Towards an antifragile South African SME

Kennon, Denzil (2017-12)

Thesis (PhD)--Stellenbosch University, 2017.

Thesis

ENGLISH ABSTRACT: “In all affairs it's a healthy thing now and then to hang a question mark on the things you have long taken for granted.” – Bertrand Russell The contribution of small- to medium-sized enterprises (SMEs) to the employment, GDP and other factors that affect poverty and income inequality of South Africa is considerable. South African SMEs contribute to the economy despite the fact that 75% of SMEs fail within the first 42 months – worse than most other countries. If SMEs can be set up to survive and prosper in the experienced volatility, economies will prosper. Enterprises are complex adaptive systems where the dynamic constructs of the enterprise cannot be determined to their finest detail. Enterprises can therefore be represented as a system with subsystems and components which should align functionally in pursuit of the purpose of the enterprise. These subsystems and components are usually formally defined in large corporations, but they often lack that level of definition in SMEs. SMEs require a way in which to master the complexity of the enterprise at effective levels. Smaller enterprises respond to volatility in their external- or internal environment, and there is a need to understand the possible responses. These responses can be fragile (reduced in value/functionality), robust or resilient (maintain value/functionality) or seen to improve in value/functionality, also now known as 'antifragile'. Antifragile, on the opposite side of the spectrum of fragility, is the system response which improves under volatility. The field of antifragility is in its infancy and a part of this study sought to find characteristics that enabled antifragility in systems. The objective of this study was to develop a framework that will assist South African SMEs to be more antifragile. The research was conducted through a constructivist perspective which sought to better understand phenomena whilst understanding that an absolute answer will most likely not be found. The research was exploratory in nature, with antifragility being approached by evaluating constructs and adapting these constructs to provide a more informed and sophisticated theory than those preceding its existence to allow for utilisation in the real world. The basic systems engineering process was utilised for the exploratory building study. This resulted in the creation of a set of requirements that needed to be met by the framework, the design of the framework, and verification and validation that the framework had met the requirements. Nine characteristics of antifragility were identified to provide guidelines for explicit antifragile SME design. In order to transform these guidelines to the design of the SME, the systems engineer is provided with the field of enterprise engineering. Enterprise engineering has evolved into three schools of thought of which the enterprise-in-environment adaptation school of thought, focussing on dynamic endo- and exogenous stressors, was chosen as the most representative of antifragile enterprise design. Requirements were gathered from the fields of South African SMEs, antifragility and enterprise-in-environment adaptation and were grouped into five types of categories: 1) user requirements, 2) functional (essential and desirable) requirements, 3) design restrictions, 4) attention points and 5) boundary conditions. These were filtered into groups which play a role in: 1) understanding the current enterprise state, 2) providing an understanding of the future enterprise status, and/or 3) those that provide guidance for the transformation from the current to the future status. These provided the three distinct phases of the framework. These requirements were further distilled, per phase, into requirements which meet the same objective and resulted in nine stages. The three phases with the nine supporting stages resulted in the output, as the objective of the study, the Epictetus framework, with each stage providing an objective, requirements, and antifragile considerations to guide the enterprise design decision-making for the SME. The validation was done through 1) a per stage validation, 2) semi-structured interviews that were held both locally and internationally, and 3) through an illustrative case study. The study provides explicit characteristics for antifragility, as well as a method in which antifragility in a system can be assessed. It also provides the clarity of practical steps which can make antifragility explicit in enterprises and more importantly in South African SMEs. It provides a stepping stone from which a better understanding of antifragility can be gained as well as how it can be used to design systems. It also provides a foundation from which SMEs can be designed to improve under volatility.

AFRIKAANSE OPSOMMING: “Yster roes as dit nie gebruik word nie, water verloor sy skoonheid as dit stilstaan en vries in koue weer; net so laat onaktiwitiet die mens se gees sterf." – Leonardo da Vinci Die bydrae van klein en medium sake-ondernemings (KMOs) om die indiensneming, die BBP en ander faktore wat 'n invloed op armoede en inkomste-ongelykheid is betekenisvol vir Suid- Afrika. Suid-Afrikaanse KMOs dra grootliks by tot die ekonomie ondanks die feit dat 75% nie langer as die eerste 42 maande oorleef nie. As die KMOs kan opgestel word om te oorleef en floreer in wisselvalligheid sal dit tot die voordeel wees van ekonomieë. Ondernemings is kompleksaanpasbare stelsels waar die dinamiese konstrukte van die onderneming nie bepaal kan word tot in die fynste detail nie. Ondernemings kan dus voorgestel word as 'n stelsel met sub-stelsels en komponente wat funksioneel moet belyn in die doelwit nastrewing van die onderneming. Hierdie sub-stelsels en komponente is gewoonlik formeel gedefinieer in groot maatskappye, maar vir KMOs is daar dikwels ‘n gebrek aan detail definisie. KMOs benodig ‘n manier om die kompleksiteit van die onderneming op effektiewe vlakke te bemeester. Kleiner ondernemings reageer op wisselvalligheid in sy eksterne- of interne omgewing, en daar is 'n behoefte om die moontlike terugvoere te verstaan. Hierdie terugvoere kan broos (verminder in waarde/funksie), of veerkragtig/robuust (Handhaaf waarde/funksie) of gesien word om toe te neem in waarde/funksie, nou ook bekend as antibroos. Antibroosheid, die teenoorgestelde kant van die spektrum van broosheid, is die stelsel reaksie wat verbeter onder wisselvalligheid. Die doel van die studie is om 'n raamwerk te ontwikkel wat Suid-Afrikaanse KMOs sal help om meer antibroos te wees. Die navorsing is gedoen deur middel van 'n konstruktivistiese perspektief wat streef daarna om verskynsels beter te verstaan terwyl 'n verstandhouding bestaan dat ‘n absolute antwoord heel waarskynlik nie gevind sal word nie. Die navorsing was verkennend van aard, met antibroosheid wat benader word deur die evaluering en aanpassing van konstrukte wat ‘n meer gesofistikeerde teorie kan voorstel wat meer ingelig is as die konstrukte wat voor hom bestaan het en toegelaat word om betekenisvol te wees vir die wêreld. Die basiese stelselingenieurswese proses is aangewend vir die verkennende studie. Dit het gelei tot die skepping van 'n stel behoeftes waaraan die ontwerp van die raamwerk moet voldoen, en waarteen die verifikasie en validasie gedoen moet word. Nege eienskappe van antibroosheid is geïdentifiseer as riglyne vir die eksplisiete ontwerp van ‘n antibrose klein en medium sake-ondernemings. Die stelselingenieur word in die dissipline van ondernemingsingenieurswese gelei deur 'n stelselbenadering vir die ontwerp van ondernemings. Ondernemingsingenieurswese het ontwikkel in drie denkrigtings waarvan die onderneming-in-omgewing aanpassing denkrigting, met die fokus op dinamiese endo- en eksogene stressors, gekies is as die mees verteenwoordigende vir ‘n antibrose ondernemingsontwerp. Die vereistes het bestaan waar die velde van Suid-Afrikaanse klein en medium sakeondernemings, antibroosheid en onderneming-in-omgewing aanpassing oorvleuel het. Hierdie vereistes is gegroepeer in vyf tipes kategorieë; 1) vereistes van die gebruiker, 2) funksionele (noodsaaklik en wenslik) vereistes, 3) ontwerp beperkinge, 4) aandag punte, en 5) randvoorwaardes. Dit was verder gegroepeer volgens hulle rol in 1) die begrip van die huidige onderneming staat, 2) die begrip van die toekomstige status van die onderneming, en/of 3) diegene wat voorsiening leiding vir die transformasie van die huidige na die toekomstige status. Hierdie vereistes, vir elk van die drie fases, was verder opgebreek in vereistes wat na dieselfde doelwit gelei het om die nege stadiums te bereik. Die drie fases met die nege stadiums het tot uitset van die studie gelei, en dit is die Epictetus raamwerk genoem. Elk van die nege stadiums het ‘n doel, vereistes, en antibrose oorwegings wat die KMO sal lei om die onderneming se ontwerp te verbeter. Die validasie is gedoen deur 1) 'n per stadium validasie, 2) semi-gestruktureerde plaaslike en internasionale onderhoude, en 3) deur 'n illustratiewe gevallestudie. Die studie bied eksplisiete eienskappe vir antibroosheid, sowel as 'n wyse waarop antibroosheid in 'n stelsel geassesseer kan word. Dit bied ook duidelikheid oor die praktiese stappe wat antibroosheid eksplisiet in ondernemings maak. ‘n Verbeterde begrip van wat antibroosheid is, sowel as hoe om stelsels daarvolgens te ontwerp word die fondasie waar dit vir KMOs gebruik kan word vir verbeterde ontwerp onder wisselvalligheid.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/102786
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