African Microfinance Journal (Interdisciplinary - | 09 September 2003
Developing Business Linkages between Large Firms and Local SMEs in South Africa: An Ethnographic Study
S, i, p, h, o, K, h, u, m, a, l, o, ,, M, a, k, g, o, b, a, M, o, t, s, h, e, g, o, a, ,, K, g, o, s, i, t, s, i, l, e, N, g, u, b, a, n, e
Abstract
This ethnographic study explores business linkages between large firms and local small and medium-sized enterprises (SMEs) in South Africa, focusing on their interactions over a specific period. An ethnographic approach was employed, involving participant observation and in-depth interviews with key stakeholders over a period of three years. Large firms predominantly engaged with SMEs in the manufacturing sector, forming partnerships that resulted in significant sales growth for both parties. A notable trend was the emergence of informal networking groups facilitating these linkages. The study reveals that while formal contracts are common, informal networks play a crucial role in fostering sustainable business relationships between large firms and SMEs. Encouraging collaboration through government-led initiatives could enhance the effectiveness of existing partnerships and promote more equitable growth opportunities for SMEs.