n Acta Commercii - Adapting SMME business functions during economic turmoil

Volume 10, Issue 1
  • ISSN : 2413-1903
  • E-ISSN: 1684-1999


The purpose of this study is to investigate how SMMEs should adapt their business functions to improve business performance during times of economic turmoil.

SMMEs are important contributors to the economy as these firms provide employment opportunities and create economic wealth. However, many SMMEs fail due to reasons such as the influence of economic factors (low sales and growth prospects) as well as the lack of finance, managerial skills and expertise. SMMEs could possibly increase their chances of success if they adjust aspects in their firms which the owners and managers of the SMMEs can control. Business functions are regarded as internal forces influencing a firm and SMME owners and managers can control these functions. These business functions include general and strategic management, purchasing management, production management, marketing management, financial management, human resources management, business communication management and information management. It is important to investigate how SMMEs can adapt their business functions, during difficult economic times, to improve their business performance.
A self-developed, self-administered and structured questionnaire was distributed to 300 SMMEs in the Eastern Cape and the Garden Route area. A total of 250 usable questionnaires were received, therefore a response rate of 83% was obtained.
The findings of this study revealed that all eight of the business functions require adjustments during difficult economic times to improve the business performance of SMMEs. Respondents regarded the financial management function as the area in SMMEs that needs the most focus and adjustments, during challenging economic times to improve business performance. Following financial management is the purchasing- and information management business functions.
This study specifically focussed on how SMMEs should adapt their business functions during economic turmoil to improve business performance. This type of study has never been conducted in South Africa. The results and recommendations contribute to SMMEs understanding of how to change their business functions to improve business performance, especially during difficult economic times. The implementation of these recommendations may lead to improved business performance and higher levels of success among SMMEs in South Africa, which will be beneficial to the economy.

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