Business strategy, financial performance and the survival of women-owned small and medium enterprises in Gauteng province

Abstract

Small and Medium Enterprises (SMEs) are economic drivers and key in job creation in emerging economies. In the past, the difficulties faced by women have deprived them of opportunities to establish and run successful businesses. Previous research reveals that women’s involvement in businesses creates sustainable economic growth, thereby reducing poverty. Women-owned SMEs in South Africa receive minimal government support, and many women lack the resources required to run a business successfully. Ensuring growth and profitability in women-run enterprises can alleviate the extent to which women have been disadvantaged in South Africa. In the Fourth Industrial Revolution, women have a significant role in creating jobs, which can grow the South African economy. This study aimed to determine the influence of strategy implementation in women-owned SMEs in South Africa, specifically Gauteng Province. The study considered constructs such as strategy implementation, financial performance and SME survival in women-owned SMEs. Against this background, a deductive reasoning based quantitative approach was adopted using a cross-sectional survey design to assess the connection between the constructs under consideration. The final sample consisted of 347 women entrepreneurs and managers and employees of selected SMEs in various regions of Gauteng Province. The data collected were analysed using the Statistical Packages for the Social Scientists (SPSS) version 25.0 software. Statistical analyses techniques applied in the study included descriptive statistics, exploratory factor analysis, person correlations and regression analyses. The results of the study showed that corporate and business strategies exert a significant influence on SME financial performance. However, operational strategy was statistically insignificant. Financial performance, in turn, influenced SME survival. Additionally, all three strategies, namely, corporate, business and operational, significantly influenced SME survival. Thus, the financial performance and ultimate survival of women-owned SMEs in South Africa are both dependent on strategy formulation and implementation. The research is practical in that its results may be used as a reference source for ideas in strategy formulation and implementation in stakeholder committees. The results may then be directed towards alleviating the challenges facing women-owned SMEs in South Africa and stimulate their chances of success. The study, therefore, has implications in generating employment, improving the efficiency and effectiveness of women-owned SMEs. Theoretically, the study contributes by closing the gap in literature within the area of the nexus between strategy implementation, financial performance and SME survival in the context of South Africa.