The impact of affordable loss on business model innovation amongst South African entrepreneurs

Abstract

Entrepreneurs face high levels of uncertainty; this has been amplified the globally uncertainties and events such as the COVID-19 pandemic. The South Africa economy is dependent on the flourishing of the entrepreneurship to create jobs and add to the economy. In recent years, the study of Business model innovation (BMI) has gained the attention of researcher and businesses. Literature has largely linked BMI to improved firm performance and this is evident given the likes of businesses that have seen great success with BMI such as Airbnb, Alibaba and Uber. Literature has found that effectuation has a positive impact on BMI. The affordable loss principle of effectuation deals with uncertainty. The study therefore sought to empirically test the relationship between AL and BMI amongst South African (SA) entrepreneurs. The study collected data from 127 entrepreneurs in SA who own a business. The study conducted Pearson’s correlation analysis to test the relationship between AL and the formative subconstructs of BMI. The results of the hypotheses were not supported, therefore concluding that AL does not have an impact on BMI for SA entrepreneurs.