An exploration of entrepreneurship within established family businesses in Grahamstown

Abstract

Family businesses make up a large number of businesses in South Africa, although they are not often researched. Many of these family businesses are SME (Small and Medium Enterprises), however they contribute substantially to the local economy, as well as job creation. Despite their extensive presence there is a very poor success rate of family businesses. One of the reasons for their low success rate could be the seemingly increased conservative nature of family businesses over time. Thus, a look into entrepreneurial processes, which promote adaptation, innovation and learning, may give family businesses a competitive advantage. An Abbreviated Grounded Theory approach was used to explore the presence, if any, of entrepreneurial processes within established family businesses in Grahamstown. Two generations of family owners as well as a non-family employee across four local businesses were interviewed. The results show that all four business show signs of entrepreneurship within their business, these include: risk taking, creativity, active competition, opportunity grasping and change. Previous generations within the business also showed signs of learning new technology, in turn the new generations learnt from the experience that their parents have had in the businesses. The results show that family businesses are capable of change, adaptation and learning, thus it may enable consultants and future researchers to strengthen family businesses across generations.