The Relationship between Learning Orientation and the Performance of Small and Medium Enterprises in South Africa
Keywords:
Learning orientation, performance; SMEs, South Africa
Abstract
Small and medium enterprises (SMEs) are an important vehicle in income re-distribution, poverty alleviation, employment creation and contribute to the gross domestic product of South Africa. However, SMEs in South Africa suffer from a weak level of performance and a high failure rate. The main objective of this study was to investigate the impact of learning orientation on the performance of SMEs. A quantitative approach was used, while a self-administered questionnaire was also employed during data collection process. A three- section questionnaire covering demographic information, learning orientation variables and performance variables was prepared and distributed randomly to a selected sample of 390 SME owners in Msukaligwa Local Municipality in Mpumalanga Province of South Africa. A total of 181 questionnaires were returned. Descriptive statistics, factor analysis, correlation and regression analysis were used for data analysis. The Cronbach’s alpha was used to measure reliability. The results of the study revealed a significant positive relationship between learning orientation and the performance of SMEs. Recommendations to improve the learning orientation of SMEs are suggested.
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References
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Bakar, H. A., Mamatm, L., Ramlee, N. A. Z., Sama, M. F. & Karim, Z. H. A. (2016). Effect of Entrepreneurial Orientation, Learning Orientation, Strategic Improvisation on SME Performance. International Journal of Management and Applied Science, 2(12), 57-62.
Baker, W. E. & Sinkula, J. M. (2007). Does market orientation facilitate balanced innovation programs? An organizational learning perspective. Journal of Product Innovation Management, 24(4), 316-334.
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
Beneke, J., Beneke, J., Blampied, S., Blampied, S., Dewar, N., Dewar, N., Soriano, L. & Soriano, L. (2016). The impact of market orientation and learning orientation on organizational performance: A study of small to medium-sized enterprises in Cape Town, South Africa. Journal of Research in Marketing and Entrepreneurship, 18(1), 90-108.
Bierly, P. E. & Daly, P. S. (2007). Alternative knowledge, competitive environment, and organisational performance in small manufacturing firms. Entrepreneurship Theory and Practice, 31(4), 493-516.
Chang, S. C. & Lee, M. S. (2007). A study on relationship among leadership, organizational culture, the operation of learning organization and employee's job satisfaction. The Learning Organization, 14(2), 155-185.
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Eris, E. D., Ozmen, T. & Neczan, O. (2012). The effect of marketing orientation, learning orientation and innovativeness on firm performance: A research from Turkish logistics sector. International Journal of Economic Science and Applied Research, 5(1), 77-108.
Espedal, B. (2008). In the pursuit of understanding how to balance lower and higher order learning in organizations. Journal of Applied Behavioural Science, 44, 365-390.
Fatoki, O. & Garwe, D. (2010). Obstacles to the growth of new SMEs in South Africa: A principal component analysis approach. African Journal of Business Management, 4(5), 729-738.
Gnyawall, D. R., Singal, M. & Mu, S. C. (2009). Knowledge ties among subsidiaries in Mncs: A multi-level conceptual model. Journal of International Management, 15, 387-400.
Hair, J. F., Anderson, R. E., Tatham, R. L. & Black, W. C. (2006). Multivariate data analysis with readings. Englewood Cliffs: NJ, Prentice Hall.
Haryanto, A. T., Haryono, T. & Sawitri, H. S. R. (2017). Market Orientation, Learning Orientation and SMES Performance: The Mediating Role of Innovation. International Review of Management and Marketing, 7(1), 484-491.
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Idar, R. & Mahmood, R. (2011). Entrepreneurial and marketing orientation relationship to performance: the SME perspective. Interdisciplinary Review of Economics and Management, 1(2), 1-8.
Jyathibabu, C., Faroog, A. & Pradhan, B. B. (2010). An integrated scale for measuring an organisational learning system. Learning Organisation, 17(4), 303-327.
Kafouros, M. I., Buckley, P. J. & Clegg, J. (2012). The effect of global knowledge reservoirs on the productivity of multinational enterprises; the role of international depth and breadth. Research Policy, 41, 848-861.
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Kotabe, M., Dunlap-Hinkler, D., Parente, R. & Mishra, H. A. (2007). Determinants of cross-national knowledge transfer and its effect on firm innovation. Journal of International Business Studies, 38, 259–282.
Kreiser, P. M. (2011). Entrepreneurial orientation and organizational learning: The impact of network range and network closure. Entrepreneurship Theory and Practice, 35(5), 1042–2587.
Lages, L. F., Silva, G., Styles, C. & Pereira, Z. L. (2009). The NEP scale: A measure of network export performance. International Business Review, 18, 344-356.
Lai, C. S., Pai, D. C., Yang, C. F. & Lin, H. J. (2009). The effects of market orientation on relationship in industrial marketing: The dyadic perspectives. Industrial Marketing Management, 38(2), 166–172.
Liu, C. L. E. (2012). An investigation of relationship learning in cross-border buyer–supplier relationships: The role of trust. International Business Review, 21, 311–327.
Lu, Y., Zhou, L., Bruton, G. & Li, W. (2010). Capabilities as a mediator linking resources and the international performance of entrepreneurial firms in an emerging economy. Journal of International Business Studies, 41, 419-436.
Machirori, T. & Fatoki, O. (2013). The Impact of Firm and Entrepreneur’s Characteristics on Networking by SMEs in South Africa. Journal of Economics, 4(2), 113-120.
Mahmood, R. & Hanafi, N. (2013). Learning orientation and business performance of women-owned SMES in Malaysia: the mediating effect of competitive advantage. British Journal of Arts and Social Sciences, 11(II), 2046-9578.
Masocha, R. & Dzomonda, O. (2016). The mediating role of effective working capital management on the growth prospects of Small and Medium Enterprises in Polokwane Municipality. 5th Annual SAAPAM conference. Limpopo Chapter.
Nasution, H. N. & Mavondo, F. T. (2008). Organisational capabilities: Antecedents and implications for customer value. European Journal of Marketing, 42(3/4), 477–501.
Nasution, H. N., Mavondo, F. T., Matanda, M. J. & Ndubisi, N. O. (2011). Entrepreneurship: Its relationship with market orientation and learning orientation and as antecedents to innovation and customer value. Industrial Marketing Management, 40, 336–345.
Nybakk, E. (2012). Learning orientation, innovativeness and financial performance in traditional manufacturing firms: a higher-order structural equation model. International Journal of Innovation Management, 16(5), 24- 28.
Rebelo, T. M. & Gomes, A. D. (2011). Conditioning factors of an organizational learning culture. Journal of Workplace Learning, 23(3), 173-194.
Rhee, J., Park, T. & Lee, D. H. (2010). Drivers of innovativeness and performance for innovative SMEs in South Korea: Mediation of learning orientation. Technovation, 30, 65–75.
Salavou, H. (2005). Do customers and technology orientations influence product innovativeness in SMEs? Some new evidence from Greece. Journal of Marketing Management, 21(3/4), 307-338.
Saru, E. (2007). Organizational Learning and HRS: how appropriate are they for small firms. Journal of European Industrial Training, 31(1), 36-51.
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Statistics South Africa. (2016). Quarterly labour force survey. Accessed 12 September 2014 Available at http:/www.statssa.gov.za publication/P02111stQuater2016.pdf. Accessed on 28 July 2016.
Suliyanto, S. & Rahab, R. (2012). The role of market orientation and learning orientation in improving innovativeness and performance of small and medium enterprises. Asian Social Sciences, 8(1), 134-145.
Tsele, L. (2015). Female entrepreneurship: Is South Africa winning the gender inequality struggle? Available:http://www.smesouthafrica.co.za/15922/Female-entrepreneurship-Is-South-Africa-winning-the-gender-inequality-struggle/. Accessed on 29 May 2017.
Van Scheers, L. (2012). Marketing related challenges of small and medium enterprises (SMEs) in developing African countries: the South African challenge. African Journal of Business Management, 5(13), 5048-5056.
Willesse, J. (2010). The forum SA SME fairer statistics. Available at http//www.theforumsa.co.za/forum/showthread.php?t=7808. Accessed on 19 September 2014.
World Bank. (2015). The Big Business of Small Enterprises: Evaluation of the World Bank Group Experience with Targeted Support to Small and Medium-Size Enterprises. Available at https://books.google.co.za/books?isbn=146480377. Accessed On 15 July 2015.
Abor, A. & Quartey, P. (2010). SME development in Ghana and South Africa. International Research Journal of finance and Economics, 39, 218-228.
Akhavan, P. & Jafari, M. (2008). Towards learning in SMEs: an empirical study in Iran. Development and Learning in Organizations, 22(1), 17-20.
Akhtar, S., Arif, A., Rubi, E. & Naveed, S. (2011). Impact of organizational learning on organizational performance: Study of higher education institutes. International Journal of Academic Research, 3(5), 327-331.
Altbach, P. G., Reisberg, L. & Rumbley, L. E. (2009). Trends in global higher education: Tracking an academic revolution. Report prepared for the UNESCO 2009 World Conference on Higher Education. UNESCO Publishing. Paris. Available at http://unesdoc.unesco.org/images/0018/001831/183168e.pdf. Accessed on 22 July 2016.
Austin, M. S. & Harkins, D. A. (2008). Assessing change: can organizational learning “work†for schools. The Learning Organization, 15(2), 105-125.
Ayse, S. H. (2010). Organizational learning as a situated routine-based activity in international settings. Journal of World Business, 45(1), 41-48.
Bakar, H. A., Mamatm, L., Ramlee, N. A. Z., Sama, M. F. & Karim, Z. H. A. (2016). Effect of Entrepreneurial Orientation, Learning Orientation, Strategic Improvisation on SME Performance. International Journal of Management and Applied Science, 2(12), 57-62.
Baker, W. E. & Sinkula, J. M. (2007). Does market orientation facilitate balanced innovation programs? An organizational learning perspective. Journal of Product Innovation Management, 24(4), 316-334.
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
Beneke, J., Beneke, J., Blampied, S., Blampied, S., Dewar, N., Dewar, N., Soriano, L. & Soriano, L. (2016). The impact of market orientation and learning orientation on organizational performance: A study of small to medium-sized enterprises in Cape Town, South Africa. Journal of Research in Marketing and Entrepreneurship, 18(1), 90-108.
Bierly, P. E. & Daly, P. S. (2007). Alternative knowledge, competitive environment, and organisational performance in small manufacturing firms. Entrepreneurship Theory and Practice, 31(4), 493-516.
Chang, S. C. & Lee, M. S. (2007). A study on relationship among leadership, organizational culture, the operation of learning organization and employee's job satisfaction. The Learning Organization, 14(2), 155-185.
Cooper, D. R. & Schindler P. S. (2008). Marketing Research. International Edition 10thed. New York: McGraw-Hill/ Irwin.
Department of Trade and Industry (DTI). (2012). White paper on national strategy for the development and promotion of small business in South Africa. Pretoria: Government Publications.
Dill, D. & Van Vught, F. (2010). National innovation and the academic research enterprise: Public policy in global perspective. (eds). Baltimore: The John Hopkins University Press.
Dubihlela, J. (2013). Determinants of market orientation adoption among small and medium enterprises (SMES) in South Africa. Mediterranean Journal of Social Sciences, 4(6), 55-65.
Eris, E. D., Ozmen, T. & Neczan, O. (2012). The effect of marketing orientation, learning orientation and innovativeness on firm performance: A research from Turkish logistics sector. International Journal of Economic Science and Applied Research, 5(1), 77-108.
Espedal, B. (2008). In the pursuit of understanding how to balance lower and higher order learning in organizations. Journal of Applied Behavioural Science, 44, 365-390.
Fatoki, O. & Garwe, D. (2010). Obstacles to the growth of new SMEs in South Africa: A principal component analysis approach. African Journal of Business Management, 4(5), 729-738.
Gnyawall, D. R., Singal, M. & Mu, S. C. (2009). Knowledge ties among subsidiaries in Mncs: A multi-level conceptual model. Journal of International Management, 15, 387-400.
Hair, J. F., Anderson, R. E., Tatham, R. L. & Black, W. C. (2006). Multivariate data analysis with readings. Englewood Cliffs: NJ, Prentice Hall.
Haryanto, A. T., Haryono, T. & Sawitri, H. S. R. (2017). Market Orientation, Learning Orientation and SMES Performance: The Mediating Role of Innovation. International Review of Management and Marketing, 7(1), 484-491.
Herrington, M. & Kew, J. (2013). The Global Entrepreneurship Monitor (GEM): South African report. UCT Development Unit of New Enterprise, Cape Town, 1-48.
Huang, S. K. & Wang, Y. L. (2011). Entrepreneurial orientation, learning orientation and innovation in small and medium enterprises, in Proceedings of 7th International Strategic Management Conference. Procardia Social and Behavioural Science, 24, 563-570.
Hult, G. T. M., Ketchen, D. J. & Slater, S. F. (2007). Strategic supply chain management: improving performance through a culture of competitiveness and knowledge development. Strategic Management Journal, 28, 1035-1052.
Hussein, N., Mohamad, A., Noordin, F. & Ishak, N. A. (2014). Learning orientation and its effects on organisational performance and organizational innovativeness a proposed framework for Malaysia public institution of higher education. Procedia-Social and Behavioural Science, 130, 299-304.
Idar, R. & Mahmood, R. (2011). Entrepreneurial and marketing orientation relationship to performance: the SME perspective. Interdisciplinary Review of Economics and Management, 1(2), 1-8.
Jyathibabu, C., Faroog, A. & Pradhan, B. B. (2010). An integrated scale for measuring an organisational learning system. Learning Organisation, 17(4), 303-327.
Kafouros, M. I., Buckley, P. J. & Clegg, J. (2012). The effect of global knowledge reservoirs on the productivity of multinational enterprises; the role of international depth and breadth. Research Policy, 41, 848-861.
Konidari, V. & Yvan, A. (2006). From TQM to learning organization: Another way for quality management in educational institutions. International Journal of Quality, Reliability Management, 23(1), 8-26.
Kotabe, M., Dunlap-Hinkler, D., Parente, R. & Mishra, H. A. (2007). Determinants of cross-national knowledge transfer and its effect on firm innovation. Journal of International Business Studies, 38, 259–282.
Kreiser, P. M. (2011). Entrepreneurial orientation and organizational learning: The impact of network range and network closure. Entrepreneurship Theory and Practice, 35(5), 1042–2587.
Lages, L. F., Silva, G., Styles, C. & Pereira, Z. L. (2009). The NEP scale: A measure of network export performance. International Business Review, 18, 344-356.
Lai, C. S., Pai, D. C., Yang, C. F. & Lin, H. J. (2009). The effects of market orientation on relationship in industrial marketing: The dyadic perspectives. Industrial Marketing Management, 38(2), 166–172.
Liu, C. L. E. (2012). An investigation of relationship learning in cross-border buyer–supplier relationships: The role of trust. International Business Review, 21, 311–327.
Lu, Y., Zhou, L., Bruton, G. & Li, W. (2010). Capabilities as a mediator linking resources and the international performance of entrepreneurial firms in an emerging economy. Journal of International Business Studies, 41, 419-436.
Machirori, T. & Fatoki, O. (2013). The Impact of Firm and Entrepreneur’s Characteristics on Networking by SMEs in South Africa. Journal of Economics, 4(2), 113-120.
Mahmood, R. & Hanafi, N. (2013). Learning orientation and business performance of women-owned SMES in Malaysia: the mediating effect of competitive advantage. British Journal of Arts and Social Sciences, 11(II), 2046-9578.
Masocha, R. & Dzomonda, O. (2016). The mediating role of effective working capital management on the growth prospects of Small and Medium Enterprises in Polokwane Municipality. 5th Annual SAAPAM conference. Limpopo Chapter.
Nasution, H. N. & Mavondo, F. T. (2008). Organisational capabilities: Antecedents and implications for customer value. European Journal of Marketing, 42(3/4), 477–501.
Nasution, H. N., Mavondo, F. T., Matanda, M. J. & Ndubisi, N. O. (2011). Entrepreneurship: Its relationship with market orientation and learning orientation and as antecedents to innovation and customer value. Industrial Marketing Management, 40, 336–345.
Nybakk, E. (2012). Learning orientation, innovativeness and financial performance in traditional manufacturing firms: a higher-order structural equation model. International Journal of Innovation Management, 16(5), 24- 28.
Rebelo, T. M. & Gomes, A. D. (2011). Conditioning factors of an organizational learning culture. Journal of Workplace Learning, 23(3), 173-194.
Rhee, J., Park, T. & Lee, D. H. (2010). Drivers of innovativeness and performance for innovative SMEs in South Korea: Mediation of learning orientation. Technovation, 30, 65–75.
Salavou, H. (2005). Do customers and technology orientations influence product innovativeness in SMEs? Some new evidence from Greece. Journal of Marketing Management, 21(3/4), 307-338.
Saru, E. (2007). Organizational Learning and HRS: how appropriate are they for small firms. Journal of European Industrial Training, 31(1), 36-51.
Shih, K. H., Chang, C. J. & Lin, B. (2010). Assessing knowledge creation and intellectual capital in banking industry. Journal of Intellectual Capital, 11(1), 74-89.
Small Enterprise Development Agency Report. (2012). Analysis of the needs, state and performance of small and medium businesses in the agriculture, manufacturing, ICT and tourism sector in South Africa. Available at http://www.seda.org.za/publication/publication/analysis. Accessed 28/ July/ 2016
Statistics South Africa. (2016). Quarterly labour force survey. Accessed 12 September 2014 Available at http:/www.statssa.gov.za publication/P02111stQuater2016.pdf. Accessed on 28 July 2016.
Suliyanto, S. & Rahab, R. (2012). The role of market orientation and learning orientation in improving innovativeness and performance of small and medium enterprises. Asian Social Sciences, 8(1), 134-145.
Tsele, L. (2015). Female entrepreneurship: Is South Africa winning the gender inequality struggle? Available:http://www.smesouthafrica.co.za/15922/Female-entrepreneurship-Is-South-Africa-winning-the-gender-inequality-struggle/. Accessed on 29 May 2017.
Van Scheers, L. (2012). Marketing related challenges of small and medium enterprises (SMEs) in developing African countries: the South African challenge. African Journal of Business Management, 5(13), 5048-5056.
Willesse, J. (2010). The forum SA SME fairer statistics. Available at http//www.theforumsa.co.za/forum/showthread.php?t=7808. Accessed on 19 September 2014.
World Bank. (2015). The Big Business of Small Enterprises: Evaluation of the World Bank Group Experience with Targeted Support to Small and Medium-Size Enterprises. Available at https://books.google.co.za/books?isbn=146480377. Accessed On 15 July 2015.
Published
2017-07-20
How to Cite
Motsepe, E., & Fatoki, O. (2017). The Relationship between Learning Orientation and the Performance of Small and Medium Enterprises in South Africa. Journal of Economics and Behavioral Studies, 9(3(J), 232-240. https://doi.org/10.22610/jebs.v9i3(J).1762
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Research Paper
Copyright (c) 2017 Evelyn Motsepe, Olawale Fatoki
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