Abstract
D.Phil. (Engineering Management)
Small, Medium and Micro Enterprises (SMMEs), are playing an important role in the economy and this has led the South African government to set-up various support mechanisms. The support strategies set-up by the government include access to finance, training and helping SMMEs with compliance with both labour and tax regulations to enable them to operate formally. However most SMMEs operate in a very competitive environment. Motor body repair (MBR) SMMEs are faced with the ever changing repair technology and equipment required by newer vehicles introduced to the market by the original equipment manufacturers (OEMs). It is important therefore for SMMEs to understand and measure their business performance in order to improve their business practices. Literature suggests that performance measurement tools can help businesses to identify problem areas and improve processes by aligning objectives with strategies. Research reviewed shows that most theories on performance measurement and management that have been developed suit large corporations and very few meet the needs of SMMEs.
The purpose of this study was to investigate through business model, entrepreneurship, managerial and technical capability constructs the business performance of SMMEs operating in the South African MBR sector. Theories that were used were: systems theory, management theory, organisational theory, entrepreneurship theory, behavioural theory of the firm and economic theory. These theories were integrated with business model constructs, managerial and entrepreneurial factors. The aim was to determine how entrepreneurs, the insurance industry, bankers and motorists interact and contribute to the performance of MBR SMMEs and in so doing develop a performance driven business model and technical capability framework for the South African MBR sector.
Five objectives were identified in this research study. The first objective was to investigate economic forces that impact on MBR SMMEs’ business model environment in the sector in the last five years, (2012-2016). The second objective was to investigate the structure, business models and processes found in the South African MBR sector. The third objective was to investigate the technical capability of SMMEs operating in the MBR sector. The fourth objective was to explore the associations of business model, technical capability, managerial and entrepreneurship constructs of a selected group of SMMEs with their business performance over a five-year period, (from 2012 – 2016). The fifth objective was to develop a performance driven business model and technical capability framework that can be used by SMMEs in the MBR sector.
These objectives were achieved through a research design which included a literature review, an initial survey and the triangulation of survey results, semi-structured interviews, case studies and simulation modelling. Both qualitative and quantitative data were collected. Quantitative data was analysed through IBM SPSS Version 23 and a multiple regression model was used to analyse the survey data. Statistical methods used included descriptive statistics, frequencies, custom tables, principal component analysis (PCA), Kaiser-Meyer Olkin (KMO), Bartlett’s Test of Spherecity, Reliability-Cronbach alpha, exploratory factor analysis (EFA) and correlations. Two case studies were carried out and semi-structured questions were used to gather information on the structure, processes and factors negatively impacting on SMMEs in the MBR sector. Processes found in the MBR sector were simulated and areas of improvement were identified. The research developed both the technical capability framework and a performance driven business model for the South African MBR sector. The technical capability framework shows functioning abilities; specific knowledge, and technical skills, required by a company. The business model framework shows the relationships among the different business model components and how the company can use them to create and deliver value to its different stakeholders.
Research results show that a performance driven business model and technical capability framework can help SMMEs in the MBR sector to formulate the correct strategies that will help them to manage their businesses in an environment that is full of uncertainty. The business model and technical capability framework must align with SMMEs daily processes as required by key activities, key resources, budgeting (cost and revenue), key partners and targeted customers. The business model and technical capability framework can help these SMMEs to identify customer needs and manage and measure customer satisfaction. The literature confirms that SMMEs suffer from various problems in their daily business that include poor management, poor strategic orientation, lack of marketing, poor infrastructure, poor financing and poor perception from the public. The structure of the MBR industry makes it difficult for new players to enter the market due to regulations laid down by South African...