Entrepreneurial Leadership and Business Performance Among Small and Micro Enterprises in Soshanguve South Africa

Abstract

Background: Entrepreneurial leadership (EL) has become an important perspective for explaining how owner-managers mobilize resources, respond to uncertainty, and translate entrepreneurial intentions into organizational action. However, evidence remains limited on whether the individual behavioral dimensions of EL are equally associated with the performance of small and micro-enterprises (SMEs), particularly in South African township contexts.
Purpose: This study examined the relationships between five entrepreneurial leadership dimensions–framing challenges, absorbing uncertainty, path clearing, building commitment, and specifying limits–and business performance among SMEs in Soshanguve, Gauteng, South Africa. The study specifically sought to determine whether the dimensions differed in the strength of their relationships with performance.
Design/methodology/approach: A quantitative, cross-sectional survey was conducted with 400 SME owners. Because a complete and reliable sampling frame was unavailable, convenience and snowball sampling were used. Data was collected through a structured self-administered questionnaire and analysed using descriptive statistics, reliability analysis and partial least squares structural equation modelling (PLS-SEM)
Findings/Results: The PLS-SEM results indicated positive and statistically significant relationships between all five entrepreneurial leadership dimensions and business performance: framing challenges, absorbing uncertainty, path clearing, building commitment, and specifying limits. The structural model explained 65.0% of the variance in business performance (R² = 0.650). Specifying limits had the largest estimated relationship, followed by building commitment, path-clearing, framing challenges, and absorbing uncertainty.
Conclusion: The findings support a differentiated view of entrepreneurial leadership, in which relational mobilization and organizational clarity may be particularly important in the Soshanguve SME context. Because the study is cross-sectional and uses non-probability sampling, the findings indicate associations rather than causal effects and should not be generalized beyond comparable contexts without further evidence. Importantly, the final interpretation depends on the revalidation of the measurement and structural models, including construct distinctiveness, collinearity, and common-method diagnostics.
Originality/value (State of the art): This study provides the first empirical evaluation of the five dimensions of entrepreneurial leadership in relation to SME performance in Soshanguve, Gauteng. By examining the relative strength of individual dimensions rather than treating entrepreneurial leadership as a single, undifferentiated construct, this study extends existing research. This study provides a more targeted empirical basis for SME leadership development and performance improvement.

Keywords: entrepreneurial leadership, SME performance, small and micro enterprises, township entrepreneurship, Soshanguve, South Africa