Abstract
Small and Medium Enterprises (SMEs) are critical to the South African economy because they help create jobs, alleviate poverty, innovate, and drive economic growth and development. They frequently fail, however, due to business challenges such as the COVID-19 pandemic, which leads to poor business performance. Adopting Entrepreneurial Orientation is one of the solutions to business failure, which leads to improved performance. The aim of this study was to examine the dimensions of Entrepreneurial Orientation (EO) and its effect on the financial and non-financial performance of retail SMEs. The objectives of this research project were achieved through the use of the dimensions of EO along which an opportunity is pursued. These consist of innovativeness, risk taking, pro-activeness, autonomy and competitive aggressiveness as independent variables and performance (financial and non-financial) as a dependable variable. The researcher adopted the Resource-Based View Theory (RBV) model because it is relevant as it focuses on firms' internal capabilities that act as building blocks to create a competitive advantage and increase a firm's performance. A quantitative method was used to collect data through self-administered questionnaires. The questionnaire was divided into three sections: the business profile, dimensions of entrepreneurial orientation, and performance (financial and non-financial). Non-probability sampling was used involving convenience and snowball sampling methods to select the sample. This is because a sample frame of SMEs in the study area does not exist. Retail SME owners and managers in the Tshwane Metropolitan Municipality, Gauteng Province, were given 250 questionnaires.
A total of 196 questionnaires were returned. The IBM Statistical Package for Social Sciences (SPSS) version 28 software was employed in the statistical analyses. Descriptive and inferential statistics and T-tests were used to determine the relationship between entrepreneurial orientation and SME performance (financial and non-financial). Cronbach's alpha was applied to measure reliability. Validity was measured by testing internal and external validity. The findings of the study revealed that entrepreneurial orientation positively impacts the performance of SMEs. The study further revealed that all the dimensions of EO had a positive and significant relationship with SMEs' financial and non-financial performance. Furthermore, the study found that competitive
v
aggressiveness had the most positive relationship between financial and non-financial performance. Additionally, a positive and significant relationship exists between the overall EO and the performance of the small business.
Empirically, the study contributes to the literature on EO and advances recommendations to improve the EO of small businesses in South Africa. The study recommends that policymakers, owners and managers of small businesses create an environment that enables entrepreneurial orientation maturity within the SMEs and strategies for enterprise development and better business performance of small businesses in Tshwane Metropolitan Municipality, Gauteng Province, South Africa.
Keywords: Entrepreneurial Orientation, Financial performance, Non-financial performance, Small and medium enterprises (SMEs), performance, retail sector.