Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2020 Vol: 26 Issue: 4

Factors for the Sustainability of Immigrant Owned Small Craft Businesses in Cape Town A Grounded Theory Study

Samson Nambei Asoba, Walter Sisulu University

Nteboheng Mefi, Walter Sisulu University

Khulekani Yakobi, Walter Sisulu University


Sustainability is a concept that has recently gained significant interest in a wide spectrum of fields including management and business sciences. Despite this situation, few of these studies have been focused on the sustainability and growth of small immigrant owned craft enterprises in Cape Town, South Africa. In addition, national policy on entrepreneurship has not considered the sustainability of immigrant entrepreneurs adequately. This problem has been compounded by the existence of limited theoretical models and frameworks to inform policy on immigrant entrepreneurship. In this paper, the concept was explored against the high failure rate of small business in South Africa. This study focused on immigrant owned small craft enterprises in Cape Town given that Cape Town is a key tourist attraction area where crafts contribute immensely to the city’s growth. The aim of the paper was to explore the factors that can be considered for the growth of the small craft enterprises owned by immigrants in Cape Town. The grounded theory methodology anchored on interviews was adopted. The study found that there are personal traits, social drivers, institutional drivers, technology adoption factors and shock resilience drivers that promote the sustainability and growth of the immigrant owned small craft enterprises.


Sustainability, Small Businesses, Craft Entrepreneurship, Immigrant Enterprises.


Sustainability, an ethical construct that encapsulates inclusive existence (Gomis et al., 2011) is receiving considerable interest in a range of disciplines that included business management (Masocha & Fatoki, 2018). The importance of sustainable practices has been well documented in many academic and professional fields (Iwu et al., 2015). In the study of small businesses, elements of sustainability have been found to include the conduciveness of the economic environment (Bruwer & van Den Berg, 2017), coercive isomorphism (Masocha & Fatoki, 2018) and other non-financial dimensions (Lose & Tengeh, 2015). Despite these findings, the failure rate of small businesses remain high with an estimated seventy five percent (75%) of them collapsing in the first forty two (42) months of establishment.

Background to the Study

As in many countries, immigrants in South Africa often establish their own small businesses after failing to find employment. Most immigrant-owned enterprises in South Africa are survivalist and micro and these enterprises seldom grow from this status to formal small and medium enterprises (Hay, 2008; Khosa & Kalitanyi, 2014). Few studies have considered the case for the sustainability of immigrant owned small enterprises in the South African context with particular reference in Cape Town. South Africa occasionally suffers from xenophobia and calls to reveal the equity laws so as to favour businesses owned by South African citizens as opposed to those of immigrants. The growth and sustainability of immigrant-owned craft enterprises is a complex phenomenon. There are many factors within an economy that tend to stunt the growth of immigrant-owned enterprises. It is believed that the entrepreneurial orientation (culture, family and role models, education, work experience, and personal orientation), supportive environment (Infrastructure, business development services such as business advice, counselling, mentoring, finance, training, incubators), and cooperative environment (Universities and other educational institution, large firms and non-governmental institution) affect entrepreneurial development (Nieman & Nieuwenhuizen, 2009). Such factors need to be meticulously explored and understood, so that a framework for the growth of immigrant-owned craft enterprises can be constructed.

Literature Review

Objectives of the Study

Given the above, the present study was formulated to explore the factors for the sustainability of immigrant – owned small craft businesses in Cape Town using a grounded theory methodology. Essentially, the study was formulated to achieve the following objectives: (1) describe the growth and sustainability of selected immigrant owned craft enterprises in Cape town (2) explore the factors that can be considered for the growth of the small craft enterprises owned by immigrants in Cape Town.


The research design that was followed to achieve the objectives stated above is explained in the paragraphs below

Research Design

Given the limited scholarship available in relation to the growth and sustainability of immigrant owned craft enterprises in Cape Town, a pragmatic research design was deemed suitable. Pragmatism is a flexible approach to research that allows the researcher to explore emerging trends and follow multiple options (Bryant, 2017). The study adopted Glaser and Strauss’s (1967) grounded theory research design to which is follows pragmatism through the constant comparison of emerging data and literature. Grounded theory methodology denounces the use of hypotheses and detailed research questions as the starting points for research (Bryant, 2017). It is based on the careful analysis and study of data and basing any knowledge based on the data. Consequently, Grounded theorist follow a pragmatic approach that emphasis an open mind (Bryant, 2017). The traditional way of classifying research designs involves classifying them as quantitative, qualitative or mixed. The grounded research design which was followed in the research was qualitative in nature as it sort concepts and categories as factors for the growth and sustainability of immigrant owned craft enterprises in the cape town area.

Designing the Grounded Theory Study

The design of this study followed the approach and phases shown in Figure 1 and which are explained in the sections that follow

Figure 1: The Phases Followed In The Study

Sampling Participants

The selection of participants in grounded theory methodology often starts with purposive and convenience sampling and is then followed by theoretical sampling (Bryant, 2017:32). The purposive sampling strategy denotes the selection of participants based on their fit for the purpose of the study. Researchers often start by considering the sampling frame from which respondents and participants can be selected. In this particular study, the actual size of the sampling frame was unknown given that the craft market is highly fragmented and dominated by small players. The study sought the sustainability of immigrant owned small craft businesses in the Cape Town area. As such owners of immigrant owned small craft entreprises from major craft markets were approached to participate in the study. The four major markets from which many immigrants operate are: Green market square, Stellenbosch craft market, Hout Bay craft market and Franschhoek Craft Market. Participants who were selected from these markets were approached to seek their convenience and their capability to provide the required information. At the end, eight participants participated in the study. As described by Glaser and Strauss (1967), theoretical sampling involves collecting, coding, analysing the data and deciding data that is to be collected next. Theoretical sampling involves three main activities, namely: open sampling, relational and variational sampling and discriminate sampling (Strauss & Corbin cited in Su, Jenkins and Liu, 2011).


According to Glaser and Strauss (1967), the grounded theory process involves simultaneous data collection and analysis which is also performed iteratively. The main data collection strategy adopted for the study relied on interviews. Carmichael and Cunningham (2017) stated that grounded theory based interviews often start with a small purposively selected sample from which data is collected, analysed, compared with the literature and coded.

The interview instrument that was used in the study followed guidelines from Carmichael and Cunningham (2017) who stated that interview guides in grounded methodologies are purposive. The objectives of the study formed the basis for designing the research instrument. As suggested by grounded methodology theorists, the interview guide was open ended with a items formulated from the study objectives. To validate the interview guide, it was discussed by a panel of researchers from a reputable institution of higher learning in Cape Town. The panel of academics suggested certain changes which were made before its final approval. From this stage, the instrument was piloted by interviewing three immigrant owners of craft enterprises in another city. The participants of the pilot study did not participate in the main study. The pilot interviews result in further development of the interview guide before it was deemed suitable for the study.

The results of the initial interviews then guide the next stage of interviews. Data collected from the second round of interviews is also analysed and compared with the literature and become the basis for the next stage. This process continues until the stage of theoretical saturation is achieved. The theoretical saturation stage is one in which no new data is emerging and a clear and consistent pattern has been observed. The first interviews collected for purposes of this study involved participants (P1), participant 2 (P2) and participant 3 (P3) from Table 1. The interviews were in-depth and three open questions were asked. Respondents were allowed to provide as much information as they wanted on the three questions. Related issues to each of the questions were explored. The three questions asked were: (1) What are the factors affecting the growth or sustainability of your business? (2) What can be done improve the sustainability and growth of your business? and (3) what kind of assistance would you want to ensure growth and sustainability of your business?

Table 1: Biographical Information Of The Interviewees
  Age Years as owner of the business Country of origin
Participant 1 45 years 20 years Zimbabwe
Participant 2 Not provided More than 15 years Cameroon
Participant 3 Not provided 15 years Not provided
Participant 4 Not provided 13 years Cameroon
Get the App