How the “tone at the top” influences the economic sustainability of South African small, medium and micro enterprises

Abstract

Despite the contributions South African Small, Medium and Micro Enterprises (SMMEs) make to the national economy, they have among the highest failure rates in the world. Though various factors contribute to their high failure rate, one factor has not been considered, namely the potential lack of governance. Governance is seldom researched in a South African SMME dispensation, rendering it a nascent research topic. Hence, this study aimed to determine the influence the “tone at the top” had on the economic sustainability of sampled South African SMMEs. The research study was empirical, exploratory and took the form of survey research. A quantitative research methodology was and data were collected through self-administered questionnaires from 123 South African SMME owners/managers and 82 South African SMME employees. All respondents had to adhere to relevant sets of delineation criteria. Stemming from the results, out of all tested attributes of management, seven overlapping attributes stood out for both South African SMME owner/managers and employees, along with the managerial operating style of members of management, were found to significantly influence the economic sustainability of sampled South African SMMEs in a mixed manner. Considering the nascent nature of the research topic and the identified research problem, this study serves as a foundation for future research studies to be conducted on South African SMME governance.