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A Research ReportEvaluating the effectiveness of aSouth African entrepreneur mentoringprogrampresented toThe Graduate School of BusinessUniversity of Cape TownIn partial fulfilmentof the requirements for theMasters of Business Administration DegreebyBenjamin CredeCRDBEN001December 2016Supervised by: Janine Everson
Plagiarism Declaration1. I know that plagiarism is wrong. Plagiarism is to use another’s work and pretend that it is one’sown.2. I have used the APA 6 convention for citation and referencing. Each contributionto, and quotation, in this dissertation from the work(s) of other people has been attributed, andhas been cited and referenced.3. This dissertation is my own work.4. I have not allowed, and will not allow, anyone to copy my work with the intention of passing itoff as his or her own work.5. I acknowledge that copying someone else’s research or work/assignment/essay, or part of it, iswrong, and declare that this is my own work.Signature Benjamin Credei
AbstractSouth Africa is faced with the prospect of low economic growth and a very high unemploymentrate. The Government is placing a high emphasis on the development of entrepreneurs tostimulate economic growth and provide much needed jobs. The primary objective of thisresearch is to determine whether the mentoring program at The Business Place, an entrepreneursupport organisation based in Cape Town, is effective in providing an entrepreneur with thenecessary mentoring support to maximise the entrepreneurs learning through mentoring. Thesecondary objective is to determine whether St-Jeans (2012) comprehensive framework ofentrepreneurial mentoring is applicable in the South African context. A population of sixtyentrepreneurs was sampled from the Business Places mentoring program resulting in forty-fourrespondents to a survey questionnaire. The results of the survey provided some useful insightsinto the strengths (psychosocial, career and role-model mentor functions) and weaknesses(mentoring relationship factors) of the Business Place mentoring program. Furthermore, theresponses closely resemble the predicted values determined by St-Jeans (2012) frameworkthereby providing evidence that the model accurately reflects the mentoring relationshipbetween mentor and mentee. The research did find a significant difference in the applicabilityof the model for female respondents raising questions around whether the model takes intoaccount the different experiences of mentoring that men and women have.ii
ContentsPlagiarism Declaration . iAbstract . iiTable of Figures . vTable of Tables . viTitle . 11.2.Introduction . 11.1.Research Question and Scope . 31.2.Research Assumptions . 41.3.Research Ethics . 51.4.Conclusion . 5Literature Review . 62.1.2.1.1.Definition & background . 62.1.2.Development and training in entrepreneurship . 72.1.3.Entrepreneurship in South Africa . 102.2.3.Entrepreneurship . 6Mentoring . 122.2.1.Definition & background . 122.2.2.Role of mentoring . 142.2.3.Different forms of mentoring. 152.2.4.Benefits of mentoring . 162.2.5.Assessing the impact of mentoring . 17Research Methodology . 223.1.Research approach and strategy . 223.1.1.4.Assumptions . 233.2.Research design . 243.3.Data collection methods . 263.4.Data collection instrument . 273.5.Sampling . 293.6.Research criteria . 303.7.Data analysis methods . 31Research Findings, Analysis and Discussion. 344.1.Research Findings . 344.1.1.Reliability. 354.1.2.Respondents demographics . 364.1.3.Performance of the Business Place mentoring program . 38iii
4.1.4.The entrepreneurial mentoring model . 414.1.5.Male vs Female respondents . 454.2.Research Analysis and Discussion . 494.2.1.Evaluating the Business Place mentoring program . 504.2.2.Evaluating St-Jeans (2012) Mentoring Model . 524.3.Research Limitations . 565.Conclusions . 576.Future Research Directions . 60References . 62Appendix A – Research Questionnaire . 69Appendix B – Scatter Plot representations of Factor Correlations . 76iv
Table of FiguresFigure 1: Three factors that define a mentoring relationship . 13Figure 2: St-Jeans (2012) framework of entrepreneur learning through mentoring . 19Figure 3: The characteristics and associated factors of St-Jeans framework . 24Figure 4: The framework of entrepreneur learning through mentoring (St-Jean, 2012) . 33Figure 5: Histogram of the entrepreneur’s ages. 36Figure 6: Pie Chart reflecting the entrepreneur’s gender distribution . 36Figure 7: Histogram representing respondent’s entrepreneurial experience . 37Figure 8: Pie chart indicating the percentage of mentees who identified their mentor as working inthe same or a different industry . 37Figure 9: St-Jeans (2012) framework of entrepreneur learning through mentoring . 42Figure 10: Graphical representation of the correlation results . 45Figure 11: Scatter plot diagram representing the correlation between Self-Disclosure and PerceivedSimilarity . 76Figure 12: Scatter plot diagram representing the correlation between Self-Disclosure and Trust inMentor . 76Figure 13: Scatter plot diagram representing the correlation between Perceived Similarity and Trustin Mentor . 76Figure 14: Scatter plot diagram representing the correlation between Trust in Mentor and thePsychosocial Function . 77Figure 15: Scatter plot diagram representing the correlation between Trust in Mentor and the CareerFunction . 77Figure 16: Scatter plot diagram representing the correlation between Trust in Mentor and the Rolemodel Function . 77Figure 17: Scatter plot diagram representing the correlation between Perceived Similarity and thePsychosocial Function . 78Figure 18: Scatter plot diagram representing the correlation between Perceived Similarity and theCareer Function. 78Figure 19: Scatter plot diagram representing the correlation between Perceived Similarity and Rolemodel Function . 78Figure 20: Scatter plot diagram representing the correlation between the Psychosocial Function andEntrepreneurs Learning . 79Figure 21: Scatter plot diagram representing the correlation between the Career Function andEntrepreneurs Learning . 79v
Figure 22: Scatter plot diagram representing the correlation between the Role-model Function andEntrepreneurs Learning . 79Table of TablesTable 1: General management and People management skills . 9Table 2: The six forms of mentoring . 16Table 3: Summary of mentoring research . 20Table 4: Reliability of measurement tools (St-Jean, 2012) . 30Table 5: Internal Reliability (Cronbachs Alpha). 35Table 6: Summary of respondent’s demographics, work experience, and mentoring experience . 36Table 7: Statistical summary of the factors of the mentoring model . 38Table 8: Correlation matrix of the seven factors (and age) of the entrepreneur mentoring model . 43Table 9: Correlation Coefficient, t-stat, and p-value of the entrepreneur mentoring models correlatedfactors . 44Table 10: Correlation matrix indicating the differing correlations per gender . 46Table 11: Statistical significance of the correlations per gender . 47Table 12: Bivariate analysis results - male vs female responses . 48Table 13: Comparison of the results with St-Jean (2012) . 53Table 14: Strengths and weaknesses of the Business Place mentoring program . 58vi
TitleEvaluating the effectiveness of a South African entrepreneur mentoring program1. IntroductionOver the past five years South Africa has had to deal with the triple threat of highunemployment, with an official unemployment rate of 25% (Statistics South Africa, 2014),high levels of inequality and very slow economic growth. In order to deal with theseproblems the government has been attempting to create an environment in whichentrepreneurship can flourish (Republic of South Africa, 2004) but there has been very littlesuccess so far. Entrepreneurs are seen as the solution to the problem of unemployment andthe government is looking to help develop more entrepreneurs in order to help alleviate thehigh unemployment rate. A study on the prospects of entrepreneurship to the challenge of jobcreation in South African argues that entrepreneurial action gives rise to growth andemployment, and that, in the long term, South African needs to create a more propitious andfree environment for entrepreneurs to develop in (Mahadea, 2012).According to Nieman and Nieuwenhuizen (2014) South Africa is failing to create newentrepreneurs. Using the total entrepreneur activity (TEA) measure, the authors identifiedSouth Africa as having a relatively low number of adults (7.3%) starting their ownbusinesses, in comparison to the 14.3 percent which indicates the global average. A lack ofmotivation and belief amongst South African youth is seen as the cause of lowentrepreneurial activity. This is further exacerbate by a culture of entitlement, lack ofbusiness experience, and low education levels. In general, South Africans are not providedthe necessary education, or socialised, to become entrepreneurs. The apartheid educationsystem, in particular, created citizens who are enabled to enter the market as employees, notas creators of new jobs (Rwigema & Venter, 2004).In response to the problems created by the apartheid education system, the adoption bygovernment of the Small Business Act in 1996 allowed the department of trade and industryto address small, medium and micro-enterprise development through the creation of a whitepaper on the national strategy for the development and promotion of small business in SouthAfrica. Furthermore, a statutory National Small Business Advisory Council (NSBAC) wasestablished in 2006 in order to streamline the support provided by the Integrated SmallEnterprise Development Strategy (as cited in Wickham, 2006) which aimed to:1
Increase the contribution of small enterprises to the growth of South Africa. Create an enabling environment for small business development. Help create sustainable long term job in the small business sector. Ensure equitable access and participation in terms of race, gender, disability, age, andsector. Increase the competitiveness of the small business sector in order to take advantageof global business opportunities.In 2008 the National Youth Development Agency was created to encourage the youthdevelopment and economic participation. Part of the agency included a volunteer youthmentorship program which aims to match mentors with young entrepreneurs in order toprovide guidance to start-ups or existing business (NYDA, 2016). Since the dawn ofdemocracy in 1994, the South African government has also implemented various forms ofBlack Economic Empowerment (BEE) in order to address the economic imbalance created byApartheid. Whether BEE policies would help in developing entrepreneurs is unclear, butRwigema and Venter (2004) predicted that BEE policies alone would not be sufficient toincrease the number of entrepreneurs in South Africa.A number of researchers (Ahwireng-Obeng & Piaray, 1999; Mahadea, 2012; Preisendörfer,Bitz, & Bezuidenhout, 2012) looked into the factors that would create an environment inwhich entrepreneurs can develop. Research on the success factors of business incubation inSouth Africa by Buys and Mpewana (2007) found that networking plays an important role inthe success of new business ventures. Furthermore, Preisendorfer, Bitz, and Bezuidenhout(2012), in their study on why there is a lack of entrepreneurial activity in the black SouthAfrican population, found that a major contributing factor to this phenomenon is the dearth ofsocial capital and network support in these communities. The study also found that due to thedeficit in black entrepreneurship caused by the Apartheid imposed economic system there area lack of social contacts and role models which would help guide new entrepreneurs.In a separate study on business start-ups in a South African township, Preisendorfer, Bitz, andBezuidenhout (2012, p. 21) conclude that “Financial support, together with training,mentoring and coaching, will probably increase opportunities for success”. Similarly Griffin(2015) found that an entrepreneurs capacity as a business person was enhanced throughmentoring with another entrepreneur (amongst other factors). Griffin mentions that the2
engagement with mentoring entrepreneurs provided greater awareness regarding what it takesto run a business for the devel
mentoring and coaching, will probably increase opportunities for success”. Similarly Griffin (2015) found that an entrepreneurs capacity as a business person was enhanced through mentoring with another entrepreneur (amongst other factors). Griffin mentions that the
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