Entrepreneurial Competence (EC): 113 

Entrepreneurial skills are a prerequisite for the success of any business venture. If the entrepreneur lacks the basic skills to drive the business processes, then the venture may never grow and could eventually die prematurely. A change (growth or decline) in the business performance of a firm can be attributed to either factors external to the firm such as economic factors or to factors internal to the firm known as organisational factors. Researching these two factors, Tvorik and McGivern (1997) reported that internal organisational factors accounted for twice as much variance in performance as external economic factors. In a similar piece of research, Hansen and Wernerfelt (1989) reported that two organisational factors, goal emphasis and human resources, accounted for 38 percent of performance variance, whereas only 18 percent

114 was accounted for by economic factors (industry variables, market share and firm size). Chaston (1996) identified market orientation, entrepreneurial personality, and locating and retaining customers as key determinants of small business success, while

Dahlqvist and Davidsson (2000), identified business start-up reasons as important

determinants of business performance.

In micro-businesses, the owner-manager symbolises the entire organisation. He/she develops, implements, and manages the strategy that drives the business. This implies that in focusing on the characteristics of owner-managers a significant proportion of the variance in business performance can be accounted for. In this study, entrepreneurial competence (EC) has been defined as a latent construct reflected in

four manifest variables, entrepreneurial activity (EC1_ea), commitment to growth

(EC2_cg), customer orientation (EC3_co) and entrepreneurial/Managerial ability (EC4_em). These variables are hypothesised as being capable of influencing the integration of mobile telephony services and business performance.

EC represents the underlying intrinsic ability of the owner-manager (Gartner, 1990),

enabling him to effectively coordinate and organise sector resources (Kirzner, 1983) such as information, finance, legislation and other resources like mobile telephony

services, to generate enhanced business performance in the form of profits/personal

advantages (Morris et. al, 1994). It consists of ‘competitive behaviours of the owner- manager that drive the market process’ (Kirzner, 1973, pp 19-20). These competitive

115 is Exogenous13 or Latent in nature, and is measured by the use of four manifests or

indicators: EC1_ea, EC2_cg, EC3_co and EC4_em.

4.3.1.1 Entrepreneurial Action (EC1_ea):

This refers to the sum total of activities carried out by the entrepreneur in order to properly manage and grow his business venture. It is measured using an average of six 5-point Likert scale questionnaire items - strongly disagree/strongly agree (Table 5.3).

4.3.1.2 Commitment to Growth (EC2_cg):

This refers to the determination of the micro-business owner to grow his business. It embodies issues like hours put into the business (full-time or part-time), training programmes undertaken for the purpose of the business as well as financial commitment. It is measured using an average of eight five 5-point Likert scale questionnaire items - strongly disagree/strongly agree (Table 5.3). Part of the scale was developed by Davidsson (1989a).

4.3.1.3 Customer Orientation (EC3_co):

The link between customer orientation and firm performance has been investigated (Egeren and O’Connor, 1998; Kohli and Jaworski, 1990; Siguaw et al., 1994; Chang and Chen, 1998; Narver and Slater, 1990). The literature seems to be unanimous that higher levels of customer orientation lead to higher business performance. The ability to understand the customer in a micro-business is incumbent on the owner-manager, and it is a reflection of his entrepreneurial competence.

13_{Exogenous variables have no direct or single‐headed arrows leading to them from another latent variable, which implies} 

that they are not influenced by any other variables in the model. They are independent and their effects are reflected in  those variables which they connect to.  

116 Customer orientation refers to ‘the sufficient understanding of one’s target buyers to be able to create superior value for them continuously’ (Levitt, 1980). It requires that a seller understand and predict a buyer’s entire value chain (Day and Wensley, 1988). According to Narver and Slater (1990), customer value creation can be achieved either by increasing benefits to the customer in relation to the customer’s costs or by decreasing the buyer’s costs in relation to the buyer’s benefits. It can also be achieved by doing both.

Customer value creation involves an understanding of ‘the economic and political constraints at all levels in the channel’ (Narver and Slater, 1990 p.21). It is hypothesised in this study that the ability to achieve higher levels of customer orientation is predicted by the owner-manager’s entrepreneurial competence and as such, customer orientation can be used to measure entrepreneurial competence. Additionally, it is hypothesised that the process of customer orientation necessitates the integration of mobile telephony services.

Customer orientation is measured using an average of six 5-point Likert scale questionnaire items - strongly disagree/strongly agree (Table 5.3). The scale is a contextualisation of an original scale developed by Narver and Slater (1990).

4.3.1.4 Entrepreneurial Ability of the Owner-manager (EC4_em):

This refers to the sum total of personal attributes of the owner-manager required to bring about entrepreneurship. According to Bates (1993), entrepreneurial ability is a key determinant of entrepreneurial performance because even start-up capital cannot overcome deficiencies in entrepreneurial skills, and loans to less skilled individuals

117 often do not get repaid. These attributes, among others, include level of education, age, industry experience, functional management skills and marketing competence (Milne and Thompson, 1986; Gibb and Davis, 1990). It is measured using five 5-point Likert scale questionnaire items (Table 5.3).