Academic journal article SA Journal of Human Resource Management

Unravelling Managerial Competencies and the Profitability of Small Technology-Oriented Businesses: A Case of Public Access Venues in an Emerging Economy

Academic journal article SA Journal of Human Resource Management

Unravelling Managerial Competencies and the Profitability of Small Technology-Oriented Businesses: A Case of Public Access Venues in an Emerging Economy

Article excerpt

Introduction and problem statement

Small, micro and medium enterprises (SMME) in emerging economies such as South Africa are confronted with momentous 21st-century challenges with a strong bearing on their managerial competencies and capacities. These challenges include the global supremacy of information and communication technologies (ICTs) in the provision of products and services (Jerald, 2009 ; Selywn, 2016), and the volatility of the domestic market in light of the instability of domestic currencies (Butler, 2016 ; Maveé, Perrelli, & Schimmelpfennig, 2016). Other challenges include shifts in consumer behaviour and needs (Urban, 2010) and the increasing convergence and homogeneity of Internet-based services (Powell, 2007 ; Rambe, 2013). These constraints cast aspersions on the capacity of small technology-oriented businesses such as Internet cafés to survive without a transformation of their owners’ managerial competencies and capabilities. While the increasing permeation of ICTs into all spheres of society in the 21st-century (Jerald, 2009) has heightened the need for entrepreneurs’ recognition and anticipation of technology opportunities (Urban, 2010), there is insufficient evidence on the rethinking of SMME’s managerial competencies and capabilities to tap into these opportunities. Similarly, while the avalanche of bite-sized communications embedded in digital technologies are expanding and intensifying care work and emotional labour (Selwn, 2016), these promises and hype about technology cannot be sufficiently tapped into because of the paucity of managerial competencies that persist in South African small businesses to optimise the business opportunities created by technology (Nkosi, Bounds, & Goldman, 2013 ; Olawale & Garwe, 2010 ; Tangwo, 2012 ; Van Scheers, 2011).

While the SMME owners or managers’ possession of managerial competencies is generally considered as critical to the creation, growth and longevity of small businesses (Nkosi et al., 2013 ; Temtime & Pansiri, 2005), no systematic research has targeted technology-oriented businesses such as public access venues (PAVs), especially Internet cafés in developing countries. The few exceptions that focused on managerial competencies have not necessarily covered Internet cafés (Temtime & Pansiri, 2005 ; Yahya & Elsayed, 2012) and ironically those that foregrounded Internet cafés were theoretical studies (Rambe & Makhalemele, 2016 ; Rambe & Mokgosi, 2016) which insights lacked empirical evidence. More so, despite the professed significance of Internet cafés in ICT-based service provision, their impact in the marketplace (including the honing of managerial competencies) remains practically unknown (Dammert, Galdo, & Galdo, 2014). As such, what remained speculative in entrepreneurship and management studies that examine managerial competencies in technology-enabled contexts is the nature of managerial competencies inherent in Internet café owners or managers and their implications for the profitability of such businesses. As such, the study attempted to address the following questions:

* Which managerial competencies are discernible among owners or managers operating small technology businesses (i.e. Internet cafés) in the Free State province?

* What is the relationship between managerial competencies of owners or managers of small Internet businesses (i.e. Internet cafés) and the profitability of their businesses?

* Which managerial competencies of owners or managers have the greatest impact on the profitability of Internet cafés in the Free State province?

Problem background

The need to explore the managerial capabilities of owners or managers of PAVs such as Internet cafés should be conceived in light of limited digital competencies and skills of some Internet café users and the uniqueness of Internet café services. These issues are discussed in subsequent sections.

Parochial digital competencies and skills

Internet cafés in South Africa render a wide spectrum of services and digital competencies to users such as the downloading and uploading of documents, browsing websites, emailing and document processing. …

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