Entrepreneurial orientation and business challenges : a study of eThekwini-based construction companies.

Abstract

The construction industry in South Africa has been identified by Government to address the high unemployment rate in the country while simultaneously improving the country’s infra-structure needs ie. roads, water, sanitation and housing programmes. This is apparent from the initiatives that have been implemented to develop emerging Black Economic Empowerment (BEE) Small and Medium Enterprises (SMEs) into the industry. However, contrary to Government’s ambitions, there is a high failure rate of these SMEs in the construction industry and it has become urgent to research into the factors that will facilitate SME survival. In response to this concern, this study identifies the importance of entrepreneurial orientation in coping with the challenges facing SMEs in the construction sector. It is a widely growing phenomenon of entrepreneurship theory and the literature review advocates that entrepreneurial orientation contributes to improved business performance and competitive advantage. It is a measure of the entrepreneur’s ability to be innovative, proactive and risk averse and these characteristics are identified as precursors to business success. The focus of this study is to evaluate the entrepreneurial orientation of eThekwini-based SMEs together with their perceptions of the business challenges prevalent in the construction industry. One hundred and six (106) contractors were invited to participate in this research and sixty three (63) respondents returned completed questionnaires through online facilities. The findings show that respondents exhibit strong actualisation of entrepreneurial orientation. Data analysis through inferential statistics indicates that high actualisation of entrepreneurial orientation correlates with reduced perceived levels of business challenges. It is recommended that training institutions and Government mentorship programmes incorporate entrepreneurial orientation development amongst SME entrepreneurs to facilitate improved business success among them. There is no evidence of similar research being conducted previously, especially on the South African construction industry, therefore this study represents new research.