Compliance with Broad-Based Black

Abstract

In today’s competitive global market organisations strive to maximise market share. Therefore their strategy is seen as one of the main driving forces guiding them in this quest (Reddy 2003). Various pieces of legislation has been introduced which affects an organisation’s strategy. This legislation is governing the one thing entrepreneurs and business owners pride themselves in, namely ownership and control over their organisations. Legislation has further marginalised those with skills as they do not fit into the preferences and designated groups as stipulated within several of these legislations and Act’s. This is the reality facing both local and multinational organisations wanting to do business in South Africa. The question to be answered is; how are they dealing with this and how has it affected their respective strategies? South Africa has emerged from an Apartheid history riddled with oppression of people based on skin colour. The new democratically-elected dispensation is therefore saddled with the task of correcting the wrongs of the past in order to address issues such as the need for job creation and poverty eradication. This is where the Broad-Based Black Economic Empowerment (B-BBEE) Act 53 of 2003 comes in. Balshaw and Goldberg (2005) noted that the B-BBEE Act is arguably the one item affecting the strategy of organisations wanting to do business in South Africa. Balshaw and Goldberg (2005) further noted that the BBBEE Act touched on the sensitive issue of ownership and control with business owners. The motivating idea of B-BBEE is to provide organisations with a framework to work in to allow them to assist government with transformation within the country. This research set out to identify how multinationals are dealing with the seven elements of the B-BBEE Act in order to ensure compliance. iii A qualitative approach using in-depth interviews was followed to collect data to analyse and build a picture of the various practices and strategies employed in pursuit of compliance. The key findings are that multinationals have modified their strategies and prioritised ensuring compliance with the B-BBEE Act. There appears to be sincerity behind the efforts, although some of their actions are questionable. There are three urgent actions for government and the Black Economic Empowerment (BEE) Advisory Council; it needs to investigate the allegations of unscrupulous acts taking place within industry and to review what the B-BBEE Act is measuring and whether or not this is contributing to the unscrupulous behaviour as indicated in the findings. In addition, there is a need for more visible policing to ensure purported compliance is in fact compliance in the true spirit of the Act. The key message to be taken away from the research is that the B-BBEE Act is effective and is making a difference, but that there is room for improvement. As stated by United States president, Barack Obama, during his election campaign: “Together We Can”. This statement has profound meaning in the South African context as it motivates that together the population of this country can create history through transformation and future economic growth. Charles Darwin said, “It is not the strongest species that will survive, nor the most intelligent, but the one most responsive to change.” Therefore organisations that commit to and implement change in alignment with the BBBEE Act will surely prosper in the future.