3. Electronic Theses and Dissertations (ETDs) - All submissions

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Subject: search.filters.subject.Black business enterprises--South Africa

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    Identifying risk in small and medium enterprises: the case of black-owned SMEs In South Africa
    (2017) Lokolo Lothin, Ghislaine Jessica
    The increasing number of BB-BEE policies and strategies aimed at supporting SMEs in South Africa is evidence that Black-owned SMEs are important for development of the country. Between 2007 and 2010, the number of SMEs grew by almost 60%, contributing approximately 61% of the country's GDP. In spite of the widespread financial support put in place by government agencies to support them, findings reported that SMEs in South Africa score a relatively high failure rate. Moreover, little is known about the causes of these high failure rates. This thesis aimed at filling the gap in the literature by identifying the risks that South African Black-owned SMEs face. In doing so, Black-owned SME owners/managers were interviewed across various industry sectors. This revealed that although these owners/managers were well educated and skilled, they did not believe that their staff were trained enough. The findings revealed financial risks were still the most prominent risks these SMEs face, which seemingly gave rise to other risk factors such as the lack of access to technological improvements or skilled labour, and their inability to set up or run effective marketing strategic plans. The gap between the supply of and the demand for financial support for Black-owned SMEs could be attributed to a number of factors, including red tape, bureaucracy, corruption, politics and an unstable economy. A number of implications followed from this. For the financial support to reach its target effectively, independent and transparent micro-finance institutions have to be in place. This needs to be coupled with the establishment of a platform for Blackowned SMEs that could be used to market Black-owned SME products and services. Another solution could be the design of SME-aligned skills transfer incubation programmes. Applying the results from this research, one should be careful to consider its limitations because of the small sample size and selection criteria, which imply that these results cannot be generalised beyond the scope of this study.
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    The impact and related costs of implementing changes in the Broad-Based Black Economic Empowerment (BBBEE) codes of good practice on companies listed on the Johannesburg Stock Exchange (JSE)
    (2016) Dongwana, Neo Phakama
    Black Economic Empowerment (BEE) or Broad-Based Black Economic Empowerment (BBBEE) is an important means by which the South African government aims to address the social injustices of the past as well as eliminating inequalities between white capital and the black majority (Fauconnier and Mathur-Helm, 2008). The Department of Trade and Industry (DTI) has been tasked with overall responsibility for instituting and monitoring the laws that govern BEE. Since the introduction of the Broad-Based Black Economic Empowerment Act no. 53 of 2003 (Ferreira and Villiers, 2011) and the codes of good practice of 2007, a number of amendments were made in response to deficiencies identified, the most material being the Amended Codes of Good Practice of 2013, which were effective from 1 May 2015. This research paper sought to investigate the impact and cost implications of the 2013 amendments to the BBBEE Codes of Good Practice (new codes) on companies within the industrial goods and services sector of the Johannesburg Stock Exchange (JSE). This was done relative to the 2007 BEE Codes of Good Practice (old codes). The main purpose of the study was to explore the impact and related costs of implementing the changes in the BBBEE codes on a sample of JSE listed companies obtained from the Empowerdex Top 100 2015 survey. The sample selected was those companies in the industrial goods and services sector. The methodology used was an exploratory study using semi-structured, in-depth interviews with the executives responsible for BBBEE or transformation, as it sometimes called, in each company. While an interview questionnaire was used, the questions asked were fairly open-ended which allowed the subject to be explored fully in each setting. This enabled the researcher to also understand the practicalities of implementing the BBBEE codes within each company and each industry. The results of the study indicated that most companies found it difficult to maintain their BBBEE ratings, with indicative ratings showing a likely overall average drop of three levels. In addition, further discounting in the rating may result from not meeting the sub-minimum levels of the three priority elements. These elements are; ownership, skills development as well as enterprise and supplier development (ESD). Overall, in terms of the impact and challenges in implementing the new codes, companies found that the new codes were onerous, complex in some instances, vague in others, with a potential for misinterpretation and possible manipulation. ESD was found to be the most challenging of the new elements to implement and likely to have the most impact on companies, whereas skills development, which has been doubled from 3% to 6% of the payroll leviable amount, had the biggest impact in terms of cost as assessed on the new codes. Notwithstanding the perceived challenges, companies acknowledged that BBBEE was not only a moral imperative (Fauconnier and Mathur-Helm, 2008), but also a business imperative (Arya and Bassi, 2009) and a licence to trade in South Africa. The study had four main limitations. Firstly, that companies investigated were selected from the Empowerdex Top 100 most empowered companies 2015 survey, completed in May 2015. Within those, only the ones in the industrial and services sector were included in the study. Secondly, that all companies interviewed, regardless of sector, responded to the questions with respect to the generic scorecard, as no sector charters were enacted at the date of writing the research report. Thirdly, the ability to secure the appropriate number of interviews was key, which may affect the quality of the responses and conclusions reached. Finally, because the new codes were implemented on 1 May 2015, which is less than a year from the date of this research report, there is a limitation that limited information is available on the new codes. The effective implementation date of the new codes, means that very little research is likely to have been conducted on the new codes; or the likely impact they could have on companies; or the critical changes between the old codes (2007) and new codes (2013). The researcher hopes this study will enable greater understanding of the codes and assist listed and other companies in strategic decision-making (Horwitz and Jain, 2011) and implementation of transformation initiatives. Furthermore, issues raised as contentious, confusing or due for improvement can be further researched and possibly used by policy-makers as input to future changes in the codes. Further research can also be conducted three to five years from now when the amended codes have been in place for a period that allows implementation by companies. This can either be conducted using a case study that tracks the BBBEE strategies, initiatives and ratings over that period within one company. Alternatively, the researcher can select any one of the five elements and investigate how it has been implemented in different companies over a specific period.
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