MBA & MM Theses

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The Impact of Black Economic Empowerment
(2011-06-08) Ramuedzisi, Tshilidzi
Black Economic Empowerment is one of the South African government's initiatives to bring parity to past economic imbalances. One of the aspects of this empowerment has been through transferring of equity ownership to empowerment groups in order to increase black ownership and control. A key question that arises is the impact that these transactions have on the companies transacting. As listed companies form a significant stake of, as well as contribute significantly to the South African economy, the impact on such companies is of key interest. The purpose of this study was to investigate whether Black Economic Empowerment transactions have an impact on the cost of capital employed of listed companies that have transacted with Black Empowerment companies or consortia in South Africa. Results from an event study during the initial public announcement of the transaction indicated that no abnormal returns are earned during the preannouncement and announcement periods, hence indicating no impact on the cost of capital. The results did, however, indicate that negative abnormal returns are earned during the post-announcement period, indicating an increase in the cost of capital.
THE ROLE OF THE GAUTENG SHARED SERVICES CENTRE IN PROMOTING BLACK ECONOMIC EMPOWERMENT
(2011-06-06) Ntshangase, Thulani Givenson
The implementation of BEE initiative in South Africa was aimed at addressing the socio-economic disparities and exclusions caused by the legacy of apartheid, which had deterred socio-economic development and further entrenched unemployment and poverty. The purpose of this study was to explore whether the twelfth (12th) department established in Gauteng province referred to as the Gauteng Shared Service Centre (GSSC) does promote Black Economic Empowerment. To investigate the above the research focused on the GSSC procurement processes which are currently used as a vehicle for the promotion of BEE. Emanating from the research findings, there are significant gaps in the current procurement process, which the GSSC must improve on. Enhanced transparency, effective communication and quickened payments are but some of the areas that are essential for the GSSC procurement processes that will lead to the promotion of BEE.
Assessing the Impact of
(2011-05-19) Moosa, Farouk Goolam
This research assessed potential impacts of South African petroleum industry deregulation. Industry participants have called for changed regulation of the South African petroleum industry. The National Energy Forum task force was established to formulate recommendations concerning future petroleum industry regulation. Government subsequently released a white paper indicating a major shift towards deregulation. Deregulation and a twenty-five percent black economic empowerment (BEE) objective became the future envisaged policy. Government, oil majors, retail associations and retailer representatives were interviewed. Developments in three deregulated countries were analysed and evaluated, to determine the effects should full deregulation occur. A refined analytical framework was used. The results show that much must be achieved before implementation of full deregulation in South Africa. Government is particularly concerned about supply security, infrastructure requirements, transformation to twenty-five percent BEE and protection against massive unemployment resulting from rationalisation, caused by competitive price-cutting, of approximately 30% of the retail service stations
BLACK ECONOMIC EMPOWERMENT, PREFERENTIAL PROCUREMENT AND SMALL BUSINESS DEVELOPMENT IN EKURHULENI
(2011-05-19) MOLEKWA, BEN THAYI
Procurement in general and tender criteria – selective purchasing – in particular, is an instrument that is used to achieve non-economic goals. South Africa introduced affirmative action policies under the auspices of the Employment Equity Act No. 55 of 1998 to redress the imbalances created by apartheid. The goals of affirmative action, black economic empowerment and preferential procurement included wealth redistribution through the promotion of SMMEs that are owned by previously disadvantaged communities. Small black contractors that grow and expand their businesses may create wealth for previously disadvantaged communities such that redistribution of wealth is achieved and more employment opportunities are created. The purpose of this study is to investigate whether preferential procurement through its evaluation criteria is promoting black economic empowerment in housing procurement or not. The researcher examined the relevant legislation and policies, and interviewed builders of RDP houses in Ekurhuleni. The findings revealed conflict in BBBEE Act and preferential procurement. While the former aims at promoting participation of previously disadvantaged black contractors, the latter discourages this through its evaluation criteria. The evaluation criteria place too much emphasis upon price and do not include business skills. Resulting from this, small black contractors in housing procurement do not grow, and wealth is not redistributed. This research proposes the reallocation of points, the inclusion of business skills and social cohesion in the evaluation criteria
Career advancement challenges
(2011-05-19) Mkwalo, Lumkile
This study was conducted in an attempt to uncover the reason for the uneven pace of promotion for black African managers in the South African work place, Employment Equity Commission (2008). While many previous studies of the same subject focused on the executive management level, this study sought to include the lower levels of management. The study was conducted through in-depth, one-on-one interviews with twenty black African managers from large South African corporate companies, and their inputs were triangulated with input from six supervisors and six employment agents. The supervisors and agents were sampled to include both male and female white, Indian and coloured respondents. The study found that, while black African managers were technically competent, they were hamstrung by prejudice in the workplace, poor performance management, poor career planning and their inability to network effectively, especially with senior, white colleagues. The transformational legislation meant to help their career aspirations was also poorly enforced by the government and consequently indifferently implemented by the corporations. This left them without concrete developmental plans that would lead to measurable career progression. New negative trends included the perception of an afro-pessimistic media, diluted jobs, being surrounded and outnumbered, inequitable expectation, ethnic hierarchies of oppression, political coyness, double battery, room-for-one syndrome and acceleration to the abyss. A positive trend included the slow emergence of a one cosmopolitan culture among young managers across all racial lines which was beginning to blur previously-held stereotypes
IMPLEMENTING BLACK ECONOMIC EMPOWERMENT
(2011-05-16) MASWANGANYE, MSINDO ANDREW
In March 2002, the Department of Transport published the Ports Policy with the objectives of ensuring affordable, internationally competitive, efficient and safe port services and of restructuring port governance and operations and subsequently regulating them. The 2005 Ports Act officially separated operations from a landlord function within ports and further established the Ports Authority to own, manage, control and administer ports to ensure their efficient economic functioning. The Ports Act also established the Ports Regulator to exercise economic regulation of the ports system as well as monitor the activities of the Ports Authority. In addition, the Ports Regulations were developed, setting out the BEE targets that the Ports Authority should achieve in order to promote the economic participation and empowerment of historically disadvantaged groups in port operations. The Regulations further mandated the Ports Regulator to monitor and enforce implementation of the BEE targets when the Ports Authority would be issuing licences or granting concessions in port operations. This monitoring and enforcement function would be exercised through annual reports to be submitted by the Ports Authority, and through hearings that may be conducted by the Ports Regulator from time to time. This study found that the reasons for entrusting the Ports Regulator with the BEE monitoring and enforcement mandate, although not known to everybody, could have been orchestrated by Transnet because the Ports Regulator was seen to be less powerful than the Maritime BEE Charter Council. In addition, Transnet also developed guidelines for granting concessions, licences and permits for ‘auxiliary port services’ and not port operations. These would test the regulatory capability of the Ports Regulator hence it would require preventative enforcement measures in addition to harm-based enforcement measures that are in place (namely, annual reports and hearings). This study also established that having departmental officials on the Board of the Ports Regulator appeared to be in the latter’s best ii interests although it has to strengthen measures meant to curb the financial interests of board members and develop independent capacity for informationgathering, since implementing its mandate of monitoring and enforcing BEE will indeed be an intractable affair.
Compliance with Broad-Based Black
(2011-05-13) Osman, Mogamed Shaheen
In today’s competitive global market organisations strive to maximise market share. Therefore their strategy is seen as one of the main driving forces guiding them in this quest (Reddy 2003). Various pieces of legislation has been introduced which affects an organisation’s strategy. This legislation is governing the one thing entrepreneurs and business owners pride themselves in, namely ownership and control over their organisations. Legislation has further marginalised those with skills as they do not fit into the preferences and designated groups as stipulated within several of these legislations and Act’s. This is the reality facing both local and multinational organisations wanting to do business in South Africa. The question to be answered is; how are they dealing with this and how has it affected their respective strategies? South Africa has emerged from an Apartheid history riddled with oppression of people based on skin colour. The new democratically-elected dispensation is therefore saddled with the task of correcting the wrongs of the past in order to address issues such as the need for job creation and poverty eradication. This is where the Broad-Based Black Economic Empowerment (B-BBEE) Act 53 of 2003 comes in. Balshaw and Goldberg (2005) noted that the B-BBEE Act is arguably the one item affecting the strategy of organisations wanting to do business in South Africa. Balshaw and Goldberg (2005) further noted that the BBBEE Act touched on the sensitive issue of ownership and control with business owners. The motivating idea of B-BBEE is to provide organisations with a framework to work in to allow them to assist government with transformation within the country. This research set out to identify how multinationals are dealing with the seven elements of the B-BBEE Act in order to ensure compliance. iii A qualitative approach using in-depth interviews was followed to collect data to analyse and build a picture of the various practices and strategies employed in pursuit of compliance. The key findings are that multinationals have modified their strategies and prioritised ensuring compliance with the B-BBEE Act. There appears to be sincerity behind the efforts, although some of their actions are questionable. There are three urgent actions for government and the Black Economic Empowerment (BEE) Advisory Council; it needs to investigate the allegations of unscrupulous acts taking place within industry and to review what the B-BBEE Act is measuring and whether or not this is contributing to the unscrupulous behaviour as indicated in the findings. In addition, there is a need for more visible policing to ensure purported compliance is in fact compliance in the true spirit of the Act. The key message to be taken away from the research is that the B-BBEE Act is effective and is making a difference, but that there is room for improvement. As stated by United States president, Barack Obama, during his election campaign: “Together We Can”. This statement has profound meaning in the South African context as it motivates that together the population of this country can create history through transformation and future economic growth. Charles Darwin said, “It is not the strongest species that will survive, nor the most intelligent, but the one most responsive to change.” Therefore organisations that commit to and implement change in alignment with the BBBEE Act will surely prosper in the future.
SHARE PRICE REACTION TO BLACK MANAGEMENT APPOINTMENTS IN SOUTH AFRICA
(2011-05-12) Lowe, Craig
Research conducted both locally and internationally has yielded mixed results to changes in top management. However, once management changes are classified according to the post of an executive and according to the circumstances surrounding the changes, a statistically significant share price reaction is usually observed. This study utilises standard event methodology to determine the share price reaction to black executive management appointments for companies listed on the Johannesburg Stock Exchange. A statistically significant cumulative abnormal return of 3.39% was found to exist over the two day announcement period. The sample comprises all black executive management appointments publicly announced in appointment-only announcements between 1st July 2000 and 30th June 2005. The findings are relevant in South Africa where the market is experiencing the overarching phenomenon of Black Economic Empowerment. Possible causes of the positive share price reaction are suggested
South Africa SME's Experience of Enterprise
(2011-04-19) Macharia, Patrick
The purpose of this research was to determine the challenges facing small businesses in South Africa and further determine the experiences of small businesses under enterprise development by large firms. These challenges were determined to be lack of skills for small business owners, lack of guaranteed markets, and lack of trade financing. The supports that small businesses receive from large businesses under enterprise development were determined to be training and preferred procurement. A sample of SMEs under support from large businesses was chosen to carry out this research. Questionnaires and telephonic interviews were administered to these sampled SMEs. These SMEs were from the previously disadvantaged communities who are targeted by most SMEs support interventions from large companies through the B-BBEE policy of enterprise development. From the interviews and questionnaires administered, analysis was conducted using the content analysis method to test the research propositions. The results were discussed and conclusions drawn from them. A framework was developed which will be useful in guiding interventions within the SME development arena where linkages with large businesses are undertaken
The impact of Black Economic Empowerment transactions on
(2011-04-15) Jacobs-Nongxa, Nomthunzi
The purpose of the study is to evaluate the impact of the Black Economic Empowerment (BEE) transaction on shareholder value. In this study a specific reference data of 2002 has been chosen for analysis. The analysis measures and compares various financial ratios before 2002 and after 2002 for those companies that implemented BEE transactions in 2002. This is basically an event study where the event window is in 2002. We have a sample of 33 companies from a population of 103 BEE transactions from listed and unlisted companies. The ratios such as ROI, ROIC, ROE, ROCE, EVA and CVA were calculated for each of the 33 companies before 2002 and after 2002. Test results show there is no statistically significant change in the various ratios. Thus the BEE transactions are adding no significant value to current shareholders in the target companies. The findings have significance for future BEE policy considerations

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