Faculty of Commerce, Law and Management (ETDs)

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    The effects of ethical business practices on the profitability of firms
    (University of the Witwatersrand, Johannesburg, 2021) Kasiyamhuru, Iris; Seely, Derek
    In the last decade, many South African Corporates have been implicated in a series of scandals involving unethical behaviour. The resulting losses and loss of reputation that have occurred, have caused business ethics to gain prominence. This study aims to identify how ethical business practices influence company profitability, in an attempt to inspire organisation leaders to act ethically and in turn, preserve the long-term profitability of companies. A qualitative research methodology using semi-structured interviews was used. Data was collected from a convenience sample of 12 participants comprising C-suite employees and senior finance professionals in Corporates. The findings suggest that corporate leaders have a pivotal role to play in shaping ethics in an organisation. Furthermore, not only should leaders role model the desired ethical behaviours, but they should also see to the fact that necessary resources, systems and processes are put in place for ethics to prevail. Ethics is the responsibility of everyone within an organisation, with leaders leading from the front. The findings suggest that ethical business practices towards various company stakeholders safeguard the profitability and sustainability of a business in the long run
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    Marketing strategy and business profitability in the South African FMCG industry
    (University of the Witwatersrand, Johannesburg, 2023) Lephoko, Thembelihle Philladelphia; Quaye, Emmanuel
    This paper reviews the lay of the land of the FMCG Industry and identified technological challenges, intense competitor rivalry, and evolving consumer needs and demands as contributors that need to be considered during decision-making and marketing strategy development; an important force behind companies delivering profits. Big data analytics has gained widespread recognition as a revolutionary technology in both the academic and business arenas. With more companies launching initiatives dedicated to its implementation, there is still a lot of doubt regarding its potential to transform its operations. Through a literature review, the study revealed key factors of big data analytics and marketing strategy that influence profitability for South African FMCG companies, and it was furthe underpinned by a conceptual framework to test the relationship between the identified factors and profitability, all in the effort to implement the identified factors and constructs effectively. A cross-sectional quantitative study was executed to establish whether big data analytics has a significant relationship to profitability, furthermore, the study tested the usefulness of big data on marketing strategy as well as the rate at which it impacts profitability. The study was conducted on 150 individuals, with 88.1% of them being marketing professionals. SPSS was used as a statistical tool to test the hypotheses that were identified through the literature review. The key findings of this study recommends that FMCG companies focus their efforts on adopting an organizational culture that supports the usage and adoption of big data in decision-making, underpinned by the right technical and managerial skills to extrapolate actionable insights from the data, and forming them part of the marketing strategy process. The findings of the study will open South African FMCG companies’ eyes to the capabilities and benefits of big data and how their marketing strategies can be enhanced for greater organizational impact
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    Determinants of Growth and Profitability of the Aviation Industry
    (University of the Witwatersrand, Johannesburg, 2023) Sepeng, Reabetswe Tiisetso; Odei-Mensah, Jones
    Despite the recent decrease in growth rates, there has been a significant growth in the airline industry over the years which is evident in the increase in the number of passengers and networks before the Covid-19 pandemic, thus making the growth attributable to the increase in people’s propensity to fly. In this study, the performance of airline industries is measured in terms of the growth rate and the profitability for each region within emerging markets, namely: Africa, Asia-Pacific, Middle East, Latin America, North America and Europe. Due to a constraint in data availability, the duration of interest is between 2009 and 2017, thus excluding the effects of the covid-19 pandemic which took place in 2020. The problem this study addresses is the discrepancy identified between the growth statement made in the global context and what has been observed in emerging markets. This is done by assessing how some of the determinants that have been reported in the literature to fuel growth and profitability, affect airline companies and by investigating the relationship between the profitability and growth of airline companies in the context of emerging markets. Three different methods were used to achieve the research objectives of this study, namely: correlation, Granger causality and regression analysis. In response to the first research question, it was found that oil price fluctuations, GDP, passenger yield, size and liquidity have an effect on the growth of airline companies in emerging markets while only liquidity and fleet size to a smaller extent, have an effect on the profitability thereof. In response to the second research question, it was found that there is no significant relationship between the growth and profitability of airline companies in emerging markets. The recommendations made in the study include using a dynamic panel approach for any further research in order to increase the robustness of the study and to reduce any issues associated with endogeneity. In terms of policy and/or management recommendations, depending on the management strategy in place, the determinants should be prioritizedbased on whether the chosen business model is in pursuit of growth or profitability since the study has shown the relationship between these to be insignificant for airline companies in emerging markets
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    Credit growth and its impact on profitability and liquidity in the local Banking Industry of South Africa and the United Kingdom
    (University of the Witwatersrand, Johannesburg, 2022) Pillay, Melissa Dianne; Van Wyk, Liandi; Gomez , Samantha
    The study aims to review the impact of credit growth on local bank profitability and liquidity in both South Africa (SA) and the United Kingdom (UK) between 2015 and 2020. A quantitative approach is used in the study, using descriptive statistics and panel regression analysis. The sample data were extracted from The Banker database; this is a key source of data and analysis for the world’s banking sector, South African Reserve Bank (SARB), Statistics SA, and Trading Economics. Explanatory variables for profitability in the panel regression analysis include return on average assets (ROAA), return on average equity (ROAE), total assets, equity assets, loan assets, cost- to-income, Gross Domestic Product (GDP) growth rate, Herfindahl-Hirschman Index (HHI), consumer price index (CPI), the interest rate on loans, interest rate margin (IRM), unemployment rates, and credit growth. Explanatory variables for liquidity in the panel regression include ROAE, total assets, equity assets, GDP growth rate, CPI, interest rate on loans (IRL), IRM, unemployment, and credit growth. The findings indicate that credit growth is insignificant for bank profitability and liquidity in SA and the UK, so no relationship exists. The main issue is not credit growth per se but the combination of high credit growth, low provisioning, and looser lending. Based on the findings, a negative relationship exists between cost-to-income and bank profitability, reflecting that a higher cost-to-income ratio does decrease bank profitability in both SA and the UK. Other variables for SA were statistically significant: equity assets, total assets, the cost-to-income ratio, and GDP growth rate. In the UK, the following other variables were statistically significant: loan assets, total assets, cost-to-income, GDP growth rate, HHI, ROAE, CPI, and IRM. Further research can focus on expanding the period and the countries reviewed to assess credit growth in more depth.
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    Factors affecting SMEs growth in Lesotho
    (University of the Witswatersrand, Johannesburg, 2023) Ramosoue, Liteboho Christina
    Orientation: SMEs are considered the main drivers behind the economic systems in both developing and developed economies However, SMEs are prone to the factors that preclude their growth. These factors include the challenge of access to finance, which is renowned to threaten SMEs continued growth and long-term sustainability. Motivation of the study: Likewise, in Lesotho, SMEs are considered crucial drivers towards achieving socio-economic objectives. However, according to the World Bank, the SMEs in Lesotho fail to contribute to the socio-economic objectives as per the expectations, hence the motivation to determine the challenges faced by SMEs, and how they preclude their growth. Purpose of the study: The objective of this study is to determine the impact of the challenge of access to finance on the growth and profitability of SMEs in Lesotho. Methodology: The study adopts a quantitative approach and utilises a survey questionnaire for data collection. A sample of 400 SMEs was selected using a simple random sampling technique from a population of 76 000 SMEs in Lesotho. The data collected was analysed using Multiple Linear Regression Analysis. The key findings: The study findings revealed that there is an insignificant negative relationship between collateral security requirement, interest rates and SMEs sales growth, and a significant negative relationship between the business plan requirement and SMEs sales growth. It also showed that there is a significant negative relationship between collateral security requirement and SMEs profitability, and an insignificant negative relationship between the business plan requirement, interest rates and SMEs profitability