Emotional Intelligence and Performance of Small and Medium Enterprise Managers in Sub-Saharan Africa: The Case of South Africa

Small and Medium Enterprises (SMEs) globally have a high failure rate. Successful SMEs are crucial for poverty alleviation, positive contribution to Gross Domestic Product and for achieving socio-economic benefits as SMEs make up 95% of overall enterprises. The study aimed to investigate how SME managers EI influences SME performance. The influence of SME managers on SME performance was interrogated from four domains of emotions: self awareness, self-management, social awareness and social skills. SMS performance was measured from five factors: profitability, solvency, customer satisfaction, cost control, and sustainability. The study was anchored on Goleman’s Competency. Using a case study a mixed method research, an investigation was done in South Africa on EI and SME performance. In this causal-effect and exploratory design 206 managers responded to the quantitative method with twenty managers simultaneously interviewed in a
qualitative method for triangulation. The KMO test, Bartlett’s Test of Sphericity, and Communality were used to predict the value of variables, while confirmatory factor analysis and explanatory factor analysis were used for EI and OP datasets, respectively. Four primary hypotheses were formulated and tested using multivariate regression statistics particularly Ordinal Logistic Regression which measured the influence of SME managers’ EI on OP. The findings revealed that SME-managers’ EI social awareness and social skills strongly influence SMEs’ performance. The OP profitability and liquidity factors were partly explained by managers’ self-management EI dimension. The thesis results could assist to improve management practices, influence EI training initiatives and help contribute to alleviate SME failure. More research is needed to explore and investigate managers’ the relationship between EI, and SME performance. Further research could be conducted on mediating EI mediating variables such as Leadership (L), EI Interventions (Training, Coaching, and Mentoring with Compassion), and Cultural factors influence performance among managers of SMEs. An LEC SME Achievers Model with mediating factors is proposed.