The intrinsic motivational factors of small and medium business growth : a study on the furniture manufacturing sector in the Ethekwini Metropolitan area

Abstract

Small and Medium Enterprises (SMEs) in South Africa (SA) contribute significantly to job creation, wealth, social stability and economic growth. Growth is stimulated endogenously, through motivation, while employment is a natural consequence of a larger number of SMEs as well as the expansion of small businesses into larger enterprises. Although it has been noted that SMEs are viable avenues through which jobs can be created, relatively few studies have explicitly investigated the link between intrinsic motivation and small business growth; this study filled the gap by exploring the impact of intrinsic motivation on SMEs’ growth. This is particularly important when one considers that the failure rate of SMEs in SA is very high and it is of great importance to investigate the factors that can impact on the growth of SMEs. Why some individuals are more successful in business than others is a major question in SME research. The common view is that there are a numbers of factors involved related to the entrepreneur or business owners and the business and the business environment. Building on the concept of human capital and psychological theories, this study investigated the influence of intrinsic motivational factors in SME business growth in the eThekwini Metropolitan Area, in South Africa.

The target population for this study was SMEs in the furniture manufacturing sector. Based on census study, the sample size of the study was 68 owners of SMEs in the eThekwini Metropolitan Area. Both primary and secondary data sources were used in the study. A quantitative research design was adopted to conduct this research. The survey method, by way of a self-administered questionnaire, was used to collect primary data. Various techniques such as descriptive statistics, Analysis of Variances (ANOVA), factor analysis, Chi-square, and regression analysis were used to analyse the data. The findings of this study revealed that intrinsic motivational factors of SME managers positively impact on the growth of SMEs in SA.

The findings further revealed that creativity and necessary entrepreneurial skills influence implementation of sustainable growth of SMEs, and the entrepreneur’s success depends on the identification of crucial entrepreneurial skills for starting a business as well as for helping the business to survive and grow in the early years. Therefore, capacity building for SME owners to sustain business growth is recommended.