The influence of ict competences, knowledge management and operational efficiency on competitiveness of retail smmes in the Mangaung metropolitan area (MMA), Free State

Abstract

Despite the increasing prominence of information and communication technologies (ICTs) in the operations of small firms, there is still a need to understand fully how small, medium and micro enterprise (SMME) owners and managers appropriate ICT competences to support the management of business knowledge and improve their firms’ operational efficiency. There also exists wide acknowledgement on the contribution of SMMEs to economic growth, profitability and creation of employment opportunities, and yet there still exists limited knowledge on enterprises’ capacity to manage the knowledge of their business operations, operate efficiently, and on the way the possession of ICT competences affects these variables to improve the competitiveness of such firms. The under-exploration of these relationships in entrepreneurship literature stems from SMMEs’ limited appreciation and mastery of innovative strategies such as ICT competences, knowledge management and operational efficiency, which are variables deemed to drive competitiveness of firms. The main argument of this study is that business competitiveness is not necessarily an automatic or inevitable event for any small business but rather depends on the capacity of SMMEs to harness their ICT competences, knowledge management and operational efficiencies skilfully and strategically. Drawing on a positivist epistemology and an explorative quantitative design, the study investigated the effects of ICT competences, knowledge management and operational efficiency on the competitiveness of SMMEs in the Mangaung Metropolitan Area of the Free State Province of South Africa. A cross-sectional survey was conducted on 343 retail SMMEs in this province and a corresponding number of questionnaires (i.e., 343) was distributed to them. A total of 300 questionnaires were successfully completed and returned, representing a response rate of 87.5 percent. Descriptive statistics, especially graphs and frequency tables, inferential statistics such as correlation and regression analytics were also employed for the analysis of the data. The major empirical findings were that there is a strong positive relationship between ICT competences and knowledge management (KM), between ICT competences and operational efficiency, as well as between ICT competences and firm competitiveness. Moreover, the findings also reveal a positive, statistically significant relationship between knowledge management and operational efficiency, and operational efficiency and firm competitiveness. Most importantly, the study exhibits a positive correlation between all these variable and firm’s competitiveness. Finally, the study recommends that government agencies employ more direct approaches, such as the use of incubation structures and provision of mentoring to owners and managers of SMMEs to promote ICT competence appropriation and knowledge management implementation. These efforts can contribute to increased knowledge sharing and transfer, which enhance the operational efficiency and improve the overall competitiveness of SMMEs in South Africa. Therefore, the study which builds on mainstream literature and the validation of empirical findings, contributes a conceptual model on firm competitiveness that integrates ICT-based competences, knowledge management and operational efficiency in one investigation. The study also contributes to the development of theoretical and practical knowledge on the joint impact of ICT competences, knowledge management and operational efficiency on the competitiveness of SMMEs. For instance, the study demonstrates how knowledge management recognition and implementation lead to better firm operations and communication. Therefore, the study which builds on mainstream literature and the validation of empirical findings, contributes a conceptual model on firm competitiveness that integrates ICT-based competences, knowledge management and operational efficiency in one investigation. The study also contributes to the development of theoretical and practical knowledge on the joint impact of ICT competences, knowledge management and operational efficiency on the competitiveness of SMMEs. For instance, the study demonstrates how knowledge management recognition and implementation lead to better firm operations and communication.