African Business Environment Research Articles

Policy uncertainty, mergers, and acquisitions in the South African business environment

ABSTRACT This study examines policy uncertainty on mergers and acquisitions (M&A) in South Africa, emphasising the extensive regulatory review by the Competition Commission under the ‘public interest consideration’ criterion. It aims to identify the cost implications and uncertainties associated with M&A transactions to propose measures to reduce these uncertainties. Utilising qualitative methodologies, the study gathers empirical evidence through interviews with companies and competition lawyers involved in the M&A processes. The findings reveal significant concerns about economic uncertainty, merger control, and policy and regulation impacting investment decisions. Policy uncertainty, particularly in the context of merger regulation, imposes substantial cost implications and delays on M&A activities, negatively affecting investment, growth, and economic development. It emphasises the necessity for a regulatory framework that minimises disruptions and costs to business participants. The findings suggest that addressing policy uncertainty and streamlining regulatory processes are crucial steps towards enhancing South Africa's attractiveness as an investment destination and fostering economic growth and development.

Business environment and adoption of AI: Navigation for internationalization by new ventures in emerging markets

AbstractThis study explores the intersection of international business and artificial intelligence (AI), focusing on how new ventures navigate environmental challenges for international expansion within Africa's transportation sector. Despite a wealth of literature on AI in developed countries, a notable gap exists in the understanding of the challenges emerging economies face in implementing AI practices, particularly in the context of Africa‐to‐Africa internationalization. The current study delved into the transformative potential of AI, identifying institutional voids as opportunities for innovation on the continent. Employing the Technology Organization and Environment framework, the study investigated the adoption of AI technology in the African business environment. Qualitative data gathered through interviews with transport tech startup founders across Africa provided insights into technological innovation, institutional dynamics, and market peculiarities. The founders recognized hurdles such as data scarcity, human resource constraints, and regulatory obstacles amid institutional voids. The study underscores the importance of understanding expectations, balancing possibilities and realities, and fostering collaboration. It offers valuable insights into the complexities faced by and opportunities for new ventures leveraging AI in internationalization, with practical implications for strategic AI implementation, policy development, market expansion, technology solutions, and cross‐border transportation within Africa's unique business landscape.

Business analytics in CRM: A comparative review of practices in the USA and Africa

In the dynamic landscape of global business, Customer Relationship Management (CRM) has emerged as a crucial strategy for organizations aiming to enhance customer satisfaction and loyalty. This study delves into the realm of Business Analytics (BA) within CRM, examining the diverse practices employed in the USA and Africa. The purpose is to identify similarities, differences, and potential areas for improvement, with the overarching goal of fostering more effective CRM strategies. The American business landscape, characterized by advanced technological infrastructure and matured data analytics capabilities, provides a fertile ground for sophisticated CRM practices. A comprehensive analysis of leading companies in the USA reveals a strong reliance on predictive analytics, machine learning, and artificial intelligence to glean actionable insights from vast datasets. Such approaches empower organizations to personalize customer experiences, optimize marketing strategies, and drive overall business growth. In contrast, the African business environment exhibits unique challenges and opportunities. While certain regions may face infrastructural constraints, innovative CRM practices tailored to local contexts are emerging. This study sheds light on the utilization of mobile technology, social media analytics, and localized data collection methods as crucial tools in the African CRM landscape. These adaptive strategies not only address challenges but also present opportunities for leapfrogging traditional CRM models. The comparative review uncovers key areas of convergence and divergence between the two regions, highlighting the need for a nuanced approach to global CRM strategies. By synthesizing insights from the USA and Africa, organizations can develop a more holistic understanding of effective CRM practices. This research contributes valuable insights to the ongoing discourse on global business analytics, offering a roadmap for organizations to navigate the intricacies of CRM implementation in diverse and dynamic markets.

COLLABORATIVE APPROACH TO FLEXIBILITY, VISIBILITY AND VELOCITY IN SUPPLY CHAINS: A MULTI-GROUP ANALYSIS

Most studies focus on developed economies when investigating resilience, creating a gap in research in developing countries. This study addresses two literature gaps by examining supplier collaboration's effect on supply chain flexibility, visibility, and velocity in an African business environment and assessing the relevance of company size to this relationship. This study used a descriptive design. The population and sample were 1332 and 264 respectively. 219 questionnaire copies informed the analysis and it was performed using percentages and a structural equation model. The study reveals that resource sharing is the most effective strategy for improving supply chain resilience and collaboration practices are most effective for supply chain flexibility. Organisations pursuing supply chain resilience can implement resource-sharing and information-sharing strategies to yield resilience. Additionally, managers must note that supplier collaboration may not yield similar results across all resilience performance measurements. Medium-scale firms must focus on information sharing to improve supply chain flexibility.

Interne sosiale verantwoordelikheid as beeldhouer in organisies

Alvin Toffler from "Future Shock" (1982) fame may be regarded as the futurist who gave renewed impetus to social responsibility. Big business has marked social responsibility as a priority on their business agenda. Successful organisations, such as the Anglo-American Corporation, Barlows, Murray and Roberts, and food chains like Checkers and Pick-n-Pay realise that profits cannot be the sole aim of business anymore. The Southern African business environment is complex. It has numerous socio-economical and political problems. In order to survive in this environment, business needs a market Ing and business philosophy which Incorporates and solves these issues. People should be regarded as the most important as set of business. By practising social responsibility, business helps people to help themselves. A positive effect this has brought about is that it creates a favourable image of the organisation among external publics in society (Cutlip and Center, 1988). The question is whether the same principle can be applied to the building of positive images among employees in organisations. In other words, what about an internal form of social responsibility?

COMPETENCY~BASED APPROACH TO COMMUNICATION MANAGEMENT AS APPLIED TO THE SOUTH AFRICAN BUSINESS ENVIRONMENT

Change in the external environment, without exception, impacts upon the organisation and in particular the practising of public relations. Since the beginning of the nineties, the South African business environment Is characterised by the redefinement of business practices and partners and the shifting of boundaries as an expression of the globalization of the world economy. The lifting of sanctions, together with the events that took place in the political arena, introduced unprecedented changes in the legal-political, economic and social environments. Against this background, an urgent need for the development of a context sensitive generic framework of required outputs for communication managers in a changing business envlronment, based on an integrated approach, was identified. This article provides an overview of the dynamics of change in the external environment and the impact it has on the public relations function. A brief discussion regarding standard setting as envisaged by the National Qualifications Framework (NQF) and the professionalisation of public relations, with specific reference to training needs and accreditation, is included. The article also attempts to provide Insight into the empirical process that led to the development of a generic framework and the hierarchial classification of outputs according to levels of work.

The impact of organisational culture as a context of interpersonal meaning on the management of organisational diversity

Changes in the South African business environment is placing South African businessorganisations under increasing pressure to move toward democratic, non-racial andfully representative organisational structures. In an attempt to accelerate this process,companies are embarking on affirmative action and black empowerment programmes inorder to develop previously disadvantaged groups and to assimilate these groups intoexisting organisation cultures. The results of these efforts are viewed with interest andscepticism. This article explores the link between organisational communication andsuccessful diversity management. An overview of existing literature indicates thatsuccessful diversity management is facilitated by communication processes throughwhich sufficient shared or negotiated meaning and agreed upon language and behavioursappropriate to the workplace are constructed. This article explores the importance ofinterpersonal communication in organisational sensemaking through the framework ofthe Schemata Model of Interpersonal Communication in Organisational Contexts. Theresults of the empirical research indicate that individuals’ experiences of theorganisational culture as a context for the construction of meaning, are more importantto diversity management than individual value differences as a result of diversity interms of age, gender or race.

The impact of the South African business environment on SMEs trade credit management effectiveness

Background: Given that the impact of the South African business environment on small and medium-sized enterprises’ (SMEs) management of trade credit is largely unknown, this article argues that certain internal or external business environment variables could significantly impact SMEs’ management of trade credit effectiveness, making it necessary to ask the impact of business environment in South Africa on SMEs’ trade credit management effectiveness.Aim: To determine the impact of internal (managerial competencies, collateral, financial and business information and networking) and external (legal system, ethics, macroeconomy and corruption) business environment variables on SMEs’ management of trade credit effectiveness.Setting: This study was conducted by administering an online questionnaire.Method: Quantitative research design with purposive sampling as the sampling method, administrated to 10 450 SMEs within South Africa.Results: The results reveal several internal (5) and external (4) business environment factors significantly impacting SMEs’ effectiveness in managing trade credit.Conclusion: The article reveals how internal and external business environment factors contribute to increased SME effectiveness in managing trade credit and, in so doing, helps mitigate financial problems associated with SMEs’ trade credit as a result of asymmetric information such as adverse selection, moral hazard and credit rationing, while also understanding the significance of corruption on SMEs’ effectiveness in managing trade credit.

Examining the dominant models and theories of international staffing policies and practices through the lenses of the African context and Chinese multinational construction enterprises in Africa

ABSTRACT International staffing policies and practices of Chinese enterprises in Africa have given rise to a number of observations, critical comments, empirical support and rebuttals. One of the areas of research and critique has been the implications of the staffing policies and practices for knowledge and skills transfer to their African hosts. The availability of local skills and talent as constraints to change employment practices by Chinese enterprises has also received attention of researchers. We argue that the dominant international staffing models and theories are inadequate for a comprehensive understanding and critiquing of staffing practices of Chinese MNEs in Africa. Therefore, this paper adopted Zoogah, D. B., Peng, M. W., and Woldu, H. (2015a. Institutions, Resources, and Organizational Effectiveness in Africa. Academy of Management Perspectives, 29(1), 7–31) dynamic African business environment context to interrogate the utility of the dominant international staffing models and theories in order to understand and explain Chinese staffing policies and practices in Africa. The paper also used Chinese Multinational Construction Enterprises (CCMNEs) as a lens through which to examine the relevance of the African context. The paper advances a series of questions to guide future research. We argue that if pursued, the questions can help further our understanding of why the staffing policies and practices of multinational companies from emerging economies in Africa might focus on recruiting PCNs and the casualization of African workers.

The Barriers to High-Growth Enterprises: What Do Businesses in Africa Experience?

This study examines the challenges that micro, small and medium enterprises (MSMEs) face and provide insights on African business environment and entrepreneurial ecosystem. In the context of growth-oriented entrepreneurship, good policies and favourable institutional environments support firms' growth, productivity and development, while adverse formal and informal institutions constrain business development. Secondary data from World Bank Enterprise Survey (WBES) was used to capture barriers to entrepreneurship and high-growth opportunities which include – lack of finance, lack of innovation and technology, low skilled workforce, poor infrastructure, unfavorable regulations and more pervasively corruption. These barriers are evident in the micro, meso and macro environments. These have implications on the unemployment rate, poverty rates and economic growth of the African region.
 Keywords: Micro, Small and Medium Enterprises; Entrepreneurial Ecosystem; African Entrepreneurship; African Business Environments.

Organisational agility, business best practices and the performance of small to medium enterprises in South Africa

Background: Only one in 10 newly established business enterprises survives for longer than 10 years in the South African business environment. The primary reasons behind the demise of these small enterprises include the lack of access to financing, lack of financial and managerial skills, lack of expertise, as well as economic factors such as poor sales and weak growth prospects. The new norm in industrial markets is that business organisations must possess a remarkable amount of agility to survive and succeed. Success is important for South African small- and medium-sized enterprises (SMEs) given their significant contributions to the national economy.Objectives: This study investigated the connection between organisational agility, business best practices and the performance of SMEs in South Africa.Method: A quantitative approach using the cross-sectional survey research design was employed in which a structured questionnaire was administered to 564 randomly selected owner-managers of SMEs. Hypotheses were tested using the structural equation modelling procedure, which was conducted after implementing a confirmatory factor analysis to test the psychometric properties of the measurement scales.Results: Hypotheses tests indicated that the four business best practices, namely, technology capability, collaborative innovation, organisational learning and internal alignment, exerted a significant positive influence on organisational agility. Also, organisational agility exerted a significant positive influence on business performance.Conclusion: The study demonstrates that the performance of SMEs can be improved significantly through a proper alignment between the four business best practices considered in this study. Improving the level of organisational agility in SMEs is also important in stimulating their performance. The results of the study can be applied to assist SMEs to survive and flourish in turbulent and dynamic markets, where agile organisational abilities are a requirement for success.

The significance of electricity supply sustainability to industrial growth in South Africa

Objective: The South African business environment is characterized by supply uncertainties, which have large economic implications on the country’s capacity to achieve its industrial goals. South Africa’s industrial decline and falling economic growth is directly associated with decreasing electricity sustainability, as the industrial sector is the main economic contributor to South Africa’s GDP. This study aimed at indicating the nexus of electricity supply and industrial growth in South Africa and to appraise the effects of unsustainable supply on industrial operations. The study also assessed industrial and administrative efforts towards sustainable supply of electricity for industries. Methods: The empirical research utilized a quantitative research design. The study geography was focused in the Gauteng and North West provinces of South Africa. A purposive-convenience sampling was utilized. However, quota-sampling guidelines were considered in targeting actual participants. Enterprises across the service, manufacturing and mining industries were sampled. Descriptive and Bivariate statistics were performed. Findings: Results reflected unsustainable electricity supply for the industrial sector and the poor sustainability has an impact on the industrial growth in South Africa. Results also note that most enterprises is challenge in instituting mitigation strategies such as Small, Micro, Medium Enterprises (SMME’s) across industries. The phenomenon tends to impact electricity intensive and non-electricity-intensive industries differently. Conclusions: The public sector should apply the good governance framework to ensure policies that will priorities electricity supply sustainability to industries. Enterprises are also advised to institute mitigation mechanisms.

Corporate social responsibility initiatives and its impact on social license: some empirical perspectives

PurposeThe purpose of this study is to understand the driving forces of corporate social responsibility (CSR) initiatives in organizations and how these social initiatives influence organizations’ “license to operate” using data from the Ghanaian business environment.Design/methodology/approachThis study used purposive sampling with a well-structured questionnaire as a data collection tool. Partial least squares-structural equation modeling was used to study the driving forces of CSR initiatives in organizations and how these social initiatives influence their social license.FindingsThe findings indicate that CSR initiatives are driven by the normative, mimetic, investors and community pressures. The regulative pressure has no significant effect on CSR initiatives. The authors found no difference between the services and the manufacturing sectors as far as the results are concerned using multi-grouping analysis.Research limitations/implicationsFrom the results, the importance of normative, mimetic, investors and community pressures as the driving forces of CSR are established. The finding indicates that CSR demands by suppliers, customers the extent to which organizations perceive their competitors have benefited from initiating CSR are benefiting, the willingness of investors to invest in companies whose CSR activities are best and the opinion on the extent to which the District Assembly and the Chief Executive in the district, the Chiefs, the Churches, the Opinion leaders have significant impact on CSR initiatives.Practical implicationsThe results indicate the need for suppliers and customers to continually demand from corporations to initiate CSR activities as organizations seem to respond to these pressures, and these initiatives are also likely to be mimicked by other organizations in the same industry to enable this drive the social responsibility agenda. Investors and community members are also encouraged to invest and accept, respectively, organizations with very good CSR records to send a signal to companies who see CSR as a cost instead of performance enhancement.Originality/valueThe work illustrates and provides some insights and builds on the literature in the area of CSR from a developing country’s environment. This is also one of the few works that investigate the driving forces of CSR and social license using the institutional theory based on data from the African business environment.

The Moderating Role of Affective Interpersonal Conflict on Managerial Decision-making and Organizational Performance in Private Sector Organizations: A Study of Ghana

ABSTRACTThe issue of interpersonal conflict has been a thorny issue in high-power distant environments due to disagreement and divergence of superior and subordinate views resulting from managerial decision-making. This work looks at the moderating role of affective interpersonal conflict on managerial decision-making and organizational performance. A quantitative methodology was used to sample 197 managers from 10 private sector organizations in Ghana. By means of structural equation modeling and hierarchical regression, findings showed that there is a significant positive relationship between managerial decision-making and how organizations performance. Findings also showed that there is a negative relationship between affective interpersonal conflict and organizational performance. Our major finding revealed that affective interpersonal conflict moderates the relationship between managerial decision-making and organizational performance. The article recommends prudence in decision-making by managers in the sub-Saharan African business environment. Prudent decision-making by managers is akin to ethical decision-making, which resides in moral and theological philosophies that are fundamentally in the realm of management and business and are also concerned with explaining and predicting employees’ actual behaviors.

Business dynamics, knowledge economy, and the economic performance of African countries

This paper develops a framework (a) to examine whether or not the African business environment hinders or promotes the knowledge economy (KE), (b) to determine how the KE affects economic performance, and (c) how economic performance relates to the inequality-adjusted human socioeconomic development (IHDI) of 53 African countries during the 1996-2010 time period. We estimate the linkages with three related equations. The results support a strong correlation between the dynamics of starting and doing business and variations in KE. The results also show that there exists a weak link between KE and economic performance. Nonetheless, KE-influenced performance plays a more important role in socioeconomic development than some of the conventional control variables like foreign direct investment (FDI), foreign aid, and even private investment.

The Endogenous African Business: Why and How It Is Different, Why It Is Emerging Now and Why It Matters

ABSTRACTAfrica is currently undergoing a transition that is unprecedented in its history. For the first time, the demand of urban populations pulls business development, thus creating economies with higher levels of specialization than before. This essay highlights the phenomenon of the endogenous African businesses that are arising in this process. These businesses tap into the natural resources and the social, economic, and cultural systems that build upon them. These resources and systems make the African business environment different from business environments in other parts of the world. Furthermore, the endogenous businesses have access to knowledge on how to manage modern businesses in the formal sector of the economy. In combination with African resources and systems, such knowledge enables them to create and sustain and competitive advantage in modern dynamic marketplaces. Endogenous African businesses are important because they have the potential to fuel economic growth, to revitalize rural areas, to contribute to food security and healthy diets, and to provide role models of which Africans can be proud. Hence, these businesses deserve our attention in the next two decades of scholarly research and education on African business.

Business Dynamics, Knowledge Economy, and the Economic Performance of African Countries

This paper develops a framework (a) to examine whether or not the African business environment hinders or promotes the knowledge economy (KE), (b) to determine how the KE affects economic performance, and (c) how economic performance relates to the inequality-adjusted human socioeconomic development (IHDI) of 53 African countries during the 1996-2010 time period. We estimate the linkages with three related equations. The results support a strong correlation between the dynamics of starting and doing business and variations in KE. The results also show that there exists a weak link between KE and economic performance. Nonetheless, KE-influenced performance plays a more important role in socioeconomic development than some of the conventional control variables like foreign direct investment (FDI), foreign aid, and even private investment.

Implementation of environmental management practices in the Ghanaian mining and manufacturing supply chains

PurposeThe purpose of this paper is to understand the driving forces of environmental management practices in mining and manufacturing firms using data from Ghana.Design/methodology/approachPrior exploratory factor analysis and structural equation modeling, based on questionnaire survey data, were used to study the driving forces of environmental management practices in the extractive and manufacturing firms using institutional theory.FindingsEnvironmental management practices by organizations in Ghana are driven by regulatory and the mimetic pressures. Normative pressure has no significant effect on environmental management practices. The authors found no difference between the extractive and the manufacturing sectors as far as the results are concerned.Research limitations/implicationsThe results indicate the importance of regulatory bodies in developing good environmental policies that are implemented and monitored in order to achieve improved environmental performance. Effective implementation of environmental policies is likely to motivate other firms to mimic the actions of implementing organizations. One limitation of this work is the use of data from Ghana. It is important for other researchers to assess these relationships using data from a wider geographical area.Practical implicationsThe results indicate that organizations implement environmental management practices as a result of coercive and mimetic pressures. In practice, it is therefore important for the regulatory bodies, such as the Environmental Protection Agency Ghana, to be very innovative in developing good environmental regulations that are monitored to ensure implementation by all polluting sources. This is because the results indicate that the monitoring of regulations by regulatory bodies seems to be connected to the implementation of these regulations. Such implementation is also expected to be benchmarked by other firms, thereby influencing the “greening” agenda in Africa.Originality/valueThe study illustrates and provides some insights, and builds on the literature in the area of green supply chain strategies for a developing country’s environment. This is one of the few studies that investigate the driving forces of environmental management implementation using the institutional theory based on data from the African business environment.

What are the indicators of a successful business rescue in South Africa? Ask the business rescue practitioners

Background: Business rescue, in terms of Chapter 6 of the Companies Act No 71 of 2008, is still relatively new to the South African business environment. The need for a successful business rescue regime is beyond doubt. However, a consistent manner to measure the success of the regime has not been determined. Previous research into possible indicators of business rescue success was based on a review of international business rescue regimes that share the same underlying philosophy as the South African business rescue regime. Aim and Setting: This study extends previous research efforts by soliciting the opinions of 16 South African, senior business rescue practitioners on the indicators of business rescue success. Method: The researchers used a qualitative research approach. The Delphi research technique was used to gather qualitative and quantitative empirical data from business rescue practitioners. Results: The experts reached a high level of consensus on various indicators of a successful business rescue. Most notable are that business rescue should save as many jobs as possible and that the actual outcome should be compared to that estimated in the business rescue plan. A novel indicator of success is the business rescue points saved or rescued, when using the public interest score. Conclusion: The study makes a valuable contribution to the debate on what constitutes a successful business rescue by adding the considered opinion on indicators of success by one group of experts in the field of business rescue, namely senior business rescue practitioners.

FACTORS AFFECTING THE INVESTMENT CLIMATE, SMES PRODUCTIVITY AND ENTREPRENEURSHIP IN NIGERIA

In Nigeria, most of businesses operate in the form of Small and Medium Enterprises (SMEs). SMEs play a significant role in the economic development of many nations. This paper employs current perspectives to examine the factors affecting investment, productivity and growth of SMEs by employing the World Bank Enterprise Survey in Nigeria. It explored five main factors affecting investment and productivity in Nigeria as follows: education of the labour force, access to infrastructure, access to finance, size of firms and other business climate variables. Other business climate variables are insecurity, bribe or corruption, the amount of time that businesses spend dealing with government regulation, poor power availability, etc. In a survey of 2,676 firms, access to finance (33.1%), access to electricity (27.2%) and the level of corruption (12.7%) were the most ranked obstacles for business owners. By employing the World Bank Enterprise Survey, this paper presents and analyses the business environment challenges at the national level. Keywords: SMEs, Enterprise, Productivity, Sustainability and African Business Environment.