Institutional Constraints Affecting Small Businesses in South Africa

Abstract

This study explores the perception of institutional constraints in South Africa. It delineates the constraints into critical socio-cultural, political, and economic dimensions that impact entrepreneurs and their micro, small, and medium enterprises (MSMEs). The paper utilises an exploratory interview approach with thirty-two entrepreneurs from Cape Town, Durban, and Johannesburg and the emergent themes generated with ATLAS.ti. The study identified fourteen constraints that might affect the enterprise development process. The paper is original, with three main contributions. It first identifies constraints along institutional dimensions of socio-cultural, political, and economic contexts. Second, deriving the constraints through qualitative methodological inquiries with inductive and deductive analytical tools according to institutional variables is a unique methodological contribution. Third, the paper proposed context-specific focused policy interventions. The findings promote an understanding that South African MSMEs require continuous, needs-based, responsive, and adaptive institutional support.