A framework for the turnaround of state-owned companies in South Africa

dc.contributor.authorMutamba, Jeremiah
dc.descriptionA thesis submitted to the Wits Business School, Faculty of Law, Commerce & Management University of Witwatersrand, Johannesburg In partial fulfilment of the requirements for the degree Doctor of Philosophy in Management, 2020en_ZA
dc.description.abstractOrganizational decline is increasing globally, particularly following the 2008 global economic downturn. This is affecting both the private and public sectors. The solution to these challenges lies in responsive and sustainable turnaround programs. The turnaround concept came to the fore in the 1970s with the seminal work of Schendel and colleagues. Although growing, turnaround research has mainly focused on developed economies and the private sector. Limited research has been done in Africa, South Africa, and on state-owned companies (SOCs). Research gaps have been identified, highlighting lack of understanding, experience, and grounded knowledge on public sector turnaround. The gaps are attributed to conceptual misunderstanding; lack of empirical research and theorizing; and research fragmentation, inadequacy, contradiction, and inconclusiveness. This study contributes towards addressing the research gaps by identifying key drivers for the successful turnaround of declining South African SOCs, establishing how the drivers compare with drivers for private sector and the turnaround drivers for developed economy firms. Using the findings, the study develops a pragmatic turnaround framework to guide practitioners in crafting and implementing responsive turnaround programs and strategies for distressed SA SOCs. The study followed a qualitative approach, using a critical realist paradigm. The study used two data sets, documentary data and interview data collected through semi-structured interviews. Thirty-five participants selected from former board members and executives of SA SOCs and private firms participated in the study. The study identified 25 turnaround drivers as key to the successful turnaround of declining SA SOCs, all verified as significantly influential in the turnaround of SA SOCs. Thirteen drivers were found to impact at policy level, with 20 drivers influencing at operational level. Also, 17 drivers were found in existing literature, and corroborated by study findings. The study identified 8 new drivers; these drivers were influenced by the South African business context. These drivers include a capable leadership, a stable turnaround leadership, ability to manage political power, ability to influence politically-linked unions, sound governance, and implementation of designed strategies. Using the study outcomes, the study developed a drivers-driven turnaround framework useful in guiding South African SOCs turnarounds. A key element of the framework is securing of strategic alignment between turnaround leadership and the Executive Authority to create a positive power-governance microcosm in the SOC. The framework underscores the significance of a conducive power-governance microcosm within the SOC; allowing for the turnaround leadership to focus their energies on the turnaround of the distressed SOC. Critical to achieve this is the leadership’s ability to manage political power - one of the key drivers identified. The framework was successfully tested using two successful turnaround SOCs as well as inputs from unsuccessful SA SOC turnaroundsen_ZA
dc.facultyFaculty of Commerce, Law and Managementen_ZA
dc.rights.holderUniversity of the Witswatersrand, Johannesburg
dc.schoolWits Business Schoolen_ZA
dc.subjectState-owned Companies
dc.subjectprivate and public sectors
dc.subjectResponsive and sustainable turnaround programs
dc.subject.otherSDG-8: Decent work and economic growth
dc.titleA framework for the turnaround of state-owned companies in South Africaen_ZA
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