The impact of institutional constraints, management competencies, strategic and structural constraints on the performance of Black-owned SMMEs in City of Tshwane Metropolitan Municipality

Abstract

The purpose of this research study was to examine the impact of institutional constraints, management competencies, strategic and structural constraints on the performance of black-owned small, medium and micro-sized enterprises (SMMEs) in City of Tshwane Metropolitan Municipality (CTMM). A quantitative survey was conducted using the probability sampling (N=353) of the black-owned SMMEs in CTMM. The Pearson’s correlational analysis was used to determine the relationship between institutional constraints, management competencies (as composite sets of human resources, financial resources and information resources), strategic and structural constraints, and the performance of the business (as composite sets of financial growth and organizational growth). The results indicated a negative relationship between the dependent variables and independent variables. The item analysis, dimensionality analysis, confirmatory factor analysis and structural equation modelling were performed to determine the factor structure of all the independent and dependent variables, the results yielded a good fit of all the measurement models. These findings may provide new practical knowledge for the financial and non-financial institutions to consider the position of black-owned SMMEs when they design policies, which add to the theoretical knowledge in the SMMEs sector.