Business In South Africa Research Articles

Migrants and Xenophobic Attacks in South Africa: Theory and Evidence

Acts of xenophobia are a persistent feature of life in South Africa. Daily animosity often spills over into violence against both locals and mostly migrants and their economic enterprises. One argument is that xenophobia has characterized post-apartheid South Africa partly due to increased migration flows. Can migration cause xenophobia? Using data from Xenowatch Reports, we examine the impact of migration flows from Zimbabwe on the onset and persistence of acts of collective violence targeted at foreign nationals’ lives and their foreign-owned businesses in South Africa. Results show that increased migration flows from Zimbabwe into South Africa leads to ethnic polarization, cultural diversity, and intolerance by residents toward immigrants. The variable migrants has a positive but statistically insignificant effect on xenophobia. However, migration can impact xenophobia through inducing ethnic fractionalization, cultural diversity and ethnic polarization, intolerance, and hostility with the coefficients of ethnic fractionalization and cultural diversity being positive and statistically significant and supporting the hypothesis that more migration flows from Zimbabwe lead to more xenophobic attacks in South Africa. These findings aid our understanding of the economic consequences of xenophobia. JEL codes: Q15, Q32, Q54

The Impact of Socio-Psychological Factors on Consumer Ethnocentrism and Purchase Intentions Among South African Consumers

ABSTRACT This study aimed to investigate the impact of socio-psychological factors, such as nationalism, internationalism, collectivism, conservativism, patriotism, and cultural openness, on consumer ethnocentrism and its effect on purchase intentions among South African consumers. A total of 203 responses were collected from South African consumers over the age of 18 through an electronic self-administered survey. Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to analyze the data. The findings revealed that internationalism and conservativism have a significant positive impact on consumer ethnocentrism. Furthermore, consumer ethnocentrism has an influence on purchase intentions. This study contributes to the existing body of knowledge on predicting and understanding consumer preferences and behavioral intentions in developing countries, particularly in relation to purchasing foreign goods versus domestic goods. The results of this study can help businesses in South Africa better understand the factors that influence behavior and tailor their marketing strategies accordingly.

Impact of Corporate Governance Toward Managerial Competencies of Micro Business in South Africa

Managerial competencies are lacking in micro businesses in South Africa; the shortage, mainly micro businesses, has severely hampered the SMME sector. Due to the deficiency, the SMME sector still operates in a volatile market, significantly impacting micro businesses' competitiveness. South Africa's high micro-business failure rate can be ascribed to a lack of corporate governance framework and managerial competency. This study aimed at the impact of corporate governance on the managerial competencies of micro-businesses. Phenomenological (qualitative) approaches were used to address the lack of managerial competency affecting micro businesses to understand how this lack of managerial competency affects their ability to compete. According to exploratory research, one of the negative factors limiting micro-business competitiveness in South Africa is a lack of managerial competencies. Semi-structured interviews were one of the data collection methods employed in the study. The results showed that a lack of managerial competencies is one of the main reasons South African micro businesses are not competitive. The study concludes that the corporate governance framework is critical to the survival of South African micro businesses. To eliminate gaps in managerial competencies that negatively impact business competitiveness, the study suggested that micro-businesses should put in place suitable governance structures.

Institutional Constraints Affecting Small Businesses in South Africa

This study explores the perception of institutional constraints in South Africa. It delineates the constraints into critical socio-cultural, political, and economic dimensions that impact entrepreneurs and their micro, small, and medium enterprises (MSMEs). The paper utilises an exploratory interview approach with thirty-two entrepreneurs from Cape Town, Durban, and Johannesburg and the emergent themes generated with ATLAS.ti. The study identified fourteen constraints that might affect the enterprise development process. The paper is original, with three main contributions. It first identifies constraints along institutional dimensions of socio-cultural, political, and economic contexts. Second, deriving the constraints through qualitative methodological inquiries with inductive and deductive analytical tools according to institutional variables is a unique methodological contribution. Third, the paper proposed context-specific focused policy interventions. The findings promote an understanding that South African MSMEs require continuous, needs-based, responsive, and adaptive institutional support.

Role of Digital Transformation and Innovation in Enhancing the Competitiveness and Sustainability of Hospitality and Tourism Businesses in South Africa

Purpose: The study sought to analyze the role of digital transformation and innovation in enhancing the competitiveness and sustainability of hospitality and tourism businesses
 Methodology: The study adopted a desktop methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library.
 Findings: Digital transformation and innovation are essential drivers for enhancing the competitiveness and sustainability of hospitality and tourism businesses in South Africa. By embracing digital technologies, businesses can improve customer experiences, increase operational efficiency, make data-driven decisions, and adapt to changing market dynamics, ultimately securing their position in the evolving industry landscape.
 Unique Contribution to Theory, Practice and Policy: Resource-Based View (RBV), Dynamic capabilities theory & Disruptive innovation theory may be used to anchor future studies in the role of digital transformation and innovation in enhancing the competitiveness and sustainability of hospitality and tourism businesses. Encourage research that explores the intersection of digital transformation, innovation, and competitiveness within the hospitality and tourism sector. Promote the adoption of digital technologies and innovation strategies among hospitality and tourism businesses.

The Intervening role of Absorptive Capacity in the Nexus of Effectual Actions and Performance in Small Businesses

Purpose: This study interrogates the interfering role of absorptive capacity in the relationship between the effectual actions of small businesses and their performance.
 Design/methodology/approach: Structured questionnaires were used to generate primary data from 685 small businesses from a variety of sectors in South Africa. The data was used to interrogate the hypothesized relationships using the partial least squares structural equation modeling technique.
 Findings: The findings report a significantly positive relationship between effectuation and small business performance. Further, it is revealed that absorptive capacity partially mediates the relationship between effectuation and small business performance.
 Research limitations/implications: The limitations of this study include the use of primary data from a sample of small businesses in South Africa and dependence on specific modeling techniques. The implications of this research provide a deeper understanding of the mediating effects of absorptive capacity on the relationship between effectual actions and small business performance.
 Practical implications: This study provides fresh insights into the mediating effects of the absorptive capacity capability of small businesses in the continuous interaction between their effectual actions and performance. As such, it highlights the connection between the growing theory of effectuation and existing theories in the field of management sciences. This study enables the emergence of knowledge that could spur small businesses to effectively navigate the endemic uncertainties prevalent in their contexts.
 Originality/value: This study contributes to the understanding of the role of absorptive capacity in the relationship between effectual actions and small business performance, thus adding value to the literature on small business management.
 Paper type: This research is empirical.

The Impact of Corporate Social Responsibility on Financial Performance in a Selected Medium-Sized Clothing Manufacturing Organization in South Africa

Corporate Social responsibilities (CSR) is an established idea that urges corporations to incorporate environmental and social responsibilities into their operations. It enables businesses to be socially responsible to stakeholders and the public. Small and medium-sized enterprises (SMEs) have received international recognition for their contributions to social and economic development. This study investigates the impact of CSR on financial performance at a medium-sized clothing manufacturing company in the eThekwini District Municipality of KwaZulu Natal, South Africa. The study was designed to be conclusive. It employs a quantitative approach, examining the experiences of an organization that has implemented CSR. The study's objective was met by gathering pre- and post-quarterly data on profitability and production costs. The data was analysed using the Ordinary Least Squares (OLS) model and the Statistical Package for the Social Sciences (SPSS). The findings show that CSR can boost financial performance by minimising business-related risks and compliance expenses, which leads to increased profitability and lower production costs. Any rise in profitability boosts the organization's financial performance, while any drop in production costs improves the company's financial performance. This study identifies the strengths and weaknesses of CSR in relation to financial performance in the selected medium-sized manufacturing business in South Africa.

Building Resilient FMCG Supply Chains in South Africa Amid Prevailing Load-Shedding Challenges

Load-shedding (the controlled interruption of electricity supply) has become a prevalent challenge in South Africa, and it has had a significant impact on the operations of fast-moving consumer goods (FMCG) supply chains. The goal of this study was to find ways of developing FMCG supply chains that are resilient enough to endure the negative consequences of prevailing power outages. The frequent and erratic nature of load-shedding poses serious issues for South Africa’s FMCG sector. An exploratory research approach was used to uncover six overarching themes in the midst of prevailing load-shedding challenges in South Africa. Semi-structured interviews were used to explore primary data from 25 supply-chain industry professionals, complemented by secondary data from industry reports and literature. In the face of persistent issues with energy supply, this study adds to the body of knowledge by offering FMCG companies in South Africa useful insights and practical recommendations for sustaining operations and achieving long-term sustainability. Furthermore, the findings can provide FMCG businesses in South Africa with useful tactics and information. This useful advice is priceless for operational effectiveness and business continuity planning. Although supply-chain resilience and uncertainty management are extensively covered in the current literature, there is a deficiency of research concentrating specifically on the FMCG industry in South Africa and its particular load-shedding difficulties.

Role of active citizenship in the midst of increasing societal challenges in South Africa: A theological reflection on the looting of businesses in South Africa.

Role of active citizenship in the midst of increasing societal challenges in South Africa: A theological reflection on the looting of businesses in South Africa.

The Influence of Intrinsic Factors on Personal Attitude to Start a Farming Business: The Moderating Role of Gender

Objective: The aim of this study was to determine the influence of intrinsic factors (proactiveness, motivation, creativity) on the personal attitude of agricultural students to start a farming business in South Africa. This relationship was looked at from gender perspective. Research Design & Methods: An estimated 3,486 students were enrolled for various agriculture-related qualifications in various 27 institutions of higher learning in South Africa when this cross-sectional, quantitative study was carried out. Data from 421 agricultural students were collected through a Prospective Farmers Profile Questionnaire at six institutions of higher learning in South Africa. Findings: The study finds no significant gender influence on all intrinsic factors and also on the personal attitude of agricultural students to start a farming business. The results further revealed that personal attitude to start a business is predicted by intrinsic factors, motivation, and creativity, but not proactiveness. Implications and Recommendations: Entrepreneurial syllabi should aim to equip students with intrinsic factors as these shape the personal attitude to start a business. It is a positive personal attitude that will likely result in a start-up. Farming entrepreneurship, especially among the youth will assist in employment creation as well as food security, two problems that many countries are currently facing. Contribution & Value Added: Proactiveness is one of the most important dimensions of entrepreneurship but agricultural students do not consider it significant in their personal attitude to start a business. Proactiveness should be built into the syllabi for students to be better acquainted with this critical business start-up element.

Transient entrepreneurs?: Chinese migrant small commercial businesses in South Africa

The influx and establishment of Chinese businesses across Africa have attracted considerable research attention in the last decade, focusing primarily on the larger (state-owned) businesses. By contrast, much less is known about small commercial businesses in terms of their investment motivations, operational conditions, and aspirations of the Chinese business owner-managers in the shopping malls that have emerged to serve such enterprises. This study fills this gap by drawing on interviews with 25 owner-managers of small Chinese shops operating in twelve shopping malls in South Africa. We found that most of them are lightly embedded in the country, due to the competitive nature of their business, language barriers, regulatory uncertainty and crime. At the same time, an inability to extricate themselves and find viable outlets for business elsewhere means that they remain negatively committed. However, a minority of enterprises were much more embedded; we explore the reasons behind this. The study contributes to extending the understanding of small-scale migrant entrepreneurs and embeddedness literature with policy implications.

Social media use and performance of small businesses: a customer-centric perspective

PurposeSocial media is widely regarded as a strategic resource to improve firm performance. However, there are mixed findings on how businesses can use social media for better performance. This study aims to propose and test a mechanism through which social media can influence firm performance.Design/methodology/approachA survey approach was used to collect data from 262 small businesses in South Africa. The data were analysed using structural equation modelling (SEM) to assess the hypothesised relationships.FindingsThe findings support the significant role of social media in fostering firm performance. It is observed that the use of social media influences firm performance through three key customer-centric constructs: the strength of customer–firm relationships, customer orientation and customer co-creation. Additionally, the relationship between the strength of customer–firm relationships and firm performance is moderated by customer co-creation.Originality/valueThe study provides new insights into the mechanism through which social media fosters firm performance. Due to a lack of universality in establishing the direct effect of social media use on firm performance, providing evidence of an indirect path becomes vital for advancing knowledge on social media use in business. As such, this study contributes to the literature on social media and entrepreneurship by demonstrating a novel mechanism through which social media influences firm performance.

Assessing the role of entrepreneurship industry and SMEs to economic growth in South Africa

The study looked at the role and contribution of entrepreneurship industry to foster social and economic development through small, micro, and medium-sized businesses in South Africa. The conceptual research looked at the influence of small, micro, and medium-sized businesses (SMMEs) on South African development. The study's objective was to evaluate how small, medium-sized businesses (SMMEs) are now driving economic growth and solving social issues in a setting where big businesses and governments appear to be doing very little. As a result, the study examines how SMMEs might help the nation solve persistent societal evils including poverty, inequality, and social isolation. A desktop literature review research design was adopted to collect data on the role of entrepreneurship in South Africa, policies and practices of big business and government that exacerbate social issues in communities and impede socioeconomic development, as well as the specific roles that SMMEs play in achieving socioeconomic development goals. Findings from research indicate that, among other development outcomes, SMMEs are at the vanguard of creating jobs and fostering social and political justice in the nation. Future empirical studies that account for and evaluate the importance of SMME contributions to the construction of economic, social, and political justice in the nation are advised because this work lacks the empirical support necessary to substantiate its conclusions and observations.

Exploring ways to construction of a business bootstrapping model to equip emerging micro business in the first year of operation in South Africa

In South Africa, the small, medium, and micro businesses (SMMEs) sector contributes between 52 and 57 percent of the GDP. In the coming years, it is expected that the SMME sector would provide 90 percent of the GDP and employment in South Africa. Due to barriers that prevent potential growth, more than 50 % of businesses in South Africa fail during the first five years of operation. The study examined enterprises in their first year of operation in South Africa and identified the lack of business skills and an insufficient supply of financing as contributing factors. The investigation revealed existing concepts such as Financial bootstrapping and Balance Score Card, both of which are crucial for South African enterprises during their first year of operation. A mixed research approach was chosen for the study in order to answer the research questions. The phenomenological (qualitative) and positivist (quantitative) philosophical paradigms were adopted with a determination to achieve a thorough understanding of the strength and direction of the relationship between a business skills deficit and competitiveness of businesses in the first year in South Africa and, furthermore, the development of the Business Bootstrapping Model. The study's data collection tools included semi-structured interviews and questionnaires. In relation to the data that were gathered for the study, content analysis was utilized as an analytical technique to analyse qualitative data, while SPSS was used to analyse responses to questionnaires for a quantitative study. The availability of capital and the lack of adequate financial resources to manage account receivables were found to be major hindrances to a business' sustainability in its first year of operation. Research gaps were filled by combining empirical investigations and conclusions, and this information was then used to construct the business bootstrapping model. In its initial year of operation, the business Bootstrapping Model included three elements: finance, marketing, and corporate governance. Owners of small businesses can begin generating capital using the Business Bootstrapping Model's financial component, which is a key factor in eradicating financial and liquidity obstacles. The Business Bootstrapping Model also equips business owners with the ability to plan and manage daily operations, including developing short-term financial policies for the business. Furthermore, assists in measurement capabilities for the business’s current financial performance, financial position, and anticipated future business plan. As well as providing an overview of the company's revenues and costs from operating and non-operating activities over time. Business owners are provided with the marketing skills necessary for brand positioning, preventing pricing discrimination, and getting pertinent, hard-to-get customer information and insights on social media through the marketing components of the Business Bootstrapping Model.

Parental influence on next-generation family members in South African Black-owned family businesses

PurposeThere are many factors that contribute to a person's career choice. The decision of whether or not to join the family business is certainly most influenced by parents. The aim of this research is to determine how much of an impact parents have on their next-generation family members' (NGFMs) decision to join the family business.Design/methodology/approachFollowing a positivistic paradigm, a cross-sectional design was followed using a quantitative, self-administered questionnaire through a judgemental sampling technique. A structured questionnaire was distributed to South African respondents who have parents who own a family business. The data were analysed using Statistica.FindingsThe results indicate that parental style, culture, self-efficacy and parental identification were found to influence the NGFMs' intention to join the family business significantly. Their decisions can be influenced by several factors, and parents can better manage these aspects by being aware of these influencing factors.Practical implicationsGiven the imminent ageing of a large cohort of senior leaders, this research adds to the body of knowledge by highlighting the necessity for committed, willing and ready next-generation family members (NGFMs) to ensure efficient succession in family businesses. Therefore, effective management is required for succession-planning, particularly from the perspective of the successor.Originality/valueThis study, therefore, responds to calls for more in-depth quantitative studies on family businesses in general and on Black-owned family businesses in South Africa in particular. This study will evaluate the significance of parent influence on NGFMs to join Black family-owned businesses in South Africa. This research will assist family business owners and their families in understanding their children's intentions, designing and evolving an appropriate system to instill necessary traits, skills and attitudes in the children, preparing them for upcoming challenges, adding new perspectives to the family business and ensuring its profitability and long-term growth.

Consumer protection legislation in South Africa and its impact on promotional strategies: Perspectives of retail businesses

In the past, unfair business practices resulted in consumers suffering a host of abuses. Poverty, unequal distribution of income and high litigation costs presented a challenge for consumers seeking justice. The Consumer Protection Act 68 of 2008 (CPA) was enacted to protect consumers and prohibit unfair business practices. It also placed restrictions on promotional methods. The overall aim of this paper is to evaluate, through the findings from an empirical study, how consumer protection legislation in South Africa impacts on promotional strategies of retail businesses. Using a qualitative methodology, the study evaluated the implications of the CPA for retail businesses in South Africa. It firstly, explored specific aspects pertaining to which provisions of the CPA affect the promotional efforts of retail businesses (small to medium) in Durban; and secondly, it determined the implications of the implementation of the CPA on promotional strategies of small to medium retail businesses in the Durban area. Eighteen structured interviews were conducted with marketing managers and business owners. The findings from the study identified several provisions of the CPA that have an impact on the way promotions are being conducted currently. The study also showed that preferences for promotional tools are based on cost and on reaching larger target audiences quickly, and that more expensive and labour-intensive measures were adopted to address the restrictions of the CPA. Keywords: CPA, retail businesses, labour-intensive

COVID-19 Experiences and Coping Strategies: The Case of Differently Sized Businesses in South Africa

Businesses have experienced the impacts of COVID-19 differently due to their inherent characteristics and resilience capabilities. Understanding the varied experiences of businesses is an important ingredient for a well-informed policy and for future preparedness. The purpose of this study is to conduct a qualitative analysis of the impacts of the COVID-19 pandemic on different businesses (small, medium, and large) and their coping strategies. The findings reveal different experiences among the businesses; the majority of small businesses were unable to change their business operation model due to logistics and infrastructure constraints, forcing most to temporarily close or pause operations, unlike the larger businesses that had a relatively inbuilt resilience structure. It is also interesting to report that government relief schemes were mainly utilized by larger businesses, arguably due to their formal nature and organized labour, whereas most smaller businesses were out of operation or relying on family support networks for survival. This study further identifies different approaches such as adjusting cost structures, temporary closures, transitioning to an online business (ICT) model, reskilling staff, and retrenchment as some coping strategies. Lessons learned and recommendations are provided at the end of this study.

Understanding the Motivations for SMEs in South Africa to Adopt Social Media

Since the covid-19 pandemic in 2020, many businesses have relied on social media to stay abreast with the latest news, developments and to predict the future world of business. Many countries around the world instigated lockdown restrictions to curb the spread of the covid-19 virus, and social media platforms were very popular tools used for spreading the news. The proliferation of social media has also increasingly drawn the attention of Small and Medium Enterprises (SMEs) in South Africa to improve their efforts of sustaining their businesses. Social media platforms have become popular in the business environments for their ability to increase market reach, transfer knowledge, and sustain the business. While many benefits of social media to enhance business performance have been studied, there are also skeptics on data privacy issues that social medial brings to the business. In the SME sectors in South Africa, social media are adopted due to their cost effectiveness and ease of use. However, little is known about the effect of data privacy issues on SME business performance. The literature of social media adoption indicates that the older generation of SME owners are skeptical about sharing their confidential business insight on social media platforms. This is despite the availability of many other literature studies that report on the increase of social media studies to enhance business sustainability. This study aims to produce knowledge for understanding the key motivations of SMEs to adopting social media despite the existence of data privacy issues on social media. Qualitative interviews were conducted with 13 SME entrepreneurs who were purposively selected based on their knowledge of social media, experience of its application in the business, industries and premises of the SME business in South Africa. The results of the interviews indicated that SMEs are generally aware of the data privacy issues surrounding the use of social media, and the adoption rate differs from younger and older generation of SME entrepreneurs.

A Management Model for Transformative Corporate Social Responsibility Practices: The Case of the South African Business Sector

Purpose/objectives: In the absence of a socio-economic transformative business agenda, our purpose is to propose a transformative Corporate Social Responsibility (CSR) management model for businesses in South Africa. Design/methodology: A case study design was followed, using document analysis and a questionnaire as data collection methods. Thirty respondents, representing nine businesses from the banking, food and telecommunication sectors, were sampled. Findings: The results suggest that businesses do not follow a systematic, uniform reporting format annually and do not fully comply with Global Reporting Initiative (GRI) standards or B-BBEE compliance targets. Furthermore, no clear evidence could be found in the sampled companies’ sustainability reports of how much money was contributed annually to socio-economic development, and no progressive CSR trends could be discerned. Practical implications: A practical model with guidelines is presented to assist South African businesses to successfully comply with statutory and regulatory obligations and international CSR reporting requirements. Originality/value: The proposed transformative CSR management model offers a tangible framework for businesses in the absence of such a framework. The main elements of the final model are the oversight and management of CSR and CSR activities, stakeholder management, intervention impact planning, stakeholder engagement, implementation, and sustainable impact reporting. This model can be implemented and used by various stakeholders in the business sector to accelerate tangible and sustainable socio-economic transformation in South Africa.

Shared value as shared power: Business in South Africa’s democratic transition

Purpose: This study aimed to better define the boundary conditions of voluntary business engagement for social and economic transformation.Approach: Case study of the Consultative Business Movement (CBM) in South Africa’s democratic transition through historical narrative and analysis, applying both contemporaneous and contemporary lenses.Findings: The analysis demonstrates that creating shared value requires shared power, an arrangement into which incumbent businesses may reluctantly enter, and from which they may quickly exit when their own political interests are met but before transformational economic goals have been achieved. Thus, exogenous forces are necessary to dependably shape a private sector that is fully aligned with economic transformation and peaceful development.Practical implications: Economic and political carrots and sticks combined with the mandatory embedding of business actors in broader networks may be required to ensure that business strategies and operations are more directly the result of consensus reached with more progressive social and economic agents in ways that advance societal goals. Those managers who do want to lead change should take from the experience of CBM the imperative to take no unilateral decisions but rather to share decision-making power with civil society and community actors.Originality/value: The article challenges and refines discourse that assumes that business interests are broadly aligned with sustainable societal outcomes. It thus sheds light on the boundary conditions for the variety of propositions in the management literature that business and societal aims are largely aligned that have been underexplored.