The resilience of very small firms to large-scale crises, by Jean-Baptiste Zoungrana (PhD thesis)

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On June 23, 2017, Mr. Jean-Baptiste Zoungrana, currently Secretary General of the Economic and Social Council, defended a doctoral dissertation at the Aube nouvelle University in Ouagadougou. « Resilience of very small enterprises to large-scale crises in developing countries: the case of the informal sector following the floods of September 1, 2009 in Ouagadougou, Burkina Faso » is the subject of his thesis, which was sanctioned by the mention « Very honorable ». In this interview, he discusses the results and interest of his research.

Can you introduce yourself?

My name is Jean-Baptiste ZOUNGRANA, married with two children. Academically I hold among other diplomas, a BAC series A4, a state diploma of social assistance, a Master II in Project Management, a Research Master in Management Sciences and since June 23, 2017, a PhD in Management Sciences.

Professionally, I assume the duties of Secretary General of the Economic and Social Council. Before that, I held many positions at the Ministry in charge of social action, coordinator of the emergency relief management unit during the floods of September 1, 2009, 2nd vice president of the special delegation of the municipality of Ouagadougou, member of scientific and administrative boards of international child protection organizations, President of the African Committee of Experts on the Rights and Welfare of the Child of the African Union.

You have brilliantly defended a doctoral thesis in Management Sciences at Aube Nouvelle University on the resilience of the informal sector following the floods of September 1st 2009 in Ouagadougou. What do you mean by resilience of an informal sector enterprise?

The concept of resilience, which means to bounce back in everyday language, is used differently in many scientific disciplines. In management science, it means the ability to bounce back from the unexpected. In the case of our research, we have defined the resilience of an informal sector enterprise as « the capacity of a microenterprise or production unit without a unique identification number (IFU) and formal written accounting to survive, or even to thrive, following a shock or crisis that causes partial or total loss of one or more components of its resources (material, human, financial, etc.).

Could you briefly present to our readers the problematic of the thesis you defended? The problematic of our research started from the empirical observation of the informal sector enterprises following the serious floods of September 1st 2009 which caused the disappearance of many of them located in floodable and submersible areas. The government did not provide specific assistance for the recovery of these businesses as it did in 2011 during the socio-political and military crisis. Six (6) years later, we have observed that many businesses have totally disappeared, but others on the contrary, have survived or rebounded and are even expanding. This resurgence of the informal sector, which I could describe as the resilience of informal sector enterprises to the large-scale crisis, was the empirical interest of my research.

What is the interest of such a topic for Burkina Faso?

Such a topic is very important for all developing countries and particularly Burkina Faso. First, the contextual paradigm of tranquility that the world has known is giving way to a world of uncertainty and recurrent crises (financial, economic, food, socio-political…), armed conflicts, terrorist attacks, climate change with its corollaries such as severe floods alternating with droughts, etc. Second, informal sector enterprises, which represent more than 89% of enterprises in Burkina Faso according to the results of the 2009 Industrial and Commercial Census (RIC VI), play a very important role in social cohesion, employment and development, but are paradoxically the most vulnerable to crises. If the resilience factors of these companies are known, mastered and disseminated, it will be of great interest not only for the managers of these companies, but also helps to fight against migration, especially of young people from countries in crisis to developed countries in search of hypothetical opportunities even at the risk of their lives.

Indeed, our research will have practical contributions for economic actors on how to manage very small enterprises (VSEs), especially those in the informal sector, as it is more difficult to get back on their feet than to stay down after a shock. It will be of great help to the government in its economic development and disaster management policy and to the technical and financial partners (TFPs) who wish to provide advice to the informal sector. In short, an answer on how to help managers emerge stronger from a crisis.

What are the research questions you tried to answer in your work?

To achieve our goals, we asked the following research question: What factors determine the resilience of informal sector enterprises to large-scale crises in West Africa?
It is accompanied by the following specific questions:

  1. Is the resilience of informal sector enterprises dependent on the area of activity?
  2. Does firm resilience depend on the size of resources owned prior to the disaster?
  3. To what extent does the resilience of the enterprise depend on the manager or owner?
  4. Does the resilience of the company depend on exogenous factors?

What are the resilience factors of an informal sector enterprise?

It should be noted that very small enterprises are the poor relations or forgotten enterprises of research because there is very little research on these organizations compared to large enterprises that are sufficiently structured. According to the results of scientific research, there are many resilience factors. We have approached the resilience factors by building on the failure factors because resilience and failure are two sides of the same coin. We treated our topic in a holistic way, namely that resilience factors depend on the entrepreneur, the company and the environment.

What theories and methodologies did you adopt to conduct this study?

There are several theories on organizational resilience. In the context of our research, we analyzed the different theories and built our work on Lucie BEGIN and Didier CHABAUD’s (2010) theory on the resilience of a family business which is very close to our research object. According to this theory, resilience refers to a capacity through three intertwined dimensions
1) An absorptive capacity that allows the organization not to collapse in the face of shock or the unexpected; a capacity to mobilize internal and external resources;
2) A capacity for renewal by which the company can invent new futures, find new solutions;
3) A capacity for appropriation, enabling it to become stronger from its experiences.

From a methodological point of view, we used a mixed or dual method, i.e., an exploratory qualitative methodology through three interview guides, one of which was addressed to experts and resource persons, another to technical and financial partners and another to resilient entrepreneurs. We also designed a questionnaire addressed to 269 managers of informal businesses that were victims of the September 1, 2009 floods, located in the flood-prone and submersible areas of 14 sectors of 5 districts according to the old division of the city of Ouagadougou. The sample was established on the basis of the results of the 2009 INSD industrial and commercial census before the September floods. It was selected according to generally accepted scientific standards with an error of 6%.

Briefly, what were your findings from your research?

In terms of results, there are qualitative and quantitative results. Qualitatively, according to the experts and resource persons, it is necessary to diversify sales outlets and products, to build partnerships, to be proactive/know how to anticipate, to have a good business model… For the entrepreneurs who were victims, it was the credits they took out and the solidarity that allowed them to rebound. We also noted that there is no single definition of these types of businesses in Burkina Faso.

Quantitatively, in relation to monthly turnover, this ranged from less than 50,000 CFA francs to more than 3 million. The losses recorded during the floods of September 1, 2009 and declared by 244 respondents amounted to 308,344,000 francs and ranged from a minimum of 15,000 francs to the highest amount of 33 million. It is important to note that 236 or 87.73% of these businesses are not registered. With regard to the level of education of the entrepreneurs, 35.32% have primary education, 33.09% have never attended school, 23.42% have secondary education and 2.23% have higher education.

In the area of training, 38 entrepreneurs, or 14%, claim to have received training before starting their businesses. The majority of cases, 85.87%, did not receive any training before starting their businesses. In terms of continuing education, 11 or 4.09% had received training. The vast majority 258 or 95.91% said they had never received continuing education in a high-risk area.

Furthermore, it should be recalled that we formulated five hypotheses relating to the resources possessed by the firm before the crisis, the level of formalization of the firm before the crisis, the entrepreneurial profile of the manager and his or her ability to understand the environment, the choice and application of strategy by the entrepreneur, and the exogenous factors, notably solidarity, culture and resilience. We have indeed observed that these elements have a positive impact on resilience. However, only the hypothesis relating to the entrepreneurial profile of the manager and his or her ability to understand the environment was validated through the Connor-Davidson Resilience Scale (CD-RISC) test.

What are the contributions, limitations and perspectives of this study?

Our research has had several types of contributions. For example, at the scientific level, our work has provided new knowledge on the resilience factors of these companies that were forgotten by research, notably solidarity. It also showed that illiterate entrepreneurs have capacities and are more resilient than more educated entrepreneurs. They also helped to refute the hypotheses that resilience depended on the importance of resources possessed prior to a crisis and that African culture was an obstacle to business performance, without forgetting the methodological, managerial and operational contributions.

Limitations
All research work has its limitations. In our case, we can point out the fact that the results only reflect the views of the managers, the absence of written support to validate certain assertions; the culture of orality which is specific to this sector.
These risks of bias were contained by successfully establishing a relationship of trust with the interviewees through experience and communication. As a result, the results obtained are convincing.

Perspectives
Future research could focus on the support mechanisms of these enterprises during crises, the ways in which they subscribe to insurance, the causes of the low resilience of more educated entrepreneurs and the strategies for encouraging entrepreneurs to move towards formalization.

How did you find this research work?

This research work has been really challenging in every way. There were even moments when I wondered if I should give up? But it was also an exciting work when we managed, through a rigorous methodology, to find results that, while advancing science, are very useful to our populations and to the authorities of developing countries and even developed countries because the informal sector nowadays is a global reality.

What are your perspectives after such a research work?

In terms of perspectives, I will focus more on research, teaching and consulting to organizations. I urge all those who have the capacity, especially young people, to go for a doctorate and the authorities to invest more in research because the relationship between research and the development of a nation is a trivial truth.

Your final words?

Allow me to take this opportunity to first of all thank God who has given me the ability to do this important work. Secondly, I would like to express my gratitude to my thesis director Mr. Alidou OUEDRAOGO, Full Professor in Management Sciences, Universities of Moncton (Canada) and Aube Nouvelle (Burkina Faso) and to my co-director, Mr. Jean-Fabrice LEBRATY, Professor in Management Sciences, University of Lyon3 (France) who, for 5 years, that is to say, since my Master’s degree, have agreed to accompany me through their various supports to the realization of this work.

This gratitude also goes to the members of the international jury chaired by Mr. Marc Bidan, Professor of Management Sciences, University of Nantes (France) and Aube nouvelle (Burkina Faso) who, after deliberation, awarded me the mention « very honorable ».

I express my heartfelt thanks and gratitude to Mr. Isidore KINI, President and Founder of the University Aube Nouvelles for all the solicitudes towards me. I associate in this thanks, all the team of supervision of the University Aube Nouvelle for its devotion as well as all the persons who, in one way or another, brought me their support.
A big thank you to Dr. Cyriaque PARE, founder of Lefaso.net and to all his team for giving me the opportunity to communicate the results of my research work.
May God Almighty bless everyone a hundredfold with his blessings.

Interview conducted by Yvette ZONGO
Lefaso.net

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