1 

Entrepreneurial Orientation and Performance within  
the South African Minibus Taxi Industry  

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 in Entrepreneurship and New Venture 
Creation 

Student  

Jessica Kier  

Supervisor  

Professor Boris Urban  

Wits Business School  

Date: 30 MARCH 2021 



 2 

 
ABSTRACT  

The primary purpose of this research is to understand the relationship between the three  
dimensions of entrepreneurial orientation within the South African minibus taxi industry.  

This industry is pivotal to the South African economic structure and landscape as a whole.  
The taxi industry serves as the main mode of public transport in South Africa.  

A survey was used to conduct an empirical research study. A sample size of 120  
participants was originally selected; however, of those 120, only 95 surveys were valid  
and used due to missing values in the data provided in the others. This sample size is  

representative of the population concerning the taxi industry. The research instrument  
included a 7-point Likert scale. Further, the instrument included demographic coverage  

and sections covering the three entrepreneurial orientations’ dimensions.  

The aim of this study is to understand the extent to which entrepreneurial orientation 
enables small- to medium-enterprise growth performance within the South African taxi  

industry. Empirical data to support research suppositions is difficult to access within the  
public domain, but this research identified and provided an analysis extracted from 
private  enterprise which fills the gap in the current research literature space.  

The results indicated a weak positive influence between the three dimensions of  
entrepreneurial orientation and growth performance within the industry. Due to the  
significance of the findings, the results are not strong enough for generalising the same  
findings for the entire South African minibus taxi population.  

This industry is the main source of public transport within the country and needs to  
increase its literature in order to grow and further improve. Further findings can contribute  

to the understanding of the complexity that surrounds the industry’s atmosphere. The  
value of working to formulate constructive information on the taxi industry will allow for  

further engagement within the field.  

Key words: Entrepreneurship, growth, innovation, minibus taxi, SME, South Africa. 



 3 

  
DECLARATION  

I, Jessica Kier, declare that this research report is my own work except as indicated in the  
references and acknowledgements. It is submitted in partial fulfilment of the requirements  
for the degree of Master of Management in the Field of Entrepreneurship at the University  
of the Witwatersrand, Johannesburg. It has not been submitted before for any degree or  

examination in this or any other university. 

Jessica Kier  

-------------------------------------------------------------  

Signed at 

……………………SANDTON……………………………… On the 

28 day of February 2021 



 4 

 
ACKNOWLEDGEMENTS  

I would like to formally acknowledge all those who have played a role in my academic  
journey.  

My parents, who have supported me and guided me with love and understanding. 

Without  you both, I would not be where I am today.  

To my boyfriend, Lee, your encouragement and constant care is always appreciated.  

I would like to thank my supervisor, Professor Boris Urban for his expert mentoring and  
valuable insights. It was an honour to work under your supervision.  

My appreciation also extends to SA Taxi Finance, for their kind continued help, 
generous  intuition into the industry and support during this research. 

  



 5 

 

Table of Contents 

ABSTRACT	.........................................................................................................................................................................	2	

DECLARATION	.................................................................................................................................................................	3	

ACKNOWLEDGEMENTS	.................................................................................................................................................	4	

CHAPTER	1:	INTRODUCTION	......................................................................................................................................	7	

1.1	Introduction	.............................................................................................................................................................	7	

1.2	Theoretical	background	to	the	study	..............................................................................................................	9	

1.3	Context	of	the	study	..............................................................................................................................................	10	

1.4	Problem	statement	...............................................................................................................................................	10	

1.5	Research	purpose,	research	question	and	aims	of	the	study	................................................................	11	

1.6	Conceptual/theoretical	definition	of	terms	.................................................................................................	12	

1.7	Contribution	of	the	study	...................................................................................................................................	13	

CHAPTER	2:	LITERATURE	REVIEW	.........................................................................................................................	14	

2.1	Introduction	...........................................................................................................................................................	14	

2.2	Literature	review	on	entrepreneurial	orientation	...................................................................................	15	

2.3	Innovativeness	.......................................................................................................................................................	18	

2.4	Risk-taking	..............................................................................................................................................................	19	

2.5	Proactiveness	.........................................................................................................................................................	21	

2.6	Environmental	perceptions	-	dynamism	......................................................................................................	23	

2.7	Environmental	perceptions	-	hostility	...........................................................................................................	23	

2.8	Conceptual	framework	of	hypothesis	............................................................................................................	25	

2.9	Conclusion	...............................................................................................................................................................	25	

CHAPTER	3:	RESEARCH	METHODOLOGY	..............................................................................................................	28	

3.1	Research	methodology	/	paradigm	...............................................................................................................	28	

3.2	Research	design	....................................................................................................................................................	28	

3.3	Population	and	sample	.......................................................................................................................................	30	

3.4	The	research	instrument	...................................................................................................................................	31	

3.5	Procedure	for	data	collection	...........................................................................................................................	34	

3.6	Data	analysis	and	interpretation	...................................................................................................................	35	



 6 

CHAPTER	4:	PRESENTATION	OF	RESULTS	...........................................................................................................	38	

4.1	Introduction	...........................................................................................................................................................	38	

4.2	Demographic	profile	of	respondents	.............................................................................................................	38	

4.3	Validity	of	constructs	...........................................................................................................................................	41	

4.4	Reliability	................................................................................................................................................................	49	

4.5	Descriptive	statistics	and	correlation	...........................................................................................................	50	

4.6	Regression	...............................................................................................................................................................	51	

4.7	Results	pertaining	to	Hypothesis	1	................................................................................................................	57	

4.8	Results	pertaining	to	Hypothesis	2	................................................................................................................	57	

4.9	Results	pertaining	to	Hypothesis	3	................................................................................................................	58	

4.10	Summary	of	the	hypotheses	...........................................................................................................................	58	

CHAPTER	5:	DISCUSSION	OF	THE	RESULTS	.........................................................................................................	60	

5.1	Introduction	...........................................................................................................................................................	60	

5.2	Demographic	profile	of	respondents	.............................................................................................................	60	

5.3	Discussion	pertaining	to	Hypothesis	1	..........................................................................................................	62	

5.4	Discussion	pertaining	to	Hypothesis	2	..........................................................................................................	64	

5.5	Discussion	pertaining	to	Hypothesis	3	..........................................................................................................	65	

5.6	Conclusion	...............................................................................................................................................................	68	

CHAPTER	6:	CONCLUSIONS,	IMPLICATIONS	AND	RECOMMENDATIONS	....................................................	70	

6.1	Introduction	...........................................................................................................................................................	70	

6.2	Conclusions	of	the	study	.....................................................................................................................................	70	

6.3	Implications	and	recommendations	..............................................................................................................	70	

6.4	Limitations	of	the	study	......................................................................................................................................	71	

6.5	Suggestions	for	further	research	....................................................................................................................	72	

REFERENCES	..............................................................................................................................................................	73	

APPENDIX A: RESEARCH INSTRUMENT	.........................................................................................................	80	

TAXI SURVEY	...............................................................................................................................................................	81	

APPENDIX B: CONSISTENCY MATRIX	..............................................................................................................	89	
 
 



 7 

 
CHAPTER 1: INTRODUCTION 

1.1 INTRODUCTION  

South Africa has a unique context, and it is often inappropriate to apply case studies and 
experiences from western economies to Afrocentric emerging market conditions (Schiele,  

1990). Public transport is essential to the South African infrastructure. Small to medium  
enterprises (SMEs) have become increasingly important to a country’s economic growth.  

SMEs create jobs and with this comes economic sustainability, an important element for  
a country like South Africa. New and promising entrepreneurs play an essential role in  
managing resources and opportunity in order to achieve their desired results (Carson et  

al., 1995). In regard to this, this study will examine the related factors of entrepreneurial  
orientation and their contribution towards the potential performance of SMEs in the South  

African minibus taxi industry.  

It is estimated that roughly 15-million to 16-million passengers travel daily in minibus  
taxis on the public roads (Fobosi, 2013). Today, the South African minibus taxi industry  
remains the critical pillar of the country’s public transport sector. Not only is it the most  

accessible mode of transport, but it is also the most affordable to the general public. The  
minibus taxi industry therefore is crucial for South African economic development (SA  

Taxi, n.d.).  

South Africa has comparatively low entrepreneurial activity, albeit with high intentions  

(Harrington, 2017). Entrepreneurship is an essential source of business success and  
national economic development (Ding and Abetti, 2003).  

With current economic  challenges having an effect, the notion of creating greater 
entrepreneurial activity has  become an important goal for many national governments 

(Cooney, 2012). This is  because entrepreneurial activity increases employment and 

economic growth (Kirchhoff  et al., 1988). In addition, entrepreneurial activity effects the 
economy at both regional  and national levels (Wu, 2009). “Entrepreneurial orientation 

has become one of the most established constructs in  entrepreneurship”, (Covin and 

Miller, 2014, pp 770-791).  

 



 8 

The number of texts on the topic of  entrepreneurial orientation has exceeded that of 
articles examining the broader topic of  corporate entrepreneurship (Covin and Lumpkin, 

2011).  

The importance of entrepreneurial orientation to the survival and growth performance of  
an organisation has been acknowledged in previous studies (Lumpkin and Dess, 2001).  
Research confirms three underlying dimensions of entrepreneurial orientation, as  

innovativeness, risk-taking, and proactiveness (Lumpkin and Dess, 2001). Understanding  
the importance of entrepreneurial orientation, is prevalent in determining how SMEs  
generate sustainable growth and build a competitive advantage in a hypercompetitive and  

dynamic environment (Sirmon, Hitt and Ireland, 2007).  

Small businesses in particular tend to excel at adaptability and flexibility (Smallbone et  
al., 2012). The taxi industry that consists of many SMEs, must demonstrate these  

characteristics in response to the COVID-19 crisis. The taxi industry faces implications  
due to the lockdown that was implemented in the country in March 2020. The taxis were  

only allowed to operate at 70% capacity and only permitted to travel during certain hours.  

However, no economist or strategist could have predicted how 2020 would play out. The  
outbreak and rapid spread of COVID-19 has disrupted lives, communities, and economies  
worldwide (John Hopkins, n.d.). A crisis such as the COVID-19 pandemic threatens the  

functioning and performance of a business (Williams et al., 2017). Even during this  
pandemic, taxis play a vital role as they transport essential workers as well as being  

pivotal in the functioning of the economy as a whole.  

The South African National Taxi Council (SANTACO) launched a disinfection program  
to aid the curb of the virus. In addition, the taxi drivers faced concern, for both their own  
safety as well as that of their commuters. To combat this, taxi ranks made sure sanitising  
innovations were introduced. SA Taxi donated R3m worth of protective equipment that  

was distributed to ranks across the country (SA Taxi, n.d.).  

Further, in order to reduce the financial burden felt due to COVID-19, payment relief for  
finance and insurance customers was implemented (SA Taxi, n.d.).  

 



 9 

This response indicates the importance of the industry and the pivotal role it plays in the 
country’s socio economic framework. Research indicates that the environment is  
pertinent to business ventures due to external influences (Urban, 2017).  

 
1.2 THEORETICAL BACKGROUND TO THE STUDY  

The presence of the entrepreneurial orientation dimensions has been linked to improved 

industry performance where ‘all the dimensions are central to understanding the  

entrepreneurial process’, (c). It is significant to emphasise that for  the accumulation of 
knowledge to take place, future research that will add to the current  knowledge based on 

entrepreneurial orientation should include the three core dimensions  of entrepreneurial 

orientation (Lumpkin & Dess, 1996). Lumpkin and Dess (1996), argue  that any enterprise 
is entrepreneurial provided they engage in an effective combination of  innovativeness, 

risk-taking and proactiveness.  

Entrepreneurial orientation is a theoretically defined construct; there is no sole context  
that exists where “it can be argued on empirical grounds that the three dimensions should  

not be combined” (Covin & Lumpkin, 2011 pp. 855-872). Researchers must  acknowledge 
that the dimensions of entrepreneurial orientation may form a collective  ‘catchall’ (Miller, 

2011). Yet, the dimensions will likely not constantly be equal in strength. Lumpkin and 

Dess (1996), show the usefulness of viewing the firm’s  entrepreneurial orientation as a 
multidimensional construct. 

The potential benefits, could to the conclusion that entrepreneurial  orientation improves 

performance. However, close examination of the literature has not  conclusively 

established this relationship (Rauch et al., 2009; Wang, 2008).  

However, as mentioned by multiple scholars, the extent to which entrepreneurial  

orientation improves firm performance may depend upon additional factors (Rauch et al.,  
2009; Wang, 2008).   

 

 



 10 

 

1.3 CONTEXT OF THE STUDY  

The exclusion in the apartheid era of black South Africans, from freely contributing to  the 

country’s economy, created discrepancies and adversities, particularly within the  socio-

economic landscape (Human, 2006). After 1994, South Africa developed new  
polices and put in place some transformation measures and legislation in order to 
improve  the residual conditions left behind by the apartheid government (Mkoka, 2012).  

Entrepreneurship and small business development have received growing attention by  
researchers, both locally and in the international arena (Herrington et al., 2009).  

The South African taxi industry is acknowledged as being entrepreneurial with many taxi  
owners identified as being an SME. According to SA Taxi Finance, one of South Africa’s  
leading financiers of minibus taxis, taxi owners are entrepreneurs who start and sustain  

their own business needs (SA Taxi, n.d.). Each taxi is full of opportunity and the industry  
itself runs on the backs of local entrepreneurs and their small business (SA Taxi, n.d.).  

The minibus taxi industry is considered a critical pillar of South Africa’s public transport  
sector. Not only is it the most available mode of transport but it is also the most affordable  
to the public. It is thus considered as the servant for the majority of the urban poor (Fobosi,  

2013,). “The typical minibus taxi is a 16-seater minibus, typically white in colour. The  
most common model is the Toyota Quantum Ses’fikile or Hi Ace”, (SA Taxi, n.d. pp 3). 
The minibus taxis operate an unscheduled service on fixed routes which are self-

regulated by taxi associations (SA Taxi, n.d.). The minibus taxis travel to remote places 
within  South Africa, which is extremely difficult when using government public 
transport.  

 
1.4 PROBLEM STATEMENT  

Since the early 2000s, South Africa’s early-stage entrepreneurial activity has  been below 

average in comparison to that of all participating countries.  

 



 11 

The taxi industry is pivotal to South Africa’s transport system (SA Taxi, n.d.). South  
Africa has a relatively high level of unemployment, so entrepreneurial activity is greatly  

encouraged by the political and economic policymakers of the country. “Regarding South  
Africa’s growing workforce but lack of formal employment opportunities, job seekers  
have turned more to the informal sector for employment”, (Ferreira & Rossouw, 2016, pp. 

810).  

“Unemployment is the root of many other challenges such as inequality, poverty, labour  
unrest and slow development” (Ferreira & Rossouw, 2016, pp. 809 ). In order to combat 
the problem of unemployment, entrepreneurship must be used as a tool to fix the problem.  

For the achievement of sustainable success, entrepreneurs often need support from 

external  sources. It is important to mention that the taxi industry does not benefit from 

any fiscal  support. With little governmental policy intervention, the industry remains 
fragmented.  

 
1.5 RESEARCH PURPOSE, RESEARCH QUESTION AND AIMS OF THE STUDY  

The purpose of this study is to understand the extent to which entrepreneurial orientation 
enables performance within the South African taxi industry, while taking into account  

environmental hostility and dynamism. Innovativeness, proactiveness and risk-taking 

make up the combination of the three dimensions of EO, (Wiklund, 1999,).  
Entrepreneurial orientation is an established construct that has attracted substantial  

research.  

This study examines the three constructs of entrepreneurial orientation mentioned above,  
in an industry that has little research surrounding it (SA Taxi, n.d.). However, the taxi  

industry is pivotal to South Africa’s public transport structure.  

Only 38% of South Africans make use of private transport, which establishes that the  
majority of the country relies on public transport for commuting purposes (SA Taxi, n.d.).  
The South African minibus taxi industry transports 69% of the available public transport  

market (buses contribute 19% and commuter trains 12%) making it a valuable contributor  
to the South African economy (Barrett, 2003).  



 12 

Findings provide an understanding of the entrepreneurial orientation constructs behind  
the performance of SMEs within the taxi industry as well as which constructs are of higher  
importance in regard to performance.  

This study aims to gain clarity regarding entrepreneurial orientation and the South 

African  taxi industry, using the following premises: 

1. Taxi owners with high levels of entrepreneurial orientation innovativeness are  

associated with SME growth and performance within the taxi industry in South  
Africa.  

2. Entrepreneurial orientation risk-taking relates to SME growth and performance within 
the South African taxi industry.  

3. There is a positive relationship between entrepreneurial orientation proactiveness and  

SME growth and performance within the South African taxi industry.  

 

4. Environmental dynamism will have a positive influence on the relationship between  
(a) entrepreneurial orientation innovativeness; (b) entrepreneurial orientation risk taking; 

and (c) entrepreneurial orientation proactiveness and growth performance.  

5. Environmental hostility will have a positive influence on the relationship between (a)  
entrepreneurial orientation innovativeness; (b) entrepreneurial orientation risk-taking; 

and (c) entrepreneurial orientation proactiveness and growth performance.  

 

1.6 CONCEPTUAL/THEORETICAL DEFINITION OF TERMS  

The key terms that will be used in this research are explained as follows:  

• Dynamism – Rate and unpredictability of change in the industry (Damanpour 

&Schneider, 2006).  

• Entrepreneurial orientation –“ A combination of three dimensions:  

innovativeness, proactiveness and risk-taking”,  (Wiklund, 1999, pp 39-

50).  

• Hostility – Tough conditions including strict regulation and competition  (Damanpour 

& Schneider, 2006).  

• Minibus taxi – A 16-seater vehicle used for public transport  

• SANTACO – South African National Taxi Council  



 13 

• SME – Small to medium enterprise  

 
1.7 CONTRIBUTION OF THE STUDY  

The focus of this study is on the minibus taxi industry in South Africa and the extent of  

entrepreneurial activity embedded within the taxi industry. This study will allow for 

other researchers to gain insight into an under researched sector. Empirical data to 

support  research suppositions is difficult to access within the public domain, but this 

research will  identify and provide an analysis extracted from private enterprise which 

will fill the gap  in the current research literature space.  

This industry is a unique context so could not be applied to similar contexts as this study  
regards to findings strongly related to specific context.  

According to Lumpkin and Dess  (1996), the effects of the dimensions of an 
entrepreneurial orientation vary according to  context.  

This may enable future research into the specific potential that exists with  reference to 
context and entrepreneurial orientation. 

 
 

  



 14 

CHAPTER 2: LITERATURE REVIEW  

2.1 INTRODUCTION  

Entrepreneurship and small business development are imperative to economic growth,  

particularly in emerging market economies. Research states that in an emerging 
economies, entrepreneurial activity is mostly represented by small- and medium scale 

enterprises (Lightelm, 2005; Lightelm 2006; Larossi & Clarke, 2011; Ene & Ene,  2014).  

Low levels of entrepreneurship prevail in South Africa compared to those in other  
developing countries (Hanson, 2009). The development of economic activity lies at the  

heart of entrepreneurship. Scholars have argued that entrepreneurship is an essential  
feature of high-performing firms (Covin & Slevin, 1991). Many companies have the  
belief that entrepreneurship is essential in a world that is fuelled by constant change.  

As the primary form of public transport in South Africa, the minibus taxi industry has a  
significant impact on the environment, society and the economy (Hanson, 2009). Each  
taxi operator serves as a micro business that contributes to the functioning of the South  

African economy. In order to get the 15- to 16-million passengers to and from their  
desired destinations on a daily basis, the taxi operator is a key member of the economic  
ecosystem.  

According to SA Taxi, as of September 2019, the institution currently has financed around  
32,441 taxis on the roads, giving direct business to over 32,000 SMEs (SA Taxi, n.d.).  

The company states that each taxi benefits more than the owner, but the entire rank’s  

economy, including queue organisers, conductors and street traders, benefit as well.  
 

The importance of to the survival and performance of a firm has been acknowledged in  
previous studies (Lumpkin & Dess, 2001). Businesses that are fast growing attribute 

much of their success to high levels of entrepreneurial orientation (Dess & Lumpkin,  
2005). When a business considers these levels of entrepreneurial orientation they create  
the opportunity for themselves to exploit new market opportunities, and if need be, to 

respond to potential threats effectively (Wiklund & Shepherd, 2003).  

The objective of this research is to explore the relationship between entrepreneurial  



 15 

orientation and growth performance by integrating prior theory and empirical findings  
into a researchable whole within the context of the South African minibus taxi industry.  

This research study examines independent variables that form the three dimensions of  

entrepreneurial orientation: innovation, risk-taking and proactiveness. The study also  
examines the dependent variables of entrepreneurial growth performance among the  

South African minibus taxi operators. Factors that may affect this relationship through  
moderation are also considered. The data is collected around these factors.  

 
2.2 LITERATURE REVIEW ON ENTREPRENEURIAL ORIENTATION  

Entrepreneurial orientation is a major topic within both the strategic management and  
entrepreneurship literatures (Covin, et al., 2006).  The three dimensions of entrepreneurial 

orientation have been identified and used consistently in the literature, namely 
innovativeness, risk-taking and proactiveness.  

Foremost, studies began to explore how organisations can become more entrepreneurial  
(Brazeal, Schenkel, & Azriel, 2008). These studies focus on how those in managerial  

positions in the organisations could overcome the natural barriers to entrepreneurship  
(Hisrich and Peters, 1986). This early work did not directly test but rather assume that 
entrepreneurial orientation enhanced performance. To combat this, entrepreneurial  
orientation research emerged to empirically examine this issue.  

Past research of these entrepreneurial orientation dimensions has shown high correlations  

with each other (Bhuian, et al., 2005; Richard, et al., 2004; Stetz, et al., 2000; Tan & Tan,  
2005).  

These three constructs of  entrepreneurial orientation form the independent variables of 

this study.  

Research has shown that there is a relevance to understanding entrepreneurial orientation 

in relation to enterprise growth performance. Covin and Slevin (1991) explained that 
there  is a reason for growing interest in research in the area of entrepreneurship. This is 
because  there is a strong notion that entrepreneurship can lead to heightened growth 

performance  in both new and established enterprises.  



 16 

Studies show most used mediating factors concerns learning orientation (Wang, 2008), as 
well as  innovativeness (Hult, Hurley, & Knight, 2004).  Most studies find a positive 
performance relationship. However, the strength of this  relationship varies significantly 
across various studies and contexts (Wales, Gupta, & Mousa, 2013).  

Performance is alleged to be a multidimensional and complex construct that has been  

measured using a range of indicators (Lumpkin & Dess, 1996). From an organisational 
perspective, performance relates to how well the organisation is  managed as well as the 

value that customers and stakeholders derive from that  organisation (Wu & Zhao, 2009). 
It is important to mention that a basic relevance  concerning entrepreneurship and strategic 

management theory and research is the  development of organisational performance 

(Mthanti, 2012).  

The performance of entrepreneurs can be measured through the growth of their businesses  

which can be seen in sales, number of employees and number of other businesses that the  
entrepreneur owns (Callaghan & Venter, 2011). It is common that researchers when  
reflecting on entrepreneurial orientation and firm growth performance reflect on a clear  

focus around financial performance. Therefore, it is a common practice among  
researchers to examine growth performance and profitability jointly (Kreiser & Davis,  
2010).  

 

 

 

 
Table 2.1: Select studies of entrepreneurial phenomena in established organisations 

Author  Focal   

entrepreneurial  
phenomenon 

Locus of   

entrepreneurship 

Relationship   

between   

entrepreneurship 
phenomenon  and 
strategy 

Causally   

adjacent  antecedents 
of  the  
entrepreneurial  
phenomenon 

Causally adjacent  
outcomes of the 
entrepreneurial  
phenomenon 

Covin 
and   

Slevin   

(1991) 

Entrepreneurial  
orientation  

Not specified  Reciprocal   

relationship   

between   

entrepreneurial  

Firm   

performance,   

strategic   

variables,   

Firm 
performance,  
strategic 
variables,  



 17 

orientation and  
strategy 

managerial and  
organizational  
variables 

environmental   

variables,   

managerial and   

organisational   

variables 
Lumpkin 
and  
Dess  

(1996) 

Entrepreneurial  
orientation 

Not specified  Strategy and   

entrepreneurial  
orientation are  
distinct, non  

casually related  
phenomena 

Not specified  Firm 
performance 

Urban &   

Barreira  

(2010) 

Entrepreneurial  
orientation 

Top level   

management   

serving as a 
proxy  for 
firms 

Reciprocal   

relationships   

between   

entrepreneurial  
orientation and  
technology   

orientation 

Firm   

performance,   

individual and  
organisational   

variables 

Firm 
performance  
and 
competitive   

capability of 
firms 

Rauch et 
al.,  
(2009) 

Entrepreneurial  
orientation 

Not specified  Enhancing a   

firm's   
performance 

Not specified  Firm 
Performance  

Wiklund 
and  
Shepher
d,   
(2003) 

Entrepreneurial  
orientation 

Not specified  Strong &   

Positive   

relationship   

between   

entrepreneurial  
orientation and  
firm   
performance  

Not specified  Firm 
Performance  

Hisrich 
and  
Peters 
(1986) 

Entrepreneurial  
orientation 

Managerial   

positions in   
organizations  

Assume   

correlation   

between   

entrepreneurial  
orientation and  
Firm   
Performance  

Not specified  Firm 
Performance  

Source: Adapted from Ireland, Covin and Kuratko (2009:22)  



 18 

 

2.3 INNOVATIVENESS  

Studies have found a positive relationship between innovation and firm or  industry 

performance (Rauch et al. 2009).   

The minibus taxi industry is a thriving commercial industry which has a 69% public  
transport market share generating approximately R90bn in yearly revenue (Fobosi, 

2019). Despite this, the minibus taxi industry is sadly lacking in technology 

advancement and  usage when compared to other service organisations.  

The majority of the taxi passengers work in low-income jobs. Many of those jobs are paid  
in cash, especially in domestic work or garden employment. A large number of South  

Africa’s poorer commuters do not have bank accounts into which salaries can be paid, or  

bank cards with which to make payments. This means the industry is cash dominated.  

South Africa has a large part of the population that is unbanked. According to recent  
statistics this is estimated at around 11-million people (BuisnessTech, 2019).  

In a direct comparison to the unregulated nature of the taxi industry, the banking industry  
in the country is acknowledged as being well regulated.  

Despite the global move towards more technologically based payment methods, this  
industry relies on the origins of a cash-based system. Being the most popular form of  
public transport for the majority of the country, even if the industry were to move towards  
a cashless system, it would not benefit those who rely on the transport. The industry can  
therefore not be innovative in the classical technological sense. The cash nature of the  
business suits owners, who can avoid taxation, as well as drivers, who can earn excess  

profit off the top, but it also suits passengers very well.  

Schumpeter (1942) is one of the first to point out the importance of innovation in the  
entrepreneurial process. ‘He notes the innovation process as ‘creative destruction’.  

 

 



 19 

Innovation in itself can be modelled on a process. In terms of this process understanding,  
a common distinction relates to factors that are inputs in the innovation process. This  

includes financial resources committed to the innovation task or the number of people  

working in R&D.  

In addition, the process also considers factors that are outputs, including but not limited  
to, number of patents, new services, products, or the manufacturing processes. (Urban &  
Mothusiws, 2014).  

The innovation process is highly complex and has risks involved. It is not enough for the  
industry to simply dedicate substantial resources to the innovation process. If the industry  
is unable to turn the resources into innovative offerings, these resources are wasted, and  
the performance of the industry is hurt (Lazonick, 2008). 
 
An innovative process that has benefited the industry, concerns that of a system that is  
truly embedded within the taxi culture.  

These hand signals are completely unique to the South African context. They are not  
taught in schools or advertised on television or in books. There is no formal manual one  
can download in order to gain insight into these signals. These signals form part of the 
innovative nature of the industry.  

Hypothesis 1: Innovativeness as an entrepreneurial orientation dimension has a positive  
impact on the growth performance of the South African taxi industry.  

2.4 RISK-TAKING  

The minibus taxi industry continues to dominate the public transport sector. There has  

been an increase in commuter density, arising from rapid urbanisation. This trend is  
projected to increase. Statistics show that currently 63% of South African’s live in urban  

areas. However, by 2050 this number will increase to over 80%. (StatsSA, 2020). This  
will result in an increase in public transportation and public infrastructure requirements  
in urban cities.  

Bus and rail transport services, responsible for 1-million commuter trips per day in urban  
areas, receive government subsidies which consequently reduce the transportation cost  
for commuters. The minibus taxi industry, despite being the dominant form or public  



 20 

transport and a key service linkage between the other public transport modes, receives no  
government subsidy, thus costs more that bus and rail, but offers a more reliable  

transportation service.  

For better performance and high returns, SMEs take risks such as collecting higher 

levels  of debt, committing large amounts of resources, introducing entirely new 
products into  new markets and investing in unexplored technologies (Urban & 

Mothusiws, 2014).  

The price of the minibus taxi has increased considerably over the past number of years.  
The Toyota Quantum diesel, considered to be the most common vehicle type purchased,  

has increased in price by over 50% (R166 300) from January 2014 to January 2021 (SA 
Taxi, n.d.). 
 
Minibus taxi fares over the same period have increased by 30% (R80) and 67% (R8) for  
the illustrative long distance (Johannesburg to Durban) and short distance (Soweto to  

Johannesburg) routes, respectively (SA Taxi, n.d.).  

The taxi industry uses 2- to 3-billion litres of fuel annually, which approximates to an  
average industry fuel spend of R30bn (SA Taxi, n.d). The full operational cost of these  
SMEs not recovered from fares, is borne by the minibus taxi operator.  

These operational costs include vehicle finance instalments, insurance, tracking devices,  

fuel, maintenance and repair costs.  

Risk-taking is defined as ‘the degree to which managers are willing to make large and  

risky resource commitments i.e. those which have a reasonable chance of costly failures’  
(Miller & Friesen, 1978, p. 923). Risk-taking involves the taking of actions into the  

unknown.  

It is important to mention that the COVID-19 pandemic has had a negative impact on the  
global and South African economy.  

The minibus taxi, however, demonstrated its  resilience. SA Taxi’s own published fleet 
data reflects that as the lockdown levels eased  and as economic activity resumed, minibus 

taxi operators quickly returned to pre-lockdown levels of vehicle operations and average 



 21 

distances travelled (SA Taxi, n.d.).  However, profitability was impacted by the 
restrictions on passenger loads and fewer trips  as passengers worked from home and 

school transport activity reduced.  

The security of the minibus taxi vehicle, the primary asset of the minibus taxi operator’s  
business is an asset that has a high risk of theft. SA Taxi’s proprietary data reflects that  
four of every 10 theft and hijack claims registered, represented valid theft claims (SA 
Taxi, n.d.).  

In order to combat this, the use of technology such as telematics or car tracking devices  
have been used. Technology as a resource has been moderately successful in recovering  

stolen vehicles.  

Vehicle safety and security remains a primary risk of the minibus taxi  operator. 
 
Hypothesis 2: Risk-taking as an entrepreneurial orientation dimension has a positive  
impact on the growth performance of the South African taxi industry.  
 

2.5 PROACTIVENESS  

The term proactiveness is defined in Webster's Ninth New Collegiate Dictionary (1991,  
p. 937) as “acting in anticipation of future problems, needs, or changes”.  

The minibus taxi industry is a critical pillar of the South African public  transport sector, 
operating and competing with the heavily subsidised bus industry for  more than five 

decades without receiving a cent from the government in the form of  grants.  

The industry must therefore be proactive in its approach due to the lack of governmental  
intervention. Today, the taxi industry operates in a self-regulated context. It is no question 
that the nature of this industry is informal.  

Even though there is a lack of formal documentation as well as regulation, this industry  
survives due to the notion that routes and stops are well known to the drivers and  
passengers. These stops are not documented or formally marked, but that does not 

change the fact that they exist. These stops have been given informal names by both 
drivers and  passengers and are used frequently.  



 22 

Proactiveness is an opportunity-seeking, forward-looking perspective characterised by  
the introduction of new products and services ahead of the competition and acting in  

anticipation of future demand (Rauch et al., 2008). A proactive firm as described by  
Lumpkin and Dess (1996), is a leader not leader because it has the will and  foresight to 
obtain new opportunities (Lumpkin  & Dess, 1996, pp 135 - 172).  

Proactiveness can be defined as discovering “new opportunities which may or may not 
be  related to the present line of operations, introduction of new products and brands 
ahead  of competition, strategically eliminating operations which are in the mature or 
declining  stages of their life cycle”, (Venkatraman, 1989 pp, 942- 962).  

The taxi industry in South Africa has been regarded as informal for many years, 

although  it has elements of a formal industry.  

The formation of associations within the taxi industry have managed to resolve certain  

problems. These include reducing conflict and taxi violence. In vigorously dealing with  
the transport authorities the associations are proactive.  

In terms of previous research, firm-level proactiveness has been operationalised by  
enquiring about the business’s ability to lead rather than follow in the development of  new 
procedures and technologies and the introduction of new products or services (Covin  & 
Slevin, 1989).  

SA Taxi aims to broaden inclusivity and create shared value opportunities to ensure the  
sustainability of the sector (SA Taxi, n.d.). ‘Through its dedicated initiatives, SA Taxi has  
invested R3.5bn into empowering female entrepreneurs in the minibus taxi industry since  

2008’ (SA Taxi, n.d, pp 3). ‘During this time, SA Taxi has increased its female client base 
by an  average of 4.5% per annum, helping to create 8,473 female-owned SMEs and 
financing  12,092 vehicles’, (SA Taxi, n,d).  

Hypothesis 3: Proactiveness as an entrepreneurial orientation dimension has a positive  
impact on the growth performance of the South African taxi industry.  

 



 23 

2.6 ENVIRONMENTAL PERCEPTIONS - DYNAMISM  

The current perception surrounding the taxi industry is that taxi operators are aggressive  

and unlawful. The taxi industry in South Africa has for decades suffered from a negative  
reputation and public perception. This can be seen as partly self-inflicted due to bad driver  
behaviour on the roads and incidents of taxi violence. News24 wrote that the taxi industry  

was very violent in response to harsh economic and social conditions, with taxi bosses  
still killing each other (News24, 2019). 

 
Public transport is essential to the South African infrastructure. Only 38% of South  
Africans make use of private transport, which establishes that the majority of the country  

relies on public transport for commuting purposes (SA Taxi, n.d.).  
In a developing  country context like South Africa, policies have been implemented to 

promote  entrepreneurial activity. Given the possibility that the minibus taxi industry 
creates  entrepreneurial activity within a semi-unregulated context that is mainly 
unenforced,  understanding the governmental influence and the institutional environment 

is important.  

Hypothesis 4: Environmental dynamism will have a positive influence on the 
relationship  between (a) entrepreneurial orientation innovativeness; (b) entrepreneurial 
orientation risk-taking; and (c) entrepreneurial orientation proactiveness and growth 
performance.  

 
2.7 ENVIRONMENTAL PERCEPTIONS - HOSTILITY  

A hostile environment forms when there is an abundance of competitors, unfavourable  

supply conditions, and strict regulations (Damanpour & Schneider, 2006). In the taxi  
industry this manifests with over 250,000 taxis operating within a self-regulated  

environment. 

 

The minibus taxi industry is acknowledged as being the dominant form of public 

transport  in the country. This mode of transport serves 65% of people using public 
transport (SA  Taxi, n.d.).  



 24 

The industry supports many jobs, in an economy with an official unemployment rate of 
26.7% (Boudreaux, 2006). Taxis, as a form of public transport, are  relatively 

inexpensive and widely accessible to the South African public. They help  millions of 
South African commuters, thus improving worker productivity and the economy as a 
whole.  

Taxis will normally depart from fixed terminals but stop anywhere along their  designated 
route to pick up and drop off passengers. To catch a taxi, passengers will use  hand signals 
in order to indicate where they are travelling.  

Five distinct role players make up the informal transport industry, namely the owners, 
the  drivers, the passengers, the taxi associations, and the regulation authorities.  

Despite this lack of formal documentation, the taxi routes are well known to the drivers  
and passengers. The more passengers a driver picks up the more income he will make.  

Drivers work exceptionally long shifts, often starting long before sunrise and continuing  

until after dark. This nature of the business and that of the hardworking driver is often  
forgotten when the taxi stops in the middle of the road to fetch or drop a passenger.  

Instead, what is fuelled by the media and disheartened South African citizens is the  
negative reputation of the taxi industry as a whole.  

 
Hypothesis 5: Environmental hostility will have a positive influence on the relationship  
between (a) entrepreneurial orientation innovativeness, (b) entrepreneurial orientation 

risk-taking and (c) entrepreneurial orientation proactiveness and growth performance.  
 



 25 

2.8 CONCEPTUAL FRAMEWORK OF HYPOTHESIS  

Based on the theoretical perspectives in this study, a conceptual framework is provided 

which displays the hypothesised links between the study variables (see Figure 2.1).  

Figure 2.1: Entrepreneurial orientation model with environment relations 

(Source: Developed by author)  

2.9 CONCLUSION  

The South African minibus taxi industry is acknowledged as being the main form of  

public transport in the country. It provides a transport system to millions of commuters.  
In doing so, it enables increased levels of productivity and benefits the economy as a  

whole. The advancement of entrepreneurial activity can be seen on both local and national   

levels. The literature explains that entrepreneurship is a pivotal tool with regard to  
economic growth.  

The three constructs of entrepreneurial orientation form the independent variables of this  

H4&H5: Environmental 
hostility& Dynamism  

Industry 
Performance  

H3: Pro-
Activeness  

H2: Risk 
Taking 

H1: 
Innovation  



 26 

study, these being innovation, risk-taking and proactiveness.  

The combination of these  dimensions formulate entrepreneurial orientation (Wiklund, 
1999). For the purpose of  this study, the independent variables are used in order to 

measure the constructs’  relationship between growth performance and the industry.  

Covin and Slevin (1991), explain that there is growing interest pertaining to this field of  
research due to the correlations between entrepreneurship and higher levels of enterprise  

growth performance. The taxi industry in South Africa is not heavily researched and with  
that, this study aims to contribute towards business insight with analysis and measurement  

of data.  

The literature provided explains that a mostly a positive growth performance relationship  
identified. However, the strength of this relationship is context specific. (Wales et al.,  

2011). With a negative perception, the industry can be connected towards environment  

hostility and dynamism. This is fuelled by the media as well as ongoing taxi violence.  

The study conducted focuses on the relationships between the variables in order to  
determine the relationship of entrepreneurial orientation and the South African taxi 
industry.  

The following relationships are tested.  

2.9.1 Hypothesis 1  

Innovation has a positive impact on the growth performance of the South African taxi  
industry. 
 
2.9.2 Hypothesis 2:  

Risk-taking has a positive impact on the growth performance of the South African taxi  
industry.  

2.9.3 Hypothesis 3:  

Proactiveness has a positive impact on the growth performance of the South African taxi  
industry.  



 27 

2.9.4 Hypothesis 4:  

Environmental dynamism will have a positive influence on the relationship between (a)  
entrepreneurial orientation innovativeness; (b) entrepreneurial orientation risk-taking; 
and (c) entrepreneurial orientation proactiveness and growth performance.  

2.9.5 Hypothesis 5:  

Environmental hostility will have a positive influence on the relationship between (a)  
entrepreneurial orientation innovativeness; (b) entrepreneurial orientation risk-taking; 

and (c) entrepreneurial orientation proactiveness and growth performance. 
 
 
 
 
 
 
 
 
 
 
 
 

 
  



 28 

CHAPTER 3: RESEARCH METHODOLOGY  

This chapter will provide an overview of the methodology adopted for this research. The  
practical application of how the research aimed to be carried out, the population, sampling  
method, data collection procedure as well as the analysis of the data are discussed.  

The quantitative research approach is therefore considered viable for this study as it is  
objective and enables the assessment of entrepreneurial orientation through the guidance  
of theory (Hayton & Cacciotti, 2013). This research study employs theories to guide the  

development and testing of the five hypotheses.  

 
3.1 RESEARCH METHODOLOGY / PARADIGM  

The aim of this research is to determine how the entrepreneurial orientation dimensions  

contribute to SME growth performance in the South African minibus taxi industry. The  

research design creates a formation that prescribes a structure to identify relationships  
between the variables. A quantitative approach is used for the purpose of this study.  

Quantitative analysis of data is used as it can provide precise means of testing  
relationships between the variables (Hayton & Cacciotti, 2013). The use of this method  is 

that it is a reliable scientific means of testing relationships (Blumberg, Cooper, &  
Schindler, 2011).  

A research paradigm refers to the beliefs and values that guide the way in which a  
researcher solves a problem. Research paradigms are important as to how the work is  

studied and interpreted. Survey research methodology is suited towards a positive  

research paradigm. The positivist paradigm is usually validated by applying four criteria,  

namely internal validity, external validity, reliability and objectivity (Burns, 2000). 
 

3.2 RESEARCH DESIGN  

Research design is a blueprint that is used to accomplish research objectives by  
responding to questions (Schindler, 2019). The research design provides a formal  

structure to identify the relationships between the variables used for this study.  



 29 

There are two approaches to research design – longitudinal studies and cross-sectional  
studies (Schindler, 2019). For the purposes of this study, data from cross-sectional studies  

are used to analyse patterns between two or more variables.  

With the time constraints of this study and in order to analyse relationships, a cross 

sectional approach for survey research was used. Cross-sectional methodology using  
survey instruments attempts to test the effects of variables in this study concerning  

innovation, risk -taking and proactiveness.  

The survey, as the chosen methodological approach, allows for the collection of data  
through the use of structured questions. Pinsonneault and Kraemer (1993), defined a  

survey as a “means for gathering information about the characteristics, actions, or  
opinions of a large group of people” (p. 77).  

It is a low-cost option and allows for expanded geographic coverage which is important  
during the Covid-19 pandemic. In terms of advantages, this method is effective in that it  
allows for the respondents to report directly on their own answers.  

Survey research is also used to quantitatively describe specific aspects of a given  
population (Kraemer, 1991). This allows for the examining of relationships among  

variables. Survey research uses a selected portion of the population from which the  
findings can later be generalised back to the population (Kraemer, 1991). “Surveys are  

inclusive in the types and number of variables that can be studied, require minimal  
investment to develop and administer, and are relatively easy for making generalisations”,  
(Bell, 1996, p. 68). 

 
“It is important to note, however, that surveys only provide estimates for the population,  
not exact measurements (Salant & Dillman, 1994, p. 13)”. An entire industry cannot be  
measured, which is why a sample is selected.  

The disadvantage here is that an accurate mailing list is needed, and another disadvantage  
is that response rates may be low as well as skewed. Lastly, a disadvantage to be aware  
of in terms of this research context is that there is no probing for explanation. Biases can 
occur unintentionally or from a lack of response.  

  



 30 

The main  disadvantage of this method as pertaining to this study was the response rate 
from email  and WhatsApp respondents. To combat this, the study was conducted 

manually to obtain the data in the given time frame as well as to assist in any language 

barrier concerns that  may have arisen if the study were to go ahead virtually.  

 

3.3 POPULATION AND SAMPLE  

3.3.1 Population  

There are more than 250,000 minibus taxis on the South African roads (SA Taxi, n.d.).  
This is the population from which the sample wase drawn. A non-disclosure agreement 
with SA Taxi was signed in order to receive a sample database of existing clients. The  

non-disclosure ensured that the company was open to discuss the obtaining of this data  
base for academic purposes. In addition, the non-disclosure protects the privacy rights of  
the clients and ethical considerations are to be considered.  

According to the company, SA Taxi Finance, their database includes settled deals for  
71,100 customers and 104,000 loans (SA Taxi, n.d.). All the financed loans have a  
mandatory telematics device installed and stream real-time data into a Google Cloud  

platform with real-time events (cross border monitoring, no-go areas and accident  
detections) and analytics (stops, binding spots, bases and trip details). This frequency data  

is event based and accumulates approximately 500-million points per month. There are  

currently 25-billion data points for the taxi movement for the last five years. 
 
3.3.2 Sample and sampling method  

A sample consists of a portion of the target population and is carefully selected (Schindler,  
2019). From the above-mentioned population, a sample was drawn of 180 respondents  

for the purpose of the study. Simple random sampling was the method used for this study.  

The participants were chosen based on availability and willingness to take part. This  
proved to be beneficial as surveys were handed out on location to potential respondents.  

According to Schindler (2019), a sample is a portion of the target population and this  

sample should accurately represent the population in order for data to be reliable.  



 31 

The sample was taken from the SA Taxi database. The company currently has 32,900  
minibus taxi loans on their books. The average loan has been on record for 30 months and  
split across the asset type new (75%) and pre-owned (25%).  

The book is heavily weighted towards Toyota Quantum Ses’fikile (88%) followed by  
Mercedes Sprinter (4%) and Nissan NV350 (3%). The loan book is spread across 26,400  

customers (24% female, 76% male). The average age of a financed customer is 47 (SA  
Taxi, n.d.).  

According to the company, in terms of contact method, the communication is mainly  
telephonic. However, since the start of lockdown, 3,000 customers are registered on the  

WhatsApp platform. There are also communication channels via email and SMS. These  
customers are distributed nationally. Below is a table showing this distribution (SA Taxi,  
n,d): 
Table 3.1: Distribution by province  

 

 
3.4 THE RESEARCH INSTRUMENT  

Decisions regarding the measuring of entrepreneurial orientation must be based on a firm  

understanding of the theoretical nature of the construct. entrepreneurial orientation as a  
construct is intended to measure the extent to which an organisation is entrepreneurial.  

Qualtrics is online software that is used to design and distribute data. The research  
instrument must not be too confusing or ambiguous (Schindler, 2019).  



 32 

This survey used closed-ended questions. This requires the respondent to choose from  
among a given set of responses (McIntyre, 1999, p. 75). The choices form a continuum  

of responses.  

The research instrument included a seven-point Likert scale. The use of this seven-point 

scale will allow for a greater analysis of the respondents’ evaluation. The seven-point 
Likert scale is reasonable to create and is used for evaluation with regard to how much  

the respondent agrees or disagrees (Schindler, 2019).  

A seven-point Likert scale was used to test independent and dependent variables ranging  
from (1) Strongly disagree to (7) Strongly agree. Entrepreneurial orientation was 

measured using this seven-point scale adapted from Covin and Slevin (1990). 
The predominant way of measuring entrepreneurial orientation is using the Miller/Covin  

and Slevin (1989) instrument which is shown in Table 3.2 (Covin et al, 1989). The scales  
are chosen due to past research establishing instrument validity and reliability, which  

confirms that the entrepreneurial orientation factor structure is consistent with the three  
dimensions of innovation, risk-taking and proactiveness (Covin & Lumpkin, 2011).  

For the purpose of this research, each entrepreneurial orientation dimension is tested  
separately. The instrument was divided into blocks. Each block represented an  

entrepreneurial orientation construct. The instrument began with demographic questions,  
followed by questions on innovation, risk-taking, proactiveness and the environment,  

divided into blocks respectively.  

Table 3.2: Research instrument scales 

Scale  Operationalisation  Literature Support 



 33 

Independent variables:  

Entrepreneurial   

orientation:   

innovativeness,   

proactiveness and risk 
taking. 

Entrepreneurial orientation is a measure of  
entrepreneurship in an organisation that  
looks at both the degree and frequency of  
events with respect to innovativeness, risk,  
and proactiveness. Frequency of  
entrepreneurship was measured by using  
summative measures of these three  
dimensions as they apply to the  
organisation. entrepreneurial orientation 
can  be viewed as a firm’s placement along 
a  continuum ranging from conservative to  
entrepreneurial. Measured along a seven 
point Likert scale ranging from ‘strongly  
disagree = (1) to strongly agree = (7)’. 

Covin and Lumpkin (2011);  
Covin et al. (1989); Lumpkin  
and Dess, (1996); Rauch et 
al.,  2009.; Miller/Covin and  
Slevin (1989) 

 
 

 
Dependent variables:  

Growth performance 

Growth performance was operationalised 
as  an index commonly used performance  
measures pertaining to performance and  
growth. These included items such as,  
profitability, number of vehicles owned  
growth performance was treated as a  
perceptive measure for the past three years  
(performance over three years is broad  
enough time-space to account for seasonal  
and cyclical variations in business 
practices  and performance). Used same 
scale as for  IVs. 

Lumpkin and Dess, (1996);  
Kreiser and Davis, (2010);  
Callaghan and Venter, 
(2011) 



 34 

Environmental Hostility  
& Dynamism 

The environmental dimensions of  
dynamism and hostility are selected. This 
is  due to the modest correlations reported  
between these two dimensions (Zahra,  
1993). ‘Environmental dynamism (5-
items)  and hostility (6-items) are 
measured with a  7-point Likert scales’.  

Used same scale as for IVs. 

Damanpour and Schneider,  
(2006); Uzkurt et al., (2012),  
Urban and Heydenrych,  
(2015), Zahra, (1993). 

 
 

3.5 PROCEDURE FOR DATA COLLECTION  

Due to Covid-19 it was not safe to collect data on the ground. Data was collected between  

November 2020 and December 2020. The survey was created on Qualtrics. This system  
was selected due to its functionality and ease of use.  

It is important to mention that originally this form of methodological approach was to be  

administered via email and WhatsApp; however, due to time constraints the rate of 
email addresses and WhatsApp responses were too slow. Time was allocated 
accordingly to  collect data manually. This was done by printing out the surveys and 
allowing  respondents to fill them out. SA Taxi allowed the use of their premises to hand 
out surveys  and collect them at the end of the day. This took a full working week. Once 
all the hard  copies were collected, the data was then recorded manually onto Microsoft 

Excel.  

In order to ensure ethical measures were taken into account, the respondents were not  
incentivised in any way to participate in this research survey. Nowhere in the survey did  

it require participants to fill out any personal information, to ensure the participants  
remained anonymous.  

The participants were requested to participate completely voluntarily in the survey.  



 35 

 

Lastly, the first question of the survey was “I consent to participate” or “I do not consent”,  

which allowed the option for the respondents to ensure consent is adhered to. In addition,  
the participants were assured that there were no right or wrong answers and that their  

participation was greatly appreciated.  

University of the Witwatersrand, Johannesburg, insists that all its research be conducted  
following the very highest ethical standards. All students who are conducting research  are 
required to gain ethical clearance from the university in order to begin the data  collection 
process. According to the university, if one fails to obtain ethical clearance  before the 

research is started, then this may lead to a breach of research integrity.  

The ethical clearance certificate was granted by the University on 25 November 2020 
and  the protocol number is as follows: WBS/BA1122787/558  

3.6 DATA ANALYSIS AND INTERPRETATION  

The data collected from the completed questionnaires was then analysed using Statistical  

Package for the Social Sciences (SPSS). SPSS is an electronic system that is especially  
used for descriptive statistical analysis. By using SPSS, the data from the survey can be 
analysed and extracted in order to obtain the data that will inform the study. 
 

Firstly, the data needs to be cleaned. This means for all the respondents that did not  
consent to participation, their data would be discarded. During the cleaning process the 
incomplete questionnaires are deleted and not be statistically analysed. The data is 

assessed for any missing values in the data set, meaning if a respondent did not fully  
answer the question it will not interfere with the data that is collected. This is done to  

ensure quality results.  

The following methods of analysis were used for the purpose of this research:  

3.6.1 Descriptive statistics  

This method of analysis was used in order to describe the sample of the study. The  
demographic data collected in the survey is presented in chapter 4, sub section 4.2. The  



 36 

demographic data is presented in charts and graphs to categorise the results.  

3.6.2 Correlation analysis  

Correlation analysis is used to evaluate the relationship between two variables; it  
generally tests the direction and strength of the relationship (Newbold, et al., 2013). The  
correlation coefficient was used in order to assess the relationship of the three hypotheses.  

3.6.3 Multiple regression models  

To assess the dependent variables on the three independent variables, the multiple  
regression tool is used. This is done to examine the independent variables in terms of the  

three dimensions of entrepreneurial orientation and hostility and dynamism on the  
dependent variable, growth performance.  

3.7 Validity and reliability of research  

The data used for this study is data is collected using multi-item and Likert scales; 

therefore, it was important to ensure that the constructs were valid and scales reliable. 

Exploratory factor analysis was used to assess the validity of the data. There are several  
types of validity; however, this research concerns two major varieties being internal  
validity and external validity. These two varieties will be addressed:  

3.7.1 External validity  

External validity occurs when the observed causal relationship can be generalised across  
persons, settings as well as times (Schindler, 2019).  

External validity is concerned with the ability of factors and their resulting impact on the  
ability to generalise the research results. External validity should allow the results of the  

research to be extended to the minibus taxi industry in South Africa as a whole.  

3.7.2 Internal validity  

In contrast to the above, according to Schindler, (2019), internal validity can be defined  



 37 

as the ability of a research instrument to measure what it is alleged to measure.  

This test measured how valid the survey was that was sent out to the respondents from  
the sample. In SPSS the validity test is done by using the Pearson Correlation.  

3.7.3 Reliability  

Reliability is concerned with the degree to which a measurement is free of random or  
unstable error (Schindler, 2019). To ensure this, the research and data collected will need  
to be transparent and consistent. A reliability test indicated how reliable the questions are  

that were asked in the survey in order to ensure consistent results.  

These tests are important to run as questions can be valid yet not reliable. To test this in  
SPSS, reliability analysis was used in order to test the Cronbach Alpha score. The result  
indicates if the factors that are being compared are correlated. Reliable instruments can  
be used with assurance that there is no interference from situational or transient factors  

(Schindler, 2019). In the event a scale is not reliable it therefore cannot be valid. 
With these requirements fulfilled, the research can be considered more valid in that the  
data represents what it is supposed to.  

The next chapter presents and describes the results of the data analysis. 



 38 

 
CHAPTER 4: PRESENTATION OF RESULTS  

4.1 INTRODUCTION  

The data collection administered via the survey was broken down into various 

categories, starting with demographics. The demographic profile of the respondents is 
firstly be  addressed. The demographic data includes gender, age, education, parental 

involvement  as well as duration in the industry. This is then followed by the results 
pertaining to each  of the hypotheses.  

In terms of the hypotheses for this study, there was no valid construct with regard to the  
environment. Therefore, the hypothesis to do with the moderating effect of environment  
on the relationship between each of the entrepreneurial orientation dimensions on  

performance could not be assessed.  

At the end of the data collection process, it was identified that 120 respondents provided  
data. Of these 120, 25 were removed because they lacked all the data points for analysis.  
Missing values affect the data, so the sample was made up of 95 respondents. The data  

was captured on Microsoft Excel and imported to the system SPSS in order to be  analysed. 
The outputs of the analysis are presented below.  

 

4.2 DEMOGRAPHIC PROFILE OF RESPONDENTS  

4.2.1 Gender  

With regard to the demographic data, the results presented in Figure 4.1 indicate that 
majority of the respondents were male (77%) while the other 23% were female (23%). 

 



 39 

  

 

Figure Error! No text of specified style in document..1: Respondent gender 

4.2.2 Age 

Figure Error! No text of specified style in document..2 presents the age distribution of the respondents. It 

can be noted that 95% of the respondents were 35 years or older. Only 1% were 18 – 24 years and 5% were 

between 25 – 34 years old. 

 

 

 

Figure Error! No text of specified style in document..2: Respondent age 

77%

23%

Male
Female

1%

5%

15%

35%

31%

14%

0%

5%

10%

15%

20%

25%

30%

35%

40%

18-24 25-34 35-44 45-54 55-64 65-74

Pe
rc

en
ta

ge
 o

f r
es

po
nd

en
ts

Age (years)



 40 

 

4.2.3 Education 

The respondents’ highest attained level of education is presented in Figure Error! No text of specified style 

in document..3. Close to one in every two respondents had no formal schooling (48%), followed by 41% 

that had grade 12 as their highest attained level of education. A proportion of 3% went to college, 5% had 

diplomas, while 2% of the respondents had degrees. 

 

 
 
 
 
 
 
 
 
 

 

Figure Error! No text of specified style in document..3: Highest level of education 

4.2.4 Familial involvement 

The respondents were asked if their parents or family relatives were involved in the taxi industry. The results 

presented in Figure Error! No text of specified style in document..4 show that more than half of the respondents 

indicated that their parents or relatives were either definitely involved or probably involved in the taxi industry. 

 

48%
41%

3% 5%
2%

0%

10%

20%

30%

40%

50%

60%

No formal
schooling

Grade 12 College Diploma Degree

Pe
rc

en
ta

ge
 o

f r
es

po
nd

en
ts

Education level



 41 

 
Figure Error! No text of specified style in document..4: Highest level of familial involvement 

4.2.5 Experience 

The last point with regards to the demographic data regards the respondents’ involvement within the industry. 

Most of the respondents had been involved in the taxi industry for five years or more (88%). The results are 

illustrated in Figure Error! No text of specified style in document..5. 

 
Figure Error! No text of specified style in document..5: Length of time in the taxi industry 

 

4.3 VALIDITY OF CONSTRUCTS 

Exploratory factor analysis (EFA) with Principal Axis Factoring method and ProMax rotation were 

conducted for the dependent variable separately and all the independent variable items in one model. 

The dependent variable EFA was conducted separately. This was due to the fact that some items 

from the dependent were loading together with items from the independent variable. 

31%

22%

3% 2%

42%

0%
5%

10%
15%
20%
25%
30%
35%
40%
45%

Definitely yes Probably yes Might or might
not

Probably not Definitely not

Pe
rc

en
ta

ge
 o

f r
es

po
nd

en
ts

Parents involved

2%

10%

88%

1-2 years
2-4 years
5 years +



 42 

Validity of the dependent variable 

The Kaiser-Meyer-Olkin Measure of Sampling Adequacy value was 0.613 as shown in Table Error! 

No text of specified style in document..1. This was greater than the required value of at least 0.5, indicating 

that the sample was adequate for conducting EFA. The Bartlett's Test of Sphericity was significant 

(p-value = 0.000 < 0.05). This implies that the items within the performance construct were 

correlated strongly enough to support the conducting of EFA. 

Table Error! No text of specified style in document..1: KMO and Bartlett’s test – dependent variable 

 

Table Error! No text of specified style in document..2 presents the total variance explained. The results 

indicate that one factor was retained as one factor had an eigen value greater than 1. The retained factor 

explained 63.635% of variance of the initial three items in the retained factor as shown by a cumulated 

initial eigenvalue percentage of 63.635. 

Table Error! No text of specified style in document..2: Total variance explained – dependent variable 

Factor Initial Eigenvalues Extraction Sums of Squared Loadings 

Total % of Variance Cumulative 

% 

Total % of Variance Cumulative % 

1 1.909 63.635 63.635 1.503 50.089 50.089 

2 .699 23.295 86.929    

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .613 

Bartlett's Test of Sphericity Approx. Chi-Square 59.716 

df 3 

Sig. .000 

 



 43 

3 .392 13.071 100.000    

Extraction Method: Principal Axis Factoring. 

The scree plot in Figure Error! No text of specified style in document..6 confirms that there was only one 

construct as indicated by a steep slope between factor 1 and factor 2. This shows that only one factor 

explained most of the variation in the initial items. 

 

Figure Error! No text of specified style in document..6: Scree plot – dependent variable 

The composition of the retained factor and the factor loadings are presented in Table Error! No text of 

specified style in document..3.  

It can be moted that all the three items that initially hypothesised to be in the performance were 

retained in the factor.  

All the items loaded highly onto the retained factor with a minimum factor loading of 0.518. This 

was greater than the minimum requirement of at least 0.4. This indicates that the performance 

construct was valid. 



 44 

Table Error! No text of specified style in document..3: Factor matrix – dependent variable 

 Factor 

1 

PERF1 Industry supportive .939 

PERF3 It takes three years to become proficient .593 

PERF2 I am satisfied with my chances of growing .518 

Extraction Method: Principal Axis Factoring. 

a. Attempted to extract one factor. More than 25 iterations required. (Convergence=.001). Extraction was 

terminated. 

4.3.2 Validity of the independent variables 

The KMO and the Bartlett's Test of Sphericity results are presented in Table Error! No text of specified 

style in document..4. The KMO value was 0.690, which was greater than the minimum requirement of at 

least 0.5. This indicates that the sample was adequate for conducting EFA. The Bartlett's Test of 

Sphericity was significant (p-value = 0.000 < 0.05). Thus, indicating that the items within the 

constructs were correlated strongly enough to support the conducting of EFA. 

Table Error! No text of specified style in document..4: KMO and Bartlett’s test – independent variables 

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .690 

Bartlett's Test of Sphericity Approx. Chi-Square 255.391 

df 36 



 45 

Sig. .000 

The total variance explained results shown in Table Error! No text of specified style in document..5 indicate 

that the EFA retained three factors instead of the four initially hypothesised independent variables 

and moderator variable. This is shown by three factors with eigenvalues greater than 1. The retained 

three factors explained 67.150% of variance of the initial items in the retained factors. This is as 

indicated by a cumulated initial eigenvalue percentage of 67.150. 

Table Error! No text of specified style in document..5:  Total variance explained – independent variables 

Fact

or 

Initial Eigenvalues 
Extraction Sums of Squared 

Loadings 

Rotation Sums 

of Squared 

Loadingsa 

Tota

l 

% of 

Variance 

Cumulativ

e % 
Total 

% of 

Variance 

Cumulativ

e % 
Total 

1 
3.09

9 
34.435 34.435 2.676 29.729 29.729 2.283 

2 
1.70

9 
18.989 53.424 1.166 12.952 42.681 1.672 

3 
1.23

5 
13.726 67.150 .728 8.088 50.769 1.933 

4 .777 8.632 75.782     

5 .604 6.711 82.493     



 46 

6 .564 6.262 88.755     

7 .439 4.879 93.634     

8 .354 3.934 97.569     

9 .219 2.431 100.000     

Extraction Method: Principal Axis Factoring. 

a. When factors are correlated, sums of squared loadings cannot be added to obtain a total 

variance. 

 

The scree plot in Figure Error! No text of specified style in document..7 confirms that there were indeed 

three factors as by a steep slope between factor 1 and factor 4 and the line graph flattens after factor 

4. This indicates that most of the variance was explained by the first three factors. 



 47 

 

Figure Error! No text of specified style in document..7: Scree plot – Independent variables 

The pattern matrix presented in Table Error! No text of specified style in document..6 indicates the final 

construct composition for the independent variables. The innovation construct retained all the three 

items that were in the hypothesised construct, while the risk-taking construct had the two risk-taking 

items and one item that had initially been hypothesised to be in the proactive construct. Lastly the 

proactive construct had two items that were hypothesised to be in the proactive construct and one 

item that had initially been hypothesised to be in the environment construct. 

The items “PRO1 Technology”, and “PRO2 Regulatory” were removed during EFA because they 

had factor loadings less than 0.4, the minimum required factor loadings for an item to belong to a 

factor. 

The environment construct had two items only, namely “ENV1 Competitive” and “ENV2 

Environment is aggressive”. 

These were eliminated during EFA because they were less than the minimum requirement of at least 

three items in a construct. Thus, there was no valid construct for environment. 

The retained items loaded highly (factor loading >0.4) onto their respective factors. This indicates 

that there were valid constructs for innovation, risk-taking, and proactiveness. 



 48 

Table Error! No text of specified style in document..6: Pattern matrix  independent variables 

  Factor 

 1 2 3 

Innovation 

INNO3 Idea Gen .81

8 

  

INNO2 The industry is often bringing in new P/S .75

3 

  

INNO1 I consider myself to be innovative .69

2 

  

Risk -Taking 

RT2 Encouraged to take risks  .705  

RT1 Leaders encourage risk  .664  

PRO3 Opportunities  .654  

Proactiveness 

PRO4 Proactive awarded   .763 

ENV3 Changing environment   .604 

PRO5 Innovation   .600 

 Extraction Method: Principal Axis Factoring. 

 Rotation Method: Promax with Kaiser Normalization. 



 49 

 a. Rotation converged in 5 iterations. 

 

4.4 RELIABILITY 

Cronbach’s Alpha was computed for the items retained in each construct to assess reliability of the scale. The 

results are presented in Table Error! No text of specified style in document..7. It can be noted that there was acceptable 

reliability level for each of innovation (3 items, α = 0.798), performance (3 items, α = 0.703), and risk-taking 

(3 items, α = 0.701) as they had Cronbach’s Alpha values greater than 0.7. 

There was poor reliability for proactiveness (3 items, α = 0.662) as the Cronbach’s Alpha was less than 0.7. 

This was, however, greater than 0.5, below which the reliability level becomes unacceptable. 

Since the Cronbach’s Alpha values for each of the constructs was acceptable or poor but still acceptable, a 

composite scale was constructed for each construct. The composite scale was computed by calculating the 

average of the items within each construct. 

Table Error! No text of specified style in document..7: Reliability of scale 

 

Construct Number of Items Cronbach's Alpha Reliability level 

Innovation 3 .798 Acceptable 

Performance 3 .703 Acceptable 

Risk -Taking 3 .701 Acceptable 

Proactiveness 3 .662 Poor 

 



 50 

 

4.5 DESCRIPTIVE STATISTICS AND CORRELATION 

The descriptive statistics and the Pearson’s correlation for the final constructs is presented in Table Error! No 

text of specified style in document..8. The results show that proactiveness (mean = 5.08 ± 1.57) was the highest 

rated construct followed by performance (mean = 5.06 ± 1.59), innovation (4.74 ± 1.71) and risk-taking (2.71 

± 1.54) was the lowest rated construct. 

The correlation results show that there was a weak positive and significant correlation between performance 

and each of innovation (r = 0.265, p-value < 0.01), and proactiveness (r = 0.259, p-value < 0.05). There was 

a weak, positive and insignificant correlation between performance risk-taking (r = 0.077, p-value > 0.05). 

Table Error! No text of specified style in document..8: Descriptive statistics and correlation 

 Descriptive Statistics Pearson Correlation 

Construct Mean SD 1. 2. 3. 4. 

1. Innovation 4.74 1.71 1    

2. Risk-Taking 2.71 1.54 .250* 1   

3. Proactiveness 5.08 1.57 .405** .144 1  

4. Performance 5.06 1.59 .265** .077 .259* 1 

*. Correlation is significant at the 0.05 level (2-tailed). 

**. Correlation is significant at the 0.01 level (2-tailed). 



 51 

 

 



52 
   

4.6 REGRESSION 

Multiple regression with innovation, risk-taking, and proactiveness as the independent 

variables and performance as the  

dependent variable was applied to assess the hypotheses. There are certain regression 

assumptions made and these were tested before interpreting the regression results. 

Regression assumptions diagnostics 

Test for Outliers 

Multiple regression and most other models require that there be no outliers (extreme 

values) that negatively impact on the quality of the model. This assumption was tested by 

plotting a boxplot for all the variables in the model. As indicated in  Figure Error! No text of 

specified style in document..8, the set of boxplots to the left indicates that there were a few 

outliers for the risk-taking variable. Numbers outside the whiskers of a boxplot are 

outliers. 

All the outliers were on the higher end of the scale for the construct. The outliers were 

eliminated by replacing them with the next highest values that are not outliers. The 

boxplot to the right shows the boxplots after eliminating the outliers. 

It can be noted that the final constructs had no outliers. This implies that the no outlier 

assumption was met. The model was fitted with the variables that had no outliers. 



53 
   

 Figure Error! No text of specified style in document..8: Boxplots – before and after removing 
outliers 

 

Test for Linearity 

It is also assumed that there is a at least a linear relationship between performance and 

each of innovation, risk-taking, and proactiveness. This was tested by plotting scatter 

plots as illustrated in Figure Error! No text of specified style in document..9. A line of best fit 

drawn within each scatter plot shows that there is a linear relationship between each 

independent variable and the dependent variable. This implies means that the linearity 

assumption was also met. 

Figure Error! No text of specified style in document..9: Scatter plots of independent variable 
against dependent variable 



54 
   

 

Test for normality 

The third assumption is the normality assumption, which assumes that the regression 

residuals are normally distributed. This assumption was tested by plotting a histogram on 

the regression standardised residuals as shown in Figure Error! No text of specified style in 

document..10. It can be noted that almost all the bars on the histogram fit below the 

superimposed normal curve. This indicates that the residuals are either normally 

distributed or at least approximate the normal distribution as required. This means that 

the normality assumption was met. 



55 
   

 

Figure Error! No text of specified style in document..10: Histogram of regression standardised 
residuals 

 

Test for multicollinearity 

It is assumed that there is no multicollinearity, which means that there are no independent 

variables that have a very strong relationship that negatively impact on the regression 

model. The variance inflation (VIF) values shown in Table Error! No text of specified style in 

document..9 are all below the cut-off of 10, above which there will be a worry about 

multicollinearity. This implies that the no multicollinearity assumption was also met. 

Table Error! No text of specified style in document..9: Test for multicollinearity 

 Collinearity Statistics 

Tolerance VIF 

Innovation .799 1.252 



56 
   

Risk-taking .935 1.069 

Proactiveness .834 1.199 

 
Test for homoscedasticity 
 
It is also assumed that there is there no homoscedasticity, which means that the error 

terms are assumed to be the same for all values of the independent variables. This 

assumption was tested by charting a scatter plot of the regression standardised residuals 

against the regression standardised predicted values as indicated in Figure Error! No text of 

specified style in document..11. The scatter plot showed values randomly dotted around the 

zero line with no obvious pattern. This indicates that the homoscedasticity assumption 

was also met. 

 

Figure Error! No text of specified style in document..11: Scatter plot of regression standardised 
residuals 

 



57 
   

Regression results 

Table Error! No text of specified style in document..10 presents the regression model summary. It 

can be noted that proactiveness, risk-taking, innovation explained only 9.8% of variance 

in performance as indicated by an r-square of 0.098 shown in Table Error! No text of specified 

style in document..10 

Table Error! No text of specified style in document..10: Model summary 

Mode

l 

R R Square Adjusted R 

Square 

Std. Error of the 

Estimate 

Durbin-Watson 

1 .313a .098 .068 1.53220 2.335 

a. Predictors: (Constant), Proactiveness, Risk-taking, Innovation 

b. Dependent Variable: Performance 

The ANOVA shown in Table Error! No text of specified style in document..11 indicates that a 

model with proactiveness, risk-taking, and innovation was significant in predicting 

performance. This is because the p-value of the model was less than 0.05 as indicated by 

F(3, 91 )= 3.291, p-value = 0.024. 

Table Error! No text of specified style in document..11: ANOVA 

Model Sum of 

Squares 

df Mean Square F Sig. 

1 Regression 23.176 3 7.725 3.291 .024b 

Residual 213.636 91 2.348   

Total 236.812 94    



58 
   

a. Dependent Variable: Performance 

b. Predictors: (Constant), Proactiveness, risk-taking, Innovation 

The coefficients presented in Table Error! No text of specified style in document..12 indicate the 

individual contribution of each of proactiveness, risk-taking, and innovation in predicting 

performance. The results revealed that none of innovation (p-value = 0.091), risk-taking 

(p-value = 0.974), and proactiveness (p-value = 0.099) was significant in predicting 

performance. This is because the p-vales were greater than 0.05. 

Table Error! No text of specified style in document..12: Coefficients 

Model Unstandardised 

Coefficients 

Standardise

d 

Coefficients 

t Sig. Collinearity 

Statistics 

B Std. 

Error 

Beta Toleranc

e 

VIF 

1 (Constant) 
3.272 .613  

5.33

8 

.00

0 
  

Innovation 
.177 .104 .190 

1.70

9 

.09

1 
.799 

1.25

2 

Risk-taking 
.003 .106 .003 .032 

.97

4 
.935 

1.06

9 

Proactiveness 
.184 .110 .182 

1.66

8 

.09

9 
.834 

1.19

9 



59 
   

a. Dependent Variable: Performance 

 

 

4.7 RESULTS PERTAINING TO HYPOTHESIS 1 

H0: There is no impact between innovativeness growth performance within the South 

African taxi industry. 

H1: Innovation has a positive impact on the growth performance of the South African 

taxi industry. 

The results presented in Table Error! No text of specified style in document..12 show that although 

innovation (β = 0.190, t-value = 1.709, p-value = 0.091) had a positive impact on 

performance, the impact was not significant. The impact was positive because the 

coefficient of innovation (β = 0.190) was greater than zero. The impact was, however, not 

significant because the p-value was greater than 0.05. 

This shows that the null hypothesis could not be rejected at 5% significance level. This 

implies that there was no sufficient evidence at 5% significance level to suggest that there 

is a positive impact between innovativeness and growth within the South African taxi 

industry. 

4.8 RESULTS PERTAINING TO HYPOTHESIS 2 

H0: There is no impact between risk-taking and growth performance within the South 

African taxi industry. 

H2: Risk-taking has a positive impact on the growth performance of the South African 

taxi industry. 

The results presented in Table Error! No text of specified style in document..12 show that although 

risk-taking (β = 0.003, t-value = 0.032, p-value = 0.974) had a positive impact on 

performance, the impact was not significant. The impact was positive because the 



60 
   

coefficient of risk-taking (β = 0.003) was greater than zero. The impact was however not 

significant because the p-value was greater than 0.05. 

This shows that the null hypothesis could not be rejected at 5% significance level.  

This implies that there was no sufficient evidence at 5% significance level to suggest that 

there is a positive impact between risk-taking and growth within the South African taxi 

industry. 

4.9 RESULTS PERTAINING TO HYPOTHESIS 3 

H0: There is no impact between proactiveness and growth within the South African taxi 

industry. 

H3: Proactiveness has a positive impact on the growth performance of the South African 

taxi industry. 

The results presented in Table Error! No text of specified style in document..12 show that although 

proactiveness (β = 0.182, t-value = 1.668, p-value = 0.099) had a positive impact on 

performance, the impact was not significant. The impact was positive because the 

coefficient of proactiveness (β = 0.182) was greater than zero. The impact was, however, 

not significant because the p-value was greater than 0.05. This shows that the null 

hypothesis could not be rejected at 5% significance level. This implies that there was no 

sufficient evidence at 5% significance level to suggest that there is a positive relationship 

between proactiveness and growth within the South African taxi industry. 

4.10 SUMMARY OF THE HYPOTHESES 

Table Error! No text of specified style in document..13: Summary 

Hypothesis 
Supported/ 

Not 

Significant/ 

Not 

H1 
Innovation has a positive impact on the growth 

performance of the South African taxi industry. 
Supported Not Significant 



61 
   

H2 
Risk-taking has a positive impact on the growth 

performance of the South African taxi industry. 
Supported Not Significant 

H3 
Proactiveness has a positive impact on the growth 

performance of the South African taxi industry. 
Supported Not Significant 

 

 

 
 
 

  



62 
   

CHAPTER 5: DISCUSSION OF THE RESULTS  

5.1 INTRODUCTION  

This chapter is the discussion of the results as well as an explanation of the 

findings with  reference to the relevant literature. First, the demographic profile 
of the respondents of  the sample will be addressed. This will include the 

findings and any comparison as to  what was planned to be obtained and what 
was indeed obtained. Differences will be  explained accordingly. Second, a 

discussion pertaining to each of the hypotheses in  relation to the literature will 
follow.  

Only the three hypotheses concerning the dimensions of entrepreneurial 
orientation will  be discussed. As previously highlighted in chapter 4, there was 

no valid construct for the  environment. The discussion of the results will 
therefore not include hypotheses 4 and 5,  as the requirements for analysis were 

not met.  

5.2 DEMOGRAPHIC PROFILE OF RESPONDENTS  

5.2.1 Gender  

The sample size is reflective of the industry as a whole. It is majority male 
orientated.  However, 23% of the respondents were female. This indicates that 

although the industry  is male dominated by an overwhelming majority, there 
is female involvement. The sample size therefore coincides with SA Taxi’s 

loan book that is spread across 26,400  customers of whom 24% are female, 
and a majority of 76% are male (SA Taxi, n.d.).  

Despite being a male-orientated industry, the results coincide with a growing 

female base.  ‘SA Taxi has increased its female client base by an average of 
4.5% per annum’, (SA Taxi,  n.d.).  

Thus, indicating a growing inclination towards female involvement. 
 

5.2.2 Age  



63 
   

The average age of a financed customer is 47 (SA Taxi, n.d.). In terms of the 

age  demographic, the results indicate that most of the respondents fall into the 
category of 35  and above. Only 1% of the respondents were between 18 and 

24. This indicates that the  industry is not majority youth based but instead tends 

toward an older age group.  

The findings are therefore consistent with regard to the sample size of a 
majority being  over 47 years old.  

5.2.3 Education  

This industry is not one that is founded upon high levels of education. A 
staggering  statistic from the data collected highlights that most of respondents 

had no formal  schooling (48%). Grade 12, the highest level of school education, 
was attained by 41%  of the respondents. This industry can therefore be said to 

be an opportunity for those who  are lacking formal education to create an 
income. College or university is therefore not a  necessary requirement for entry 

into the industry.  

5.2.4 Familial involvement  

Being an unregulated industry, the means of entry is not linear. However, 53% 
of the  respondents indicate some familiar involvement in the industry. This 
indicates some type  of a grounding based on familial expertise.  

5.2.5 Experience  

The results indicate with an overwhelmingly high majority that the respondents 
have been  involved for over five years.  

Hardly any of the respondents were newcomers into the  industry. Being an 
unregulated industry, level of entry and experience coincide. 

 



64 
   

 

5.3 DISCUSSION PERTAINING TO HYPOTHESIS 1  

H1: Innovation has a positive impact on the growth performance of the South 

African  taxi industry.  

Research findings showed that entrepreneurial orientation generally has a 
positive effect  on business performance in the United States, Europe and other 

developed countries  (Hughes & Hosman, 2012). However, several studies, like 
that of Wiklund and Shepherd  (2005) show that these studies are context 
sensitive. This is in line with the findings of  this research.  

The results indicate that, although there is a positive impact between innovation 
and  growth performance, the impact is not significant. However, there is an 

impact between  the independent variable, innovation, and dependent variable, 
growth performance. This  is shown in the results as when innovation increases 

so too does growth performance.  

The findings for this hypothesis show a weak positive relationship between  
innovativeness and growth performance within the South African taxi industry. 
The  results are not strong enough for generalising the same findings for the 

entire population.  Therefore, it can be deduced that there is no general concrete 
evidence to imply that  innovation is guaranteed to be related to growth 
performance within this industry.  

There is agreement in previous literature that entrepreneurial orientation 
positively  influences industry performance (Rauch et al., 2009). ‘Of the original 
three dimensions  that constitute the entrepreneurial orientation construct, 

innovativeness is the one dimension that meets with the greatest degree of 
consensus regarding its positive  relationship with firm growth performance’ 

(Rauch et al., 2009:779).  

 
‘Moreno and Casillas (2008, p. 507) state that strategy of innovation in new 
products and  new processes has a positive and significant influence on an 
industries growth rate’.  



65 
   

However, these studies have largely been done in developed economies, 

leaving a gap in  the research with regard to developing economies (Gupta & 

Batra, 2015).  

In terms of the South African minibus taxi industry, as in many other African 

countries, minibuses dominate the public transport space. ‘Critical to an 
understanding of the  minibus taxi industry is the fact that the industry is very 

dynamic – it is not easy to  understand, and is also dangerous’ (Karol, 2006). 
The industry is said to be very  complicated in how it operates.  

According to President Cyril Ramaphosa (2020), the industry is acknowledged 
as being  the lifeblood of the South African public transport system. At the Taxi 

Lekgotla in 2020  it was stated that government have an ‘aspiration to see the 
minibus taxi industry overcome  its challenges, adapt in response to the demands 

of modern public transportation, and  ultimately to grow and thrive’.  

In order for this to be achieved, government acknowledge that at the core of 
their  endeavours is formalisation, regulation and economic empowerment (Taxi 

Lekgotla,  2020). The Lekgotla further states that