Abstract
M.Comm.
The study was concerned with the problem of the long-term survival and success of SMEs in
the tourism industry in a turbulent global operating environment, as well as in hostile
conditions, such as unexpected changes, or disaster in the operating environments of the small
businesses. The study was prompted by the high failure rate of SMEs worldwide and in SA.
The tourism industry has a predominance of small business and was identified by SA as the
industry of choice to support for the achievement of macroeconomic goals that include
economic stability, poverty alleviation and employment creation. The overall objective of the
study was to explore and examine factors located within the three operating environments
(macro, industry and micro), that contribute to the survival and long-term success of tourism
SMEs (five guest houses on the Dolphin Coast), operating in a turbulent global environment
and hostile conditions such as disaster and unexpected events. The study explored and
explained factors from four interrelated perspectives, namely a macro, meso, micro and
chrono contexts; to examine the way in which the guest houses engaged with their
environments; to determine the role of networks and clusters in the process; and to determine
the impact of industry-specific and sector-specific factors on success.
The study used an embedded case study methodology to assess five tourism SMEs, guest
houses, located on the east coast of SA in a region known as the Dolphin Coast. The area was
studied over a three year period from 2005 to 2007, a period of favourable economic and
industry conditions globally and nationally (SA). Slowing economic conditions, severe
coastal storms, rates increases and changes in the external environment provided conditions of
turbulence and hostility in which to assess the responses of the guest houses, compared to
activity and perceptions in the prior stable conditions. Porter’s (1980; 1990; 1996; 2000)
theoretical frameworks, including the Diamond Model, the Five Forces Model and
augmentations to these models were used to guide the research and interpretation of results.
The study concluded that various sets of interlinked factors located in the macro, industry and
internal (micro) operating environment of the firm, contributed to the success and constraints
experienced by the guest houses. The presence of elements in the environments does not
facilitate or ensure success, but success is dependent on the actions and choices of leaders and
managers. These actions and choices are, in turn, guided by the values and culture present in
the environment and are affected by human agency and efficacy.