African Business Research Articles

Potential Constitutional Concerns regarding Employees’ Rights during Business Rescue Proceedings

The South African business rescue procedure has not yet been adequately tested against the Constitution of the Republic of South Africa, 1996. In particular, the extent to which company stakeholders could raise constitutional rights to litigate against companies placed under business rescue is not clear. This contribution discusses the apparent tension between the ideal of providing business rescue practitioners the breathing space to attempt to rescue companies and the desire of the employees of those companies to litigate against such companies when they are placed under business rescue. It appears that generally, courts seem to be of the view that the moratorium established in chapter six of the Companies Act 71 of 2008 is broad enough to include employment-related disputes and that during the period of business rescue, employees are not permitted to litigate against their employer companies. Nevertheless, it would also appear that courts have not adequately considered how this moratorium should be balanced with employees’ constitutional rights, like the right to fair labour practices, social security and equality, and whether the moratorium legitimately and reasonably prohibits employees from protecting these rights by approaching courts during business rescue proceedings. It is argued in this contribution that either the courts or the legislature should provide clarity on the matter.

Innovation activities of informal micro-enterprises in Gauteng, South Africa: A systematic review of the literature

The literature revealed that 70–80% of South African small businesses, including informal micro-enterprises, fail in the first year of their existence. Innovation has been recognized as a catalyst that can enhance informal micro-enterprises’ probabilities to survive and transform them from survivalists to sustainable businesses that grow the economy and create jobs. As far as it can be reasonably determined, there has not been a systematic review of the literature on innovation activities of informal micro-enterprises in the Gauteng province, South Africa. This study aims to present a systematic review of the literature, as well as research gaps identified in the literature, and future research opportunities. This paper thus systematically reviews the literature on innovation activities of informal micro-enterprises in the Gauteng province. The study revealed that the innovation capacity of informal micro-enterprises is severely hampered by innovation tradition and social tax. Subsequently, informal micro-enterprises engage less in innovation activity and those that do innovate often engage in incremental rather than radical innovation. Radical innovations are more crucial than incremental innovations. Thus, there is a need for researchers and government organizations to establish initiatives that can aid the informal micro-enterprises to engage more in radical innovation.

On the Emergence of Russian-South African Business Links. Allan Bowe, Faberge’s Business Partner

Allan Bowe, a Cape-born entrepreneur in the Russian Empire, has not been mentioned in literature on the history of Russian-South African contacts. However, his long business partnership with Carl Fabergé should be considered in this context, primarily because it took place when Russia and the territories that are now part of South Africa, apparently, had no trade relations yet. Henry Allan Talbot Bowe, known in Russia as “Allan Andreyevich Bo”, can be rightfully regarded as a South African. He spent his childhood and youth in the Cape Colony, mostly in Namaqualand, a region dominated by native speakers of languages that had originated in Africa. Contrary to the established notion that “the exquisite artistic taste and amazing energy of Carl Fabergé” were the main reason for the international success of this business, it owed much to the work of his companion, A. Bowe. The latter contributed to the development of the largest jewellery company in the Russian Empire and its international reputation in the 1880s–1890s. As a founder and co-owner of the Fabergé Moscow branch, he organised and managed the largest jewellery factory in the country. Bowe also expanded the company’s presence abroad by establishing the London branch (as a joint owner with Fabergé) and building up clientele securing orders for bespoke jewellery pieces in Europe, Southeast Asia and North America. The first arrival of Bowe in Russia was almost accidental, but he became deeply involved in the business life of Moscow – so much so that he returned to that city after he had dissolved his partnership with Fabergé. Being possibly the first successful South African-born entrepreneur in Russia, he deserves a prominent place in the history of relations between our countries. It implies that the emergence of Russian-South African business links can be traced to the 1880s, when Bowe started his business in Moscow.

Economic empowerment of women in the informal African craft industry: The case of Tembisa

Orientation: In Tembisa, within the Ekurhuleni Metropolitan Municipality, women sell woven baskets and traditional beaded accessories, trading informally. The baskets have both functional and aesthetic values, as they are used for interior decoration. The skill of weaving is passed on from generation to generation. Research purpose: To investigate the business model used, the skills needed and the opportunities and support measures available to these craft traders to empower them to transition from being informal traders to becoming formal craft traders. Motivation for the study: Little is known about the women who sell crafts informally in Tembisa. The literature has revealed that the majority of informal traders in South Africa are women from poor communities. It is not known whether opportunities, support measures and sources of funding are available in the local municipality and community to assist these craft traders in transitioning from the informal to the formal sector. Research approach/design and method: A mixed-methods research approach was adopted. A quantitative survey using a structured questionnaire enabled data collection from 32 traders. Through in-depth interviews, information on current programmes by the Ekurhuleni Metropolitan Municipality and the Moses Molelekwa Centre were obtained. Main findings: This research revealed that the African craft business is seasonal, depending on the supply of weaving material and cultural and other functions. Most of the traders were not South African and were not interested in transitioning from the informal to the formal sector. Both the municipality and the centre offered programmes to assist informal traders to transition from the informal to the formal sector. Practical/managerial implications: Only a few of the respondents were South African. It is essential to ensure that the skill of weaving continues and be elevated to lucrative business. Owing to the fact that informal businesses purchase from formal business, government programmes should focus more on supporting informal business to be successful without requiring them to be formalised. Contribution/value-add: The business model of the craft traders in Tembisa has been unpacked. Insight has been gained into their economic challenges and the measures that a local authority could implement to empower and assist these women.

The resilience of African migrant entrepreneurs in China under COVID-19

PurposeAs the impact of COVID-19 on businesses was impossible to predict, so is the future of migrant entrepreneurs – some of whom, before the outbreak, had to deal with immigrant status associated challenges. Against this backdrop, this paper aims to focus on African migrant entrepreneurs in China, much less studied ethnic migrants who have always lived on the margins of Chinese society, to examine their entrepreneurial resilience under COVID-19 in China.Design/methodology/approachThe study used a qualitative design using a survey and semi-structured follow-up interviews as the primary data collection instrument. The questions in the questionnaire guide were adapted from the Center for Global Development survey instrument designed to gauge the resilience of SMEs under COVID-19.FindingsAlthough most business operations in China are impacted, African migrant businesses were very hit due to existing social challenges coupled with their informality (i.e. operating at a low level of organization), lack of contingency plans and lack of stimulus support. COVID-19 is thus not only a force majeure that threatens the growth expectation of African owned-business but also presents a threat to their very existence in an already challenging society for Africans.Research limitations/implicationsAlthough the study has achieved its intended purpose, the sample was relatively small due to the low return rate of questionnaires and the difficulties in reaching out to target respondents due to the restrictive measures on movements during the data collection period.Originality/valueThis paper draws attention to the entrepreneurship-related challenges faced by ethnic migrants in China during a crisis. The social challenges of Africans living in China became a global topical issue during the COVID-19 outbreak in China. However, little is known about their entrepreneurship endeavors and the associated difficulties. This paper helps our understanding of African businesses’ resilience in China during uncertain times, such as the one created by COVID-19.

Ease of Doing Business and Capital Market Development in a Demand Following Hypothesis: Evidence from ECOWAS

Abstract Capabilities of African businesses in a transformative role in solving the continent‘s challenges are underestimated and misunderstood. This study examined ease of doing business and financial development from a demand following hypothesis in the West African sub-region, employed Structural Equation Model covering the period of 2004 - 2017. Ten ease of doing business indicators and five distinct financial (capital market) development variables from the World Bank database were used. Findings indicate weak demand following the hypothesis of capital market development: positive and negative, depending on the measure of capital market development from the ease of doing business for West African countries majorly because of inadequate electricity. The indirect effect of the construction permit, property registration, access to credit, minority investors‘ protection and cross-border trading are indirectly significant to capital market development while starting a business, tax-paying, contract enforcement and settling insolvency are insignificant. The study recommended roadshow by West African capital markets to improve the listing of companies and the government should improve on the electricity supply.

Sociological factors influencing the success of African immigrant-owned micro businesses in South Africa

The sociological imbalance of African immigrant-entrepreneur hampers the growth and progress of their businesses. Therefore, the need to investigate the sociological factors influencing the success of African immigrant-owned micro businesses in Durban, South Africa. The research approach adopted was a cross-sectional field survey with a total of 364 questionnaires distributed to African immigrant-entrepreneurs in Durban with the use of cluster sampling technique. The results of the study revealed that there was a significant strong positive relationship between sociological factors and the success of foreign-owned micro-businesses in Durban. It is therefore recommended that the government should creating an enabling business environment for African Immigrant-Owned Businesses, including the protection of the lives and property of the African immigrants and their micro businesses in Durban and country wide.

A “Body of Business Makers”: The Detroit Housewives League, Black Women Entrepreneurs, and the Rise of Detroit’s African American Business Community

This article examines the Detroit Housewives League (DHL) in the 1930s and 1940s, concentrating on DHL members’ actions as businesswomen. Past narratives have framed the DHL as an extension of the black women’s club movement or as part of the women-driven consumer movements of the 1930s and 1940s, particularly highlighting the organization’s philosophies on black women’s purchasing power. I argue that entrepreneurial DHL women brought prior business knowledge to their organizing and were significant business experts and leaders. By conducting business research, forging community networks, and, significantly, establishing commercial colleges and other forms of business education in the city, DHL members’ work was vital for the black business community as a whole and for women entrepreneurs in particular. In reframing the DHL as an organization established by black entrepreneurial women, I suggest scholars should reevaluate black women’s contributions to other forms of activism in order to recover additional histories of black women’s entrepreneurship and business leadership.

Making a Global Impact the Institutions-based View and African Contingency Theory Development

ABSTRACT As the Journal of African Business moves past its first twenty years, it is a time to contemplate new research directions. Contingency theories offer an exciting way forward that plays to the strengths of African researchers and the relevance of African research in global scholarship. This paper illustrates a practical, step-by-step approach to contingency theory development in emerging markets. The approach will help researchers apply institutions-based view thinking to important African problems in marketing and international business.

Challenges and Solutions during Intercultural Adaptation Process—A Case Study of Four African Business Officials in China

Challenges and Solutions during Intercultural Adaptation Process—A Case Study of Four African Business Officials in China

Economic and Non-economic Satisfaction as Outcomes of Micro-enterprises’ Perceived Value from Banking Relationships

ABSTRACT Purpose The purpose of this paper is to position economic and non-economic satisfaction as outcomes of micro-enterprises’ perception of value, and to determine the antecedents of perceived value within the business banking industry. Methodology/Approach The study is based on a self-administered and internet-based questionnaire conducted in the South African business banking industry. The sample consists of 381 micro-enterprises that employ one or two staff members. Findings The results reveal that economic satisfaction and non-economic satisfaction are influenced by customers’ perceived value, and that price fairness influences perceived value through the mediating effects of perceived price and service quality. Significant relationships were also found between perceived price and economic satisfaction, and between economic satisfaction and non-economic satisfaction. Research Implications Drawing on social exchange theory, this research adds to the existing literature by exploring price fairness in business customers’ perception of value, and their subsequent satisfaction judgments – specifically economic and non-economic satisfaction. Managerial Implications The study offers banking executives insight into factors that influence micro-enterprises’ perception of value, and the consequences of higher perceived value in terms of their economic and non-economic satisfaction levels. Originality/Value/Contributions Micro-enterprises are an under-researched target group in the areas of price, quality, value, and satisfaction within the business banking industry. The study further contributes to theory by being among the first to posit economic and non-economic satisfaction as dual outcomes of perceived value.

An interrogation of the approach to social licence to operate (SLO) on the African continent

The divergence between the mining industry's business-case decisions and key stakeholder expectations, both local and global, is complex. The objective of this paper is to examine the approach of mining companies to the concept of Social License to Operate (SLO), with a focus on the African continent. A background to the concept of SLO was outlined. An inextricable link between the African business context and the approach that mining companies adopt in fulfilling an extremely cosmetic process was proffered. The key issues defining the African context, namely corruption, conflict, human rights, weak institutions, artisanal and small-scale mining amongst others were interrogated within the mining industry context and further related to the concept of SLO by identifying specific examples. The paper further identifies the key differences in the approach to SLO and examines some underlying reasons. Finally, the paper proposes some interventions that the mining industry can adopt in order to gain the SLO in Africa. The proposed interventions were premised on genuine engagement with all relevant stakeholders as opposed to tick-box exercises. One of the key pillars identified to unlock this licence was through strengthening and building upstream, downstream and side-stream linkages between local suppliers and the mining industry.

The chartered accountant profession in South Africa: In dire need of decoloniality and ubuntu principles

The chartered accountant (CA) profession plays a significant role in the South African business society, as individual members often fulfil leadership positions. Consequently, whether CAs are cultivated into being responsible and socially just leaders whilst they are at higher education institutions (HEIs) in South Africa is an important aspect to consider. Decoloniality and ubuntu principles, those associated with restoring human dignity through recognition, contribute to the fostering of the appropriate conditions for human engagement that could result in a social awareness. So far, the CA profession has largely ignored the call for decoloniality, and we argue for a certain response by the profession that will result in meaningful transformation of the profession, the fostering of relationships, and a socially just consciousness. In particular, such a response has to do with openness towards other knowledge systems, a willingness to deliberate and the adoption of deliberative teaching and learning approaches.

Business registration and firm performance: a case of maize traders in Malawi

ABSTRACT Small businesses could spur economic growth. Most African small businesses are not formally registered, and informality leads to loss of government revenue. This article assesses the effect of business registration on firm performance in Malawi’s maize sub-sector. The study uses panel data of 172 traders from Malawi, and instrumental variable estimation on a systematically drawn sample. The results indicate that when registered, traders make four times less profits. Variables such as sex, exporters, information gathering and general trading had positive effects on business profitability. Unless the business environment is reformed in favour of small businesses it does not pay to register.

The spill-over effects of postgraduate coaching studies in the resilience of women in triple roles

ABSTRACT Working women who fulfil multiple roles face demands which test their resilience. The purpose of this research paper is to report on how postgraduate studies in executive coaching at a South African Business School, had a spill-over effect that assisted women with their resilience in their triple roles of business leaders, mothers at home and postgraduate students at university. Eight women in these triple roles were chosen from a class of postgraduate students studying towards a master’s degree in executive coaching. This qualitative study employed Interpretive Phenomenological Analysis to analyse their lived experiences using a combination of individual semi-structured interviews and excerpts from their reflective journals. Studying coaching gave participants valuable external resources (techniques, tools and new competency skills), which in turn built their internal resources (self-esteem, confidence and new perspectives) that led to increased resilience. In addition, the positive spillover effects from their postgraduate coaching studies strengthened their resilience in their other roles, while negative spillover effects had the opposite effect.

Target Market Solutions in South African Online Businesses: The Generational Effect

ABSTRACT Questions arise whether demographic, socio-economic and motivational criteria based on, inter alia, gender, income, education as well as generational cohort alignment can assist online businesses in making optimal target market decisions. Are there alternative target markets in the growing online community? Quantitative research with 111 respondents telephonically interviewed in the Gauteng province of South Africa provided the data. Two generational cohorts of consumers were identified that are buying online, namely the generation X&Y cluster and the Baby Boomers cluster. Generation X&Y is the larger group but has lower income levels. Both groups are well-educated with more male shoppers going online. Online businesses should acknowledge the emergence of the Baby Boomers as a viable force in online shopping as they have sufficient disposable income. They are the leading buyers of books, travel tickets and even electronic equipment and computers. Only in the apparel category is Generation X & Y the leading online buyers. Online retailers should keep track of generational online buying behavior as this is a dynamic environment where online businesses could easily misjudge their target market.

Nigeria and the African Continental Free Trade Agreement Area (AFCFTA): Issues, Challenges and Prospect.

In order to improve intra-continental trade in Africa Union (AU) introduced the African Continental Force Trade Agreement Area (AFCTFA) to create single continental market for the free movement of goods and services within the African Continent. AU is progressively eliminating tariffs as well as non-tariff barrier to African trade through the AFCFTA which will make it easier for African businesses to trade within the continent and benefit from growing African market. Nigeria’s position on the AFCFTA remains that African economic and social integration must be rules-based and with built-in safeguard against injurious practices. AFCFTA is an important part of the AU – 2063 Agenda to promote economic and social integration on the continent. Agreement comprises of the framework, the protocols for trade in goods and trade in services and the mechanism for dispute resolution. AFCFTA is to facilitate economic growth and diversification through preferential access to Africa’s market. The paper examines Nigeria’s stands which states that continental aspirations must compliment Nigeria’s national interest which includes not positioning it as a dumping ground for finished goods. The paper makes use of secondary source of data to elicit information while it examines the challenges like how will the agreement be implemented on the ground without the necessary infrastructure being built without the procedural issues that makes corruption very possible at the borders. The paper adopts free trade theory to midwife the study.

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.

Asian and African Business Students: A Comparative Analysis of their Motivation, Family Support and Culture on Business Orientation

This research and resulting contribution are with the patronage of President University, Indonesia, School of Business research project based on a lecturer’s obligation of 2019.

Complementarity Between Innovation Knowledge Sources in Small Manufacturing Sector Firms: Evidence From the South African Business Innovation Survey

In this paper, empirical research on complementarity between organizational design decisions has traditionally focused on the question of the existence of complementarity or complementarity between innovation knowledge sources in small manufacturing sector firms – limited to South Africa. The purpose of this study is to identify the impact of different knowledge sources on business performance through the different links in the innovation value chain. This study uses 138 responses from small South African firms as contained in the Community Innovation Surveys styled fifth national South African innovation survey, conducted between 2010 and 2012. Appropriate hypotheses were derived and tested by multivariate probit regression analysis in order to analyze complementarity between innovation activities, internal research and development (R&D) and external knowledge acquisition. Our results suggest that internal R&D and external knowledge acquisition are complementary innovation activities, but that the degree of complementarity is sensitive to other elements of the firm’s strategic environment. We identify the ‘lack of importance’ of public universities and publicly-funded research centres as an information source for the innovation process. In addition, firms are less likely to rely on knowledge utilisation variables such as skilled labour, dedicated teams for innovation activities, and R&D investment. The findings of this study offer a more recent insight in innovation strategies in small firms.