Research Article: 2021 Vol: 20 Issue: 1
Joseph Chikwendu Ezennia, University of KwaZulu-Natal
Emmanuel Mutambara, University of KwaZulu-Natal
African immigrant-owned micro enterprises encounter so many challenges and sometimes, physical attacks and otherwise were directed at the entrepreneurs for taking the aborigines job opportunities. Despite this, they have continued to strive beyond expectations, in any way they could, amidst the shortcomings. Hence, this investigation was conducted to unravel the factors influencing their need for high achievements. Cluster sampling technique was employed to determine the sample size of three hundred and sixty-four from the entire population. Questionnaires were used to collect the required information from the 364 African immigrant-entrepreneurs that were surveyed. Greater percentage-return of questionnaires (338) was achieved. Descriptive and inferential statistics were used to analyse the data. Subsequently, the results revealed that the need for high achievement factors positively influence African immigrant-owned micro businesses significantly in achieving business success and sustainability.
African immigrant, Influence, High achievement, Micro business, Durban, Entrepreneurship.
African immigrant-owned micro businesses assume a welfare enhancing business activity which takes place under good institutions playing important roles in channeling entrepreneurial imagination and initiatives into productive activities that enable consumers to maximize their utility at a lower cost (March et al., 2016). These activities benefit both the immigrant-entrepreneur and the society at large and generate economic wealth informed by the zeal to achieve economic stability and sustainability. The enthusiasm propels the entrepreneur to pick-up what is left behind from an unfortunate business failure and forge ahead with innovativeness, enterprising intuitiveness to revive the business enterprise.
However, African immigrant entrepreneurs in Durban are seem to be trying to make the ends meet amidst the prevailing circumstances, such as, hostilities, xenophobia, victimisation and the fear of the unknown. Some cases of the above challenges, including xenophobic attacks and other like-manner tensions have been established in recent past (News24, 2019; Fabricius, 2019). That notwithstanding, African immigrants-owned micro businesses have managed to progress over the years. They have proved to be resilience towards the pursuant of their business endeavours to achieve sustainability. The objective of this survey was to investigate and reveal the factors influencing the need for high achievement on African immigrant-owned micro businesses in Durban, South Africa.
Entrepreneurship
Entrepreneurship has been one of the main sources of job creation which has a direct influence on economic growth and also guides national propensity towards that. The pursuit for a generally acceptable definition of entrepreneurship has eluded many authors, and as a result of that, many authors tend to adopt definition that best suits the purpose of their research. In this study, an entrepreneurship is an encompassing entrepreneurial activity by an entrepreneur towards achieving his livelihood and sustainability.
Micro Business
Micro businesses are defined differently by various scholars, individuals and organisations. However, the common features or indicators are contained some of the definitions, including the size of labour force, total assets, annual returns and capital investment (Bouazza et al., 2015). In South Africa, micro businesses are defined as, “those companies with an annual turnover of less than ten million Rands” (Ansary, 2016). Further, Ayandibu & Houghton (2017) defined micro businesses as those businesses that have turnover below the VAT registration level of three hundred thousand Rands per year. On the other hand, Thompson & Zang (2018) conceptualise the term ‘foreign-owned businesses’ as businesses owned and controlled by individuals who are not citizens of the host countries, but residents from different countries.
Furthermore, South Africa National Small Business Act 102 of 1996, as amended in National small business Act of 2019 defined small enterprise as “a separate and distinct business entity, together with its branches or subsidiaries, if any, including cooperative enterprises, managed by one owner or more predominantly carried on in any sector or subsector of the economy” (South Africa, 2019). The Act went further and defined micro businesses as business entities managed by one or more persons with fewer than 10 employees and total annual turnover of less than R7.5 million Rand (South Africa, 2019). Micro businesses in South Africa are classified into various forms, such as, spaza shops, cafés, home-based businesses, mini-taxis, small scale construction and textile manufacturing.
African Immigrant-Owned Micro Business
African immigrant-owned micro businesses are businesses owned by black Africans from the African continent who owns businesses and participate in entrepreneurship wherever they found themselves, including South Africa. The difficulties in securing employment in the host country’s labour market mostly drive so many of them into starting-up a micro business, as means of support for livelihood (Ngota et al., 2019). These businesses in turn create jobs and offer employment to both locals and the migrants.
African Immigrant-Owned Micro Business in South Africa
The transformation of South Africa’s socio-political structure from 1990 into 1994 brought about a massive change in the country and made it a financially attractive destination, which invited not only the investors and entrepreneurs, but also the skilled and educated workers from within the Africa continent and beyond. Sequel to apartheid regime in South Africa, new democracy has implemented several initiatives to boost the economy, especially entrepreneurship. Nevertheless, the report shows that South Africa’s rate of Total early-stage Entrepreneurial Activity (TEA) declined by 34% from 2013 to 2014, with only 7% of the country’s adult population engaging in entrepreneurship (Illingworth, 2015). The 2014 TEA rate showed that South Africa backslid three times lower than its expected entrepreneurial activity rate, given its per capita income (Illingworth, 2015). According to a World Bank Group study, more than half of South Africa’s population are found in townships and informal settlements (38% of working population) but this has not translated into widespread interest in entrepreneurial activity (Mulligan, 2015).
However, Global Entrepreneurship Monitor’s (GEM) report on entrepreneurial activity in South Africa affirmed that, “although the entrepreneurial activities were very low, they have increased marginally over the last 10 years, but in 2014 dropped by a staggering 34 percentage points (from 10.6% to 7%). It also noted the increase in women’s entrepreneurship primarily due to government support, but the perception of opportunities to start a business, and confidence in one’s own abilities to do so, remains alarmingly low compared to other sub-Saharan African countries” (Global Entrepreneurship Monitor (GEM), 2016). Moreover, the rate with which extant business terminates exceeds the rate of business start-ups, consequently causing a loss of business activity and job losses (Global Entrepreneurship Monitor (GEM), 2016). Adjusting and adapting to live and work anywhere apart from home has never been so easy and comfortable, nevertheless, across international borders or in a foreign country. United Arab Emirates (UAE) is another interesting country where foreign national entrepreneurship flourishes. According to Snoj (2015), UAE government depends on the foreign nationals in growing and contributing to the economic development of the country.
The Need for High Achievement
McClelland suggests that entrepreneurs possess outstandingly high need for achievement, therefore, the “need” demands a special type of entrepreneurial attitudes; inclusively, a willingness to risk even personal resources (capital, energy, and reputation) on a business venture that has chances for failure, hence, pose numerous challenges to the entrepreneur. The pursuit for high achievement has also been associated to each individual’s hunger for power and hedonism, which has added up to the entrepreneur’s challenges to enhance a willingness to square-off risks and uncertainty and take initiative in the face of challenges with daring energy (Miller, 2015). A high achievement motivation may serve to ignite the entrepreneurial intentions and link them to actionable business activities.
As much as the course to the need for high achievement and risk-taking tendencies pose some challenge, they also contribute immensely to the development of a positive entrepreneurship attitude in an entrepreneur (Uddin & Bose, 2012). Also, the performance of an individual is a function of their intrinsic nature and reflection of their stimuli (needs, attitude and values), the perception and subjective view of the environment, potential, and personality. The subjective reasons that influence the entrepreneurial decision reflect the motivational level of the individual.
According to Kothari (2013) & Polya & Szucs (2013), McClelland argues that those who are high in the need for achievement possesses five critical attributes. Firstly, he opines that high achievers like situations where they can take personal responsibility for finding solutions to problems. Secondly, high achievers prefer quick feedback so that they can judge whether they are improving or not. The third attribute is that higher achievers avoid easy or very difficult tasks and they dislike succeeding by chance. The fourth attribute is that high achievers prefer striving to achieve targets, which represent a challenge, and are not beyond their capabilities. The fifth is that high achievers are interested in the concrete knowledge of the results of their decisions and money most often serves as a good measurement of success.
Factors Influencing the Need for High Achievement
The factors influencing the need for high achievement on entrepreneurs, including African immigrant entrepreneurs are numerous. The need for high achievement is “a driving motive that determines the height of entrepreneurship. Entrepreneurs’ high need for achievement drives them to strive for fulfilling this need, through success in business” (Çolako?lu & Gözükara, 2016). McClelland, according to Naji (2019), also attribute this need for high achievement to social and cultural factors as reinforcement, and the role parents play in nurturing a child to self-reliant. The following factors below are identified in the literature.
Need to support one’s family
Family has been identified as the most important variable in decision making and the most prominent consumption unit, which has attracted the interest of many scholars. Successful entrepreneurs would agree that without the support of the family, they may not have been through to their success. Hence, the importance of family to an entrepreneur. As a result, a considerate entrepreneur will leave no stone unturned towards ensuring the happiness of the family despite being deep in creation of new businesses (Belyh, 2018). Africans are known for maintaining a large family, including extended families. Wealth may come and go but family remains, therefore, family’s emotional, psychological and other needs should be part of an entrepreneur’s daily goals (Liberman, 2020).
Peer pressure
Peer pressure refers to “peer influence that might cause an entrepreneur to change his/her behaviour to meet the expectations of others. The feelings cause someone to do something or to keep from doing something else, no matter the personal decision to do or not” (Wilk, 2016). This pressure may come from friends or colleagues to influence a particular decision, and it is likely to happen when someone is indecisive particularly at the weak moment. However, resilient entrepreneurs cultivate their networks of clients, peers, and friends, not only to enhance their businesses, but also to explore new sources or opportunities, while keeping updated with changes in the market (Van Wyk, 2018).
Desire to increase the size of business
The need for high achievement actually propels an entrepreneur into doing great things. Understanding that the business is so hard to operate and requires considerable effort means wearing different hats that match different business situations. Being at an alert dealing with sales and marketing, understanding taxes and compliance, interacting with clients always and so on. The entrepreneur can equally factor-in or consider expanding internationally, screen already existing offers and scale them internationally for business growth and potential profit making (Adams, 2017). Further, an innovative business idea is imperative in order to achieve a competitive edge over others at the same industry. Determining what makes you distinctive is the key (Long, 2017). Conversely, not all the entrepreneurs are interested in a genuine conscious decision to expand their businesses more. Doug & White (2020) assert that the decision not to expand may be attributed to risk involved and unwillingness to change a lifestyle, to avoid government regulations and to avoid delegating responsibilities to others.
Availability of business opportunities
Identify new business opportunities, according to Adams (2017) involves analysing available new opportunities in the industry by understanding the demographics better. Familiarising yourself with everything, from distribution channels to the competitors, and analysing foreign markets and other potential industries. There are also opportunities in the local communities. According to Medal (2017), being able to identify problems may equally transform to opportunities, because those opportunities may be disguised as problems. Further, despite cultural and language differences posing as challenges across many parts of the societies, starting locally to harness opportunities remain the best world changing idea (Spencer, 2019).
Location of the business
Migration of entrepreneurs, especially those from other parts of the African continent to South Africa are being influenced by location characteristics because of some known imminent challenges. Khosa & Kalitanyi (2014), in their study on the challenges in operating micro-enterprises by African foreign entrepreneurs in South Africa, discovered that, although xenophobia is not a frequent problem to African foreign entrepreneurs, it is detrimental to their enterprises. The authors also found that getting access to targeted business locations is one of the challenges affecting African immigrant-entrepreneurs in South Africa.
Economic and political instability
The potency of these two phenomena has the tendency to decimate any economy. According to Saleh et al. (2020), economic instability may lead to political quagmire which obviously can translate into violence leading to destruction of infrastructure and businesses, leaving the country underdeveloped. There would be fast deterioration of so many basic infrastructures. Concentrating on the prospects of business venturing will become very tough and a great challenge in the country. Further, political instability, according to Shumetie & Watabaji (2019), has significant negative effects on innovativeness of entrepreneurial activities in the country. For instance, it has caused underdevelopment of some Africa countries, especially where the level of corruption is so high. Politicians, leaders and other public servants engaging in corrupt practices and self-aggrandisement, while the poor masses suffer. Political and economic instability can be considered as a critical bottleneck for innovation and overall economic and infrastructural development of many countries or economies (Shumetie & Watabaji, 2019).
Enabling business environment
Research shows that South Africa is considered the economic powerhouse of Africa, which attracts many investors and entrepreneurs from Africa continent and beyond (Khosa & Kalitanyi, 2015). The authors discovered that South Africa is the best destination for investment because of the enabling business environment created by the government, and as a result of this, the country attracts foreign migrants from diverse parts of the world. However, the previous study by Khosa & Kalitanyi (2014) stressed that operating micro businesses by African immigrant-entrepreneurs in South Africa poses a very great challenge because of crime, finding suitable business locations, high rentals and securing growth and start-up funding.
The study site was Durban Central Business District in KwaZulu-Natal province, South Africa. The target population was the informal micro businesses with a population of 6,238 (Economic Development and Growth in eThekwini, 2013). A cross-sectional research design was adopted to investigate the research phenomenon. Sample size of n=364 participants was drawn from the population to participate in the study. Two main statistics were employed to analyse the data, namely; descriptive and inferential statistics.
The demographic data on Table 1 shows that majority of the participants were males (85%), while 15% were females. This signifies that more males (85%) participants (entrepreneurs) migrate more than females (15%) from different African countries to Durban in search of business opportunities to feed and support their family members. The study also gathered that 46.7% have done business in Durban for fewer years (0-6 years), which is significant and directly connected with the influx of many African immigrants into the country in the first few years. Then, the declining starts after few years of business turbulence and economic difficulties. A larger 53.3% survived the business storm for 7 years and above, indicating that their businesses have shown more resilience and business stability than the other. Moreover, the types of business engaged-in by African immigrants in Durban were identified and categorised, they include; African food and groceries (28.1%), Information and Communication Technology (ICT) and Innovation (19.2%), wearables and cosmetics (16.9%), household items and care services (28.4%) and others (7.4%).
| Table 1 Demographical Data | |||
| Variables | Frequency | Percentage | |
| Gender | Male Female |
287 51 |
84.9 15.1 |
| Age | 18-40 years 41-60 years |
193 145 |
57.1 42.9 |
| Years stayed in South Africa | 0-6 years 7-12 years 13 years and above |
115 150 73 |
34.0 44.3 21.7 |
| Years of doing business in Durban | 0-6 years 7 years and above |
157 180 |
46.5 53.5 |
| Types of Business | African food and groceries ICT and innovation Wearables and Cosmetics Household Items and Services Others |
95 65 57 96 25 |
281 19.2 16.9 28.4 7.4 |
Accordingly, other information on the Table 1 above shows the types of business owned and run by African immigrants in Durban. The percentage distribution reveals that the majority of the businesses established by African immigrants fall under the categories of African food and groceries (28.1%) and household items and services (28.4%), followed by ICT and innovation with 19.2%, and Wearables and cosmetics with 16.9%. The insignificant 7.4% are other merchandises that were not steadily available in the market.
However, in addressing the need for high achievement factors influencing African immigrants-owned micro businesses in Durban, ten questions were asked, each with 5-point Likert scale of 1 (strongly disagree) to 5 (strongly agree). The questions asked were based on: the desire to support one’s family, peer pressure, the desire to increase the size of the business, availability of business opportunities, better location of the business venture, economic and political instabilities in respective countries, an enabling business environment, possession of business skills and strategies, the desire to improve the lifestyles, and the desire to be well-established in the line of business.
The results on Table 2 above indicate that majority of the participants (97.6%) agreed to the fact that they support their families with the business proceeds. A significant percentage of participants (55.7%) disagreed that they were faced with peer pressure, 98.8% also indicated that they had the desire to increase the size of their business, 93.7% of them reported that there was an availability of business opportunities, and 76.7% of the participants agreed that their businesses were well-sited and at a good location for business. Further, 64.2% indicated that there were economic and political instabilities in their respective countries, 75.4% of the participants also revealed that South Africa had an enabling business environment, whilst 97.3% indicated that they had business skills and strategies to propagate the business. Moreover, 98.2% of the participants concurred that they wanted to improve their lifestyles while all the participants in the study (100%) agreed that they had the desire to be well-established in their line of business.
| Table 2 Descriptive Statistics | |||||
| Need for High Achievement Factors | SA | A | N | D | SD |
| I have a family to support | 82.0 | 15.6 | 0.6 | 1.5 | 0.3 |
| I am faced with peer pressure | 13.5 | 30.8 | 20.7 | 30.2 | 4.8 |
| I have the desire to increase the size of my business | 75.3 | 23.5 | 0.3 | 0.3 | 0.3 |
| There is availability of business opportunities | 55.1 | 38.6 | 3.6 | 2.7 | 0.0 |
| My business is well-sited on a good location | 53.3 | 23.4 | 18.9 | 2.4 | 2.1 |
| The presence of economic and political instability in my country | 42.6 | 21.6 | 31.2 | 4.2 | 0.3 |
| South Africa has an enabling business environment | 41.3 | 34.1 | 16.2 | 6.0 | 2.4 |
| I have business skills and strategies | 60.2 | 37.1 | 2.7 | 0.0 | 0.0 |
| I want to improve my lifestyle | 87.1 | 11.1 | 1.8 | 0.0 | 0.0 |
| I have the desire to be well-established in my line of business | 91.3 | 8.7 | 0.0 | 0.0 | 0.0 |
T-test
T-test was carried out at a test value of 3 on each question to test for significant agreement/disagreement. The mean score >3 indicates significant agreement while a value with a mean score <3 is interpreted as disagreement. From Table 3, it can be deduced that the mean scores revealed that there was a significant agreement that all factors have a positive influence on African immigrant-owned micro-businesses in Durban.
| Table 3 Need for Achievement Factors Measured | |||
| Item | Mean | Std. Deviation | Std. Error Mean |
| I am faced with peer pressure | 3.18 | 1.146 | 0.063 |
| I have the desire to increase the size of my business | 4.73 | 0.526 | 0.029 |
| There is availability of business opportunities | 4.46 | 0.695 | 0.038 |
| My business is well-sited on a good location | 4.23 | 0.977 | 0.053 |
| The presence of economic and political instability in my country | 4.02 | 0.968 | 0.053 |
| South Africa has an enabling business environment | 4.06 | 1.015 | 0.056 |
| I have business skills and strategies | 4.57 | 0.547 | 0.03 |
| I want to improve my lifestyle | 4.85 | 0.402 | 0.022 |
| I have the desire to be well-established in my line of business | 4.91 | 0.282 | 0.015 |
Reliability (Cronbach’s alpha)
The reliability of the measuring instrument was evaluated using Cronbach’s Coefficient Alpha to test the reliability of these factors. According to Sekaran & Bougie (2016) a Cronbach’s coefficient alpha score of 0.7 and beyond is considered reliable. The findings revealed that the Cronbach’s alpha value of 0.731 is highly reliable and therefore considered acceptable.
Validity (KMO and Bartlett's test)
To determine the validity of the research instrument, KMO and Bartlett's test was employed. According to Hair et al. (2010), the KMO measure of sampling adequacy index ranges from 0 to 1, reaching 1 when each variable is perfectly predicted without any error by other variables.
The findings from Table 4 above revealed that the measure of sampling adequacy for the need for high achievement factors which influence African immigrant-owned micro businesses in Durban was 0.611 and Bartlett’s test was significant. Hence, this indicates that the data set complies with the requirements of sampling adequacy and sphericity for the factor analysis performed.
| Table 4 KMO and Bartlett's Test | ||
| Kaiser-Meyer-Olkin Measure of Sampling Adequacy. | 0.611 | |
| Bartlett's Test of Sphericity | Approx. Chi-Square | 720.942 |
| df | 21 | |
| Sig. | 0.000 | |
Inferential Statistics
The validity of the self-developed research instrument was evaluated using Factor Analysis (Table 5). In extracting the factors, only items with loadings >0.4 were significant. Two factors were identified, namely HA1 (Higher Achievement 1) and HA2 (Higher Achievement 2). Both factors account for 72.9% of the variance in the data.
| Table 5 Pattern Matrixa | ||
| Factor | ||
| 1 | 2 | |
| The presence of economic and political instability in my country | 0.851 | - |
| South Africa has an enabling business environment | 0.778 | - |
| I have business skills and strategies | 0.592 | - |
| There is availability of business opportunities | 0.467 | - |
| My business is well-sited on a good location | 0.435 | - |
| I have the desire to be well-established in my line of business | - | 0.753 |
| I want to improve my lifestyle | - | 0.709 |
One-sample test with an average mean score (M=4.22), t (334) = 31.47, p<0.0005 for HA1 and (M=4.88), t (337) =113.82, p<0.0005 for HA2 (Table 6) shows that both factors are motivations for high achievement. Further paired samples t-test was conducted to see if one is higher than the other. Clearly, it was revealed that HA2 (personal motivation) has a greater influence on high achievement than HA1 (external motivation).
| Table 6 One-Sample Statistics | |||||||
| N | Mean | Std. Deviation | Std. Error Mean | ||||
| HA1 | 334 | 4.2181 | 0.7073 | 0.0387 | |||
| HA2 | 334 | 4.8832 | 0.30237 | 0.01655 | |||
| One-Sample Test | |||||||
| Test Value = 3 | 95% Confidence Interval of the Difference | ||||||
| t | df | Sig. (2-tailed) | Mean Difference | Lower | Upper | ||
| HA1 | 31.473 | 333 | 0 | 1.21806 | 1.1419 | 1.2942 | |
| HA2 | 113.824 | 333 | 0 | 1.88323 | 1.8507 | 1.9158 | |
Doing business in any part of the world is quite challenging, but in some African countries like South Africa, more unique set of challenges are met by entrepreneurs most especially African immigrants that owned micro businesses. The study sought to determine the factors that influence the need for high achievement amongst African immigrant-owned micro businesses in Durban. The results revealed that there was significant positive relationship between the need for high achievement and African immigrant-owned businesses in Durban. In other words, the need for high achievement had a significant impact on African immigrant-owned micro businesses in Durban in achieving business success and sustainability. This result falls in line with the findings of Kothari and Polya & Szucs, which also revealed that the key to successful entrepreneurship lies in achievement motivation and a high need for achievement.
Achieving optimality in entrepreneurship is a function of entrepreneurs being enthusiastic enough to accomplish good job with high achievement motives, running their businesses to achieve a competitive edge. Further, passion leads people to get fully committed to any business activity, higher achievement and performance. With passion, higher performance is achieved leading to goals attainment and higher efficiency.