Faculty of Commerce, Law and Management

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    Factors influencing foreign direct investment of South African financial services firms in Sub-Saharan Africa
    (2011-03-28) Charalambous, Harris
    This research investigates the key elements that South African financial services firms consider before making foreign direct investments (FDI) in Sub-Saharan African (SSA) markets. Specifically it aims to establish the order of importance of the key factors influencing FDI as well as understanding the motivation behind these investments and what methods of entry are preferred when these firms decide to enter a new market. The research performed was largely qualitative and used a questionnaire-based descriptive survey method to solicit opinions from key South African financial services firms across all spectra of the industry. Based on responses it appears that South African financial services firms are most strongly influenced by the political and economic stability of the country in question as well as the profitability and long-term sustainability of its specific markets. The degree of available infrastructure in terms of IT and telecommunications as well as the existence of credible financial systems were also viewed as highly important considerations before investing in SSA. Other factors deemed important, but not necessarily critical, included local labour and cultural considerations as well as the volatility of local exchange rates. Factors such as the degree of economic agglomeration, presence of trade incentives, barriers and agreements as well as geographic proximity of the new market did not appear to be a major influence on South African firms expanding into new markets. Given the uncertainty and ambiguity of most SSA markets many South African financial services firms prefer to enter existing markets via a majority stakeholder joint venture with a local partner, or via a new investment if the market does not currently exist. The nature of the financial services firm also seems to influence the iii entry method and once in a new country most firms seem to prefer a full service presence. Additionally, the key motives cited for expansion northward were to broaden revenue bases and improve profit margins as well as to stay close to local customers. With local South African markets becoming cramped many South African financial services firms are looking to SSA for future growth. Given the risks and complexities of conducting business in Africa the findings of this research should be borne in mind by these firms before making critical investment decisions in this regard.
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    The future roles and functions of South African bank branch managers.
    (2011-03-28) Buthelezi, Bheje Nkululeko Freedom
    This study investigated perceptions of South African bank Branch Managers about their future role in the changing banking environment and the influence of demographics on these. A comparison of the perceptions of Branch and Area Managers was attempted. A questionnaire, with 21 variables, developed by Deng, Moutinho & Meidan (1991) was used to collect data First National Bank managers. The 215 responses received were subjected to mean score analysis, factor analysis, correlation analysis and Chi-square testing. The results confirmed that marketing activities would become important in the future role of bank Branch Managers, identified three dimensions for clustering the roles of future Branch Managers and found that the demographic features of branch managers would influence their perceived roles in the future. A low response rate from Area Managers prevented conclusive confirmation that their perceptions do not differ from branch managers’ perceptions.
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    Factors influencing customer retention in South African retail banks
    (2011-03-22) Boyens, Martin
    Increased retention of its customers increases a bank’s market share and can have a significant impact on profits (Reichheld and Sasser 1990). Many customer satisfaction studies have shown clear links between customer satisfaction, customer loyalty and customer retention. Although customer satisfaction is seen as the main driver for customer retention, the objective of this research was to identify the underlying factors that influence a customer to close his or her account and move to another bank. The methodology used was quantitative, with questionnaires made available on the Internet. A sample of 290 respondents who possess a cheque account at a bank in South Africa was used. A snowballing sampling technique was used to be able to achieve the sample size required. The study found service elements to be the main drivers for customer retention in South African retail banks, but did, however, find that the product itself factored together with service elements, suggesting that in the banking industry the boundaries between the product and service becomes blurred. The second and third factors indicated the need for convenience, whether online or through other channels, and should be taken into account in all service delivery plans. The key message and conclusion of the research is that the product and the service offering from the bank are interlinked and should not be seen as separate offerings to customers. The study may be of value to other service related companies