A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management specialising in Entrepreneurship and New Venture Creation Johannesburg, 2017 / Globally, information communication technologies (ICT) have experienced rapid growth since the 1990’s. In South Africa, information communication technology now accounts for a larger percentage of the Gross Domestic Product than other sectors. Thus, ICT is an important driver of entrepreneurship, employment creation and economic development in SA. As such, one of the critical questions is how to ensure the competitiveness and performance of ICT firms. Entrepreneurship studies argue that the performance of entrepreneurial firms is affected by, amongst other things, the firms’ social capital such as formal networks. This study, therefore, examined the impact of formal networks on firm entrepreneurial performance of ICT firms in SA, paying specific attention to weak ties as well as the moderating role of the environment. The study adopted a positivist paradigm which relied on quantitative data, using a descriptive survey method. Applying probability sampling, a sample of 120 firms were surveyed from an industry database, achieving a 14% response rate. This response rate is adequate for the generalisation of the results (Urban & Sefalafala, 2015). In analysing the data, factor analysis to reduce several variables into latent factors was performed. Thereafter, statistical linear regression modelling was performed using the continuous dependent variable – Firm Entrepreneurial Performance indicated by: Growth in Sales and Market Share, and Profitability; and the continuous independent variable of Formal Networking indicated by: Network Tie Strength and Relationship Quality and Nature sub-constructs. The results demonstrate significant correlation between formal networking and firm entrepreneurial performance as well as weak ties. However, the results indicate no evidence for the moderating role of the environment. At a theoretical level, this shows that formal networking and weak ties are beneficial to ICT firms but the environment is a contingent factor. At a practical level, managers and firm owners should consider joining formal networks that promote weak tie relationships in order to access complementary assets and valuable information. Policy makers and other stakeholders should devise policies and programmes that support entrepreneurial ICT firms to engage in formal networking. The limitations of the study include the following: first, the study was cross sectional and limited to ICT firms on an industry database; second, the control variables did not include firm size. Future research should consider a longitudinal study to test the long-term impact of firm entrepreneurial behaviour as well as firm size to inform firm specific research. More studies should test the moderating role of environment. / MT 2017

This study investigates the impact of networking on access to finance and performance of small and medium enterprises (SMEs) in the Buffalo City Municipality in the Eastern Cape Province of South Africa. The objectives of this study are to examine (1) whether entrepreneurial characteristics of the SME owner and the firm characteristics of the SME are related to networking by SMEs, (2) whether networking is related to access to bank loans and trade credit by SMEs, (3) whether networking is related to the performance of SMEs and (4) whether access to debt finance by SMEs mediates the relationship between networking and performance of SMEs. The results reveal that the gender and education of SME owners and the age, size and legal status of SMEs are the entrepreneurial and firm characteristics that are positively related to networking by SMEs. In addition, the results indicate that there is a positive relationship between networking and access to finance and performance of SMEs. The results of this study further reveal that access to debt finance partially mediates the relationship between networking and performance of SMEs. Lastly, the study recommended that SMEs should network more to gain access to information, resources and contact sharing. This will increase the likelihood of SMEs obtaining finance, and will also improve the performance of SMEs.