Entrepreneurship orientation and business discontinuance: A relationship analysis of total early-stage activities in the BRICS countries

Abstract

Purpose of the study: The links between entrepreneurial orientation (EO) and business discontinuance are seldom researched. This article analyses EO and business discontinuance rates in the countries of Brazil, Russia, India, China and South Africa (SA) of which the acronym is BRICS. The study aim is to establish whether innovative management of SMEs increase business survival rates. The BRICS formed in 2009-2010 but research comparing their SME sectors are sparse. Theoretically, EO underscored by innovation, high exportintensity and new technology take-up within early-stage entrepreneurship should lower business discontinuance.Design/methodology/approach: Data for the variables studied were extracted from the Global Entrepreneurship Monitor (GEM) report and the study hypothesised that innovation, high export-intensity and new technology take-up rates are negatively correlated with business discontinuance rates. The hypotheses were tested using correlation analysis. Kruskal-Wallis and post hoc tests find significant overall variances and specific country-country variances.Findings: While overall total early-stage entrepreneurship (TEA) is positively correlated with business discontinuance, the TEA variables scrutinised in the study are indeed mostly negatively correlated. These findings indicate that more generic small businesses are not good for accelerated economic growth because specific qualities in SMEs increase their survival and growth. Furthermore, innovation and new technology takeup are consistently positively correlated, implying that innovation cannot do without new technology.Recommendations/value: EO within SME management practice must be nurtured by well-crafted entrepreneurial policy and implementation. Support to SMEs, in particular with technology and digitalisation, is required to boost their innovation and competitiveness. Policy support is required to boost SMEs enter global value chains. C DAVIES JJ VAN VUURENEntrepreneurship orientation and business discontinuance: A relationship analysis of total early-stage activities in the BRICS countries

Factors Contributing to Business Failure and Eventual Exit among Selected Tutorial Service Centers

“…Concordant with the literature, as opposed to the notion that businesses will ascribe their failure to external antecedents, empirical findings showed that management deficiency is the primary reason for business failure. It is more of the internal factors why businesses exit and discontinue parallel to the studies reviewed (Bushe, 2019;Martinez et al, 2019;Bunyaminu et al 2019;Davies, C., & van Vuuren, 2021). Moreover, all the respondents believed that owner/founder orientation, structural or firm issues, and financial conditions are the internal factors that lead to business failure and exit.…”

“…Extant literature attributed these to human capital and knowledge or the owner/founder orientations which encompass motivations, skills or management deficiencies, capabilities, characteristics/behavior, and financial knowledge shortcomings (Bushe, 2019;Martinez et al, 2019;Bunyaminu et al 2019). The competency and the leadership style of the management are significant factors for organizational performance (Davies, C., & van Vuuren, 2021). Lack of entrepreneurial skills as a difficulty in starting and managing their firms during their early stages is a major cause of business failure for small businesses (Bushe, 2019).…”

“…Business discontinuation refers to the termination of operations and eventual closure (Davies & van Vuuren, 2021). Existing research frames entrepreneurial exit mostly as business exit, i.e.…”

“…Based on the Global Entrepreneurship Monitor (GEM), the term refers to business owners who shut down their firms over the last 12 months. Meanwhile, the GEM methodology defined an "established business" as a firm that successfully survived the 42month stage (Bosma & Kelley, 2019, as cited in Davies, C., & van Vuuren, 2021). Business discontinuation is an important feature of dynamic economies, and entries and exits of businesses are closely linked (Cefis et al, 2022).…”

“…Financial resources pertain to the obtainment of monetary funds for the business through one's personal finances, colleagues, and relatives. The two main reasons behind failure lie in having inadequate financial resources but more importantly in lack of adequate managerial competence (Bushe, 2019;Martinez et al, 2019;Bunyaminu et al 2019;Davies, C., & van Vuuren, 2021). On the other hand, the external factors mainly include government and insufficient government-related policies, complex regulatory requirements and processes, and unexpected environmental events disrupting the business operations (Bushe, 2019;Bunyaminu et al, 2019;Amankwah-Amoah et al, 2021).…”