Evaluating the Influence of Organisational Culture on the Sustainability of Small, Medium, and Micro Enterprises in the Municipal Area of eThekwini ()
1. Introduction
Setting up and ensuring sustainability in business is good for different purposes (Anderson, Potočnik and Zhou 2014) [1] . Nevertheless, the most important part of it is people striving to bring development to the planet by working on it. This explains the reason why the business environment needs to be taken care of by everyone for the benefit of all. South Africa, like other countries around the world, is not exempted from this quest as the government has comparable ideas to invigorate growth and egalitarian development in the nation by making use of Small, Medium and Micro Enterprises (SMMEs) as one of the sustainable processes to crack economic opportunities (Dladla 2016) [2] . To ensure a decent life and improve the good of living of all, the government of South Africa has considered it fitting to deal with the environmental problems causing anxiety in the country (Ogunsola 2017) [3] .
However, with the designed initiatives established by the government to amplify the operations of initiating change in society will be hard to institute without SMMEs having good knowledge of what cultural values are essential to make the change and how organizational culture can be applied to institute change (Masocha and Fatoki 2018) [4] . Therefore, to understand what organizational culture connotes, how it affects organizations, as well as how it can be administered, industrial and social experts like entrepreneurs need to have an idea of how they can use the knowledge of organizational culture and behaviour to transform the changes that revitalize the world (Fernandes 2018) [5] .
Organizations are one of the core drives of culture (Poddubnaya 2019) [6] . Individual organizational culture takes place during the formation and growth of the organizations. The goal of organizational culture is to promote harmony, consistency, and worker innovation, enhancing the business’s economic viability. Additionally, organizational culture strongly influences people’s behaviour. Every organization, as noted by Urinov (2020) [7] , has its unique character just as people do and that is why the unprecedented exclusivity of an organization is its community. For the reason that organizational culture is elusive, the potent influence of it amongst the group of individuals working together influences their attitude. This in turn makes proper behavioural qualities necessarily apparent to its members when an enterprise assumes inherent stability (Wang, Farag and Ahmad 2021) [8] . An understanding of what signifies the culture of an organization, and how it is established, preserved and taught, would strengthen the business’ capacity to describe and predict the actions of individuals at work.
This article is organized in the following manner. After the introduction, the review of the literature to highlight the existing knowledge base gap and the reason for the study are provided, along with the theoretical framework. This is followed by a description of the research methodology, with the results section providing extraction and analysis of data obtained from the 250 surveyed SMMEs, followed by a discussion of the key findings and related future research topics.
2. Conceptual Framework
The concept of culture emerged from ethnic variations in the diverse fields of social sciences. Culture is noted as one of the key elements needed for recognizing corporations. Thus, the knowledge of it has been observed severally by management and organizational scholars over time. On this basis, there have been various literary findings on culture from many viewpoints.
The basis of culture from a national cultural point of view is based on the work of Deal and Kennedy (1982) [9] . Deal and Kennedy (1982) [9] found the cultural model, that the greatest influence on an enterprise’s culture is the environment where it operates. This is how these authors described a culture, which they emphasized is part of what is needed for an establishment to thrive in the competitive environment. An organization’s culture is crucial to function well in the start-up, growth, maturity and declining or renewal stages of the development of an enterprise. From the perception of Deal and Kennedy (1982) [9] , no cultural value is better than another. Culture is enforced in an establishment because of unexpected trials, positive or adverse conditions or unanticipated incidents. When the cultural principles and practices are properly instilled, an organization can start the process of understanding the workplace and structuring it into a nature where social interactions flourish. By forming and fostering a coherent and unified culture, an organization can build a formidable footing for fluent and pleasurable work that produces transparency, creativity, team spirit and commitment (Deal and Kennedy 1982) [9] .
Handy (1985) [10] , through the perception of moralities and values, states that each organization can shape their ways of life. He introduces a leading authority on culture with the understanding that corporate culture will determine how people behave or relate to one another. Since culture differs, people must understand how it regulates them to stay stress-free. According to the view of Handy (1985) [10] , there exist four categories of culture that organizations must consider. These are power, task, personal and role cultures. From the power category, the authority lies with a few lawful people to make choices and are the major decision-makers. These people also extend the delegation of duties to other workers. In return, the underlings must closely adhere to their leader’s guidelines as they do not have the freedom to articulate their opinions or communicate their thoughts in an open discussion but to only obey whatever their leaders speak. The leaders must ensure the clarity of purpose to avoid the follower’s misrepresentation of ideas. In the task culture category, team spirit is fashioned to reach objectives or untangle critical issues. In such an establishment people, with shared interests and specialities, gathered to make a team. Under task culture, there must be business awareness, to all individuals, that make a team understand what is going on in the work operation where they impact equally and perform tasks in a highly innovative way. In a person’s culture, people are particular about their interests instead of the organization. Employees of the organization embracing personal culture are rarely staunch to the management and they never agree in support of the firm they work for. They should recognize that the organization’s goals and aspirations come first and anything else later. Role culture is a type in which the operatives are assigned duties and obligations based on their experience, instructive qualification, and field or discipline to get the best out of them. In role culture, the workers select the best approach they deem essential to support their establishment to the best of their capacity and are willing to face any challenges. Each worker in an organization is liable for their deeds. They will undertake business risk and comply truthfully with the work allocated to them. Authority comes along with obligation in such a work culture.
In the view of Schein (1985) [11] , organizations did not simply agree on a culture in a period, rather culture is formed over time as the workers pass through changes, cope with the external environment, and resolve issues. Schein assumed that there are three levels in an organization’s culture. These consist of the artefacts, values, and assumed values. The first level is that the artefacts are the features of the organization that can be seen, learned, and understood by people jointly. The outfit of the personnel, office furniture, amenities, demeanour of the workers, goals and dreams of the company fall under the artefacts and decide on what the culture of the workplace implies. The next level is the values which the employees carry. This plays a significant part in determining the organization’s culture as the belief process and confidence of workers have a profound effect on the culture of any organization. The third level is the assumed values of employees that cannot be quantified but influence the culture of the organization. According to (Schein 1985) [11] , people acquire cultural experiences through daily practices which in turn form part of their normal ways of life. With organizational creeds, the newly employed workers can also adjust to the corporate culture and enjoy a stress-free life.
Hofstede (1991) [12] broadens the cultural dimensions theory on the basis that values among employees vary. Hofstede (1991) [12] assessed culture through five basics which are power distance, uncertainty avoidance, individualism/collectivism, masculinity/femininity, and confusion dynamism. The first element which is the power distance is related to how distinct organizations deal with people’s inequity in matters involving physical and psychological qualities, reputation and esteem, affluence, authority and principles, rights, and rules. In his view, a national culture reveals to what extent individuals agree with the unfair power distance in these fields. It shows exactly how unequal distribution of power is acknowledged and the intensity of reliance compared to self-motivation in the organization. In an organization, unequal power is unavoidable typically when it comes to leaders-followers affairs. In organizations, the difference in power distance among the members is requisite for control and without it, the organization would reflect clustering. Organizations with a prominent level of power distance are inclined to acknowledge a hierarchical order where each person has their place. By contrast, organizations with a modest level of power distance struggle for fairness. The second element of national culture deals with how people or institutions cope with ambiguities in life like indecision of the very time to come.
According to Hofstede (1991) [12] , organizations that are preeminent in uncertainty evasion do not allow quirky conduct and ideas but follow strict values and conduct. However, organizations with minimal imprecision evasion have a more relaxed approach to the unknown. The third aspect of national culture is aimed at whether the organization is distinctive or more concentrated on teamwork. The level of socialism or teamwork will impact the rapport that employees have with the organization or where the workers belong. The fourth element of national culture is linked to how the organization handles variations in gender roles. Although the biological gap between men and women is equal in all organizations, the opportunity or gap in employment varies widely. Although men seem to be sovereign, forceful, and authoritarians, women are encouraging, supportive, respectful, and connecting in so many organizations. In industries with a high degree of femininity (low level of masculinity) life gratifications amongst workers are a bigger preference than job achievement. Perverse goes for organizations with a low level of feminineness. The fifth and final element of national culture is the prominence the various organizations held on time. Some organizational cultures are highly time-conscious. For instance, to be late for a meeting or unable to meet the time limit would be regarded as an insult. In other organizations, time is not constrained instead these cultures observe time as a limitless resource. Hofstede (1991) [12] concluded that cultures have different learned values that can be used to control behaviours and play a key role in shaping business performance. Thus, having in-depth knowledge of culture in a corporate establishment and its dimensions can prevent possible internal conflict.
Davenport (1993) [13] initiated consistency theory with the notion that organizations can be active when they have strong cultures that are extremely dependable, well-organized, and cohesive. Operative behaviour is entrenched in a collection of fundamental ideals; leaders and followers are bright at completing a pact when they have divergent understandings. This type of consistency is a controlling cause of steadiness and core mergers that emerge from a collective attitude and a high level of agreement.
Hogg, Carter and Dunne (1998) [14] conducted a study on whether organizational culture can influence market intelligence or not. The outcome of the findings evidenced that market intelligence had a constrictive upshot on business performance and employee commitment. Prominent among the constrictions identified by Hogg, Carter and Dunne (1998) [14] to market intelligence are issues such as communication, inexperience or lack of management ability, an imperfect combination of marketing functions, and power-related or political glitches.
On the other hand, Baker (2004) [15] explains through a mission theory that a common sense of resolution, supervision and processes can organize and spur members of the organization to common objectives. Efficacious organizations have a deep sense of resolution and guidance that describes organizational aims and calculated objectives and expresses an idea of how the organization will look in the future. According to Baker (2004) [15] when an organization’s core mission changes, changes take place in all the phases of the organization’s culture.
Considering the above, it is pertinent to adopt good cultural resources to revamp development and positively impact the environment in this contemporary epoch. However, the influence of globalization, contests in the business world, scientific advances, and the untimely death of businesses dictate the necessity of culture in an organisation as an approach to regulating the extravagant use of resources to improve and nurture the environment.
3. Organisational Culture
Gu et al. (2014) [16] describe organizational culture as fundamental principles that consist of values, beliefs, assumptions, attitudes, visions and experiences that an individual instils to relate to the environment or workplace. It is a behaviour that reveals the pathway to interaction through which people relate with one another in their respective areas. Based on the virtues with which SMMEs are operated such as experience, knowledge, skills, and abilities amongst others, one of the prominent reasons that SMMEs are still dwindling is a lack of social interaction between the employer and the employees and vice-versa, forgetting that information is the live wire of a business. Thus, this effect is one of the factors affecting employees who are taking advantage of opportunities around them because of their lack of experience, little or no training, and no exposure that could enable them to make their own rational decisions towards realizing the organizational goal. Amongst other things, a prominent factor is a fear of grooming work subordinates with the required intellectual resources to succeed in business because owners assume that once workers acquire the needed abilities, they may end up being disrespectful, arrogant or resign to establish their businesses, which consequently, leads such employees to be business rivals of their former employers. Gu et al. (2014) [16] advise that, for an organization to progress and succeed, its leaders must eliminate the fear of losing their employees to rivalry. Furthermore, a clear communication of ideas must be relayed to co-workers or subordinates without any element of ambiguity, for employees to act in accordance with the realization of the set goals and objectives.
Chan (2014) [17] points out that each organization has their own organizational culture which is the doctrine that reveals the manner of talking, dressing, slogans, behaviour, business hours, employee welfare, customer relations, or task performance. In addition, it is a phenomenal concept that requires specialized training to handle issues concerning the mode of behaviour, organizational value systems, management strategies, communication processes and attitudes. The author points to the vision, emotions, values, practices, people, places, self-motivation, narrative foundation, and substance to build a lasting relationship for revitalizing organizational culture.
Lisita and Prinsloo (2015) [18] opine that organizational culture is a branch of ethics that deals with the moral justification of an individual’s actions on which decisions are made. It is imbibed from the superior to the lower staff cadre in an effective organization. However, boosting work performance or efficiency warrants working together with employees as a team to achieve corporate goals, irrespective of the post or cadres of such individuals. Issues of bias, favouritism, unfairness and racism must be excluded if organizational value systems are to be maintained, where individual workers work towards the realization of corporate goals.
Turyakira (2018) [19] describes organizational culture as an embodiment of the character of business awareness, market capturing, opportunity recognition, business ideas, market intelligence and clarity of purpose, business risk, and creativity. It is how individuals and businesses ensure development and sustenance. The ultimate idea centres on the ability of the whole business to be of high-quality standards that produce services to meet customers’ tastes and demands.
The above-quoted authors have highlighted that organizational culture is relatable as the heart for SMMEs to flourish.
4. Business Sustainability
Ogunsola (2017) [3] argues that business sustainability is about practices involving the manner through which an organization subjects financial, social, and environmental risks, obligations, and opportunities to management. In another vein, Girtz, Hill and Owens (2017) [20] opine that business sustainability is a value system connected to economic, social and environmental structures―strong community of people, profits, and even the planet. Recognizing business sustainability, irrespective of size, Small, Medium and Micro Enterprises can be evaluated through environmental performance, corporate citizenship, or from a long-term business standpoint (Muñoz and Cohen 2017) [21] . Regardless of the stance of evaluation, the utmost priority of all businesses, whether small or large scale, is to be of great benefit to their environment, communities, and customers at the expense of their continuity Bolis, Morioka and Sznelwar (2017) [22] . To fulfil the practical function of sustainable development, businesses should assess from inside their ventures if they possess support and muscle for addressing issues about the environment in which a business operates, for example, social equity and economic efficiency.
Bolis, Morioka and Sznelwar (2017) [22] note that business sustainability is a systematic way of addressing concerns of social responsibility, stewardship of the environment, and economic values without causing untold damage to regions of habitation. It is a viable way of creating strategies to make life worth living well in this modern era, whereas the joint efforts of the citizenry, government, and stakeholders are called into play.
Bansal and Song (2017) [23] view business sustainability as the structures employed for adding value to the business in all capacities and for maintaining social and economic prosperity at all levels. Business sustainability needs careful attention, as well as observing the outcome of the results of improvements through a wide range of instruments. It is a vibrant system of relating substances of concern in local, economic, and ecological matters that affect business sustainability.
In light of the above and from the viewpoints of the authors, it can be observed that making lives worthy with good living calls for the participation of the populace and legal entities. Hence, if SMMEs as a unit amidst the community of practice must help address socio-economic issues and environmental matters, then the transformation must henceforth start within the internal structure of the business. This must be built on the platform of a strong organizational culture which will not only promote business sustainability but also sustainable economic development.
5. Methods
The study aims to assess the influence of organizational culture on SMME business sustainability. To evaluate the influence, a descriptive design was selected for this study as it outlined features of present facts and determined solutions to the issues under investigation. The entire SMME sector in the eThekwini Municipal Area constituted the target population for this survey. A probability sampling design was used to ensure recognized SMMEs had a known and even opportunity for selection, while simple random sampling was employed to provide every population member with a fair chance of assessment. This study has adopted the formula as proposed by Wiid and Diggines (2013) [24] to select the sample as follows:
where n = Sample size;
N = Total Population;
α = The Degree of confidence level;
N = Number of SMMEs in eThekwini Municipal area: 823,823 as per (Yellosa 2021) [25] .
The Degree of confidence level = 0.05 or five percent, as advised by (Khademi 2018) [26] .
n = 249.6
n ≈ 250
From the calculations made on sampling above, a total of 250 were obtained and this made the sample size of this research. 250 questionnaires of the study formulated on this basis were dispersed and retrieved in the same manner. The discoveries of the evaluation were extracted from these replies. The tool for this research was a structured questionnaire with a 5-point Likert scale. Brymanv and Bell (2015) [27] state that a questionnaire is an instrument of survey and object of data collection that contains a set of written instructions, questions, and options of answers, formulated principally for acquiring information from the respondents. The purpose of a questionnaire in this respect was based on the fact that it offers privacy and motivates respondents to attend to some sensitive issues. In addition, this instrument was chosen because, as Brymanv and Bell (2015) [27] advise, it permits the collection of information from large numbers of respondents in a relatively cost-effective way. The assembled information was captured and evaluated through the Statistical Package for Social Sciences (SPSS) version 26. Similarly, all relevant quantitative methodical tools were applied to generate descriptive and inferential statistics. Instances of these are frequencies, percentages, and cross-tabulations. Furthermore, measures of central tendency and dispersion were employed to provide the data collected with a broader range of being examined. Regarding inferential statistics, T-tests and analyses of variance (ANOVA) were applied to collect needed evidence in securing outcomes from the information under study.
6. Results and Conclusions
Here, we state and address the outcomes according to the analyses of data retrieved from 250 SMMEs about their knowledge of organisational culture and their retort business sustainability.
The research findings indicate that small, medium, and micro enterprises (SMMEs) operating in the eThekwini Municipal area demonstrate an awareness of the organizational culture’s impact on their businesses. This awareness has the potential to significantly contribute to the growth and sustainability of the region. Key findings include:
1) Gender
The chart above (Figure 1) shows that men (57%) ventured into entrepreneurial activities more than female entrepreneurs (43%). Gender disparities were observed, with male entrepreneurs outnumbering female entrepreneurs. Men appeared to prioritize the economic impact of business ownership as a motivation for entrepreneurship. Disparities in organizational structures cause complicated failures. However, it all begins with people’s fraudulence, dishonesty, and mistakes (Yilmaz and Flouris 2017) [28] . According to Bin Shmailan (2016) [29] , men turn out to be entrepreneurs because they concentrate on the economic effects of business ownership. They wish to bring transformation to the world even though changing it can be a difficult task. They are driven by a desire to make a change in their community where issues such as poverty, joblessness, and hunger are abolished.
2) Age
This result (Figure 2) shows that most entrepreneurs (37%) fall in the age group of 31 - 40 years whilst there are fewer people (4%) younger than 21 years in business. The same applies to the older group (8%) of over 50 years. The study highlighted the active involvement of youth in SMME activities, which serves as a commendable effort to address issues such as unemployment, criminality, and other misconduct practices. Ozer (2017) [30] pinpoints that youth or middle-aged people are most likely to experience high rates of unemployment, unfair distribution of environmental resources, and social disparities which could lead them to start their businesses.
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Figure 1. Gender distribution (Source: Researcher’s own construction).
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Figure 2. Age distribution (Source: Researcher’s own construction).
3) Highest educational qualification
These results (Figure 3) give a possibility of good fortune that SMMEs are going to move on the proper path because 76% of the entrepreneurs have a tertiary skill. Education emerged as a critical factor for entrepreneurs, as it enhances their knowledge and skills necessary for effective operational management. According to Aasheim, Li and Williams (2019) [31] , education plays a crucial role in all aspects of business operations by serving as a catalyst for fulfilling managerial responsibilities. Additionally, it provides an opportunity to enhance business capabilities and expertise in areas such as corporate governance, sales skills, communication skills, and other unique attributes such as values that differentiate people’s conduct and their respective roles.
4) Social relations
SMMEs were successful in fostering positive relationships within the community they served, demonstrating alignment between their actions and preached values of good behaviour, even when inconvenient (Table 1). Social relationships, as defined by Gallotti, Fairhurst and Frith (2017) [32] , are the growing quality of the repeated interactions that exist amongst people over a while. In business, social interaction can be used to disseminate information in a swift and cost-efficient way as well as reach out to the number of people with a message. For information passed during interaction to be credible, it must not mislead the parties involved (Hall 2018) [33] . For the reason that information is a cord that holds a business, entrepreneurs must engage in open communication to enable people to make good decisions (Fenwick, McCahery and Vermeulen 2019) [34] . The more comfortable employees and customers are around one another, the more confident they feel at voicing opinions, and getting along with one another (Bin Hashim, Raza and Minai 2018) [35] . This level of relationship is important to initiate change, create, and bring innovation to the business. Once people realise the benefits of working together in this way, team morale and performance increase (Seikkula-Leino and Salomaa 2020) [36] .
5) Information technology
The information above (Table 2) shows that 97.2% alluded to the fact that the implementation of information technology into the business reduced transaction costs. The utilization of information technology enabled SMME owners and their teams to be more efficient, allowing for better record-keeping, expanded customer engagement, participation in conferences and discussions, strengthening of corporate security measures, and reduction of various costs, ultimately leading to increased profits. Information technology has transformed how enterprises operate (Jacks, Wallace and Nemati 2012) [37] . With information technology, the worldwide market is easily reachable, and linked, yet broad, and diverse. It makes business communication clearer and quicker. Regardless of whether entrepreneurs relate with colleagues or retort to shoppers’ enquiries in real-time, information technology provides solutions to improve the regular work tide and communications (Aasheim, Li and Williams 2019) [31] . It advances the business’s operation and accelerates the business processes.
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Figure 3. Level of Education (Source: Researcher’s own construction).
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Table 1. Impact of social relations.
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Table 2. Implementation of information technology.
Source: Researcher’s own construction.
6) Poverty
Most of the respondents indicated that they played a role in improving the standard of living within the community by providing employment opportunities and contributing to poverty alleviation (Table 3). According to Ogunsola (2023) [38] , poverty is recognized as a global concern, albeit with variations in its conceptualization across different countries. Governments worldwide consider small, medium, and micro enterprises (SMMEs) as a dynamic approach to addressing poverty and ensuring economic sustainability within the areas they operate. Ogunsola (2023) [38] acknowledges that South Africa, like other countries, faces the detrimental impacts of poverty, which hinder economic development and wealth creation. Consequently, the government has taken steps to enhance the performance of SMME activities, recognizing their potential to address various challenges within the environment, including unemployment, food insecurity, conflicts, and high crime rates.
7) Responsibility
Despite the positive aspects, there is room for improvement as 84.8% of the entrepreneurs were found to be less fully committed to fulfilling their responsibilities (Table 4). Wong and Laschinger (2013) [39] suggest that when employees acknowledge their errors and proactively approach their supervisors, leaders must recognize their accountability and commend them for bringing the issues to their attention. This not only facilitates prompt resolution of the problems but also sets a positive example for others. Matemilola and Elegbede (2017) [40] observe that when leaders are honest about their mistakes and can learn
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Table 3. Contribution to poverty alleviation.
Source: Researcher’s own construction.
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Table 4. Responsibility of entrepreneurs.
Source: Researcher’s own construction.
from them, they earn respect and along the way create an environment of transparency. The ability of the leaders to admit to their mistakes brings clarity to opportunity gaps and elevates a deeper sense of accountability that can be shared among the team. People within the work system will begin to value the importance of having each other’s back.
7. Recommendations
Based on the results, the following suggestions are recommended to the entrepreneurs.
Responsibility
1) To address the problems allied with “responsibility in this study”, entrepreneurs must learn to assume responsibility for their faults and give room to corrective actions while also placing high priority on ethical standards. Doing this will make entrepreneurs be a good role model to others.
2) Additionally, entrepreneurs must be fair, honest, transparent in their decisions and able to display a high level of integrity that others can imbibe as a culture. When entrepreneurs enlighten others with knowledge, they develop a knowledge culture which adds value to the whole organization.
This research focused on the organizational culture of small, medium, and micro enterprises (SMMEs) in the eThekwini Municipal Area. The findings revealed that a significant proportion of entrepreneurs and managers in SMMEs were young individuals, with men representing a larger percentage of participants. Furthermore, it was observed that entrepreneurs displayed a reluctance to assume responsibility for their actions. This can be attributed to factors such as a lackadaisical attitude towards duty, insufficient knowledge, experience, and inadequate skills to effectively manage their operations. To promote business sustainability and establish a conducive organizational culture, this study recommends that entrepreneurs adopt transparent conduct, demonstrate honesty and fairness in decision-making, and embrace integrity in coordinating their business activities. By setting a positive example and adhering to ethical codes that govern business practices, entrepreneurs can inspire others to emulate good values and abandon incorrigible behaviour in both the business and wider society. Implementing these recommendations has the potential to make SMMEs more dynamic in sustaining their businesses and creating a positive impact on the environment. Therefore, it is crucial for these suggestions to be effectively applied in the context of South Africa.
Limitations of Research
Only the eThekwini Municipal region was the area of concentration owing to limited financial resources, the effect of which can constrain the overview of the outcomes