Factors Contributing to SMEs Failure in Meeting Supplier Performance Standards

Open access


This study sought to determine the factors that contribute to the failure of small and medium enterprises (SMEs) in meeting supplier performance standards. Suppliers are faced with the challenge of SMEs failing to meet supplier performance standards because they rely on these providers of products and services, mainly SMEs, for their operations and to ultimately achieve their mandate. The researchers were able to establish the main factors contributing to SME failure in meeting supplier performance standards. These are as follows: unclear specifications and terms of references from suppliers; insufficient information provided to SME suppliers to ensure understanding of requirements; insufficient feedback and support; no support of SME suppliers based on their Black Economic Empowerment (BEE) status; limited or no use of business support programs by SME suppliers; and external factors such as access to finance, changes in the economy, and location.

[1] Abor, J., Quartey, P., 2010. Issues in SME development in Ghana and South Africa. International Research Journal of Finance and Economics. Issue 39. [online] Available at: http://www.eurojournals.com/irjfe_39_15.pdf.

[2] Angerhofer, B., Angelides, M., 2006. A model and a performance measurement system for collaborative supply chains. Decision Support Systems, 42(1), pp.283-292.

[3] Ary, D., Jacobs, L.C., Razavich, A., 2007. Introduction to research in education. Fort Worth: Harcourt Brace College Publications.

[4] Baard, V.C., 2009. Interactive information consulting systems for South African small businesses. Peer Reviewed Article. The South African Journal of Information Management. 6(2) June 2009.

[5] Babbie, E., Mouton, J., Vorster, P., Prozesky, B., 2009. The practice of social research. South African Fifth Edition. Cape Town: Oxford University.

[6] Berry, B., 2010. Lending confusion leaves SME without finance, [online] Available at: http://www.construction-manager.co.uk/news/lending-confusion-leaves-smes-unable-secure-financ/

[7] Bowler, A., Dawood, M.S., Page, S., 2007. Entrepreneurship and small business management. Pretoria: Juta.

[8] Brown, K.V., 2001. The determinants of crime in South Africa. The South African Journal of Economics, 69(2).

[9] Ensor, L., 2013. Seda to focus on small and medium businesses to create jobs. Business Day. 25 September 2013.

[10] Cassar, G., 2007. Money, money, money? A longitudinal investigation of entrepreneur career reasons, growth preferences and achieved growth, Entrepreneurship and Regional Development, 19 (1), pp.89-107.

[11] Chimucheka, T., Rungani, C., 2011. The impact of inaccessibility to bank finance and lack of financial management knowledge to small, medium and micro enterprises in Buffalo City Municipality. South Africa: Department of Business Management, University of Fort Hare.

[12] Coco, G., 2000. On the Use of Collateral. Journal of Economic Surveys, 14(2), pp.191-214

[13] Cooper, D.R., Schindler, P.S., 2007. Business Research Methods. (11th edition), 2011, McGraw-Hill/Irwin Paul I-Hai Lin, Professor. [online] Available at: http://www.ipfw.edu/~lin A Core Course for M.S. Technology.

[14] Coulthard, M., Loos, J., 2007. Networking, the link in firm based entrepreneurial orientation (EO) performance model, [online] Available at: http://www.buseco.monash.edu.au/mgt/staff/coulthard.max.

[15] Creswell, J.W., Vicki, L Clarke P., 2007. Designing and Conducting Mixed Methods Research. Thousand Oaks, CA: Sage Publications.

[16] Dahl, M.S., Sorenson, O., 2007. Home sweet home. Social capital and location choice, [online] Available at: http://www.druid.dk/fileadmin/images/dokumenter/sorenson.pdf

[17] Downing, R., 2011. SMEs face tough growth challenges in SA. Business Day, 6 August 2012, 13:32. [online] Available at: http://www.bdlive.co.za/articles/2011/11/22/smes-face-tough-growth-challenges-in-sa-report

[18] Driscoll, D.L., Appiah-Yeboah, A., Salib, P., Rupert, D.J., 2007. Merging Qualitative and Quantitative Data in Mixed Methods Research: How To and Why Not. Sage: Thousand Oaks.

[19] Ehlers, T., Lazenby, K., 2007. An Investigation into the Obstacles to Youth Entrepreneurship. Department of Business Management, University of Fort Hare in South Africa.

[20] Ensor, Linda. 2012. Incubators’ new buzzwords in enterprise promotion. Business Day, February 9.

[21] Falkena, H., Abedian, I., von Blottnitz, M., Coovadia, C., Davel, G., Madungandaba, J., Masilela, E., Rees, S. SME’s access to finance in South Africa. A supply-side regulatory review. [online] Available at: http://www.treasury.gov.za/publications/other/Access%20to%20Finance%20in%20South%20Africa%20-%20A%20Supply-Side%20Regulatory%20Review.pdf

[22] Fatoki, O., Akinwumi, O, 2010. Which New Small and Medium Enterprises in South Africa Have Access to Bank Credit?

[23] Fatoki, O., Garwe, D., 2010. Obstacles to the growth of new SMEs in South Africa: a principal component analysis approach, [online] Available at: http://www.academicjournals.org/AJBM/PDF/pdf2010/May/Olawale%20and%20Garwe.pdf

[24] Fida, Bashir Ahmad., 2008. The Importance of Small and Medium Enterprises (SMEs) in Economic Development. The Free Library, [online] Available at: http://www.thefreelibrary.com/ The Importance of Small and Medium Enterprises (SMEs) in Economic...-a01073924138.

[25] FinMark, 2010. FinScope: South Africa Small Business Survey 2010. FinMark Trust. [Online]. Available from: http://www.finmarktrust.org.za/pages/Focus-Areas/Small,-Micro-and-Medium-Enterprises.aspx?random.

[26] Gibb, A., 2006. Entrepreneurship and Enterprise Development in Transition Economies – Policy Guidelines and Recommendations. OECD and UNIDO.

[27] Lasser (2007) Supplier Definition. Small Business Network, Inc. [Online] Available from: http://www.askjim.biz/answers/supplier-definition_6369.php.

[28] Lambert, D., Pohlen, T., 2008. Supply Chain Metrics. The International Journal of Logistics Management, 13(1), pp.1-19.

[29] Longenecker, J.G., Petty, C.W., Moore, J.W., Palich, L.E., 2006. Small Business Management, an Entrepreneurial Emphasis. London: Thomson South Western.

[30] Maas, G., Herrington, M., 2006. Global Entrepreneurship Monitor South African Report. University of Cape Town. Graduate School of Business.

[31] Maisto, G., 2012. What is an enterprise? myfuture 2012, [online] Available at: http://www.myfuture.edu.au/The%20Facts/Work%20and%20Employment/Enterprise%20for%20Young%20People/What%20is%20enterprise.aspx.

[32] National Small Business Act (NSB Act) of 1996.

[33] Oketch, H.O., 2007. Gender Equity. In Mullei, A. & Bokea, A. (eds). Micro and small Enterprises in Kenya: Agenda for improving the Policy Environment. Nairobi: ICEG.

[34] Gouanlong, N.I., Tsapi, V., 2012. The procedures for strategic management of new products for small, medium and large firms in Cameroon: an exploratory study. African Journal of Marketing Management, 4(4), pp.118-129. [online] Available at: http://www.academicjournals.org/AJMM DOI: 10.5897/AJMM11.152 ISSN 2141-2421 ©2012 Academic Journals

[35] Van Scheers, L., 2011. SMEs’ marketing skills challenges in South Africa. African Journal of Business Management. 5(13), pp.5048-5056. [online] Available at: http://www.academicjournals.org/AJBM

[36] South Africa. Department of Trade and Industries. 1995. The White Paper on National Strategy for the Development and Promotion of Small Business in South Africa. Notice 213 OF 1995.

[37] Von Broembsen, M., Wood, E., Herrington, M., 2005. Global entrepreneurship monitor South Africa report. [online] Available at: http://www.gsb.uct.ac.za/gsbwebb/userfiles/gem2005.pdf [Accessed: 19 October 2007].

Foundations of Management

The Journal of Warsaw University of Technology

Journal Information

CiteScore 2017: 0.28

SCImago Journal Rank (SJR) 2017: 0.198
Source Normalized Impact per Paper (SNIP) 2017: 0.159


All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 452 444 48
PDF Downloads 286 283 32