contextual areas. For instance, the knowledge skills and capabilities demanded in information system and ICT domains may differ from those expected in other domains, the same way skills and competencies demanded in large corporations could vary from those expected of small organisations. However, some skills, such as time management and leadership skills can be conceived as generic across different organisations regardless of size, location and industry. Nolan, Conway, Farrell and Monks (
Innovation management competencies cannot be grasped fully without defining innovation. Szczepańska-Woszczyna (
Innovation management capabilities, on the other hand, describe the capacity of the firm to effectively manage its internal innovations in ways that optimise its performance and create value for the firm. Therefore, innovation management capabilities involve those capabilities required in the innovation value chain, that is, the entire innovation process ranging from the
In the service industry, including Internet cafés, innovation management competencies can translate into firms’ foresight to ‘think for the customer’ by creating services that offer superior value to the customer through leveraging knowledge resources and specific stakeholder relationships (Kandampully,
Market management capabilities are a bundle of market, human resources and organisational competencies, which a business employs to access, retain and augment its customer base through the generation, dissemination and articulation of customer value. These capabilities have evolved over a long history even though the theme of creating and retaining satisfied customers remains central to the advancement of market management competencies (Day
Since the 1990s, market management capabilities have evolved from creating satisfied customers to appropriately managing the marketing process, which includes analysing market opportunities, formulating clear marketing objectives and developing a marketing strategy that should be implemented and controlled (Kotler,
Drawing on Day’s (
Market relating involves attracting and strengthening the business’ relations with the market and its customers. For Ritter (
Market prioritising involves the selection and prioritising of important individual and group customers on a transactional basis as not all customers are equally important. Lastly, marketing making is founded on the instability of the market, its networks and a lack of a predetermined structure of operations. This gives rise to the need for the business to provide innovative offerings continually, maintain the dynamics of standardised markets and creating new niches through challenging the logics of the market. Therefore, these market management capabilities transcend the firm’s capacity to demonstrate responsiveness to customers’ needs to generate market innovation and attain a competitive advantage (Dubey & Ali,
Resource management capabilities cannot be grasped fully without articulating what resources, resources management and capabilities are. Resources can be conceived as organisational assets – that is (diverse physical and organisational) endowments the business has accumulated (e.g. investments in the scale, scope and efficiency of facilities and systems; brand equity; and the consequences of the location of activities for factor costs and government support) (Day,
In a narrow sense, resource management entails fiscal resource management, that is, the capacity of employees to effectively carry out the responsibility for planning, raising, allocating, spending and managing monetary resources to complete individual, group, unit or department, or organisation-wide work activities (State of North Dakota Competency Library,
Capabilities can be conceived as the adhesive which brings organisational assets together and enables them to be deployed as a source of competitive advantage (Day,
Profitability is one of the prominent measures of business performance. Small business owners seek to achieve profit and other economic benefits (e.g. increasing revenue and employment levels) through bearing calculated market risks (Carland, Hoy, Boulton, & Carland,
This study adopted a cross-sectional survey design and drew on a structured questionnaire, which was developed based on an in-depth examination of literature on managerial competencies and their impact on firm performance. A cross-sectional survey design allows the researcher to develop a set of statements that characterise the individual or groups, aimed at collecting data about these individuals or groups at a particular point in time as opposed to at intermittent intervals (Privitera,
A target population describes ‘the total group of individuals from which a sample is drawn’ (Dzansi,
Because the researcher assumed variations in Internet cafés in the metropole, cities, towns and small towns, stratified sampling which involves dividing the wider population into homogenous or discrete groups, that is, strata (Cohen, Manion, & Morrison,
As indicated, a structured questionnaire was developed based on an in-depth examination of literature relating the managerial competencies of SMMEs with a technology orientation. In view of the reality that most research instruments on competencies were prepared for small businesses in general and not technology-oriented SMMEs in particular (which have unique characteristics – offering intangible technology services, serve a particular clientele with a technological orientation, predominantly middle class and students), a new instrument was necessary.
In view of the diverse literature covering multiple competencies, only those innovation management competencies related to and feasible for small technology-oriented firms were considered in the development of the questionnaire. These included creative thinking about products and services, successful management of change (Quinn et al.
Market management competencies considered included analysing market opportunities, formulating clear marketing objectives, developing a marketing strategy (Jaworski & Kohli,
The resource management capabilities included developing human IT, technical and managerial skills (Barney & Hesterly,
Because the main business of Internet cafés is the provision of Internet, photocopying, printing and other web-based services in addition to sale of Internet related products (e.g. flash drives, compact disks [CDs], speakers and electronic gadgets), improvements in sales, profit margins, salaries and meeting financial targets were the main measurements of profitability in this study.
Likert-based close-ended questions were developed. The questionnaire had four sections covering owner or manager demographics, business profile, different managerial competencies and firm performance.
With the assistance of two research assistants, data were collected from Internet café owners or managers located in the Free State province. The Free State was large enough to provide a fair representation of various racial groups in South Africa. The data were collected over a period of 2 months.
Data were coded, captured into Microsoft Excel, cleaned and exported to Statistical Package for the Social Sciences Version 21 for detailed analysis. While frequencies verified the coding of the data, descriptive analysis assisted in comparing and describing the data. Inferential statistics, specifically correlation and regression analysis, were employed to establish relationships between managerial competencies and profitability and to predict the strength and effects of these relationships.
Principal component analysis (PCA) was carried out on each of the elements that sought to measure each of the four variables, namely, innovation management capabilities, marketing management capabilities, resource management capabilities and profitability of the business (see
Principal component analysis.
Component | Loading |
---|---|
My business imparts technological knowledge on its employees to produce new products or services. | 0.878 |
My business values the skills of introducing new business systems frequently. | 0.830 |
My business encourages the development of unique skills among its employees for marketing its products or services. | 0.911 |
My business encourages its employees to engage in creative thinking about the development of its products or services. | 0.881 |
My business employs participative decision making on the purchase of new stock or products. | 0.872 |
My business develops unique ideas and creatively transforms existing products into better products. | 0.775 |
The business uses market research knowledge on customer preferences when making decisions about amount of service to provide to them. | 0.875 |
The business frequently explores the size of the market before launching a new product or service. | 0.895 |
The business equips its employees with marketing skills (i.e. training) before promoting its products or services. | 0.868 |
The business engages in systematic planning before marketing its products or services. | 0.888 |
The business selects its employees based on their experience, qualifications or skills. | 0.731 |
The business is capable of raising funds for the purchase of its working equipment, products or service. | 0.795 |
The business owner or manager (i.e. myself) had much knowledge of the need for start-up capital when she/he started the business. | 0.777 |
The business uses skilled employees to facilitate systemic changes in its organisation. | 0.877 |
The business owner or manager displays leadership qualities which guide employees in achieving the set goals. | 0.701 |
My profit margins have increased in the last 3 years. | 0.919 |
I have been able to generate profit for the last 3 years. | 0.920 |
The business is driven by a need for continuous improvement of its products and services to raise its profitability. | 0.711 |
I was able to meet my annual financial targets in the past 3 years. | 0.699 |
I have been able to raise salaries and wages from profits in the past 3 years. | 0.889 |
The Kaiser–Meyer–Olkin (KMO) values derived are greater than 0.7, which is more than the minimum acceptable threshold of 0.5 (Field,
Results of the exploratory factor analysis.
Dimension | KMO statistic | Bartlett’s |
Cumulative % of variance explained |
---|---|---|---|
Innovation management capabilities | 0.728 | 0.000 | 78.200 |
Marketing management capabilities | 0.896 | 0.000 | 73.766 |
Resource management capabilities | 0.851 | 0.000 | 77.701 |
Profitability | 0.830 | 0.000 | 60.597 |
KMO, Kaiser–Meyer–Olkin.
Reliability is the extent to which an instrument is repeatable and consistent across time (Pietersen & Maree,
Questionnaire reliability statistics.
Section | Number of questionnaire items | Cronbach’s alpha | Comment | |
---|---|---|---|---|
Innovation management capabilities |
112 | 6 | 0.925 | High internal consistency |
Marketing management capabilities |
112 | 4 | 0.904 | High internal consistency |
Resource management capabilities |
112 | 5 | 0.826 | High internal consistency |
Growth performance |
112 | 6 | 0.931 | High internal consistency |
Profitability performance |
112 | 5 | 0.882 | High internal consistency |
Sustainability or survival |
112 | 3 | 0.860 | High internal consistency |
All Likert scale questions | 112 | 29 | 0.963 | High internal consistency |
Adequate reliability of a construct is indicated by a Cronbach’s Alpha value of at least 0.700. The fact that all constructs in the questionnaire had Cronbach’s Alpha coefficients greater than 0.700 demonstrate high internal consistency, hence were reliable. The overall questionnaire is also very reliable (Cronbach’s Alpha = 0.963).
Internet café owners’ or managers’ demographic and business profiles are summarised in
Biographical information.
Personal details | Category | Frequency | Percentage |
---|---|---|---|
1. Gender | Male | 36 | 32.1 |
Female | 76 | 67.9 | |
2. Age group | Less 25 years | 21 | 18.8 |
25–34 | 57 | 50.9 | |
35–44 | 22 | 19.6 | |
45–54 | 11 | 9.8 | |
55 and above | 1 | 0.9 | |
3. Home language | English | 12 | 10.7 |
Afrikaans | 6 | 5.4 | |
Sesotho | 56 | 50.0 | |
IsiZulu | 11 | 9.8 | |
IsiXhosa | 16 | 14.3 | |
Other language (specify) | 11 | 9.8 | |
4. Qualification | None | 1 | 0.9 |
Matric and below | 45 | 40.2 | |
FET or equivalent | 37 | 33.0 | |
University degree or diploma | 18 | 16.1 | |
Postgraduate | 11 | 9.8 | |
5. Level of training | None | 33 | 30.0 |
Short courses | 39 | 35.5 | |
Apprenticeship | 2 | 1.8 | |
High school | 5 | 4.5 | |
Undergraduate | 22 | 20.0 | |
Postgraduate | 9 | 8.2 |
FET, Further Education and Training
Company information.
Company details | Category | Frequency | Percentage |
---|---|---|---|
6. Nature of organisation that you work for | Internet café | 24 | 21.6 |
Internet and printing | 36 | 32.4 | |
Internet, printing and retail | 51 | 46.0 | |
7. Your role in this business | Employee | 20 | 17.9 |
Supervisor | 10 | 8.9 | |
Manager | 29 | 25.9 | |
Manager or owner | 8 | 7.1 | |
Owner | 45 | 40.2 | |
8. Number of years served in current job | Below 1 year | 21 | 18.8 |
2–5 years | 66 | 58.9 | |
6–10 years | 20 | 17.9 | |
11–15 years | 5 | 4.5 | |
9. Number of years served in a management position | Below 1 year | 23 | 21.7 |
2–5 years | 64 | 60.4 | |
6–10 years | 15 | 14.2 | |
11–15 years | 4 | 3.8 | |
10. The number of employees in this business | None | 8 | 7.1 |
One | 13 | 11.6 | |
2–5 | 62 | 55.4 | |
6–10 | 23 | 20.5 | |
11–15 | 5 | 4.5 | |
16–20 | 1 | 0.9 | |
11. Highest academic qualification of employees | None | 6 | 5.5 |
Matric and below | 60 | 55.0 | |
Tertiary certificate | 15 | 13.8 | |
Diploma or degree | 21 | 19.3 | |
Postgraduate | 7 | 6.4 |
Note: Figures may not add up to 100% because of rounding off after conversion to percentages.
Of the 112 owners or managers who responded to the survey, a majority (67.9%) of them were women and the remaining 32.1% were men. This finding is surprising in view of the fact that men are often considered to be more technologically savvy than women. About 50.9% of the respondents were 25–34 years old, 19.6% were aged 35–44, 18.8% were under the age of 25 and 9.8% were between 45 and 54 years of age. This points to the dominance of a young adult population as owners or managers of small technology-oriented businesses.
Sesotho owners or managers of Internet cafés were the most represented (50%), followed by Xhosa owners or managers (14.3%). The prominence of Sesotho-speaking owners or managers can be attributed to the fact that Basothos are the dominant group in the Free State province. A considerable percentage (40.2%) of the owners or managers had either a matric or lower qualification, 33% had a Further Education and Training (FET) or equivalent qualification while 16.1% had either a university degree or diploma.
A majority (58.9%) of Internet café businesses had been in operation for 25 years, 18.8% of these businesses had been in operation for less than 1 year, while 17.9% of them had been in operation for between 6 and 10 years. A sizeable percentage (46%) of the Internet cafés’ core business was the provision of Internet, printing and retail services, 32% offered Internet and printing services exclusively while the remainder served as Internet cafés only (22%). These statistics point to the different levels of diversification of these businesses.
A sizeable proportion (40.2%) of the respondents was owners, 25.9% were managers, 17.9% were employees and 8.9% were supervisors. Perhaps employees could have been managers and supervisors who performed limited managerial and supervisory roles and hence conceived themselves more as employees than managers and supervisors. A majority (60.4%) of the Internet café owners or managers had between 2 and 5 years of experience of managing such firms while 21.7% of the Internet café owners or managers had less than a year of Internet managerial experience. The statistics suggest the infantile nature of most of these businesses.
This section addresses the question on managerial competencies discernible among owners or managers operating small technology businesses (i.e. Internet cafés) in the Free State province. In view of the reality that competencies comprise a set of knowledge, skills and abilities possessed by an individual, some of which are hard to estimate with precision, a reasonable proxy for determining these competencies was to test them from the perspective of capabilities rather than arbitrarily asking their possession of a competency set. Capabilities related to practically oriented business processes, actions and activities these owners or managers were capable of accomplishing in their firms. The managerial competencies discernible among Internet café owners or managers were innovation management capabilities, market management capabilities and resource management capabilities.
The wide range of competencies encapsulating innovation management capabilities are summarised in
Innovation management capabilities.
Innovation management capabilities | Frequency distribution |
Descriptive |
Latent factor (principal component) |
||||||
---|---|---|---|---|---|---|---|---|---|
Strongly disagree | Disagree | Neutral | Agree | Strongly agree | Agree or strongly agree | Mean | Std dev | ||
Count | 0 | 3 | 13 | 42 | 47 | - | 4.27 | 0.79 | 0.878 |
% | 0.0 | 2.9 | 12.4 | 40.0 | 44.8 | 84.8 | - | - | - |
Count | 0 | 1 | 15 | 50 | 39 | - | 4.21 | 0.72 | 0.830 |
% | 0.0 | 1.0 | 14.3 | 47.6 | 37.1 | 84.8 | - | - | - |
Count | 0 | 2 | 16 | 40 | 47 | - | 4.26 | 0.78 | 0.911 |
% | 0.0 | 1.9 | 15.2 | 38.1 | 44.8 | 82.9 | - | - | - |
Count | 1 | 5 | 18 | 34 | 46 | - | 4.14 | 0.94 | 0.881 |
% | 1.0 | 4.8 | 17.3 | 32.7 | 44.2 | 76.9 | - | - | - |
Count | 1 | 10 | 15 | 41 | 37 | - | 3.99 | 0.99 | 0.872 |
% | 1.0 | 9.6 | 14.4 | 39.4 | 35.6 | 75.0 | - | - | - |
Count | 1 | 5 | 17 | 42 | 38 | - | 4.08 | 0.90 | 0.775 |
% | 1.0 | 4.9 | 16.5 | 40.8 | 36.9 | 77.7 | - | - | - |
Cronbach’s Alpha, 0.925.
% of total variation accounted for by latent factor, 73.77.
Std dev, standard deviation.
, coefficient.
About 84.8% of owners or managers agreed or strongly agreed that their businesses imparted technological knowledge on their employees to produce new products or services. This corroborates Rambe and Dzansi’s (
More so, 84% of the respondents were of the opinion that their businesses valued the skills of introducing new business systems frequently. This finding corroborates evidence in entrepreneurial literature on the value of infusing necessary skills such as project and business management skills in the successful conceptualisation and incubation of new business start-ups (Lindgren & Packendorff,
A total of 82.9% of Internet café owners or managers affirmed that their businesses encouraged the development of unique skills for marketing its products or services. A majority (76.9%) of owners or managers also claimed that their employees were encouraged to engage in creative thinking about the development of products and services. This mirrors the business development stages of small businesses, where employees are not only expected to generate innovative ideas but also to operationalise them through the application of business concepts by launching new products, introducing new methods of production and new marketing techniques (Dzansi, Rambe, & Coleman,
About 79% of the respondents agreed or strongly agreed that their businesses employ participative decision making on the purchase of new stocks or products. This view supports Liang, Huang, Lu and Wang’s (
The second set of managerial competencies is summarised under market management capabilities, which revolved around issues that are summarised in
Marketing management capabilities.
Marketing management capabilities | Frequency distribution |
Descriptive |
Latent factor (principal component) |
||||||
---|---|---|---|---|---|---|---|---|---|
Strongly disagree | Disagree | Neutral | Agree | Strongly agree | % Agree or strongly agree | Mean | Std dev | ||
Count | 1 | 10 | 17 | 50 | 26 | - | 3.87 | 0.94 | 0.875 |
% | 1.0 | 9.6 | 16.3 | 48.1 | 25.0 | 73.1 | - | - | - |
Count | 2 | 12 | 33 | 45 | 13 | - | 3.52 | 0.92 | 0.895 |
% | 1.9 | 11.4 | 31.4 | 42.9 | 12.4 | 55.2 | - | - | - |
Count | 2 | 9 | 29 | 45 | 20 | - | 3.69 | 0.94 | 0.868 |
% | 1.90 | 8.60 | 27.60 | 42.90 | 19.00 | 61.90 | - | - | - |
Count | 2 | 5 | 24 | 56 | 17 | - | 3.78 | 0.85 | 0.888 |
% | 1.9 | 4.8 | 23.1 | 53.8 | 16.3 | 70.2 | - | - | - |
Cronbach’s Alpha, 0.904.
% of total variation accounted for by latent factor, 77.7.
Std dev, standard deviation.
, coefficient.
The findings in
The majority (61.9%) of the respondents agreed or strongly agreed that their businesses equipped their employees with marketing skills before promoting their products or services. This finding seems to cohere with Agbobli’s (
A third set of managerial competencies discerned was resource management capabilities which comprised the business staff’s appointment procedures, fund raising capabilities, change management strategies and the business owners or managers’ capacity to demonstrate leadership. The findings on resource management capabilities dimensions are illustrated in
Resource management capabilities.
Resource management capabilities | Frequency distribution |
Descriptive |
Latent factor (principal component) |
||||||
---|---|---|---|---|---|---|---|---|---|
Strongly disagree | Disagree | Neutral | Agree | Strongly agree | % Agree or strongly agree | Mean | Std dev | ||
Count | 2 | 10 | 41 | 34 | 18 | - | 3.53 | 0.95 | 0.731 |
% | 1.9 | 9.5 | 39.0 | 32.4 | 17.1 | 49.5 | - | - | - |
Count | 0 | 2 | 14 | 58 | 31 | - | 4.12 | 0.7 | 0.795 |
% | 0.0 | 1.9 | 13.3 | 55.2 | 29.5 | 84.8 | - | - | - |
Count | 0 | 8 | 27 | 43 | 28 | - | 3.86 | 0.9 | 0.777 |
% | 0.0 | 7.5 | 25.5 | 40.6 | 26.4 | 67.0 | - | - | - |
Count | 0 | 6 | 16 | 59 | 21 | - | 3.93 | 0.77 | 0.877 |
% | 0.00 | 5.90 | 15.70 | 57.80 | 20.60 | 78.40 | - | - | - |
Count | 2 | 2 | 10 | 26 | 61 | - | 4.41 | 0.9 | 0.701 |
% | 2.0 | 2.0 | 9.9 | 25.7 | 60.4 | 86.1 | - | - | - |
Cronbach’s Alpha, 0.826.
% of total variation accounted for by latent factor, 60.6.
Std dev, standard deviation.
, coefficient.
The findings demonstrate that a majority (86.1%) of Internet owners or managers agreed or strongly agreed that they displayed leadership qualities that guided employees in achieving their set goals. However, Internet café managers’ exercise of leadership, power and authority may vary depending on whether the manager is a member of the family that owns the business or not. The studies by Ingram and Simon (
With regard to funding capabilities, the study examined the extent to which businesses were capable of raising funds for the purchase of equipment, products or services. The findings suggest that 84.8% of the owners or managers agreed or strongly agreed that their businesses had the capacity to raise such funds for the purchase of working equipment, products or services. Consistent with the resource-based view, the findings corroborate the view that firm resources (finance, skills, knowledge, experience and capabilities) are not limited to the possession of firm-specific resources but also to the effective utilisation of these resources to achieve competitive advantage (Ramorena,
The findings highlight that 78.4% of the Internet café businesses owners or managers used skilled employees to facilitate systemic changes in their organisation. This finding somewhat contradicts studies in the construction industry in which highly skilled employees were largely concentrated in large organisations such as Murray and Roberts, Aveng, WBHO, Group 5 and Basil Read compared to emerging contractor firms (Construction Industry Development Board,
The finding that 49.5% of respondents agreed or strongly agreed that their businesses selected employees based on their experience, qualifications or skills somewhat contradicts biographic data in
The highest ranking profitability attribute (87.5% agreed or strongly agreed) was that most of the businesses were driven by a need for continuous improvement of their products or services to raise profitability. However, this finding on continuous improvement – itself a component of innovation – seems inconsistent with the lower innovation or growth effect size reported in preceding sections of this investigation.
Performance measurement – Profitability.
Profitability | Frequency distribution |
Descriptives |
Latent factor (principal component) |
||||||
---|---|---|---|---|---|---|---|---|---|
Strongly disagree | Disagree | Neutral | Agree | Strongly Agree | % Agree or strongly agree | Mean | Std dev | ||
Count | 0 | 2 | 26 | 44 | 29 | - | 3.99 | 0.79 | 0.919 |
% | 0.0 | 2.0 | 25.7 | 43.6 | 28.7 | 72.3 | - | - | - |
Count | 0 | 2 | 22 | 47 | 30 | - | 4.04 | 0.77 | 0.92 |
% | 0.0 | 2.0 | 21.8 | 46.5 | 29.7 | 76.2 | - | - | - |
Count | 0 | 0 | 13 | 53 | 38 | - | 4.24 | 0.66 | 0.711 |
% | - | - | - | - | - | - | - | - | - |
Count | 0 | 17 | 40 | 31 | 14 | - | 3.41 | 0.93 | 0.699 |
% | 0.0 | 16.7 | 39.2 | 30.4 | 13.7 | 44.1 | - | - | - |
Count | 0 | 8 | 20 | 39 | 34 | - | 3.98 | 0.93 | 0.889 |
% | 0.0 | 7.9 | 19.8 | 38.6 | 33.7 | 72.3 | - | - | - |
Cronbach’s Alpha, 0.882.
% of total variation accounted for by latent factor, 69.50.
Std dev, standard deviation.
, Coefficient.
The relationship between managerial competencies and the profitability of emerging technology businesses is investigated using Pearson’s correlation and regression analysis. Pearson’s correlation is a measure of the linear relationship between two continuous random variables. It does not assume normality, although it does assume finite variances and finite covariance. When the variables are bivariate normal, Pearson’s correlation provides a complete description of the association. However, for non-normal populations, the sample correlation coefficient remains approximately unbiased, but may not be efficient. The results in
Correlations between business profitability and managerial competencies.
Pearson’s correlations | Managerial competencies |
||
---|---|---|---|
Innovation management capabilities | Marketing management capabilities | Resource management capabilities | |
Correlation | - | 0.767 |
0.764 |
- | 0 | 0 | |
- | 95 | 93 | |
Correlation | - | - | 0.782 |
- | - | 0 | |
- | - | 96 | |
Correlation | - | - | - |
- | - | - | |
- | - | - | |
Correlation | 0.732 |
0.695 |
0.743 |
0 | 0 | 0 | |
96 | 97 | 96 |
, Strong correlations.
N, number
The findings on the three managerial capabilities and firm profitability (a component of firm performance) seem to cohere with previous studies. Bridoux (
To predict the relationship between managerial capabilities and firm profitability and associated effect sizes, a regression analysis was conducted. The results of the regression analysis are illustrated in
Regression results for the influence of managerial competencies on business profitability.
Dependent variable |
Parameter estimates |
|||
---|---|---|---|---|
Coefficient | Std. error | |||
Innovation management capabilities | 0.337 | 0.101 | 3.322 | 0.001 |
Marketing management capabilities | 0.121 | 0.105 | 1.145 | 0.255 |
Resource management capabilities | 0.513 | 0.123 | 4.191 | 0.000 |
Std., standard.
, Performance and profitability.
The regression results in
Resource management capabilities have the most significant influence on profitability (coefficient = 0.513,
The prevalence of women and the limited participation of men in small technology-oriented businesses raise some doubts on the relevance of literature that emphasises the dominance of men in running technology-oriented businesses. Future studies should be conducted at the national level to establish if these gender gaps persist with regard to participation in management of technology-oriented businesses.
The majority of the businesses surveyed were very small establishments, employing less the six employees and had owners or managers with less than six years of experience. The implication of these findings is the need to establish whether the provision of management training to owners or managers from the inception of the business would increase the growth orientation of such businesses. Management training is conceived as critical to the success of emerging businesses (Mpiti,
Compared to other innovation management capabilities, employees’ involvement in collaborative decision making on stock purchases was comparatively lower than other variables, pointing to some owners’ or managers’ authoritative tendencies with regard to business management. Future studies may need to compare the performance implications of democratically managed and authoritatively managed businesses. Because only about half of the surveyed businesses explored the size of the market before launching a new product or service, future studies covering market management capabilities of small businesses need to examine the business growth implications of such businesses in comparison to businesses that do not embark on such market exploration.
Because resource management capabilities have the highest correlation with firm profitability, the implication is that small businesses should concentrate more on this dimension compared to other managerial capabilities to improve their competitiveness. Because regression analysis demonstrated that when all managerial competencies were considered collectively, market management competencies did not have a significant influence on firm profitability, it would be more appropriate for firms to concentrate on resource management and innovation management capabilities if their performance is to be optimised.
The study examined the managerial competencies discernible among small technology-oriented businesses, especially PAVs such as Internet cafés. The study also employed correlation analysis to examine the relationship between such businesses and their level of profitability including which managerial competency has the greatest impact of firm profitability. The study findings demonstrated three sets of managerial competencies, namely, market management, resource management and innovation management capabilities. In terms of their correlations with profitability, resource management capabilities had the highest significant correlation with firm profitability, followed by innovation management, and lastly, marketing management capabilities. When considered collectively, market management capabilities could be removed from the capabilities–profitability relationship with little effect. In view of firms’ failure to reach their financial targets including somewhat weaker effects of market management capabilities on firm performance, the need to emphasise resource management and innovation management capabilities among resource-constrained emerging firms cannot be discounted.
The author is grateful to Miss Naledi Makhalemele and her team for assisting with data collection. The author also thanks the statistician for detailed analysis and Dr Agbobli for commenting on the previous versions of the research instrument.
The author declares that there was no competing interest in the production of this article.