Original Research

Influence of self-motivation and intrinsic motivational factors for small and medium business growth: A South African case study

Thandukwazi R. Ncube, Robert W.D. Zondo

Received: 23 Jun. 2017; Accepted: 01 Mar. 2018; Published: 29 May 2018

Copyright: © 2018. The Author(s). Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Background: This study investigates the influence of intrinsic motivational factors for small and medium enterprise (SME) growth in the eThekwini District Municipality in South Africa (SA).

Aim: It examines whether self-motivation of business owners operating in the furniture manufacturing sector has an influence on SME growth.

Setting: Of the 127 SMEs operating in the eThekwini District Municipality, 112 participated in the study representing 88% of the target population.

Methods: Descriptive, chi-square and correlative analyses were used to test the two objectives. That is, to determine the influence of self-motivation of business owners for SME growth, as well as to establish the intrinsic motivational factors that stimulate creativity for SME growth.

Results: The study revealed that the intrinsic motivational factors of business owners do influence SME growth in SA. These factors include exerting effort for business growth interest, finding new solutions to business problems to achieve growth, growing business for recognition, belief to produce the desired outcomes, taking responsibilities for business expansion, the need for advancement, and growth aspiration that enables the business owner to take risks in order to grow the business.

Conclusion: The outcome is that a self-motivated business owner has the ability to grow the business. The study provides valuable data relating to intrinsic motivational factors. Such factors are the enablers of creativity and business growth. It provides initial baseline data upon which to base future work.

Introduction

When exploring the failure of businesses in both the private and public sector to absorb the growing number of job seekers in SA, increased attention is focused on entrepreneurship and its potential in contributing to economic growth as well as job creation (Ramukumba 2014). Despite the contributions of new small and medium enterprises (SMEs), their failure rate in SA is among the highest in the world. About 75% of new SMEs do not become established formal businesses (Snyman, Schutte & Leipzig 2014). According to Olawale and Garwe (2010), the probability of a new SME surviving in the early stages of its existence, is less than any other Global Entrepreneurship Monitored (GEM) sampled country, as listed in the 2015/2016 Global Report. Grouping by geographic region and economic development level, these include Botswana and Morocco (in Africa), India, China and Australia (in Asia and Oceania), Argentina (in Latin America and Caribbean), Bulgaria and Belgium (in Europe), as well as Canada (in North America). While the GEM reports, among others, presents the entrepreneurial behaviour and attitudes of individual business owners, it raises a question as to whether running a small business leads to the fulfillment of personal goals. Arguably, this may depend, on one hand, whether there is a link between small business owners’ goals and motivations or, on the other hand, the business outcomes. Hence, this study examines whether small business growth is a function of the small business owner’s personal ability to grow the business. It investigates the intrinsic motivational factors that influence SME growth in SA. According to Nieman and Nieuwenhuizen (2014), growth and the desire to grow should be embedded in the mindset of the person starting or creating a new business venture. Growth will intensify the demands made on the resources, which can only be countered by an ability to attract resources. Growth and performance are generally seen as substitutes for each other. A growing business is usually considered to be a successful business that performs well (Nieman & Nieuwenhuizen 2014). However, this study considers the following objectives: to determine the influence of self-motivation of business owners for SME growth and to establish whether the intrinsic motivational factors of business owners influence SME growth. SME owners are likely to be intrinsically motivated if they attribute their business growth to factors under their own control, believe that they have the skills to be effective agents in reaching their desired goals, and are interested in growing a business, not just in achieving wealth (Grant & Berry 2011). Wiklund, Patzelt and Shepherd (2009) add that self-motivation is the need for self-fulfillment.

Theoretical considerations

This section presents an overview of motivation, its influence on SME growth, the intrinsic motivation in SMEs as well as motivation and creativity in SMEs.

Overview of motivation

Motivation is a process that accounts for an individual’s intensity, direction and persistence of effort towards attaining a goal (Robbins, Odendaal & Roodt 2011). Intensity is concerned with how hard a person tries. However, high intensity is unlikely to lead to job performance outcomes unless the effort is channeled in a direction. Robbins et al. (2011) add that the persistency dimension measures how long a person can maintain their effort. Motivated individuals stay with a task long enough to achieve their goal. Hence, the needs theory of McClelland and Koestner (1992) contends that individuals are motivated by three basic drives: achievement, affiliation and power. Tu and Lu (2014) argue that these needs not only motivate individuals but also include many of the most important human goals and concerns. This research attempts to demonstrate that each of these need dimensions affects the level of accountability a person feels for himself or herself and others. However, this section will only focus on the achievement and power needs as they are relevant to SME growth (Pinder 2014).

Achievement needs

The need for achievement describes a person’s drive to excel with respect to some established set of standards (Bande et al. 2016). It refers to the motive to do well and achieve a goal relative to a set of standards. The inclusion of measures of achievement orientation within the framework of entrepreneurs’ personal characteristics is consistent with this research. The need to achieve reflects individuals’ orientation, the willingness and drive for satisfaction or a sense of accomplishment (Pinder 2014). This is demonstrated by the exertion of intense, prolonged and repeated efforts to accomplish something difficult, whether by skill, practice or perseverance. This is accomplished by a future-oriented dedication to the task involving prioritisation of accomplishing the task and frequently sacrificing other activities and personal time (Royle & Hall 2012). Individuals’ achievement needs are satisfied when they are able to actualise their own purposes relative to and regardless of the situations of others (Pinder 2014). Individuals with high achievement needs do not like to prosper by chance but rather seek personally identifiable sources for their success and cannot leave the outcome to probability (Royle & Fox 2011). Such individuals experience joy or sadness contingent upon the identifiable outcomes of their efforts (McClelland & Koestner 1992).

Power needs

The need for power denotes individuals’ desire to be influential. This could manifest itself in attempts to make others behave as one would like or in a manner that they might not have done otherwise (McClelland & Koestner 1992). In other words, the individuals that are high in this need seek position power so that they can compel the actions of others. Those high in power needs prefer being in competitive, status-driven situations, and actively seek the trappings of status (Royle & Hall 2012). They are concerned with ensuring that the methods they choose to influence others are within their control (Csikszentmihalyi & Wong 2014). However, in order to maintain viable interdependent relationships with others, individuals with high power needs must often restrain these desires (Royle & Hall 2012). Central to one’s need for power is gaining influence over others. Individuals with influence can then parlay informal accountability for others into the accumulation of additional resources that serve to enhance their status. Consequently, this study examines business owners’ influential behaviour that is related to SME growth.

Motivation and its influence on small and medium enterprises growth

In work settings, productivity can be increased by using extrinsic rewards such as bonuses, but the actual quality of the work performed is influenced by intrinsic factors (Pinder 2014). If one is doing something that one finds rewarding, interesting and challenging, one is more likely to come up with novel ideas and creative solutions (Csikszentmihalyi & Wong 2014). Management’s motivation, creativity and skills have an influence on the way a business is managed or mismanaged. Insufficient and inappropriate skills of management could cause failure in businesses (Arasti, Zandi & Talebi 2012). Motivation, in this case, refers to a process that elicits control and sustains certain behaviours (Zimmerman & Chu 2013). It can either be extrinsic or intrinsic in nature. Extrinsic motivation has a stronger relationship with material factors, while the individual in the intrinsic position attempts to fulfill his or her aims in life (Becchetti, Castriota & Tortia 2013). This study determines whether intrinsic motivation influence SME growth. It must be noted that human motivation plays a critical role in the entrepreneurial process (Antonites & Van Vuuren 2014). Grant and Berry (2011) have stressed the importance of entrepreneurial intentions as a forerunner to establishing a new venture, thus highlighting the importance of what motivates a person to grow a business. Consequently, Tu and Lu (2014) provide clarity in that motivation plays an important part in the creation of new businesses. They indicate that theories of business creation that fail to address this notion are incomplete.

Motivation can also be defined as a driving force that causes the flux from desire to will in life (Zimmerman & Chu 2013). For example, a plant with no water still desires water to sustain life. However, due to its incapability to move and get water, the plant cannot get water, thus suffering from a break in the driving force of motivation. It is not to say, however, that the plant necessarily lacks driving force. Therefore, all life can be said to have, at its very minimum, the igniting spark of motivation. Hence, it can be considered a psychological state that compels or reinforces an action towards a desired goal (Tu & Lu 2014). For example, hunger is a motivation that elicits a desire to eat. Thus, motivation is an action directed towards something specific, and this something is a need to be intrinsically motivated (Grant & Berry 2011). Therefore, the need is an internal motive (i.e. intrinsic) for acting, leading to the set of actions (e.g. to grow the business). Motivation can also be described as behaviour towards the achievement of a goal. It is an action directed towards something specific, and this something is a need to be intrinsically motivated. Thus, the need is the motive (the reason) for acting. Consequently, this study determines whether SME owners are driven by intrinsic motivational factors in growing their businesses.

Intrinsic motivation in small and medium enterprises

Intrinsic motivation occurs when one acts without any obvious external rewards (Zimmerman & Chu 2013). It refers to the reason why one performs certain activities for inherent satisfaction or pleasure (Hennessey 2010). It arises from the individual’s positive reaction to the task itself such as interest, involvement, curiosity, satisfaction, or positive challenge, which serves as a type of reward for the work (Grant & Berry 2011). From the Self Determination Theory, intrinsic motivation is central to the proactive, growth-oriented nature of human beings, which is the basis for learning and development (Deci & Ryan 2011).

Grant and Berry (2011) confirm that intrinsically motivated business owners are more likely to pursue enjoyment, interest, satisfaction of curiosity, self-expression, or personal challenge in business. Intrinsic motivation is a natural motivational tendency and a critical element in cognitive, social, and physical development (Hennessey 2010). According to Bande et al. (2016), SME owners who are intrinsically motivated, are more likely to engage in the business willingly and work towards improving their skills. Grant and Berry (2011) state that SME owners are likely to be intrinsically motivated if they attribute their business growth to factors under their own control (also known as autonomy), believe that they have the skills to be effective agents in reaching their desired goals (also known as self-efficacy), and are interested in growing a business, not just in achieving wealth.

Motivation and creativity in small and medium enterprises

Creativity is one of the most important factors in developing and growing businesses (Csikszentmihalyi & Wong 2014). The emphasis of this study is to examine the conditions under which intrinsic motivation promotes creativity. Coon and Mitter (2010) believe that intrinsic motivation is an important enabler of creativity. According to Hennessey (2010), intrinsic motivation is the desire of interest and the enjoyment of work that is being performed. Coon and Mitter (2010) identify the three interrelated psychological mechanisms through which intrinsic motivation may stimulate creativity.

Firstly, the emotional theorists proposed that when business owners are intrinsically motivated, they experience positive effect (Becchetti et al. 2013). This stimulates creativity by broadening the range of cognitive information available, expanding the scope of attention towards assimilating a wider set of ideas and encouraging cognitive flexibility for identifying patterns and associations between ideas (Grant & Berry 2011).

Secondly, Deci and Ryan (2011) propose that when business owners are intrinsically motivated, their curiosity and interest in learning enhances their cognitive flexibility, willingness to take risks, and openness to complexity, which, in turn, expands their access to ideas and potential solutions.

Thirdly, both the emotion and self-determination theorists suggest that intrinsic motivation promotes creativity by encouraging persistence. By fostering a positive effect, intrinsic motivation enhances psychological engagement and builds energy for sustaining effort, increasing the amount of time that SME owners are willing and able to work on their tasks (Coon & Mitterer 2010). This relates to the emotional theories of motivation. On the other hand, by fostering confidence and interest, the intrinsic motivation encourages SME owners to persist with challenging tasks, as well as to concentrate their attention more effectively on these tasks (Hennessey 2010). This relates to self-determination theories of motivation. However, this study is designed around the following questions:

• Does self-motivation of business owners influence SME growth?
• Do intrinsic motivational factors of business owners influence SME growth?

Methodology

The study methodology will be discussed under the following headings: the target population, profiles of respondents and sample size, data collection method, as well as the measurement and analysis.

Target population

This study had a target population of 127 SME owners of furniture manufacturing businesses operating in the eThekwini District Municipality. Furniture manufacturers is one of the most labour-intensive industries in South Africa (Department of Trade and Industry 2014). They were selected to participate in this study based on their potential of contributing to the reduction of unemployment, increased exports and the development of SMEs.

Brief profiles of respondents and sample size

Of the 127 SMEs, 112 participated in the study. The majority of SMEs at 60% have been operating for more than 5 years. Seventy-eight per cent of the participants were male and twenty-two per cent were female business owners. The following Table 1 provides the total turnover and gross asset value of furniture manufacturing industry in relation with their size classes.

Data collection method

A list of the furniture manufacturers was obtained from the Durban Chamber of Businesses. Recruitment of respondents was undertaken with the aim of ensuring that all the 127 furniture manufacturing SMEs would participate in the study. The questionnaires were forwarded through electronic mail to the owners of SMEs who represented their businesses. However, 78 completed questionnaires were returned via electronic mail and the remaining 34 were physically collected from their businesses, representing an 88% response rate, considered high compared with the norm for survey responses (Baruch & Holtom 2008). The main reason for this high response rate was due to the invitation letter sent to all the SME furniture manufacturing owners and consistently follow-up of questionnaires through telephone calls.

Measurement and analysis

In line with the research framework, the study measured 13 variables using the questionnaire. It employed a Likert scale ranging from 1 (strongly agree) to 5 (strongly disagree).

Self-motivation of business owners for small and medium enterprise growth

Six items listed in this variable (as informed by Antonites & Van Vuuren 2014; Csikszentmihalyi & Wong 2014; Tu & Lu 2014; Zimmerman & Chu 2013) are:

• self-motivated SME owners are likely to grow their businesses even bigger,
• when business owners are self-motivated they experience positive effect,
• being self-motivated is the reason behind SME growth,
• SME growth is regarded as an important goal of the business,
• interest in learning enhances SME owners’ willingness to take risks, and
• SME growth increases a business’s sustainability.

A reliability analysis Cronbach’s alpha of 0.676 was achieved. This value is close to 0.7 and indicates an internal consistency and reliability of the variables in this objective.

Intrinsic motivational factors of business owners for small and medium enterprise growth

The variables in this objective were measured by seven items and based on the intrinsic motivational factors of business owners for SME growth (Grant & Berry 2011; Pinder 2014). These include:

• as a self-motivated business owner I exert effort based on business growth interest,
• I find new solutions to business problems because I want to achieve business growth,
• I grow my business because I want to be recognised,
• I am driven by belief to produce the desired outcomes of my business,
• the aim of expanding the business is to take responsibility,
• my need for advancement is the personal attribute that has great impact on the growth of my business, and
• my growth aspiration enables me to take risk in order to grow my business.

A reliability analysis Cronbach’s alpha of 0.626 was achieved. This value is also close to 0.7 and indicates an internal consistency and reliability of the variables in this objective.

Descriptive statistics, chi-square and correlation tests were used to analyse data. In addition, SPSS (version 23.0) was used for data analysis.

Study results

Self-motivation of business owners for small and medium enterprise growth

This section presents findings on the influence of self-motivation of business owners for SME growth.

Descriptive analysis

The result in Table 2 shows that the SME owners are self-motivated to grow their businesses. Percentage agreement ranges from 93.3% to 96.7%. Eighty per cent of the owners indicated that their interest in learning enhances willingness to take risks and 95% indicated that SME growth increases business sustainability. These high agreement percentage responses affirm that self-motivation is a veritable tool in the growth and development of SMEs. This is confirmed by Gay-Perret and Mainali (2012) who state that self-motivation is much better than simple motivation that involves financial incentive. It also concurs with the views of Shepherd and Wiklund (2009) who agree that motivation behind venture creation is the need for self-fulfillment.

The chi-square test for each variable was also performed. Hence, Table 3 presents test results for determining whether the scoring patterns across the different statements were similar.

The p-values of all the variables in Table 3 are less than the 0.05 level of significance. This implies the significant relationship of the variables on self-motivation of business owners for SME growth.

Correlation test

The bivariate Pearson correlation analyses were used to examine the strength of the identified association between variables (Dawson 2009). These tests were used to find any significant relationship between study variables. They include the relationship of both the self-motivation and intrinsic motivational factors of business owners with SME growth. The bivariate Pearson’s correlation can reveal the significance of the correlation and, if it is significant, whether it is positive or negative (i.e. the direction of the correlation) as well as the strength of the correlation.

The relationship in Table 4 for determining whether self-motivated SME owners are likely to grow their businesses even bigger was analysed:

• The self-motivation of a SME owner variable has a directly proportional correlation with the four variables relating to business growth. These variables include the positive effect of self-motivated business owners, the naturally motivated business owner as the reason for SME growth, SME growth as an important goal of the business, as well as the SME growth as a variable that increases business sustainability. They have coefficient r-values of 0.681; 0.505; 0.503 and 0.285, respectively (at p > 0.05). This analysis indicates that self-motivated SME owners have the potential to grow their businesses.
• The variable relating to self-motivated SME owners who are likely to grow their businesses does not have a significant relationship with the variable on SME owners’ interest in learning to enhance willingness to take risks (at p < 0.05). This analysis indicates that an interest in learning by self-motivated SME owners has no relation to business growth.

Intrinsic motivational factors of business owners for small and medium enterprise growth

This section presents findings on the influence of intrinsic motivational factors of business owners for SME growth.

Descriptive analysis

Table 5 presents results (in percentages) of intrinsic motivational factors for SME growth.

The result in Table 5 indicates that the intrinsic motivational factors of business owners have an influence on SME growth. The high percentage agreement values on intrinsic motivation factors range from 88.3% to 98.3%. The response with low percentage agreement at 58.3% is when business owners indicate that they want to grow their businesses because they want to be recognised. The majority of respondents confirmed the position held by Gay-Perret and Mainali (2012) who stated that business owners with an internal locus of control should exert effort and persistence towards achieving their goals and grow businesses. Such business owners are able to control outcomes, and their actions do determine the achievement of rewards.

In addition, the chi-square test per each variable was also performed. Table 6 presents test results for determining whether the scoring patterns across the different statements were similar.

The p-values for all the variables in Table 6 are less than the 0.05 level of significance. This implies the significant relationship of the variables, thus indicating that the business owners are influenced by intrinsic motivational factors for SME growth.

Correlation test

The bivariate Pearson correlation analyses were also conducted to test any significant relationship between study variables.

The relationship in Table 7 for determining the variables of self-motivated business owners who exert an effort based on business growth interest was analysed:

• The self-motivation of business owners has a directly proportional correlation with the four variables relating to them exerting effort based on their interest for business growth. They include the SME owners who find solutions to business problems because they want to achieve business growth, the SME owners who are driven by a belief to produce the desired outcomes of their businesses, the need for advancement that has great impact on business growth and the SME growth aspirations that enable business owners to take risk in order to grow their businesses. They have coefficient r-values of 0.467, 0.338, 0.319 and 0.394, respectively (at p > 0.05). This analysis indicates that self-motivated SME owners exert efforts based on their business growth interest.
• The variable relating to self-motivated business owners who exert effort based on their interest for business growth does not have a significant relationship with the variable of SME owners who take responsibility to grow their businesses for recognition purposes (at p < 0.05). This analysis indicates that the growth of SME businesses does not depend on business owner recognition.

Discussion

This article investigated the influence of self-motivation and intrinsic motivational factors of business owners for SME growth. One hundred and twelve SME owners of furniture manufacturing businesses operating in the eThekwini Metropolitan Area in KwaZulu-Natal participated in the study. The findings indicate that if SME owners are intrinsically motivated, they exert effort based on business growth interests. They find solutions to business problems because they want to achieve growth. This gives an indication that the level of SME owners’ motivation is crucial for SME growth in SA. In addition, it reveals that SME owners are self-motivated in growing their businesses. This is in line with the assertion of Abor and Quartey (2010) that SME growth is closely associated with overall business success and survival. The need to achieve success is the motive to do well and achieve a goal to a set of standards (Royle 2013). Thus, when SME owners are intrinsically motivated, their desires to learn, explore their interests, and engage their curiosity lead to the focus of novel ideas that help them grow their businesses even bigger.

Furthermore, the intrinsic motivation is an important enabler of creativity. It enhances self-motivation for business growth. Hence, the creative potential of SMEs will eventually lead to a better support of national goals for SA. They will thus be the enablers of economic growth for the country. The effort to stimulate creativity by broadening the range of cognitive information available, expanding the scope of attention towards assimilating a wider set of ideas and encouraging cognitive flexibility for identifying patterns and associations between ideas, will influence business growth (Barringer & Ireland 2010). Intrinsic motivation enhances psychological engagement and builds energy for sustained effort (Grant & Berry 2011). This increases the amount of time that SME owners are willing to work for business growth.

In addition, the results obtained during the study imply that the intrinsic motivational factors that stimulate the creativity process of the SME owners play a role in SME growth. The following conclusions relating to intrinsic motivational factors can be made:

• Self-motivated business owners have the ability to grow their businesses.
• An interest in leaning enhances SME owners’ willingness to take risk.
• SMEs find new solutions to business problems because they want to achieve business goals.
• The need for advancement is the personal attribute that has greater impact on business growth.

Limitations of the study

The study was conducted in the eThekwini Metropolitan Area. Only SMEs in the furniture manufacturing sector participated. However, the respondents were geographically dispersed within the Metropolitan Area.

Conclusion

This article examined the influence of intrinsic motivational factors on business growth. It was established that the relationship between self-motivation and business growth is quite complex. This is consistent with the theory of planned behaviour, the importance of access to resources, as well as the access to opportunities for business growth. In addition, the intrinsic motivational factors that stimulate the creative process sustain business growth of SMEs. This helps the business to survive and grow in the early years of establishment.

Acknowledgements

The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.

T.R.N. administered the questionnaire and provided a draft literature review while R.W.D.Z. analysed the raw data, aligned and consolidated the article into a final manuscript.

References