Entrepreneurial orientation amongst Collective Investment Schemes (CIS): transition to venture capital service in South Africa Africa

Abstract

Literature shows that there is limited research on Entrepreneurial Orientation (EO) in the Middle East, Latin America, and Sub-Saharan African countries. At the same time, despite its potential as a source of finance for entrepreneurship, stokvels are still shaped by their cultural roots, where the majority still function under the old operating model of rotating funds amongst its members and grocery purchases. The purpose of the study was to assess the impact of EO on Collective Investment Scheme’s capability to invest in a new product, entering an established market or investing in a new venture. The study used a positivism research philosophy, and the research design was based on a cross-sectional approach. The target population for this study was limited to investment stokvel groups in Gauteng that were founded for purely investment purpose. An online survey questionnaire was used as a method of data collection, with 131 members from different Collective Investment Schemes responding to the survey. The results from the study indicated that new entry plays a mediating role in the relationship between the three dimensions of EO (innovativeness, risk-taking, and competitive aggressiveness) and business performance (profit and efficiency) of Collective Investment Schemes. This research contributes to the literature as it illustrated Collective Investment Schemes’ ability to anticipate, pursue and exploit entrepreneurial opportunities that exist in the environment. It also affirmed the application of EO theory in a different cultural setting and that it remains an active driver of business performance.