Faculty of Commerce, Law and Management

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CRITICAL SUCCESS FACTORS FOR INSURANCE COMPANIES IN THE SOUTH AFRICAN SME MARKETS
(2011-07-14) Muigai, Andrew Kamau
This study was carried out to determine critical success factors for insurance companies targeting the SME market, for business insurance products. This is expected to benefit both sectors as SMEs require insurance services, especially because of their inherently risky nature. In turn, insurance companies have the potential of increasing their profitability and reducing risk exposure by targeting this growing market, hence creating a virtuous cycle for both industries. The conclusions of this study are drawn from a sample survey of both insurance company managers as well as SMEs operators. The perspectives given by the participants were then contrasted with the emerging literature in this area before drawing very specific conclusions. The research established critical success factors for insurance companies in targeting SMEs as service quality, trust, cost of insurance, effective communication, necessary cover, referral business, the availability of technology and effective sales promotion. In order to build on these critical success factors, insurance companies have to focus on customer satisfaction, relationship marketing, operational excellence, developing well trained employees, leveraging the efficient use of technology, building trust with customers and providing necessary
The influence of indigenous governance
(2011-06-24) Yeatman, Craig
The nature and effect of small business governance is inadequately researched despite the growing importance of the small business sector to South Africa’s economy. This study reviewed literature drawn from history, sociology and anthropology as well as contemporary small business literature, and constructed an ideal type of indigenous governance against which the governance modalities of four Black South African small business owner managers were examined. A phenomenographic exploration of these governance modalities through the lens of an indigenous framework of good governance finds reasonable support for the idea that indigenous governance principles have a contribution to make to small business governance. Recommendations for small business owner-managers as well as academia include the over-arching emphasis of an indigenous model of small business governance; an emphasis on a broader definition of organisational purpose; greater use of independent council and a concern for employee wealth in the governance of small business
Small business opportunities within the
(2011-06-22) Swanepoel, Ezánne
The field of biotechnology is diverse and the industry is immature in comparison to other sectors. Biotechnology represents the convergence of biology, computer science, chemistry, physics, and engineering, working in synergy (Cardinal & Opler, 1995). This industry is a starting point for utilising the continent's indigenous resources to strengthen South Africa, and Africa, economically. By broadening the scope to include innovation, business can increase opportunities in the industry. This research aimed to provide insight into four key elements relating to the development of small business opportunities in the biotechnology industry of South Africa i.e. the factors influencing small business opportunities; the promoters for and shortcomings to successful development of small business opportunities; and the varying stakeholder perceptions with respect to the first three sub-problems. The research outcome was as follows: The majority of stakeholders agreed that the factors that have to be considered in order to create or develop small business opportunities within the biotechnology industry of South Africa are training, industry structure, funding, barriers to entry and regulatory environment. One of the biggest challenges for professionals within the biotechnology industry is that they have no business or entrepreneurial training in their formal degree structure, and therefore they are not adequately equipped with the knowledge and expertise to seek out small business opportunities. Further the current industry does not allow for incubation or implementation of scientific business ideas from the laboratory level to market level, primarily due to lack of appropriate funding and the regulatory environment. The various stakeholder groups reached a broad consensus in terms of the type of shortcomings that the biotechnology industry faces in developing small business opportunities in South Africa. Business leadership, funding and brain drain were the most commonly cited shortcomings by the different stakeholders. Due to lack of business training within the scientific curriculum, most stakeholders were of the opinion that there should be business leadership in place to assist scientists in making entrepreneurial/business decisions during product development. Further, due to changes in the educational system, lack of personal incentives within the working environment, political pressure and a limited resource capacity many top 3 professionals within the South African system have been lost due to better opportunities in other countries (brain drain). Other shortcomings pertaining to the biotechnology industry were high barriers to entry (national and international), a regulatory environment that does not protect national products, resources or individuals from international competition, as well as, a fragmented industry (very powerful private sector that taps the governmental and academic system), which sometimes led to power play/lack of trust between the stakeholders. The various stakeholder groups reached a broad consensus in terms of the type of promoters that the biotechnology industry can use to developing small business opportunities in South Africa. Business training, funding and weakening barriers to entry were the top three cited promoters, and all the stakeholders cited weakening of barriers to entry. Respondents believed that by focusing on these issues, the chances for a successful implementation process would be enhanced.
Critical success factors for start-up companies
(2011-06-15) Sparrius, Stephan
The South African Futures Exchange (SAFEX) implemented anonymous trading on all their futures contracts on 26 May 2009. The impact of market design on market liquidity is still not well understood. Some markets, e.g. Hong Kong Stock Exchange, disclose broker mnemonics whereas in other markets, e.g. New York Stock Exchange, conceal broker mnemonics. The degree of trader anonymity is a potentially important determinant of market quality. Institutional traders are often said to prefer an anonymous environment because they do not want to publicly disclose their trading needs (Schwartz and Steil 1996). On the other hand, however, anonymity allows traders with inside information about a company to remain unidentified. The problem is that we do not know how anonymity has impacted market liquidity on SAFEX. This study examines the impact on market liquidity due to the removal of broker mnemonics on SAFEX by examining the changes in bid-ask spreads, price volatility and trading volume on the near to expiry ALSI futures contract before and after SAFEX implemented anonymous trading. In order to gain the necessary insights into the intraday liquidity of the ALSI futures contract, high frequency data is required. Therefore, the sampling approach captured each and every trade that was executed against the near to maturity ALSI futures contract for a sample period of three months before and three months after SAFEX changed over to anonymous trading, i.e. from 2 March 2009 to 20 August 2009. Details of intraday trade time, trade price and trade quantity was extracted to calculate bid-ask spreads, volatility and volume. Bid-ask spreads, volatility and volume were calculated for minute intervals and then averaged across each day to produce one observation for each day. The research found that:  Bid-ask spreads have dropped significantly after the introduction of anonymous trading on SAFEX. But after controlling for changes in volatility and volume, since the lower bid-ask spreads may be in part iii driven by changes in these variables, the decrease in bid-ask spreads is no longer significant.  Bid-ask spreads and price volatility have a statistically significant positive relationship. Volatility has dropped significantly after the introduction of anonymous trading on SAFEX.  Bid-ask spreads and trade volume have a negative relationship but this finding is not statistically significant. Volume has dropped significantly after the introduction of anonymous trading on SAFEX.
Women Income Generation Projects in Rural
(2011-06-15) Shoba, Nomthandazo
In the search of solutions to socio-economic problems, there is global consensus on the fact that, alleviating the plight of small medium macro enterprises (SMMEs) is a condition sine qua non. Poverty, unemployment, and other societal ills which ensue from such socio economic problems are very prevalent in developing countries. In South Africa, efforts to resolve such ailments have produced disappointing results— with poverty and unemployment growing by the day especially in the rural areas. Women driven SMMEs in rural areas are unsustainable, ineffective and remain subsistent in nature. The lack of basic social amenities (water, electricity, and proper health care facilities), infrastructure, proper communication facilities, and prevalence amongst others, of HIV/AIDS has greatly incapacitated the functionality and industrialisation of SMMEs in South Africa. Government efforts to resolve some of these socio-economic problems, has been through support for urban and rural SMMEs. Notwithstanding this, such efforts have not been very successful due to lack of sound policies which bears into mind that, problems of rural and urban SMMEs are of different magnitude. The difficulty is further exacerbated by geographical and technological factors, and the absence of published data on the severity of the situation. This research hypothesises that, available policies are not factually backed and equipped to respond to contemporary challenges, and that the equal status quo treatment of urban and rural SMMEs and assumption that they are vibrant and properly functional are amongst other presumptions which have ill-affected government programs. With the example of Learning for All (LFA) Care Clubs, this research interrogates factors that incapacitate the sustainability of SMMEs. In this esteemed regard, the role of government policies towards the inefficacy of rural SMMEs will be reviewed
Success criteria of SMMEs for
(2011-06-10) Sutherland, Scott
Many SMME in South Africa have attempted to enter exporting, often with very bad experiences and losses. This is not consistent with the experiences of similar small firms in first world countries. Given that South African SMME may find great difficult competing in first world markets without prior exporting experience. This research seeks to fill a gap in the literature by looking if there are issues that may be particular to South African firms looking to export in Africa. In particular what could be the key criteria small firms lacking in finances and management resources can concentrate upon to try ensure success? The researcher was seeking a wide view of the exporting industry and sought out a group of experts to gain insight to the possible key success criteria. A phenomenological approach using an unstructured interview was done with these experts to gain insight of both successful and unsuccessful export ventures. In particular what these experts have advised smaller firms on and where the firms have succeeded. There was convergence from the respondents that the networks or relationships of an exporting SMME are of key importance. This is largely due to the nature of complexities of exporting and the diversity of requirements in multiple jurisdictions. As there can be no certainty all problems have been provided for by the exporter working alone, the exporter and importer are dependent upon each other and their business partners to ensure mutually beneficial transactions
Success criteria for development
(2011-06-09) Reddy, Sarvasan
The National Empowerment Fund has been used as a case site as it is a development funding institution of the Department of Trade and Industry. The purpose of the research was to identify and evaluate the attributes of successful versus unsuccessful funding applications for Small and Medium Businesses. The method of data collection used in the research was through content analysis of archival documents. The key findings were as follows: o Poorly structured and incomplete business plans, poorly structured and unsubstantiated financial information, as well as the high risk profile of the SME, do lead to unsuccessful funding applications. o Entrepreneurial ability or orientation, the technologies used to fund SMEs, highlighting the impact that SMEs have on economic growth and development, as well as the completeness of the funding submission, have increased the likelihood of successful funding applications. SMEs have a vital role to play in economic growth and development and since access to funding is an obstacle that they face, more effort and attention needs to be given by all funders to ensure that SMEs are promoted through being able to access the required funding by meeting the stipulated criteria and informational requirements.
Small, medium and micro enterprises as an element
(2011-06-08) RAMODUMO, MADIDIMALO AARON
The development of Small, Medium and Micro Enterprises (SMMEs) has become one of the major focal points for Local Economic Development (LED) in South Africa. This is demonstrated by the National and Provincial policy as well as local government initiatives wherein appropriate environment for small businesses to flourish has become a central element for promoting entrepreneurship within municipalities. However, the challenge is that the survival rate of the established small business initiatives and their sustainability to realize the purpose for which they have been established, that is, to promote sustainable entrepreneurship, to stimulate economic growth and to create jobs is enormous. The purpose of this research study was to examine the nature of support provided to SMMEs as an element of LED strategy, its effectiveness in terms of job creation, entrepreneurial development and the lessons learnt for SMME development in the Greater Giyani Municipality, Limpopo Province of South Africa. Chicken farming had been used as a unit of analysis. The major findings of the study were that the development of small businesses in the Greater Giyani Municipality is hindered by insufficient skills for the implementation of LED strategy for small business development, lack of training on small business development, inefficient and uncoordinated strategy within the local government municipality as well as lack of penetration of small business development agencies and above all, lack of training on small business management The study recommends the following measures for effective small business development in the Greater Giyani Municipality: proper management systems, development of local economic development operation plan, good governance, improvement of service delivery, the effectiveness of small business development agencies and the need for performance measurements and monitoring
OWNER-MANAGER STRATEGIES
(2011-06-08) Poulos, Nicolette
In recent years small businesses have contributed to countries economies through increased production and turnover. Growth in small businesses can play a key role in adding value for the economy because growth stimulates employment and wealth creation which contributes to national employment growth and increased output. The small business owner-manager and employees in a growth business also achieve a sense of self-fulfilment and independence. The world is constantly changing as a result of globalisation, increased competition, industry consolidation and technological advancements. Many small businesses are experiencing significant growth problems and are unable to grow beyond micro business stage because they do not have the resources to grow in the ever-changing environment. Owner-managers are still in search of greater assistance to grow small firms and pinpoint factors which guide growth and success. The purpose of this research was to determine the internal factors that contribute to small business growth and understand the growth strategies that can be applied to grow beyond micro-business stage. In-depth interviews for three case studies were conducted. It was found that there appears to be a pattern for growth beyond micro-business stage. It seems that growth beyond micro-business stage can be achieved when there is a positive influence of the internal growth factors on the business. It was also found that there are many small business growth strategies that can be applied to counter balance the negative influences of growth. The research should be of value to ownermanagers seeking insight from what is necessary to achieve growth and what strategies to employ for business growth.
FACTORS INFLUENCING INDIVIDUALS’
(2011-06-02) Nkambule, Nonhlanhla
The aim of this paper was to investigate factors that influence individuals’ propensity to start their own businesses. These factors were divisible into three categories: non-psychological, psychological and environmental factors. A survey was conducted on 36 existing entrepreneurs and potential entrepreneurs on a purposive and convenience basis. The data gathered was nominal and ordinal, the latter being rescaled into interval data using Stacey’s (2005) Normal Distribution Fitting Algorithm. The results of the survey indicated that in the South African context, entrepreneurs’ propensity to start businesses is largely influenced by psychological factors, and that the strongest factors were the desire to create wealth for themselves, their desire for independence, their inclination to take risks and tackle challenges. A majority of the entrepreneurs also agreed that education in entrepreneurship could increase the quality of businesses that are started. Although previously published literature on non-psychological factors such as lack of business skills, low education levels, inefficiency of government structures, social networks and exposure to family business suggest a negative impact on entrepreneurial propensity, the results of this study indicate that South African entrepreneurs disagree that these factors would have a negative influence on their inclination to start a business. The findings of this survey will benefit different stakeholders that have the interest in engaging and in promoting entrepreneurship in South Africa. These include business schools, government, financiers and potential and existing entrepreneurs

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