Critical success factors for small and medium enterprises: a case of the tourism industry in Cape Town

Abstract

Small and Medium-sized Enterprises adopt Business Excellence to maintain good leadership, customer/client focus, conceptual concerns, increase in scale and speed of innovation and creative implementation for high performance and competitiveness. Business Excellence is a way to better an organisation’s performance through improved practices. This study examines small and medium-sized enterprises to achieve Business Excellence to bolster value and quality in hotels’ performance, resources and capabilities to bring internal growth and job creation within the Cape Town Central Business District. The study’s objectives were to describe the macro-environmental factors that contribute to the decline in the Cape Town Central Business District hotel industry, define the hotel industry’s lack of emphasis on the importance of Business Excellence knowledge and determine the critical success factors to re-energise the hotel industry to ensure economic development. The study adopted a positivism approach (the theory of the grounds for knowledge) and used a quantitative research instrument. To describe and quantify the attributes of the product researched, namely critical success factors for growth in the Small and Medium-sized Enterprises sector of the Cape Town hotel industry, a descriptive method was used. A convenience (non-random) approach was applied with a sample of 34 small and medium-sized hotels, following a convenience sampling technique—system with an open- and closed-ended questionnaire. Two set of questionnaires were used – one for employees and one for managers giving 34 participants - 11 managers and 23 employees. All data were coded and analysed using the Statistical Package for the Social Sciences (version 27). Results revealed that efficiency, growth, job satisfaction, teamwork, passion and development are the most critical success factors for both employees and managers. The results revealled that the three most influencing external environmental factors in the development of the organisation were economic, political and COVID-19 (specific to 2020/2021). While excellence is expected at all levels, not every Business Excellence model takes a holistic approach that considers environmental, economic and social factors. The participants (management and employees) were aware that a policy plan was in place but were not necessarily able to identify the policies and quality management responsible for ensuring that the policies are followed. The results revealed that the selected criteria were quality awareness, employee motivation, understanding of critical success factors in line with Business Excellence, work relationships, employee growth development, employee compensation and rate of motivation preference. Regarding what could be done in the hotel industry to re-energise the Western Cape, specifically Cape Town being the study area, most respondents indicated that they have never, or rarely, used the models discussed as part of their daily operations. These models include Total Quality Management, Project Management, ISO 900, Baldrige Business Excellence, European Foundation for Quality Management. They had only used the excellence award for internal events. This study contributes significantly to the literature on hotel Business Excellence adoption. The study also provides the effective and efficient incorporation of Business Excellence into existing and future tourism Small and Medium Enterprises’ organisational development strategies. This study provides a unique context using South Africa in adopting the Business Excellence models tailored for the hotel industry. Much of the existing research is primarily theoretical and conceptual and it is not focused on South Africa. As a result, there is currently very little empirical research on the factors that influence Small and Medium Enterprises’ ability to achieve Business Excellence. This research aimed to close that gap.