Faculty of Commerce, Law and Management (ETDs)
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Item Early-stage entrepreneurs’ marketing activity in South Africa(University of the Witwatersrand, Johannesburg, 2019) Botha, Jamie-Lee Ann; Mazonde, NomusaPurpose: This paper explored the unique characteristics of the marketing function of early-stage entrepreneurs operating in South Africa. Methodology/approach: A qualitative study was done. The data was collected by doing unstructured face-to-face interviews to conceptualise the unique marketing activities of early-stage entrepreneurs operating in the South African market. Findings: The study indicated that entrepreneurs do digital marketing; however, the primary marketing activity is the ‘on the ground’ marketing. Entrepreneurs still execute old fashioned, cold calling and relationship building with the customer at the centre of the business. Entrepreneurs boasted of their agility to adopt new technology and offer personalised service and product packages to meet the customer’s needs. Value: This paper uncovered the marketing activities of early-stage entrepreneurs and highlighted the marketing areas that need improvement. The results will assist entrepreneurs in the early business development stages with their marketing endeavours and enhance the business performance. The research contributed to the domain of entrepreneurial marketingItem Shared Mobility and Private Vehicle Ownership: A South African Perspective(University of the Witwatersrand, Johannesburg, 2019) Radebe, Valela Napthtal; Ndaba, ZaneleWhen former and late President Nelson Mandela arrived in Soweto after his release from prison in 1990, he was surprised to see the high number of private vehicles that were there since his imprisonment in the early 1960’s. The improved living standards (in spite of Apartheid) and poor public transport services had led to an increase in private vehicle ownership by Sowetans. Unlike in other more affluent areas, the majority of vehicles leaving Soweto on any given weekday have at least three occupants and some may even be overloaded. Owing to the high cost of owning and maintaining private vehicles, owners thereof have had to organise lift clubs to share costs with commuters for trips of similar origins and destinations. This form of shared mobility has also been very popular in other parts of South Africa. The lack of viable mass-transit public transport services in both poor and affluent areas has placed more reliance on private vehicles. Outdated public transport services in cities like Johannesburg are still clustered around old economic nodes like the Johannesburg Central. Rail lines built in the 1960’s and 1970’s are still based on transporting daily commuters to these central business districts. However, new economic hubs have since mushroomed in commercial districts in the north of Johannesburg in areas like Sandton, Fourways and Rosebank. The relocation in the late 1990’s of the Johannesburg Securities Exchange from Johannesburg Central to Sandton proved to be a catalyst to this business migration. Owing to the inflexibility of traditional public transport, mini-bus taxis have had to fill this void for poorer communitiesItem Entrepreneurial orientation of the City of Johannesburg(University of the Witwatersrand, Johannesburg, 2019) Malakoane, JonesThe notion of entrepreneurial orientation (EO) is important because it contributes to the fundamental apprehension of entrepreneurship. Increasingly, attention is being paid by scholars and policy makers to the concept of entrepreneurial ecosystems (EE) as incubators of innovation, creativity and entrepreneurship. Though the concept is still in its embryonic phase, well performing entrepreneurial ecosystems such as the Silicon Valley in California are the envy of many governments striving for economic success, through promotion of entrepreneurship. The primary objective of this study was to explore the relationship between the perceived entrepreneurial orientation of the City of Johannesburg Department of Economic Development (CoJ-DeD) and the perceived City of Johannesburg’s (CoJ) local EE performance. EO of an organisation, for the purpose of this study, is reflected in the organisation’s innovativeness, proactiveness and risk-taking abilities while EE was measured by the three variables, opportunity exploitation (OE), opportunity recognition (OR) and entrepreneurial activity (EA). The data relating to the perceived city’s EE performance was from 109 usable questionnaires collected from a target sample size of 150, the sample’s population was comprised of nascent entrepreneurs, early start-up and established business owners in the CoJ. The data concerning perceived EO of CoJ-DeD officials was from 46 usable questionnaires, this sample was collected from a population of 50 CoJ-DeD officials, comprised of middle and senior managers. The measuring instruments construct validity was evaluated by means of Cronbach alpha coefficients and principal component exploratory factor analysis. The Welch’s t-test was utilized to assess the study’s conceptual framework model. The results showed that EO of the CoJ-DeD officials is defined by proactiveness, innovativeness and risk-taking and the city’s local EE perceived performance is defined only by opportunity exploitation and opportunity recognition. The results also showed a positive relationship between innovation and opportunity recognition, proactiveness and opportunity recognition and between risk-taking and opportunity recognition. It is vi recommended that entrepreneurship becomes the dominant strategic thinking in the CoJ to help unlock opportunities and new sources of value, services and innovation.Item Identifying obstacles to the growth of new SMEs: A Factor Analysis Approach(Identifying obstacles to the growth of new SMEs: A Factor Analysis Approach, 2019) Mphahlele, Dorothy B.; Merino, AndresIt is widely acknowledged that Small and Medium-Sized Enterprises (SMEs) are key drivers of economic growth and job creation in developing countries. It has also been established that new SMEs face common problems that arise as they grow and develop. These challenges stem from internal as well as external factors that can have an adverse impact on their survival and growth. The objective of this study was to identify the internal and external obstacles to the growth of SMEs. A questionnaire was used to collect data on factors affecting the growth of SMEs. The results of the questionnaire were analysed using Factor Analysis. Eight different factors were identified. These factors were further analysed to determine their impact on SMEs. The ranking of the factors in order of importance was as follows: lack of access to finance, overregulation, the economic environment, high competition, lack of internal resources, high input costs, lack of experience of the entrepreneur and poor service delivery. The report examines possible ways of mitigating the adverse factors identified and makes a series of recommendations to increase the likelihood of the survival of SMEs in the South African context.Item Changes in consumer behaviour of urban black emerging middle-class consumers in South Africa, as a result of rural to urban migration(2019-03) Malesa, NnanikiMultinational Corporations (MNCs) are facing the scenario that established markets are becoming saturated. They have consequently identified that pursuing entry in emerging markets will contribute to the growth of their respective brands. In turn, the development of emerging market strategies adapted to reflect understanding and localisation of the consumer behaviour habits found within these emerging markets, has become a priority for them. It is within this context that this research study was undertaken. The purpose of this research study was to investigate the changes in consumer behaviour of black emerging class consumers when they migrate from rural areas within SA to urban areas of Gauteng. A qualitative research methodology was pursued with three focus groups to understand the changes in their consumer behaviour across four key themes, namely: Circular Migrators and Remittance providers to rural dwellers; dietary consumption habits; purchase decision making and shopping habits; as well as appreciation for high-value products. Findings from this research study highlighted that black emerging middle-class consumers who migrated from rural areas of South Africa to urban areas of Gauteng remain circular migrators and do not see Gauteng as a permanent establishment for them. In addition, upon migrating to urban areas of Gauteng, these consumers continued to keep in contact with their rural-based relatives. These urban-based participants confirmed that they remitted groceries, money as well as furniture to their rural-based relatives. Lastly, the research findings confirmed that, upon migrating from rural areas to urban areas of Gauteng, the consumer behaviour habits of these participants changed. Their dietary consumption habits, their decision-making shopping habits, as well as their grocery shopping purchase habits reflected changes in their consumer behaviour patterns. In addition, it was identified in this study that the dietary consumption behaviour, decisionmaking shopping habits, as well as grocery shopping purchase habits of the rural-based relatives also changed. This was as a result of being influenced by the changing consumer behaviour habits of the urban-based participants who remitted contributions to them regularly. The findings of this research report have practical implications when pursuing strategies in emerging markets such as South Africa. In ensuring that the strategies deployed have factored an understanding of the local market and placing the consumers’ interests at heart, three key areas are proposed for consideration when developing emerging market strategies in this rural-urban context. Firstly, the decreasing rural-urban gap eminent in the changes to dietary consumption habits and grocery purchases that are similar between the two areas needs consideration. Secondly, the increasing “urban poverty”, contributed to by the limited access of basic services to the peri-urban communities, must be recognized. Lastly, the role aspiration plays in driving desire and subsequent acquisition of high-valued products by emerging middle-class consumers, is important.Item The principles governing 'place of effective management' and 'permanent establishments' and their application to the digit al economy: a South African perspective(2016) Boel, KatherineThe purpose of this research report is to consider the application of existing 'place of effective management' (POEM) and 'permanent establishment' (PE) principles to a company operating in a digital economy in order to determine its appropriateness and limitations. This paper is broadly divided into four parts. The first part of the paper provides a brief background to the above taidng principles and the digital economy. The second part considers, in detail, the guidance and factors that are currently available on how the POEM and the creation of a PE for a company may be determined both internationally and from a South African tax perspective, including the role of the residency tie-breaker article and the PE article in most double taxation agreements (DTA's) with South Africa. The third part of the paper considers how these guidelines and factors may apply to the digital economy and the practical challenges which arise. Finally, the paper seeks to identify possible alternatives to overcome the pitfalls in the POEM and PE interpretations and to highlight aspects which require further consideration.Item Assessing digital transformation within a South African mining firm(2019) Benzane, Mahene PatriceSouth Africa is still one of the top global producers of various mineral commodities, including gold, coal, platinum, palladium, manganese, titanium, and uranium. The mining industry contributes about 8% to the GDP of South Africa, and it used to be a dominant sector in the past. This industry is known to be a labour-intensive sector with little application of the digital technologies which many industries that were born after the boom of mining in South Africa are currently using. The recent example is the increasing depth of gold which tends to require technology interventions to access these resources where it is not feasible for physical humankind intervention, and this shows the need to transform the mines digitally. The effects of various digital technologies in the mining industry due to the Fourth Industrial Revolution (4IR) phenomenon means that mining organisations can mine smarter, improve safety, reduce cost, develop new insights from their current operation, and contribute towards the sustainable economic and social development of the country. However, the required level of digital maturity, the applicable digital transformation model in terms of what to digitally transform within the mining value chain, as well as understanding the mechanism required to drive maximum adoption and successful implementation of these digital technologies across all levels of the organisation remains unclear and challenging. In a quest to address these, a qualitative research strategy was selected as a means of getting to understand what needs to be digitally transformed in the mining value chain, this would then help identify an applicable Digital Transformation Framework for a mining firm willing to embark on this transformation journey. This qualitative approach is further used in the research to unpack the effective ways to engage various stakeholders within the organisation to help enable successful implementation and adoption of these digital technology initiatives. To do this, a single case study method was utilised and Company X was identified as an ideal mining company in which to conduct the study. Company X has embarked on a digital transformation journey which they run through an internal initiative called Digital@Comapany X, and they have been making a buzz across the South African mining industry as the pioneers in adopting and embracing digitisation in mining, hence they were selected for this study. Based on the reviewed literature, the research made several propositions. One of the propositions indicated that the digital transformation of the internal processes within the mining value chain is the key area of focus for a South African mining firm. The key findings from this case showed that 100% of the interviewed executives, junior managers, middle managers, and senior managers believe that the introduction of the digital technologies within Company X will lead to worker enablement through digitised processes that will eventually improve decision making by using the power of visualised data. Therefore, according to the first proposition made, it is evident from the research that digitalisation of the internal process within the mining value chain is an important area of focus. In summary, the findings showed the following areas as what the digital transformation initiative aims to transform: Digital Capability, Human Resources, Worker Enablement, Culture, Customer Experience, Process Digitisation, Unified Data, and Performance Management. 50% of the executives indicated the importance of customer experience in their digital transformation journey. 65 % of the respondents indicated the importance of unified data by having integrated operations centres, whereas 36% mentioned performance management as the key area of focus, and only 14% of the respondents mentioned IT infrastructure to enhance digital capability as another focus area for the internal digital transformation journey. According to the reviewed literature, it was further proposed that the Digital Piano framework is the most appropriate or relevant transformation model to be used by Company X, and can be further tested by mining firms intending to embark on a digital transformation journey. The aim was to test this proposition by comparing what to transform in practice according to Digital@Company X roadmap to what other various theoretical and conceptual frameworks focus on in terms of the digital transformation process. The findings were not entirely in agreement with the proposition made. Based on what is currently done at Company X, the combination of these following frameworks in the context of the mining firm proves to be more appropriate than using a specific model: Digital Piano framework, Digital Orchestra Framework, Six Keys to Success Framework, Digital Enterprise Integrative Management Framework, Digital Transformation Framework, by Corver and Elkhuizen, The Digital Reinvention Framework, and the Digital Innovation Strategy Framework. Therefore, choosing a single framework from the literature to apply to the mine as a relevant digital transformation strategy may have a dire digital transformation process or journey that leads to poor implementation, lack of adoption and wastage of resources with no realisation of intended digital benefits if it does not holistically cover various aspects of the mine or organisation as a whole. The researcher named the combination of these frameworks an Integrated Digital Transformation Framework for Mining (IDTFM). The last proposition made in this research was that to embark on the digital transformation journey in the mining sector in the 4IR era requires the co-operation and participation of all stakeholders to ensure the successful implementation and adoption of digital technology initiatives. According to the findings, the following themes in terms of what may or may not lead to success emerged: Poor Change Management, Unclear Vision, Value Realisation, Stakeholder Involvement, and Ease of Use and Adoption. According to the findings gathered from the 14 respondents, it is evident that there is a clear understanding of what could lead to the failure of digital technology interventions within Company X. Respondents further echoed the importance of change management, vision, stakeholder engagement, the value brought by these technologies as well as the importance of Ease of use to drive adoption. The managers have a strong interest in the practicality of any IT system implemented to drive productivity and efficiency, and the ease of use of the system is an important factor for them as key stakeholders that need to drive these initiatives at the operations. 80% of all the respondents emphasised on the ease of use. 57% indicated the importance of stakeholder involvement, and further findings showed the significance of good change management is one of the driving factors for successful implementation and adoption. In addition to these findings, one of the two executives interviewed highlighted the importance of everyone understanding the vision of the company. Therefore, the third proposition is validated through the research findings and literature that any lack of effective stakeholder engagement when pursuing a digital transformation roadmap or efforts within a mining firm will lead to a lack of adoption and ineffective implementation. To link some of the findings to the literature, the Diffusion of Innovations Theory developed by E.M. Rogers in 1962, states that Innovation, communication channels, time, and social system are the four key components of the diffusion of innovations, and when promoting innovation to a target population, it is important to understand the characteristics of the target population that will help or hinder the adoption of the innovation. The Technology Acceptance Model (TAM) theoretical framework helps explain the usage of technology within a specific context, and the usage could either be the ease of use or the usefulness of that specific technology as perceived by the users (Venkatesh and Bala, 2008). Therefore, based on the 80% of the respondents believing that the ease of use of these technologies and the perceived usefulness in terms of practical application will lead to easier adoption indicates that TAM is accurate in the case of Company X. Therefore, the research further recommends the use and applications of these theories when embarking on the digital transformation journey of a mine. Further to these findings, the Diffusion of Innovations Theory has been used successfully in many industries including communication, agriculture, public health, criminal justice, social work, and marketing, therefore it can also be applied in a case of a mining firm to ensure adoption of innovations brought in the form of digital technology implementations. TAM is also applicable in the context of a mining firm and must be utilised. With the support of literature and the findings of the research, It is further recommended that the leadership team in a mining firm must create and follow an integrated digital transformation compass (Westerman, Bonnet & McAfee, 2014).Item Equalising taxing rights in the digitalised economy: an analysis of diverse tax practices implemented globally(2019) Forman, AshleighThere are limitations to the application of existing international tax laws as a result of digitalisation as these were formulated based on traditional ‘brick and mortar’ transactions. These laws are not well suited to the realities of the ‘modern way of doing business’ as they do not cater for business models which can generate returns from offering digital services in a jurisdiction without being physically present in that jurisdiction. Ultimately, if left unaddressed, these weaknesses threaten to expose tax authorities to erosion of national tax bases and profit-shifting manipulation (OECD, 2015b). The international tax framework needs to be responsive to the changing nature of global economies in the digital age. The tax framework should be able to accommodate new digital businesses which operate and create value in different ways (Saint-Amans, 2017). As a result, “there is a disconnect between where value is created and where taxes are paid” (European Commission, 2018b). In response to digitalisation, different jurisdictions have hastily imposed their own domestic tax practices to prevent further base erosion and to improve the collection of tax revenue (Petruzzi and Buriak, 2018). The OECD has attempted to address these tax challenges but has failed to provide clear guidance on taxing rights, as well as on how the profits should be allocated (Medus, 2017). The objective of this report is to summarise the tax practices implemented by the United Kingdom, the European Union, Italy and India in responding to the digitalisation of the economy. The aim will be met through a correspondence analysis between the different tax solutions implemented or proposed by these jurisdictions, and the problems identified in taxing the digital economy.Item A multidimensional analysis of the professional accountant’s ethical judgement and behavioural intentions(2019-02) Subramanian, KaveshanOrientation: The professional accountant’s ability regarding ethical decision-making has come under increased scrutiny within recent times. This is particularly relevant within the South African accountancy environment given the recent accounting scandals that surfaced during 2017 and 2018. For professional accountants to achieve the goal of serving the public interest, they are required to have a mindset that fosters ethical-decision making. Research aim: The primary aim of this study was to explore the different factors which influence ethical judgement and behavioural intentions of professional accountants and to investigate which are significant factors which influence ethical-decision making. Ethical judgment involves the ability of the participant to recognise the seriousness of an ethical conflict whereas ethical behavioural intentions focus on the willingness of the participant to behave ethically. The secondary aim of the study was to explore the effect of demographical characteristics on ethical decision-making. Motivation for study: From a South African perspective, it is critical to ensure that professional bodies who are tasked with developing the accounting profession as well as serving the public interest gain a better understanding of the different factors which influence ethical judgment and behavioural intentions of professional accountants. Research approach and method: This study used a multidimensional ethics scale (MES) to measure the significant considerations of professional accountants when faced with an ethical dilemma. A quantitative research approach was followed and a questionnaire based upon the MES and three tax related ethical dilemmas was used to gather data. To address the research aims of the study, two research questions were answered through hypothesis testing which involved both descriptive and inferential statistical methods. Main results: The primary results indicated that factors such as morality, fairness, justice and acceptability to one’s family play the most significant role in influencing the ethical judgement of professional accountants. In addition, it was found that egoism which prioritises the long-term self-interest of the professional accountant significantly influences their ethical behavioural intentions. Lastly, the secondary results indicated that demographical characteristics such as rank and highest qualification attained by professional accountants play an important role in influencing the mind of the professional accountant when faced with an ethical dilemma. Application: This study contributes to the existing body of research involving ethical decision-making of professional accountants. This is an important topic in the current discourse on accounting and amongst accounting professionals. Furthermore, the results of this study can also form the basis of a mechanism for change within professional accounting bodies (PAO’s). The results of this study can be applied to assist in re-aligning continuous professional development (CPD) programmes. Based on the results, professional bodies can shift their focus in terms of CPD’s towards prioritising public interest as a key consideration for current and future accountants. To this end, PAO’s and higher education institutions can use this contribution when designing a new syllabus which addresses the issues that arise around ethical decision-making. Contributions: Key conclusions of this study contribute to the understanding of professional accountants’ ethical judgment and behavioural intentions. The topic under investigation is in direct response to calls for increased research on ethical judgement and behavioural intentions of professional accountants. The results also contribute towards a better understanding of the effects of gender, rank and professional qualifications on ethical decision-making.Item A case study: an exploration of the implications of computer-assisted audit techniques on the audit approach in terms of the key elements of an assurance engagement.(2019-08) MacDonald, Darren KyleNot only has IT become more prominent in the business environment, but it has also expanded the available tools at the auditors’ disposal. These tools are more commonly known as CAATs. The implications of CAATs have not been addressed adequately in the academic environment. As a result, this leads to the purpose of this research report: to illustrate the implications of introducing CAATs in the audit process on the five key elements of an assurance engagement. A case study methodology has been selected to explore this audit approach in great detail by focusing on one client and its audit firm. This methodology has been chosen to illustrate the context of a computerised audit and its specific consequences over a period of time. As a result, this study has managed to demonstrate the benefits from introducing CAATs throughout each key area of the audit process. In order to achieve these benefits, the auditor needs to consider several matters to ensure an efficient IT-based audit is realised.