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Abstract

Small and medium enterprises (SMEs) are notably the engines that drive economic development. SMEs make up about 95 percent of all businesses globally. Primarily, they are vital to economic expansion as they create employment for billions of people across the planet. The importance of SMEs cannot be understated for developing African countries. SMEs are a crucial source of innovation and entrepreneurial skills; providing opportunities for people to establish businesses to deliver goods and services, which are vital to a developing economy. SMEs improve entrepreneurship and competition; thus, contributing positively to innovation, creativity, and overall productivity. In addition, they boost employment rates more than large organisations due to their labor-intensive initiative, which in return contribute significantly to the development of a competitive market system.
Nevertheless, SMEs face significant challenges in South Africa, where corruption permeates all levels of government. Rent seeking, bribery, vote buying, and institutionalised corruption are just some of the forms of crime that have manifested themselves in the region. Control Risks (2018), Transparency International (2018), and other international organisations, such as the United Nations, have determined that corruption is one of the most significant barriers that SMEs face when entering the Southern African market. The lack of the financial muscle of Multi-National Companies (MNCs) as well as their managerial resources are often cited by SME’s as not just detriments to their growth but also their survivability. This paper offers guidelines that can be employed by SMEs to mitigate the risk of falling into the corruption trap and operate in an environment where they remain free of corruption in South Africa. This paper shows that while corruption is a significant problem, it is possible for SMEs to operate without engaging in corrupt practices.

Course: Risk and Security Management - BSc (Hons) - C1565

Date Deposited: 2020-11-25

URI/permalink: https://library.port.ac.uk/dissert/dis13625.html