South African Business Research Articles

What you do (not) get when expanding the net-evidence from forced taxpayer registrations in South Africa

A significant share of firms in developing countries is not registered for income taxation. Expanding the tax net is a priority for many governments, but most formalization policies proved relatively ineffective in bringing firms into the tax net. Drawing on rich tax administrative data, we document that snapshot-synchronizations of the business tax and the commercial registry in South Africa led to a large-scale expansion of the South African business taxpayer net. While the targeted firms are a valuable segment within the non-formal sector, we show that their post-registration tax compliance is weak and few of them pay taxes. Owing to the large scope of the tax net expansion, the aggregate revenue gains are, nevertheless, non-negligible and the interventions are fiscally cost-effective. In additional analyses, we provide evidence for enforcement spillovers: In areas where many firms were drawn into the tax net, tax registration timing compliance significantly improved after the snapshot synchronizations. We find no indication of a drop in registration numbers at the commercial registry.

Predicted and Prized Critical Skills for a Graduate to Produce Effective Innovation

Higher Education Institutions (HEIs) have been mandated with the task to train and produce graduates with the capability to contribute to the economy and improve societies through teaching and learning. Furthermore, they are tasked with the responsibility to produce graduates with the capability to produce innovations that change the world for the better. For a university to produce such graduates it would need to focus on the curriculum and ensure that the skills and knowledge taught are relevant to produce innovative graduates. The purpose of this research paper was to identify the predicted and prized skills that a graduate can use to produce groundbreaking innovations. This objective would yield guidance on the most critical skills that should be included in a BCom degree to produce graduates with the capability to produce groundbreaking innovations. This research employed a Mixed-method approach with the use of both qualitative and quantitative approach. Data was collected using semi-structured interviews with 11 participants from the University of Johannesburg commercialisation units and an online questionnaire from 69 innovation experts from the South African Business Innovation Community (Innovation Summit), and the Innovation, Sustainability and Visionary Leadership Group. Data was collected through descriptive content analysis with the aid of Atlas.ti and inferential statistical analysis. This study is part of a completed PhD study, the reporting is only on Predicted and Prized critical skills for a BCom degree graduate. Based on the results ideation, reasoning, problem solving, complex problem solving, critical thinking, creativity and analytical thinking are skills and competences predicted to improve innovation and produce graduates with the capability to innovate. Furthermore, based on the results critical thinking, judgement and decision making are very significant skills for a person with a BCom degree. In conclusion, HEIs should place more emphasis on critical thinking skills within the curriculum and complex problem-solving skills. These skills should not only be exclusive to certain programmes but throughout the entire HEI’s curriculum.

Aspects Considered Relevant in Higher Education Curriculum to PRODUCE Business innovative Graduates

Higher Education Institutions (HEIs) have been tasked with the responsibility to generate knowledge through research and educate students and PRODUCE graduates with the capability to innovate and develop business innovation through entrepreneurial teaching. Therefore, it is significant for a university to align itself with the needs of the industry to PRODUCE graduates with the capability to PRODUCE business innovation. The purpose of this research was to determine aspects considered relevant in the Higher Education curriculum to PRODUCE graduates ready to develop business innovation and become entrepreneurs. The mixed-method research approach was deemed suitable for this research, therefore both qualitative and quantitative data were collected through the use of semi-structured interviews with 11 participants from the University of Johannesburg commercialisation units and an online questionnaire from 69 innovation experts from the South African Business Innovation Community (Innovation Summit), and the Innovation, Sustainability, and Visionary Leadership Group. The data collected was then analysed through descriptive content analysis and statistical analysis. This study is part of a PhD study completed in 2022 and only the results about the aspects considered relevant in the Higher Education curriculum to PRODUCE graduates ready to develop business innovation are presented and discussed. Based on the findings it is significant to note that aspects, such as creativity; originality and initiative; critical thinking and analysis; analytical thinking and innovation complex problem solving; and entrepreneurship are relevant and suitable for the university curriculum. In conclusion, more emphasis should be reflected in the Higher Education curriculum on these aspects mentioned above to PRODUCE graduates ready and capable of developing and producing business innovation. Higher Education Institutions should regularly implement interventions to improve their curriculum to best suit the needs of the industry or the business sector.

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.

Effectiveness of Risk Management Strategies in Mitigating Supply Chain Disruptions in South Africa

Purpose: The aim of the study was to examine the effectiveness of risk management strategies in mitigating supply chain disruptions in South Africa Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The effectiveness of risk management strategies in mitigating supply chain disruptions in South Africa has proven to be critical in maintaining operational stability and ensuring business continuity. In an environment characterized by frequent economic, political, and environmental challenges, robust risk management strategies have become indispensable for South African businesses. These strategies, including risk assessment, diversification of suppliers, implementation of advanced technologies, and development of contingency plans, have significantly enhanced the resilience of supply chains. By systematically identifying and evaluating potential risks, businesses have been able to proactively address vulnerabilities and reduce the impact of disruptions. The use of advanced technologies, such as predictive analytics, real-time monitoring systems, and blockchain, has further strengthened risk management efforts. These technologies provide valuable insights into supply chain dynamics, enable early detection of potential disruptions, and facilitate rapid response measures. As a result, businesses can maintain smoother operations and minimize downtime during unforeseen events. Unique Contribution to Theory, Practice and Policy: Resilience Theory, Resource-Based View (RBV) & Contingency Theory may be used to anchor future studies on effectiveness of risk management strategies in mitigating supply chain disruptions in South Africa. Encourage the adoption of advanced technologies such as Internet of Things (IoT), artificial intelligence (AI), and blockchain for real-time monitoring and supply chain visibility. Practical implementation of these technologies can enhance early detection of disruptions and facilitate rapid response strategies. Foster closer collaboration with suppliers to co-develop robust contingency plans and risk-sharing mechanisms. Practices such as dual sourcing, supplier diversification, and joint risk assessments can build resilience across the supply chain network. Advocate for policies that incentivize resilience-building practices within supply chains. This could include tax incentives for investments in resilient infrastructure, as well as mandatory reporting on supply chain risk management practices to enhance transparency and accountability.

The use of augmented and virtual reality to enhance the customer experience

Digital technologies such as augmented reality (AR) and virtual reality (VR) offer businesses an opportunity to create a competitive advantage by providing a unique customer experience across the customer’s pre-purchase, purchase, and post-purchase journey. Several businesses have engaged with these technologies, yet, South African businesses are slow adopters. A qualitative study was conducted with AR and VR developers to determine how businesses can use AR and VR technologies to enhance their customer experience. Additionally, the study aimed to identify the factors contributing to and hindering the adoption of AR and VR technologies. The findings indicate that these technologies are mainly used for (1) marketing and (2) training purposes, enabling product customization, enhanced brand experience, and improved communication. Several factors contributing to adopting these technologies were identified, such as improved marketing campaigns, reduced training risks, reinforcing best practices, identifying and managing potential hazards, and offering simulations of real-life events. The factors that hinder the adoption include high cost, data usage, customer adoption, and lack of high-quality user experience designers. The findings of this study offer several practical contributions to assist businesses in the decision to implement and engage with these technologies.

An analysis of the micro- and macro-economic determinants of firm R&D intensity in the South African business sector

Research and experimental development (R&D) is an important driver of economic growth and productivity. Gross expenditure on domestic R&D (GERD) is a country’s total expenditure on R&D performed by all sectors of the economy. South Africa’s GERD as a percentage of its GDP (GERD/GDP) remains below government targets and has stagnated over the past decade, largely due to declining business sector R&D. This paper aims to identify the drivers of firm-level R&D intensity, defined as the firm’s R&D expenditure as a percentage of turnover. It is the first South African study to examine both micro- and macro-economic drivers of firm R&D, with a paucity of literature on this topic for middle-income countries. Using the South African National R&D Survey data, the study utilized the Generalized Method of Moments (GMM) model and found that public financial support for firms, smaller firm-size, firm-level collaboration, political stability, foreign direct investment, and public R&D investment are positively associated with firm R&D intensity. The results highlight the importance of public financial support for smaller firms and investments in higher education and research institutions in promoting firm-level R&D, thereby providing useful policy insights for boosting business sector and economy-wide R&D expenditure and reaching national GERD/GDP targets.

A disconnect between training evaluation theory and the practical realities of South African businesses

A disconnect between training evaluation theory and the practical realities of South African businesses

Enhancing creditor decision-making in South African business rescue proceedings: a comprehensive analysis of information requirements in business rescue plans

PurposeBusiness rescue, as a mechanism to aid financially distressed companies in South Africa, has received considerable academic and practical recognition. However, the business rescue plan is an overlooked and, perhaps, underdeveloped aspect of the regime. For stakeholders, this is the ultimate decision-making document. Creditors are the most influential stakeholders in business rescue proceedings owing to their voting rights. For creditors to make informed decisions and exercise their votes meaningfully, the business rescue plan should be transparent and adequately disclose relevant and reliable information. This study aims to identify creditors’ primary information needs to enhance the sufficiency and decision-usefulness of business rescue plans, not only to entice the vote of creditors but to enforce accountability from practitioners.Design/methodology/approachUsing a qualitative research design, semi-structured interviews were conducted with 14 executives from 10 South African financial institutions.FindingsThe findings reveal that comprehensive disclosure of financial, commercial and legal information in business rescue plans was a critical antecedent for stakeholder decision-making. Additionally, leadership and social impact information were influential determinants. This study advances academic knowledge and, for practitioners, adds value to the development of business rescue plans. This can enhance creditors' confidence in supporting the rescue effort and approving the plan.Practical implicationsThis study advances academic knowledge and, for practitioners, adds value to the development of business rescue plans. This can enhance creditors' confidence in supporting the rescue effort and approving the plan.Originality/valueThe originality of this article lies in its investigation of how creditors assess the information in BR plans as a precursor to supporting the company’s reorganisation in a creditor-friendly business rescue system such as South Africa. This study provides novel insights into the decision-making process, particularly how creditors assess BR plans, address information asymmetry and vote on the plan.

The reshaping of curriculum transformation to address the 21st-century skill sets and employment prospects during the Fourth Industrial Revolution era: A case of the South Africa TVET colleges

This research explores the employability of Technical and Vocational Education and Training (TVET) college graduates in the Fourth Industrial Revolution (4IR) era in South Africa. It examines the role of TVET lecturers in providing skills that are relevant to the contemporary period. The study uses qualitative research inspired by the interpretivist approach, and a purposive sampling strategy to get the perspectives of TVET lecturers and employers. It was observed that TVET lecturers play a minimal role in the development of the curriculum due to a rigid top-down approach from the Ministry of Higher Education. Companies are forming partnerships with TVET colleges by offering places for in-service training, practicals and internships. The study reveals that South African businesses have adopted 4IR-related technologies, requiring a skilled TVET force that is ready for these transformations. The findings highlight the need for regular curriculum transformation and the importance of TVET education in producing artisans, technologists and technicians that are vital for the South African economy on an ongoing basis.

Note from the Editor

As we are awaiting the 29 May national election outcome results, it seems that South Africa has underscored the electorate's demand for comprehensive reforms and a commitment to addressing pressing socio-economic challenges, signalling a pivotal shift in the nation's political landscape. Industrial engineering professionals are at the forefront of transforming South Africa’s economic landscape, particularly within the context of the country’s evolving political arena. As South Africa navigates a period of significant socio-political change, the role of Industrial engineering professionals has never been more critical. Industrial engineering professionals are uniquely positioned to drive efficiency, innovation, and sustainability across various sectors, addressing the urgent needs of a nation striving for inclusive growth and development. One of the pivotal contributions of industrial engineering professionals is its ability to streamline operations and enhance productivity. This is essential in a country where industries must adapt to new regulations and global competitiveness. Industrial engineering professionals play a crucial role in optimising supply chains, reducing waste, and implementing cutting-edge technologies, thereby ensuring that South African businesses can compete on an international stage. Moreover, Industrial engineering professionals could be more instrumental in advancing social equity. By designing systems that are not only efficient but also equitable, industrial engineering professionals contribute to creating job opportunities and improving working conditions. This aligns with South Africa’s requirement of reducing unemployment and fostering a more inclusive economy. In the new political arena, where policy shifts and economic reforms are frequent, the adaptability and problem-solving skills of industrial engineering professionals are invaluable. They are the architects of a resilient economy, capable of weathering political changes while driving sustainable development. As South Africa looks to the post-election future, the strategic role of Industrial engineering professionals will be a cornerstone in building a prosperous and equitable society. Let us tackle this challenge! This edition has a total of 11 articles, with 7 from authors with South African connections and the balance from international authors.

Corporate Social Responsibility 2.0 Towards a socio-transformative paradigm for business

The South African business fraternity is expected to contribute to and foster the government’s social transformation agenda. This contribution should be directed by businesses’ corporate social responsibility (CSR) intentions and organizational arrangements. However, companies’ efforts in this regard are being increasingly criticized due to the absence of a socio-transformative agenda. In other words, CSR praxis is perceived to be inadequately positioned in businesses to act as a core strategic function aimed at benefiting society. The purpose of this article is to outline the perceived failures of conventional CSR praxis and to propose a framework for businesses to adopt a socio-transformative CSR paradigm. A generic qualitative research design, utilizing document analysis and a literature survey, was followed in this study. The findings indicate that businesses do indeed need to adopt a socio-transformative business model to comply with national and international driving forces for change. Recommendations are proposed to guide businesses towards such a transformative management approach utilizing the principles of McKinsey 7-S model for business readiness and Kotter’s 8-step change management model. The study encourages corporations and firms to adopt a socio-transformative paradigm by utilizing established business readiness and change management models.

Testing the Application of the Integral AQAL Model in Entrepreneurial Coaching in South African Business Incubators

Objective: Despite significant investment in entrepreneurial coaching in South Africa, the failure rate of small businesses remains high. This empirical study addresses this issue by creating an effective entrepreneurial coaching framework with the help of business incubators, entrepreneurs, coaches, and industry experts. Research Design & Methods: The study used a quantitative cross-sectional design, with a questionnaire distributed to 296 entrepreneurs and statistical analysis performed using SPSS and STATA software. Findings: The findings support the AQAL model of Ken Wilber in how the entrepreneurial outcomes relate to each other. The findings also align with the literature's emphasis on relationship building as a key factor for business growth, with relationship building emerging as the only statistically significant predictor of business growth. Implications and Recommendations: Relationship building should be prioritised over other coaching outcomes, such as self-efficacy, entrepreneurial resilience, and visionary skills, by entrepreneur development practitioners. Contribution & Value Added: These findings have implications for entrepreneurial coaches, policymakers, and professional bodies, urging them to understand entrepreneurs' contexts, take a systemic approach to entrepreneurial coaching, and provide guidance on industry developments and best practices. It is expected that by implementing these recommendations, the proposed entrepreneurial coaching framework will contribute to better outcomes for entrepreneurs and their incubated businesses.

The Critical Success Factors for Entrepreneurial Coaching in South African Business Incubators

This study examines the critical success factors for entrepreneurial coaching in South African business incubators through a qualitative method that involved interviewing 32 participants. The research aimed to identify the factors contributing to successful coaching interventions between coaches and entrepreneurs. The key findings include the importance of demographics, diversity, and cultural intelligence, coaching relational aspects, the coach’s personal attributes, the entrepreneur’s characteristics, the coach’s competence, and coaching elements. The study highlights the need for coaches to possess emotional intelligence, empathy, and a cultural understanding of their coachees. Additionally, the research underscores the significance of coaching programs and methods tailored to the unique needs and characteristics of the entrepreneurs being coached. The study’s findings have significant implications for coaching practitioners and program developers who work with entrepreneurs in South Africa, and it underscores the need for a nuanced and culturally sensitive approach to coaching and mentoring in the context of South African business incubators.

Prized Innovation Features of a Business Environment for Graduates

Innovation has proved to be a credible source for business development for various organisations, many organisations rely on their ability to innovate to produce impactful and disruptive products and services. Organisations are increasingly focusing on employing candidates or graduates with the ability to be innovative and improve business development. Higher Education Institutions (HEIs) hold the responsibility to produce graduates with the capability to produce innovation and adapt to the innovative cultures and structures created by organisations. This aim of this paper is to determine the most prized innovation features of a business environment suitable for business development, this is to aid HEIs to be informed of the curriculum relevant to produce graduates capable of innovation and business development. The quantitative approach aspect of this research paper enabled the researcher to collect data using an online survey questionnaire from 69 innovation experts from the South African Business Innovation Community (Innovation Summit), and the Innovation, Sustainability and Visionary Leadership Group. The quantitative data was then analysed through inferential statistical analysis. Based on the findings from this research paper, business leadership is deemed the most prized feature of an innovative environment, along with explorative culture and brand identity. Findings from the commercialisation units further support the above findings, as they indicated that most graduates and young entrepreneurs lack leadership skills. In conclusion, entrepreneurial Higher Education Institutions should align their curriculum to industry needs, through understanding the various activities that graduates are expected to engage with in industry to contribute to business innovation and business development.

DOMAIN NAME PROTECTION IN SOUTH AFRICA

This paper investigates the legal mechanisms that are available when one is dealing with domain name disputes. It describes the domain name system and contrasts this with other forms of intellectual property. The different types of domain name conflicts are discussed and the legal measures available for protection of domain names as intellectual property are highlighted. Reference is made to national protection measures such as the Trade Marks Act 194 of 1993 and common law protection of intellectual property. Certain international legal mechanisms such as the World Intellectual Property Organisation’s rules with regard to online domain name dispute resolution and the United State’s Anticybersquatter Consumer Protection Act of 1999 are also discussed as these measures have a direct influence on some domain names of South African businesses. Lastly the changes to domain name dispute resolution procedures envisaged by the Electronic Communications and Transactions Act 25 of 2002 are discussed.Since the advent of e-commerce a new species of highly valuable intellectual property has developed. Although there are remarkable similarities between domain names and “common law trade marks” and trade marks protected by the Trade Marks Act 194 of 1993 there are also important differences, which cause uncertainty and confusion when disputes involving domain names arise. These differences flow mainly from the unique characteristics of domain names. The purpose of this note is to investigate the domain name system as it is used in South Africa, to compare domain names and trade marks, and to look at the protection mechanisms which an aggrieved party may have at his or her disposal if he should find that his business name or trade mark (or something similar) is being used by a domain name registrant in a way that conflicts with his interests. In addition, a short comparison of how these problems are addressed by the international community, particularly the USA and Britain, will be made.

Exploring the nexus of relevance for south african business schools in the 4th industrial revolution

The world of work is changing at a rapid and alarming pace. These changes have been ushered by several factors, including new technologies due to the 4th industrial revolution, political instability such as the war in Ukraine and the global health crises due to the Covid-19 pandemic. These changes have resulted in an increasingly complex business operating environment, where leaders in the 4th industrial revolution are now facing challenges that previous generations have never encountered. Business schools have a strategic role in developing leaders fit for the 4th industrial revolution. Business schools have remained a steadfast pillar of strategic development across the world with the purpose of cultivating leaders that are able to achieve business success. However, in times of change, business schools need to adapt and align to ensure that they are cultivating leaders that are able and capable of navigating through the changing world of work. This study explored the relevance of South African business schools in programmes such as the MBA. This was done by conducting 30 in-depth qualitative interviews with key stakeholders related to the business school ecosystem. The findings of the interviews were coded, analysed and interpreted into a conceptual model documenting the nexus of relevance for South African business Schools. This model presents a conceptual framework which indicates that if a business school acts within the nexus of industry, society and government, it will remain relevant to key stakeholders in the business school ecosystem.

South African business rescue regime

In South Africa, the devastating effects of the COVID-19 plague forced several corporates to resort to business rescue proceedings to guarantee the continuance of their operations. However, the low success rates associated with the current South African business rescue regime are a thing of concern among policymakers. In this article, we conduct a systematic literature review highlighting the shortcomings of the current South African business rescue mechanism and recommendations that can be adopted to improve its success rates. The study then proposes a broad agenda for future research. We discover that even though the South African business rescue mechanism is an economically significant, promising framework that gives companies time and space to find solutions for their problems, it is associated with numerous shortcomings that lessen its success rates. Also, the study results indicate that the regime can be improved in more than a few dimensions to augment its success rates. Further, the review divulges that implementing the current South African business rescue framework has some uncharted areas that need to be investigated. As a recommendation, policymakers should improve the business rescue regime to increase its success rates.

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.

The role of values in enhancing longevity among indigenous black South African family businesses

Background: Values play a fundamental role in the longevity of family businesses. However, not fully understanding these roles threatens their long-term survival. Given their potentially large numbers and subsequent ability to reduce unemployment and poverty, it is critical that black-owned South African businesses achieve entrepreneurial success. While much research exists on family business values in a Western and European context, research on family business values in an indigenous black South African (IBSA) context is nonexistent.Aim: The aim of this research is to determine the role that family business values play in enhancing the longevity of IBSA family businesses.Setting: The study focused on IBSA family businesses that are independently owned and managed by one or more IBSAs and which are located in various major cities of South Africa.Methods: A qualitative methodological approach following a multiple–case study design was adopted. Semistructured interviews were conducted with several key participants using a combination of face-to-face, telephone and online interviews. The six steps of reflexive thematic analysis were used to analyse the data.Results: Four themes describe the role of family business values in enhancing longevity among the IBSA family businesses. Family business values were found to guide the behaviour of family business members, build the identity of the business-owning families and their businesses and build a sense of community in both the family and the family business. The continuity and success of their family businesses were also attributed to these underlying family business values.Conclusion: Family business founders and/or current leaders should articulate the value set they uphold and use it as a resource to build the identity of both their families and family businesses while moderating the behaviours of family business members.Contribution: The study responds to several research calls to investigate family businesses in African cultural settings and provides practical guidance to scholars, entrepreneurs and practitioners on how family businesses can use values as strategic resources to enhance business longevity and success.