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...
Category - Yolande SMIT
Independent Researcher
In South Africa, Small, Medium and Micro Enterprises (SMMEs) are often described as the driving forces of the national economy, mainly due to the socio economic value they add. Unfortunately, prior research suggests that South African SMMEs are adversely influenced by an array of economic factors, one of which is taxation. One form of taxation, which influences an array of South African SMMEs, is that of excise taxation; as levied on specific products that are considered detrimental to the social- and/or environmental well-being of South African citizens. When taking into account that excise taxation has increased year-on-year for the past 20 years, the perception was formulated that South African tobacco-and-alcohol-selling SMMEs that are subject to excise taxation, experience weak financial sustainability. As such, this study placed emphasis on the influence excise taxation levied on products sold on the financial sustainability of tobacco-and-alcohol-selling South African SMMEs...
A large proportion of South African Small, Medium and Micro Enterprises (SMMEs) make use of customised internal control initiatives and customised risk management practices to mitigate and/or manage risks, to provide reasonable assurance regarding the attainment of objectives in the foreseeable future. According to research studies however, the aforementioned internal control initiatives and risk management practices are deemed to be inadequate and/or ineffective. This is especially the case as these business entities are predominantly focused on preventing generic risks in relation to the safeguarding of assets and independent checks, while ignoring key risks which may be detrimental to the attainment of their objectives. Since approximately 70% of South African SMMEs fail after being in existence less than four years it is highly probable that these business entities are not paying enough attention to mitigate and/or manage key risks (potential loss events) and controlling actual...
In South Africa, almost all existing businesses are regarded as Small Medium and Micro Enterprises (SMMEs). Through legislation, the South African government has identified SMMEs as the best enablers to help with the achievement of certain core socio-economic objectives; particularly the creation of jobs and reduction of poverty levels. According to previous research studies these business entities are not achieving the latter socio-economic objectives; mainly as a result of their weak existence rate – up to 80% of these business entities fail within their first three years of existence. The latter is believed to stem from the realisation of economic factors – a major economic factor which adversely influences South African SMMEs is that of taxation. Over the years, more South African SMMEs have started to make use of the internet to conduct their respective business, which spurred the national government to make amendments to existing Value Added Tax (VAT) Laws by levying taxation on...
According to the South African Small Business Act No. 102 of 1996 Small Medium and Micro Enterprises (SMMEs) are regarded as separate small business entities owned by one or more owners; operating in various sectors of the national economy. SMMEs play a significant role in contributing to the South African economy, particularly by means of providing employment opportunities and assisting in the equal distribution of wealth. Albeit the latter prior research reveals that 80% of SMMEs do not survive beyond their first five years of existence. Plausible reasons for the latter include the influence of micro-economic factors and macro-economic factors; resulting in direct, inevitable risks being placed on the overall existence of SMMEs. In order to identify and manage these risks, SMMEs need to make use of adequate risk management strategies. More often than not a risk management strategy should eliminate and/or mitigate risks and provide reasonable assurance that business objectives will...
Small Medium and Micro Enterprises (SMMEs) are of grave importance to the South African economy as they are legally obliged to support in the alleviation of poverty, the diminution of unemployment and the equal dissemination of wealth throughout the country. Despite the importance of these entities, prior research suggests that these entities are not mainly sustainable as between 70% and 80% of South African SMMEs fail after being in operation for five years. More often than not the latter dispensation is believed to stem from the realization of risks which, in turn, is cultivated by the ineffective management of economic factors. Among the economic factors which have a direct influence on the existence of South African SMMEs is the effectiveness of accounting information system(s). Here it is argued that a small organization is more likely to attain sustainability if its accounting information system(s) provide relevant, reliable and recent information, to management, for better...
