Doctoral Degrees (Business Management)

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Annuity decision-making
(Stellenbosch : Stellenbosch University, 2021-03) De Villiers-Strijdom, Jeannie; Krige, J. D. (Jacob Daniel); De Villiers, Johann U.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH SUMMARY : As a standard practice, retirement capital is converted into a subsequent income stream. There are two main annuity income products to choose from, namely: (i) a guaranteed/life annuity (or annuitisation); and (ii) a living annuity (or self-annuitisation). The former guarantees an annuity income for life, whereas the latter exposes capital to volatile investment returns, with the possible danger of depletion before death, especially in the wake of excessive withdrawals. The world-wide phenomenon of reticence among retirees to protect themselves against longevity risk, is an annuity puzzle that has been the subject of vigorous academic debate. This study investigated the factors that relate to individuals’ annuity perceptions, intention and satisfaction. Based on existing literature in this field, a theoretical framework is presented with respect to the annuity puzzle, on the basis of which two questionnaires are designed as measurement instruments, namely: (i) a questionnaire for employees who are members of various retirement funds in order to ascertain the factors that relate to annuity perception and intention; and (ii) a questionnaire for pensioners, in order to measure their satisfaction levels that relate to the eventual outcome of their annuity choice. Based on an investigation into the factors that relate to annuity decision-making, the principal conclusions of this study are: (i) a bias towards self-annuitisation before retirement is mainly related to investor confidence in earning an above-average income based on the capital growth generated by the underlying capital, although the accompanying issues with respect to managing these investments often prove problematic; (ii) the bequest motive, which refers to the desire to leave retirement capital to heirs, often results in an unjustified belief in living annuity desirability, with the possible negative outcome of outliving retirement capital and facing poverty in retirement, the result of which could lead to dependency on the state or family members; (iii) a substantial impact on individuals’ perception and intention to annuitise, is the expectation of a predictable and consistent annuity income stream, without continuous involvement in investment decision-making; (iv) trust in the integrity of financial advisors significantly relates to individuals’ annuity perceptions and intentions. Finally, this study presents a new annuity decision-making tool, consisting of two questionnaires and user’s manuals, to be used by benefit counsellors and financial advisors, in guiding their clients with respect to their choice of an optimal annuity income option. In summary, this study therefore provides further insights into the intriguing annuity puzzle.
Antecedents to consumer willingness to share information with retailers
(2022-12) Koorts, Christie; Gerber, Charlene; Terblanche-Smith, Marlize
An assessment of urban land administration in Ethiopia : evidence from Mekelle City
(Stellenbosch : Stellenbosch University, 2022-12) Gebrihet, Hafte Gebreselassie; Pillay, Pregala; Stellenbosch University. Faculty of Economic and Management Sciences. Dept of Business Management.
ENGLISH SUMMARY: There has been a growing scholarly interest within the land administration community to realize fit-for-purpose land administration that meets people's needs across society. While global research into land administration is on the rise, little attention has been paid to the Ethiopia's context. The literature gap results from the problem of available data to examine questions relating to good governance, land market, and land policies. This study offers evidence from Ethiopia by providing an analysis of triangulated data while focusing on good governance, land market, and land policies. The study is based on a pragmatic research design that used surveys, interviews, secondary data, and document reviews to gather evidence on urban land administration in Mekelle City, Ethiopia. The study's first objective is generating a good governance index that fits the context of urban land administration in the Mekelle City context. The findings demonstrate that accountability, transparency, the rule of law, and public participation matter the most in urban land administration. The good governance index generated from this study is included in the survey to analyze the determinants of customer satisfaction in urban land governance. The findings of the study demonstrate that urban land administration in Mekelle City is characterized by weak governance. The regression analysis results reveal that undermining the rule of law, accountability, public participation, transparency, and rampant corruption negatively affect customer satisfaction. In addition, the study examines the determinants of the urban land lease market. As a result, this study found that plots specified for residential housing, plot grade, payment period, monthly income and plot size increases the markup price by 160.34; 5.56; 0.5; 0.056 and 0.04 percent, respectively. Plots located in Adi-Haki, Hawelti, and Ayder increase the markup price by 19.28, 16.98 and 12.89 percent, respectively. In the fourth objective, the study appraises the rhetoric and praxis of Ethiopian urban land policies. Results show that urban land legislation in Ethiopia has failed to achieve efficiency and fairness in the land lease market. These failures, in turn, contribute to increasing customer dissatisfaction. The proliferation of customer dissatisfaction was found to be influenced by weak land governance. However, the scale of the phenomenon was seen beyond weak land governance as a signal of policy failure and market failure. The land policy-making failure emanated from the complexity and under-estimation of the modalities of land lease delivery. Hence, all stakeholders must be committed to work as a team to ensure quality service delivery, improve customer satisfaction, and realize sustainable urban land administration in Mekelle City. The study contributes to Sustainable Development Goal (SDG) no. 11 by tracing the performance of urban land governance, the dynamics of the urban land market, and urban land policies towards fit-for-purpose and sustainable land use and development. It also contributes methodologically by generating a good governance framework for urban land administration and combining rhetoric informed and practice-based discourse analyses to show the whole picture of policy research.
The attitudes and expectations of managers and trade unions regarding the social responsibility activities of firms
(Stellenbosch : Stellenbosch University, 1994) Struwig, Amori; Stellenbosch University. Faculty of Economics and Management Sciences. Department of Business Economics.
The behaviour of financial ratios for capital intensive and labour intensive enterprises during an upswing and decline phase of the economic cycle
(Stellenbosch : Stellenbosch University, 2001-04) Bloom, Jonathan,1976-; Lambrechts, I. J.; Le Roux, N. J.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business management.
ENGLISH ABSTRACT: Financial performance ratios are generally based on a set of financial statements without taking cognisance of other factors that could affect the measurement of performance. The behaviour of financial performance indicators during an upswing and decline phase of the economic cycle, together with the nature and scope of an enterprise's activities may have an effect on the manner in which financial performance indicators are used by an enterprise. The question may arise whether or not a ratio's behaviour for capital intensive (CI) and labour intensive (LI) enterprises could capture the essence of external factors such as an upswing or decline in the economic cycle as measured by the Gross Domestic Product (GOP). In this study an upswing phase (1987-1989) of three years and a decline phase (1990-1992) of three years have been selected after an analysis of the economic cycle over the period 1970 to 1996. The distinction between the capital and labour intensity of an enterprise is based on an analysis of the total assets, fixed assets and number of employees of industrial enterprises listed on the Johannesburg Stock Exchange (JSE). The initially selected 62 financial performance indicators categorised under profitability, growth, cash flow, value-added and inflation-adjusted ratios are calculated for each enterprise of the CI (33) and LI (36) groups and for each year of the research period. The primary objectives of the research are: • To distinguish between the CI and LI nature of enterprises listed in the industrial sector of the JSE by using measures of capital and labour intensity; • To obtain patterns and identify differences in the behaviour of the selected financial indicators between CI and LI enterprises during an upswing and decline phase of the economic cycle, as measured by the GOP; • To analyse and investigate patterns and differences to determine whether or not there is specific justification(s) for the behaviour exhibited by the CI and LI enterprises for a particular ratio during either or both the upswing and decline phases of the economic cycle; • To identify key financial indicators, which could possibly be used by CI and LI enterprises to forecast financial performance and to identify lead and lag patterns in the economic cycle. An elaborate statistical analysis is conducted of the ratios to satisfy the objectives stipulated above. The first part of the analysis is based on a single representative measure, which represents an average of the three-year upswing and three-year decline phases respectively. Mean and median values are calculated for the CI and LI enterprises for both the upswing and decline phases. A profile analysis based on Hotelling's T2 test is used for the analysis of ratios that exhibit approximate normal distributions. Non-parametric tests, Mann-Whitney Utest and Wilcoxon matched-pairs test, are used for the analysis of ratios that do not indicate approximately normal distributions. The second part of the study focuses on an analysis of the ratios based on the individual years of the research period. The statistical techniques used for the analysis of the ratios based on a single representative measure are also used in the analysis of the ratios based on the individual years. The limitations identified during the analysis based on a single representative measure are addressed to a large extent in this section of the statistical analysis. By analysing the mean and median values based on the individual years, it is possible to classify the ratios as one of five pattern groups exhibited by the CI and LI enterprises, i.e. normal expected, lag, lead, cyclical and mixed. The patterns of the various ratios within each of the pattern groups are also analysed from a financial management perspective. The findings of the study confirm the stated hypothesis that there are differences in the behaviour of financial indicators based on a single representative measure and over the individual years of the research period between CI and LI enterprises during either or both an upswing and decline phase of the economic cycle. Furthermore, the analysis highlights several ratios based on a single representative measure that could not be used universally by all enterprises to measure financial performance and only during either an upswing or decline phase of the economic cycle. Ratios which are part of this category include return on total net assets (before tax), return on total net operating assets, dividend per share, sales to total net assets and interest-bearing debt to total shareholders' interest. The results based on the individual years of the analysis indicate that a large number of ratios exhibit normal expected patterns. Among the traditional profitability indicators, 80% exhibit normal expected patterns for the CI and LI enterprises during the upswing and decline phases. Traditional profitability ratios such as return on total net assets, return on net operating assets, return on total shareholders' interest and the value-creation ratio, economic value added form part of the normal expected group of patterns. All the inflation-adjusted ratios indicate normal expected patterns. These ratios indicate relative stability over the economic cycle and may be appropriate for the purposes of medium- and long-term financial forecasting as they follow the trade cycle. Approximately 39% of the ratios indicate mixed patterns, i.e. different patterns for the CI and LI enterprises. The growth in attributable earnings, cash flow to interest payments, market value of equity to book value of equity and market value added ratios indicate behaviour patterns for the CI and LI enterprises which may lead the economic cycle. These ratios may indicate the possibility of anticipating upswing and decline phases in the economic cycle. The relevance of the results for a CI enterprise alludes to the use of more debt financing during the decline phase to cover costs and working capital requirements when demand for products and services decreases as a result of a slow-down in the economy. The pattern exhibited by EPS may allude to an anticipated upswing phase in the economic cycle. An increase in the cash flow to interest payments ratio during the decline phase may indicate an imminent change in the cycle of the economy. The relevance of the results for LI enterprises indicates that an upswing in the economic cycle may be anticipated by an increase in the working capital to operating cash flow ratio. More debt financing is used during the upswing period, which may be attributed to greater demand and consequently results in a higher gearing position for LI enterprises. An increase in the cash flow to interest payments ratio during the decline phase may indicate an imminent upswing in the economic cycle. Several limitations of the study include the use of a single upswing and decline phase to represent the movements of the economic cycle; the approach used to distinguish between the CI and LI enterprises requires further analysis, and the large number of ratios could in future research be limited to several indicators. The more important recommendations of the study include the use of multiple upswing and decline phases of the economic cycle; more research into the lags and leads exhibited by the CI and LI enterprises for specific ratios should be conducted; the possibility of adopting a different approach to distinguish between CI and LI enterprises could also be considered; and further research is required to ascertain the reliability of indicators that highlight lead patterns for forecasting an upswing or decline phase in the economic cycle.
Capital structure and financing of SMEs : empirical evidence from Ghana and South Africa
(Stellenbosch : Stellenbosch University, 2007-12) Abor, Joshua; Biekpe, Nicholas; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: This thesis is made of stand-alone essays on the capital structure and financing of Small and Medium Enterprises (SMEs) in Ghana and South Africa. Chapter Two reviews issues on SME development in Ghana and South Africa. Chapter Three compares the capital structures of large, quoted firms and SMEs in Ghana. The results show that quoted firms exhibit higher debt ratios than those of SMEs. The results suggest that age, size, asset structure, and profitability of the firm affect the capital structures of quoted firms and SMEs. For the SME, it is evident that level of education and gender of the entrepreneur, industry, and location of the firm are also important in explaining their capital structure. Chapter Four examines the determinants of bank financing of SMEs in Ghana. The results reveal that bank financing accounts for less than a quarter of SMEs’ debt financing, with short-term bank credit representing the greater proportion of bank finance. The results show that age, size, asset tangibility, and growth of the firm have positive associations with long-term bank debt, while profitability is negatively related to long-term bank debt. The short-term debt indicates a positive relationship with size, but negative relationships with profitability, and growth. Chapter Four also investigates the awareness and use of various financing schemes available to the Ghanaian SME sector. The results reveal low awareness and usage levels of these financing initiatives. Chapter Five explores the determinants of Ghanaian small and medium sized non-traditional exporters’ (NTEs) choice of formal/informal finance. The results show that NTEs depend on formal financing sources with bank finance representing the greater percentage of NTEs’ financing. The results suggest that, newer firms depend more on formal finance and less on informal finance. The results show positive relationships between formal finance and size, and growth of the firm. Chapter Six assesses how corporate governance affects the performance of SMEs in Ghana and what the implications are for financing opportunities. The results reveal that better corporate governance structures lead to better performance of SMEs. The paper concludes that the adoption of good corporate governance structures could lead to better management decisions and enable SMEs to attract financing resources. Chapter Seven examines the relationship between agency factors and the capital structure of quoted SMEs in South Africa. The results indicate that firms with one institutional blockholder are able to monitor the opportunistic behaviour of management more effectively than those with more than one institutional blockholders. Chapter Eight looks at the financial market and financing choice of SMEs and large firms in South Africa. The results indicate that developments in the financial market affect both longterm debt/equity and short-term debt/equity decisions of large firms. However, for SMEs, it is the long-term debt/equity decision that is affected by the financial market. The final essay examines the effect of debt policy on the performance of SMEs in Ghana and South Africa. The results indicate that long-term debt and total debt ratios negatively affect performance of SMEs. These findings have important implications for policy-makers, entrepreneurs and managers of SMEs.
Cellphone banking adoption and continuance of use in an internet banking context : a study of consumers'cross-channel cognitive evaluations
(Stellenbosch : Stellenbosch University, 2013-03) Nel, Jacques; Boshoff, Christo; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: The convergence of the Internet, wireless technologies, and mobile devices has led to the development of a new paradigm of transacting, namely, mobile commerce. Because banking activities are easily digitised and automated, banks have seized the mobile transacting opportunity and have developed cellphone banking applications that allow more flexibility for bank clients than internet banking in terms of anywhere, anytime banking. For banks, considering the benefits associated with multi-channel customers, the ideal situation would be that bank clients using internet banking also adopt and continue to use cellphone banking in the future. Therefore, to assist marketing managers with the development of marketing strategies to enhance the concurrent use of internet and cellphone banking, this study investigates the influence of internet banking cognitive evaluations on the perceived usefulness and the perceived ease of use of cellphone banking in the formation of the intention to use and the continuance of use intention of cellphone banking. A literature review revealed that two consumer behaviour theories can guide crosschannel cognitive evaluations between the internet banking and cellphone banking channel namely, expectation-transfer theory and status quo bias theory. In the context of this study, expectation-transfer theory can explain cross-channel evaluative synergies from the internet banking channel to the cellphone banking channel, as well as dissynergies; whilst status quo bias underpins only evaluative dissynergies. These theories point to internet banking beliefs that could influence the perceived ease of use and perceived usefulness of cellphone banking. Based on the literature review, a conceptual model was developed of the formation of intention to use and the continuance of use intention of cellphone banking in an internet banking context. To assess the validity of the model empirically, data were collected from 678 users of only internet banking and 491 users of both internet and cellphone banking. The data collected in the empirical phase of the study were analysed using the structural equations modelling (SEM) software program AMOS 20.0. The results revealed that the perceived convenience and time saving of internet banking positively influence the perceived usefulness of cellphone banking for the users of both internet and cellphone banking. On the other hand, only the perceived convenience of internet banking influenced the cellphone banking usefulness perceptions of the users of only internet banking. Furthermore, internet banking trust and risk perceptions only influenced the cellphone banking usefulness perceptions of the users of only internet banking. Expectation-transfer in both cohorts was also confirmed between the ease of use perceptions of internet banking and the perceived ease of use of cellphone banking. The results also confirmed that internet banking facilitating conditions negatively influence the perceived usefulness of cellphone banking (evidence of status quo bias). The theoretical contribution of the study is apparent at three different levels. Firstly, the conceptual model of cross-channel cognitive evaluations extends the Technology Acceptance Model (TAM) with beliefs of a related technology as the determinants of perceived usefulness and perceived ease of use. Secondly, the study provides more insights into how cross-channel cognitive evaluations influence the formation of intention to use and the continuance of use intention of cellphone banking. And lastly, the study identifies additional sources of expectation-transfer and status-quo bias in the multichannel marketing context. The study provides valuable insights into internet – cellphone banking multi-channel consumer behaviour that should be considered by managers in the development of cellphone banking marketing strategies. To facilitate the conversion from internet banking to the concurrent usage of internet and cellphone banking, managers of cellphone banking services must ensure that the internet banking service is reliable and risk free. Equally important, cellphone banking must be marketed as a complementary channel to internet banking. In other words, the usefulness of cellphone banking must be emphasised in situations when the bank client is not near a computer to do internet banking or when he/she does not have the time or money to use a computer for internet banking. And lastly, to enhance the adoption of cellphone banking marketing communications must emphasise the similarities between internet and cellphone banking so that expectation-transfer between the two channels can influence behavioural intentions to adopt cellphone banking. Based on the results of the study, several recommendations can be made to enhance the continuance of use of cellphone banking. Firstly, marketing communications must remind the concurrent users of internet and cellphone banking of why they are using cellphone banking. The most important reason to remind them of is the usefulness of cellphone banking in situations where there is a lack of internet banking facilitating conditions. Marketing managers should also take note that cellphone banking users do not draw on internet banking trust and risk perceptions to form perceptions of the usefulness of cellphone banking. It may be that they only consider trust and risk perceptions directly related to cellphone banking. This conclusion emphasises the importance of cellphone banking trust and risk perceptions in cellphone banking continuance of use behaviour. Finally, the study quantified the influence of internet banking cognitive evaluations on the formation of intention to use and the continuance of use intention of cellphone banking. Considering this result, the study provides valuable information for marketing managers of cellphone services. The methodology employed can also guide future studies exploring cross-channel evaluations in a multi-channel marketing context.
Connecting capital : the factors influencing the decision-making process of institutional investors towards responsible investing
(Stellenbosch : Stellenbosch University, 2019-04) Habberton, Colin Vincer; Viviers, Suzette; Skelly, Lara; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.; Stellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School.
ENGLISH SUMMARY : Institutional investors, as agents of other people’s money, have come to dominate investment holdings globally. Through the concentration of ownership of the assets they are mandated to manage, institutional investors have the right and power to influence decision-making in the companies in which they invest. Consequently, the decisions they make regarding investments can significantly impact the stakeholders and economies connected to these assets. Traditionally, institutional investor decision-making has been driven by the objective of maximising risk-adjusted financial return without commensurate attention given to the environmental and social impact of the investments made. The legacy of South Africa’s colonial history, coupled with the global repercussions of financial sector failures and company collapses, has generated ongoing debate and academic enquiry into the roles and responsibilities of institutional investors and their investment decision-making process. In response to the acknowledgement for greater accountability and action, more ‘responsible’ investment principles, policies and practices that consider environmental, social and governance (ESG) criteria in investment decision-making have emerged. Responsible Investing (RI) has risen to prominence since the launch of the United Nations Principles of Responsible Investment in 2006. In South Africa, since 2006, increased awareness of and participation in RI has been spurred on by changes in legislation and the development and adoption of codes of corporate governance by civil society and increasingly by the private and public sectors. Despite progress in policy and practice, research has found that barriers to the growth of RI in South Africa outweigh the drivers and enablers. In addition, there appears to be lack of commitment among South African institutional investors, with them being characterised as having a ‘passive and selective approach’ to RI. With the aim of better understanding the connection between institutional investors and the impact of their investment decisions, this study sought to identify and analyse the factors influencing the decisions, decision makers and decision-making processes of South African institutional investors towards RI. Theoretical and sector research over the period 2013 to 2018 highlighted the characteristics of the stakeholders in the institutional investment value chain in South Africa from a stakeholder perspective and the factors influencing their respective decision-making processes. Senior decision-makers from a broad representation of identified institutional investor categories were the units of analysis. Influenced by transdisciplinary and participatory action research methods, over 30 semi-structured interviews were undertaken to gather primary data for the study that were recorded, transcribed, coded and analysed. Through ongoing consultation with academic and investment professionals, the analysis of relevant theory, industry reports and empirical data, the researcher formulated and refined a conceptual framework that proposes an integrated view of the factors influencing the investment decision-making towards RI. The framework consists of stakeholders in commercial and contractual value chains influenced by social, political, ethical and legal structures, informed by a variety of information sources and metrics reported over time and ESG horizons. The conceptual framework illustrates the aspects and connections between institutional investors and the stakeholders impacted through their investment decisions. The empirical evidence points to the adoption of a more holistic, specific, stakeholder-driven view of the investment value chain to improve RI policy and practice, recommending mutual accountability to optimise stakeholder salience, improve accountability, guide engagement and promote participation in the investment decision-making process. The study contributes to the body of knowledge from descriptive, instrumental and normative perspectives aligned to stakeholder theory as well as advancements to institutional investing and responsible investing research, particularly in South Africa. The study provides a detailed conceptual framework consisting of a taxonomy of institutional investors and an integrated view of the cross-sectoral factors and detailed explanations of the phenomena observed or deduced from empirical research and relevant literature that connect institutional investors’ decision-making to the stakeholders impacted by the decisions they make. The conceptual framework offers model to assist investment decision-making and thus an instrumental tool to inspire praxis in decision-makers, especially asset owners, individual contributors and their beneficiaries, enabling deeper understanding of the factors to consider in their investment decision-making process. Against the background of stakeholder theory, the study offers stakeholder-specific recommendations to address the inertia and inconsistency in the entrenchment of RI philosophy, policy and practice prevalent among institutional investors in South Africa. Furthermore, the interpretation of the unique characteristics that South Africa presents through the lens of its political economy and the theory of the state, informed recommendations towards a more ‘collibratory’ approach to improving the adoption of RI.
Consumer ethnocentrism and attitudes towards domestic and foreign products : a South African study
(Stellenbosch : Stellenbosch University, 2011-12) Pentz, Christian Donald; Terblanche, N. S.; Boshoff, Christo; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: The continued growth of international trade has resulted in levels of global product availability that is not only unprecedented, but would have been regarded as impossible not too long ago. Products of almost every conceivable national origin are now readily available in numerous countries throughout the world. Because the “country of origin” label of a product is a factor that could influence the buying behaviour of consumers, prescient international marketers know that they need to investigate consumer attitudes toward both domestic and imported products and the findings of these investigations should be used to formulate more effective marketing strategies. Previous research into the “country of origin” phenomenon has focused on consumer ethnocentrism as a possible reason why consumers would buy a domestic rather than an imported product. The basic premise of the concept of consumer ethnocentrism is that the attitudes and purchase intentions of consumers can be influenced by what could be called nationalistic emotions. In short, consumer ethnocentrism implies that consumers might regard the purchase of foreign products as “wrong”, as it might harm the domestic economy and result in job losses in industries that compete with imports. As a result, consumer ethnocentrism has been actively researched in developed countries in particular, but there seems to be a dearth of knowledge about consumer ethnocentrism in developing countries. This study‟s primary objective is therefore to investigate consumer ethnocentrism in a developing country, in this case South Africa. The study is based on a review of the literature, covering aspects such as marketing, consumer behaviour, globalisation and especially the phenomena of country of origin and consumer ethnocentrism. The literature review was followed by an empirical, survey-based study investigating consumer ethnocentrism in South Africa. A novel contribution of this study is that consumer ethnocentrism was investigated among different racial groups in the same country. This was done to assess whether there are significant similarities and/or differences between different racial groups in terms of consumer ethnocentrism and any of the attitudinal variables relevant to international marketing. A conceptual model (containing sixteen variables) was developed as a guideline from the literature review to investigate consumer ethnocentrism and how it could influence the attitudes of South African consumers (of different races) towards the import of foreign products (Chinese clothing in this case) and ultimately the willingness of these consumers to buy imported clothing. A questionnaire was subsequently developed to collect data from a sample of black and a sample of white South African respondents. An exploratory factor analysis of the data was done and the results indicated that for the samples of both black and white respondents, the original number of variables (excluding demographic variables) that drive consumer ethnocentrism could be reduced to ten. These variables were exactly the same for both sub-samples studied. The proposed theoretical model was also empirically tested by means of the structural equation modelling technique. The result of these tests was the creation of structural models for both sub-samples, illustrating all the variables and indicators of the measurement model and the structural relationships among the different variables. From the results it is clear that even though there were differences in terms of the impact of a number of antecedents on consumer ethnocentrism, the two sub-samples responded in a relatively similar way. The results also indicated that the antecedents, cultural openness, patriotism, individualism, age, income, attitude towards human rights and history of oppression, were regarded as antecedents for consumer ethnocentrism by both sub-samples. The differences confirmed were that the sample of white respondents also regarded nationalism and gender as predictors of consumer ethnocentrism. The results also revealed that black respondents seemed to be more ethnocentric than their white counterparts. From the results it seems that, due to the differences between the two sub-samples of this study, marketing strategies related to consumer ethnocentrism should not be identical for white and black South African consumers. Based on the results, a number of marketing strategies that could be implemented by both local and international marketers for the South African market are proposed.
Corporate governance and the financial performance of selected Johannesburg Stock Exchange industries
(Stellenbosch : Stellenbosch University, 2014-12) Mans-Kemp, Nadia; Erasmus, Petrus Daniel; Viviers, Suzette; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: Mainstream investors are mostly interested in how they can benefit financially from a specific investment. Although this is the case, an increasing number of so-called responsible investors are also beginning to integrate environmental, social and corporate governance (ESG) aspects into their investment analysis and ownership practices. Corporate governance compliance is often the first level of ESG interest for these investors. Previous researchers considered the relationship between corporate governance and various financial performance measures, but reported inconclusive evidence on the nature of the relationship. Even though the three King Reports provide a well-developed framework for corporate governance compliance in South Africa, no comprehensive academic study has previously been conducted on the above-mentioned relationship in the South African context. The primary objective of the current study was therefore to investigate the relationship between corporate governance and the financial performance of selected JSE industries. The chosen study period (20022010) coincided with the launch of the King II Report and included the 20072009 global financial crisis. A combination of convenience and judgement sampling was used to draw a sample from six JSE industries. In an attempt to reduce survivorship bias, the sample included both listed firms and firms that had delisted during the study period. The complete sample comprised 227 companies (1 417 annual observations). When the study commenced, there was a lack of reliable, readily available ESG data for JSE-listed firms. An existing corporate governance research instrument was therefore refined to develop standardised data on the corporate governance compliance of the selected firms. An annual corporate governance score (CGS) was compiled for each of the firms by means of content analysis of its annual reports. Five financial performance variables were considered, namely return on assets (ROA), return on equity (ROE), earnings per share (EPS), total share return (TSR) and risk-adjusted abnormal return (alpha). The selection of these measures was based on previous research. The secondary financial data were sourced from the McGregor BFA database and the Bureau for Economic Research. The resulting panel dataset was analysed by means of various descriptive and inferential analyses. The descriptive statistics revealed an overall increasing corporate governance compliance trend. Both the disclosure and acceptability dimensions of the sample companies’ CGSs improved over time. The sample firms complied with approximately 68 per cent of the corporate governance criteria on average. The panel regression analysis showed a significant positive relationship between CGS and the accounting-based EPS ratio. Although this result is encouraging, it should be kept in mind that managers can have an influence on both these variables. On the other hand, a significant negative relationship was observed between the market-based TSR measure and CGS. The TSR measure is not adjusted for risk. Risk-adjusted abnormal returns were thus also estimated for four corporate governance-sorted portfolios. In a positive change of events, both the capital asset pricing model (CAPM) and the FamaFrench three-factor estimations showed positive alphas for the portfolio consisting of firms with the highest CGSs. These encouraging results were observed for the overall study period and the period before May 2008. Investors could thus have benefitted, in risk-adjusted terms, by investing in the sample firms with high corporate governance compliance. In the period after May 2008, the FamaFrench three-factor estimations revealed that the risk-adjusted market-based performance of almost all the sample firms were negatively affected by the global financial crisis of the late 2000s. The reported alphas for this period were, however, not significant. Based on these results, the researcher recommends that directors, managers and shareholders should consider the valuable opportunities associated with sound corporate governance compliance, rather than merely regarding it as a “tick-box” obligation.
Corporate governance, institutional investors and firm performance: A comparative study of South Africa and China
(Stellenbosch : Stellenbosch University, 2016-12) Zhang, Qiaowen; Erasmus, Pierre; Stellenbosch University. Faculty of Economic and Management Sciences. Business Management.
ENGLISH SUMMARY : As growing role players in corporate governance, institutional investors are regulated and guided by a series of rules, according to which they are required to address their fiduciary duty by protecting the interests of their clients as well as a diverse group of stakeholders. This study explores whether institutional investors comply with this fiduciary duty through an investigation of their prudent stockholding behaviour and their impact on improved corporate governance. The first empirical chapter assesses what types of firms institutional investors tend to invest in. The impact of institutional investors on corporate governance has been considered from both financial and non-financial perspectives in prior studies. The financial perspective includes institutional investors’ impact on financial performance and on corporate operations (earnings management in this study). These aspects are discussed in Chapters 3 and 4 respectively. The non-financial perspective is represented by the impact of institutional investors on corporate environmental, social and governance (ESG) performance, which is studied in Chapter 5. South Africa and China, two major emerging markets where institutional investors and corporate governance have experienced considerable development in recent years, were employed as cases for this study. The selected sample came from South African companies listed on the Johannesburg Stock Exchange (JSE), observed over the period 2010 to 2013, and Chinese companies listed on either the Shanghai Stock Exchange (SSE) or the Shenzhen Stock Exchange (SZSE), observed over the period 2008 to 2013. After taking account of endogeneity problems and by using pooled ordinary least squares (OLS), fixed effect (FE), two-stage least squares (2SLS) and system generalized method of moments (Sys-GMM) estimations, this study observed that similarities and differences co-exist in terms of institutional investors’ stockholding behaviour and their relationship with improved corporate governance between South Africa and China, between pressure-insensitive and pressure-sensitive institutional investors, and between passive and non-passive institutional investors. More specifically, it was found that institutional investors overall in both South Africa and China are not always prudent in terms of their stockholding behaviour; although institutional ownership was observed to have a significant relationship with improved corporate financial performance and earnings management alleviation, it was insignificantly associated with corporate ESG performance. Institutional investors are therefore considered more conventional than socially responsible, and seem unlikely to accept suboptimal financial performance to pursue ESG aims. It should be noted that institutional investors seem effective in promoting corporate governance disclosure in South Africa, but this phenomenon was not detected in China. By disaggregating institutional investors into specific types, this study found that pressure-insensitive institutional investors, compared to their pressure-sensitive counterparts, appear to be more effective in monitoring, with a resulting advancement in corporate financial performance. Additionally, passive institutional investors in both South Africa and China were noted to show less preference towards past financial performance when they select stocks; in China, however, they exhibit a stronger association with improved corporate financial performance after the investment relationship has been built than their non-passive peers.
The critical success factors for commercialising microfinance instititions in Africa
(Stellenbosch : University of Stellenbosch, 2010-03) Kiweu, Josephat Mboya; Biekpe, Nicholas; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: Uncertainty of continued donor funding poses a risk to microfinance operations worldwide, and this study explores the circumstances under which African microfinance institutions (MFIs) will consider commercial funding as a viable alternative source of funding. This research aims to identify the factors that are associated with successful access to private capital for pro-poor financial institutions. It examines the suitability of new opportunities for accessing fresh capital by MFIs for development and poverty reduction using commercialisation as an option. In a world awash in private capital, it is vital to harness the power of the private sector to solve key development challenges (World Bank, 2007). As microfinance institutions grow, they increasingly find themselves in need of additional capital to finance expansion of services to cover more poor communities. The study undertook a cross-country data analysis of 103 microfinance institutions to help provide understanding of the critical success factors that underpin successful access to commercial capital. The study also tested the hypothesis on the viability of commercial finances, and developed and tested a commercialisation success model for tapping commercial funds. The prediction model based on firm-level data from a sample of 21 African countries between 1998 and 2003, aims to minimise chances of failure and act as a screening system by investors as well as a selfassessment tool for MFIs intending to seek commercial capital. On examining the direct and indirect impact of firm-level success factors on commercialisation, the study identified key predictors of success and guidelines for MFI financing’s integration with the larger financial system. The study finds that certain critical success factors (CSFs) define minimum pre-conditions for microfinance institutions considering commercial funding as an alternative source of finance. There is evidence to suggest that the desire to tap into the capital markets and capacity to link with commercial investors is a realisable vision for African MFIs. The research evidence is instructive of widened financing options for MFIs and capacity to relax growth constraint in the industry. Based on the CSFs, the study suggests how MFIs can break free from 'captive' donor funding as a necessary platform for the switch to commercial finance in the industry. However, the findings also suggest the need for MFIs to satisfy the interests and requirements of prospective commercial investors to overcome new challenges. In particular, the results show that the extent of organisational formalisation and transparency in financial reporting are absolutely essential in drawing commercial lenders to invest in microfinance. In addition the study establishes the reasons why traditional approaches to financing microfinance cannot work any longer. There are some concerns on mission drift; in particular whether the poor gain from commercialisation, and under what circumstances their interests are taken care of in order to preserve the long-term social value of microfinance as a poverty reduction strategy. The study was carried out based on a rather limited time series data. However, the number of firms and the diversity is considered adequate for the study, as well as sample representation across Africa. The study also used views of 'thought leaders' as the source of information. Other personnel calibre may have had different suggestions. Perceptions were drawn from commercial lenders/investors of microfinance programmes based in Africa. Needless to say, any generalisation of CSFs beyond the African microfinance context should be made with caution. This study is probably one of the first attempts to explore the possibility of a linkage between microfinance and capital markets and it will be of interest to MFIs, commercial banks, international donors and investment funds with an interest in investing in the microfinance industry. The findings suggest that the speed of increase in financial leverage per country depends as much on the dynamism of the market, as it does on the level of development of the finance sector. The results indicate that commercial investors will be attracted by good financial returns and administrative efficiency (return on assets, cash-flow adequacy and operating expense ratio), transparent reporting and information disclosure and clarity, as well as low inflation levels. Investors will also be looking for larger, regulated and profitable MFIs with a low-risk profile for their investment portfolios. The study found strong support to the hypothesis that the commercialisation index (CI) is a better measure of successful commercialisation than the LMA (leverage multiplier added), given the variables used. In all cases, compelling evidence shows that the CI has more explanatory power and is an accurate predictor of two-year success in commercialisation as examined by logistic regression. These results suggest that the superior predictive abilities of the CI commercial rating rule could be explored to guide screening efforts for winners, investment decisions and other binary classification investigations. Specifically, the model can be useful in guiding successful commercialisation schemes in Africa because it provides MFIs with a structured approach for achieving sustainable commercial microfinance.
Determining a method to measure the capital intensity for enterprises listed in the industrial sector of the Johannesburg Stock Exchange for the period 1989 to 1996
(Stellenbosch : Stellenbosch University, 2001-04) Erasmus, Petrus Daniel; Lambrechts, I. J.; Le Roux, N. J.; Stellenbosch University. Faculty of Economic and Management Sciences. Department of Business Economics.
ENGLISH ABSTRACT: A definite need exists for a measure which can be used to determine the degree of capital intensity of an enterprise. One of the main reasons why it is important to determine if an enterprise is capital or labour intensive is that the two types of enterprises react to changes in the economic environment in different ways. Some changes in the economic factors will have a totally different effect on a capital intensive enterprise than they would have on a labour intensive one. The degree of capital intensity of an enterprise can therefore be used to predict how it will react to economic changes, and it is therefore a valuable source of information for financial decision-making. The measurement of capital intensity, however, presents a major problem. A large number of different measures have been developed and used in the literature. These measures include the measures of total assets to revenue; property, plant and equipment to revenue; property, plant and equipment to total assets; depreciation as a percentage of revenue; as well as property, plant and equipment per employee. A number of measures are also based on value added figures, and these include salaries to revenue; value added per employee; property, plant and equipment to value added; and salaries to value added. In the literature most researchers provide no or little justification for their preferred measure of capital intensity. The main objective of the study is to determine an appropriate method to measure capital intensity. For this purpose the above-mentioned measures, which are generally used to determine capital intensity, are considered critically and evaluated by classifying enterprises listed in the Industrial Sector of the Johannesburg Stock Exchange during the period 1989 to 1996. During this period the South African economy experienced a decline, followed by an upswing in the economic cycle. Principal component analyses (PCA) are used to analyse the data. These analyses are carried out for each year separately as well as for the period as a whole. Biplots are used to provide a multidimensional graphic representation of the results. The results indicate that the five traditional measures of capital intensity which are not based on value added figures are all suitable to use as measures of capital intensity. Only one of the measures based on value added figures, however, are able to indicate capital intensity. The five traditional measures of capital intensity which are not based on value added figures, as well as the measure property, plant and equipment to value added, are therefore included in the principal component analyses. The principal component scores obtained from the first principal component are proposed as a composite measure of capital intensity. These principal component scores represent a linear combination of the six measures of capital intensity. The relative contributions of the various measures to this composite measure are also investigated, and it is found that all six the measures provide an important contribution. The results indicate that a number of enterprises listed in the Stores and Food sectors are relatively less capital intensive, while enterprises listed in the Building and Construction, Engineering, Steel and Allied, and Electronics sectors are relatively capital intensive. A visual evaluation of the results indicates that the proposed method IS able to distinguish between capital and less capital intensive enterprises. The results of the study provide researchers with a more efficient way of measuring capital intensity, and can be used to provide more information about the effect of changes in the economic cycle on the expected financial performance of enterprises.
Development of a synergy audit model for sustainability of horizontal airline alliances
(Stellenbosch : Stellenbosch University, 2003-12) Muller, Dirk D. (Dirk Dieter); Leibold, M.; Brockmann, W.; Stellenbosch University. Faculty of Economic & Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: For more than a decade there has been an economic need to mitigate the negative effects of the air transport industry's innate sensitivity to cyclical developments as well as the effects of its inherent lack of substantial profits. The past 20 years were additionally marked by a change in policy that prompted various countries to liberalise and privatise their civil passenger air transportation industry. At the same time, airlines' business ambitions became more global, tapping into markets beyond countries' or continents' main gateways. All three aspects started to change the pattern of airline competition and required new business models. Key features of airlines' novel business models are geographic expansion and thus market development. Global expansion strategies and market development activities in passenger air transportation are, however, not easily and fluidly executable. The airline industry is, to some extent, still nationally regulated, thus impeding passenger airlines from fully participating in the global market-scene and from freely entering promising geographies. Concomitantly, the competitive landscape in which scheduled passenger airlines operate changed drastically, with travel value chains occasionally undergoing revolutionary transformations on both the supply and the demand side. Finally, the air transport service reveals several peculiarities that impact its production, distribution and consummation. These characteristics have inspired the execution of novel forms of competitive strategies that are described and critically discussed in this dissertation. Within this context, a main root cause for passenger airline partnerships appears to be its continued regulation and the circumvention thereof through the horizontal joining of forces, thus emulating concentration tendencies that have long been a fixture in other globalising industries. Consequently, horizontal interairline partnerships were induced and identified as a key competitive device with which to weather the challenges of the new air transport rivalry structures, the increasingly deregulated environment, and the impediments of sustained market regulation. All major airlines are now involved in some type of horizontal collaboration. The spectrum of these linkages is wide and ranges from loose, unattached, operative agreements to long-term, far-reaching, strategic ones, the most salient forms and instruments of which are thoroughly scrutinised in this dissertation. This dissertation additionally presents the general core inducing economic drivers of carrier interrelationship, which are cost reduction, revenue generation and corporate power considerations. While these aspects offer a multitude of possible partnership forms and instruments, the bulk of airline linkages, however, is presently constituted of joint revenue generation and, consequently, jointly pursued marketing and market expansion goals. In view of these causes, the present dissertation engages in a profound discussion of the rationales behind interairline partnerships, their likely evolution and effects on management practice. Essentially, the key importance of airline partnerships in meeting basic economic imperatives on the one hand, while circumventing persistent regulation on the other, questions the sustainability of incumbent carriers' current business models. There are clear indications that a structured sequence of events in establishing interairline linkages is a key success factor for horizontal airline partnerships. However, the empirical examination of contemporary partnerships' governance structures and managerial practice strongly points to a lack of ample tools with which to establish airline partnerships, select the appropriate match between alliance goals and intensity, and govern alliances during their entire life-cycles. This drawback seems particularly unacceptable in view of the urgent requirement for more appropriate managerial practice in today's discontinuous air transport business environment, and speaks loudly of the need for a framework with which to enhance airline partnership output. Most ideally, a coherent, structured sequence of events should be followed in partnership formation, organisational set-up and management in order to bring an alliance to fruition. On this basis, the establishment of a collaboration governance organisation, adequately mirroring the specific partnership type and meeting the specific demands of all partners involved, is equally identified and described as a fundamental success driver in this dissertation. Further structural, organisational and functional issues thereafter need to be considered in order to transform the joint business venture of two horizontally allied carriers into a venture for mutual success. The most essential of these are introduced in this dissertation. Synergy plays a central role in this context. Synergy, as the overreaching intention and result of working together towards a common goal, must be anchored as a prime objective of all forms of partnership activities. Synergy through interfirm linkages can be derived from various collaborative areas and is greatly influenced by both internal and external factors. One gauge for synergy, in particular for the transformation of synergy potentials into synergy effects, is partnership intensity. The measurement of partnership intensity can be used to perpetually monitor the benefits of partnership activities. At the same time, inconsistent or uneven partnership intensity can indicate the existence of dissynergies or frailties in the alliance. The underlying theories of collaborative synergy generation, its main drivers and impediments, with particular reference to horizontal partnerships of scheduled passenger airlines, are explored in this dissertation. In recognition of the theoretical and practical background of airline partnerships and the acknowledged problems associated with their establishment and operation, the present dissertation proposes a novel model dynamically supporting the quest for synergy in airline interrelationships. Incorporating the goals of synergy generation and its continual measurement in interairline partnerships, the synergy audit is designed as a dynamic managerial tool. The synergy audit functions as a recurring device for unleashing all the positive partnership benefits of collaborative scope and width. It aids airline alliance management in transforming the desired benefits of partnership activities - synergy potentials - into real, tangible synergy effects during the entire partnership life cycle. The tool A.PIE (Airline Partnership Intensity Evaluator) supports the synergy audit and, which idiosyncratic to the airline industry, multidimensionally applies the deduced relationship of partnership intensity and synergy to the most salient partnership areas and functions. The present dissertation shapes understanding of the true drivers and complexities of today's airline partnerships. It proposes a circular, multidimensional and dynamic model, thus attempting to enhance the set-up, performance and output of horizontal airline collaboration. From this point of view it endeavours to fill the gap identified in contemporary airline partnership management and practice.
The development of an instructional design model as a strategic enabler for sustainable competitive advantage
(Stellenbosch : Stellenbosch University, 2008-12) Le Roux, Leonie; Oosthuizen, Hein; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
Organisations increasingly operate in an environment of continuous change and turbulence which places new demands on the choice of business and supportive strategies relevant not only to the sustainable competitive advantage (SCA) of the particular organisation, but also countries and the global nature in which they operate. A business-level strategy is to a large extent vested in intangible resources, specifically human resources strategy and capital, including the capabilities embodied in a productive and skilled workforce. In Africa, and South Africa in particular, there is a shortage of a workforce of such a nature. This is amongst others the result of past inequalities but also of shortcomings in current training practices in both the private and public sectors. One way to improve workforce output is though appropriate training aimed at increasing job-specific knowledge and the concomitant skills and productive behaviour. Changes and turbulence in the environment, therefore also create different challenges to training strategies and practices, with a shift from all-at-once to ongoing training with verifiable learning. In this regard instructional design (ID) models are deemed intrinsic to training strategy. In this dissertation an ID model within a particular contextualised situation is offered that broadens, deepens and extends existing ID models by positioning it within business-level strategy and by utilising a multidisciplinary approach pertinent to the new demands on training. To serve as a test-bed for the ID model it is implemented in a case organisation. The aim of the research is to evaluate the impact, based upon action standards, of the ID model on job-specific knowledge and productive behaviour and to provide an explanation of the internal construct relationships of the ID model. The purpose of the research is exploratory and interpretive, culminating in the single-case study tactic, wherein both quantitative and qualitative methods are applied. The case organisation is considered to be representative of a certain type of organisation with comparable characteristics. Where the existing literature supports the results (as in this instance), inductive generalisation facilitates the transferability and exportability of the ID model to other organisations. Results reveal a positive reaction to the ID model and a measurable increase in job-specific knowledge and concomitant productive behaviour. It is considered to be preferable over more traditional training practices. The relationships between the internal constructs of the ID model and improved job-specific knowledge and productive behaviour are seen to be facilitated by the combination and interplay of the components of the ID model. The contribution of this research is in providing and evaluating an ID model aimed at addressing the previous shortcomings in training and ID models and the application thereof in practice. Thus, the significance of the study lies in its extension of existing literature on ID models and specifically their contribution to sustainable competitive advantage, i.e. an academic theoretical contribution that extends the current body of knowledge. Particularly in its South African and African context, given the background of shortages in skills and productive behaviour and the need for fast-tracking the development of a competent workforce, the study is significant in that it provides guidelines for the practical development and implementation of a new ID model. The study makes recommendations to enhance both the formulation of the theoretical ID model as well as its practical implementation. It furthermore recommends extended research to explore the possibility of exporting the ID model to a broader range of private sector organisations as well as its possible transferability to public sector organisations.
Donor decision making in a non-profit religious organisation
(Stellenbosch : Stellenbosch University, 2012-12) Weideman, Eleanor; Terblanche, N. S.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: The non-profit sector has grown and changed substantially since its origins more than 2 000 years ago. At present there is an increase in organised voluntary activity around the globe, which reflects a set of social and technological changes, as well as an increasing lack of confidence in the ability of the state to render certain vital services. NPOs that do not work in the fields of housing, the aged, HIV/AIDS and education, for instance organisations doing missionary work, are faced with the difficult task of procuring funds within this highly competitive environment. The overall purpose of relationship marketing is customer retention and development, not simply a series of transactions. With this in mind, it seems that relationship marketing has an important role to play in the non-profit sector. Why is it then so difficult to "sell brotherhood like soap"? To answer this question tools have been developed and adapted to fit the non-profit sector. Donor behaviour plays a crucial role in the survival of an organisation and insights into behaviour can give the organisation an edge over its competitors. In the case of this study the research problem relates to the identification of the dimensions impacting on donor behaviour in religious (Christian) organisations. A conceptual model of donor behaviour in religious non-profit organisations was developed and used for the eventual formulation of 23 hypotheses to guide the study and to represent the possible relationships. For the statistical analysis it was deemed necessary to revise both the model and the proposed hypotheses. The model was split into three models: - Perceptions of non-profit organisations; - Individual donor characteristics; and - Donor perceptions of the non-profit organisation. A thorough overview of the literature was undertaken, mainly to investigate the nature of the non-profit sector in general as well as in South Africa, its marketing and behaviour of its donors. The conceptual model that was developed through the literature study was used to develop a measuring instrument specifically for this study for collecting primary data. It was empirically tested in a religious (Christian) non-profit organisation in South Africa by collecting primary data. Questionnaires were mailed to its whole donor database. The questionnaires returned were captured with the aid of an Excel spreadsheet and merged with data from the donor database. The first step was to assess the validity and reliability of the measurement instrument used. Next, an exploratory factor analysis was done to identify the unique factors evident in the study data. The next step entailed testing the proposed theoretical model by means of the "Structural Equation Modelling" technique. The results of the data analysis led to the creation of a model suitable for the management of the donors of a Christian missionary organisation. This study is a pioneering study of donor behaviour in South African religious non-profit organisations, in particular Christian organisations. It is clear from the results that donors of religious organisations react differently than donors of other non-profit organisations and therefore that different approaches are needed to secure Christian donor loyalty and trust.
Emerging leadership : a study of leadership thinking and its implications for business leadership and practice in the 21st century
(Stellenbosch : Stellenbosch University, 2000-12) Plougmann, E. M. T. (Elizabeth Mary Therese); Esterhuyse, W. P.; Stellenbosch University. Faculty of Economic & Management Sciences . Dept. of Business Management.
ENGLISH ABSTRACT: This study seeks to demonstrate the impact of late 20th century leadership literature, which is taken as the accepted embodiment of leadership thinking. Leadership thinking influences both the academic study and resultant practice of leadership. A paradigmatic approach was employed to contrast that the demands of a post-industrial, globalised society would be of a different order to those of the 20th century industrial society. The study seeks to challenge the intellectual climate of the business leadership discipline at the level of the normative, which in turn would present a challenge to the conventional strategic focus and approach of business leadership. A challenge to the normative requires that a certain philosophical perspective be introduced in the crossing of the boundary lines between various disciplines. As business is part of the social sciences, the critical intellectual challenges to modern knowledge were explored, which provided a foundation for the challenge. This required that new scientific theory, both in the pure and the natural sciences as well as certain postmodern authors representing the humanities be reviewed. A refocusing on what has been taken for granted, what has been neglected, regions of resistance, the forgotten, the irrational, the repressed, the borderline, the classical, the sacred, the marginal and the excluded signifies .. The question is asked if we are able to recognise the ways in which our lives and livelihood have been influenced by outmoded structures? Due cognisance is not taken of the unsettling shifts of mindset that will be required to exercise leadership in the post-industrial paradigm. The concept of paradigms is central to this study where it operates' as the methodology device, given that the nature of the research is exploratory, open-ended and hermeneutic compared to the mensural convention that most business research follows. The study explores the paradigm dependency of leadership, as a sociological frame of reference, where leadership is viewed as a patterned social action and a political/structural action, so that leadership is analysed as a socially constructed reality. A key distinction of this study is the major temporal transformation from the industrial to the post-industrial paradigm, where post-industrial is of a magnitude far greater than information technology advances. The current populist interpretation is e-commerce, the Internet and genetic engineering. The notion of the 'Limits of the Model', representing the breakdown of the industrial paradigm, occurs when the paradigm is being pushed too far. The significance of this breakdown for leadership, is that leadership vision and purpose must take its cue from an external frame of reference, which is categorised as a paradigm of the 'sociological' region, The crisis of leadership is bound to their sociological understanding situated within a network of culturally shared knowledge, beliefs, ideals and taken-for-granted assumptions about the nature of industrial life. Three distinct crises of leadership are identified and they combine to form a major existential crisis which embodies the struggle of the individual to find purpose and meaning in working life. The study provides a different concept and criteria for vision which requires that corporate vision would have to travel beyond the rational dimension that dominates leadership thinking today and enter into the realm of the metaphysic. Corporate vision would become a 'force-field', defined by organisation culture, In order to escape from the cultural obsolescence that surrounds most organisations today, leadership has to become a process that entails the capacity to create a new story about what is to be struggled against and dreamed about. The leaders' stories would become a reconceptualisation of the purpose of life which the post-industrial paradigm will demand. Vision and purpose would be grounded in legitimacy, sustainability and ethics, creating a question mark around the organisation's current fitness for purpose. The constructs of a "'quantum worldview provide a challenge to every boundary that leadership has tended to operate by and with. These constructs promote disorder, relationship as the basis of all definition, information as the primal creative force (and not capital and labour) and sustainability based on meeting future generations' needs. Leadership becomes a set of principles governed by a hierarchy of imagination, ideas leadership. Leadership as stewardship on a more evolved plane of value promotes an ecologicalliteracy, based on the notion of the living planet. The living planet operates as a platform of supposition which dictates that ethics will become the enabling dependency for leadership in the 21st century. This reconceptualisation of leadership is one that highlights a communal relationship, based on mutual purpose which requires true community, or a second-order level of communalism. Most business initiative today is focussed on pseudo or chaos stages of community, which does not support an ethical dimension in either purpose, strategy or operation. Ecology as an eco-philosophy goes hand in hand with the idea of spirit as an animating principle. The potential contribution of Africa with its rich cultural heritage of community through the ages, as well as the Platonic archetype of Philosopher-Ruler to enable the magnitude of the shift to be addressed is the hermeneutic yield of the study. The ecology metaphor of the postindustrial paradigm is a fertile source of potential and possible hypotheses that can be explored in the identification and reformulation of the sociological paradigm necessary to move leadership research forward. The result is a much broader, more societal 'picture' of 21st century business leadership, where globalisation is recast in a set of global ethics and global accountability, which business and its leadership has to come to terms with. The 'recasting' of business leadership promotes a different ontology where an overarching communitarian approach, will become the 'ground' for leadership and business models, strategies and evaluation for the foreseeable future.
Entrepreneurial intensity: the influence of antecedents to corporate entrepreneurship in firms operating in South Africa
(Stellenbosch : University of Stellenbosch, 2007-12) Scheepers, Margarietha Johanna; Hough, J.; Bloom, Jonathan Z.
The turbulent, rapidly changing knowledge economy has forced enterprises to become more entrepreneurial in order to capitalise on new opportunities and to create value. Previous research has shown the financial and non-financial benefits of corporate entrepreneurship (CE), but the implementation and management of CE remains problematic. Despite heightened awareness and interest by both scholars and practitioners in studying and better understanding entrepreneurship within large organisations, CE is still regarded as an emerging field of inquiry. Furthermore, limited research has thus far been conducted on CE and entrepreneurial intensity (EI) in the South African context. A review of the CE literature revealed a research gap that culminated in the following research question: How do the antecedents to CE influence the entrepreneurial intensity of firms active in e-business operating in South Africa? To address the research question stated above a literature review of antecedents to CE, and entrepreneurial intensity was conducted, and an empirical study was executed. The literature review emphasised five salient internal antecedents to CE: management support for CE; autonomy of employees; rewards for CE; time and resource availability; and flexible organisational boundaries. The external antecedents which influence CE were identified as munificent, opportunity-rich environments, and hostile environments filled with threats. Other factors that also play a role in influencing the level of entrepreneurship in enterprises are the type of industry, size and age of a company, managerial influence and the role of the individual in the CE process. The level of entrepreneurship was defined as entrepreneurial intensity, a function of frequency and degree of entrepreneurship. To address the research problem, empirical cross-sectional telephone surveys were conducted in two stages. The sample selected for the study was companies active in e-business operating in South Africa and aware of innovation practices. Two groups of companies were identified, namely JSE companies and Information and Communication Technology (ICT) companies. The key respondent targeted in JSE companies was the Information Technology (IT) Manager or the Chief Information Office (CIO), while the Chief Executive Officer (CEO) or Sales Manager was the key respondent in ICT companies. The population consisted of 715 companies. The response rate for first stage of the study was 44%, while the response rate was 20% for the second stage of the study. Measurement instruments were adapted, developed and revised where necessary to ensure the reliability and validity of the data. The collected data were analysed using descriptive and inferential statistics. The findings indicated that internal antecedents to CE have a significantly stronger influence on degree of entrepreneurship than munificent, external factors. This finding underlines the important role managers can play in providing a supportive climate for CE. The prominent internal antecedents in this study were management support for CE, autonomy of employees and rewards for CE. The findings also emphasised the importance of a positive, munificent business climate, as perceived by managers inside the organisations. Furthermore, the findings suggested that the more frequently enterprises act entrepreneurially, the higher their degree of entrepreneurship should be. Differences in EI, degree of entrepreneurship, internal and external antecedents were also discernable between JSE and ICT companies, with ICT companies showing higher levels of entrepreneurship than JSE companies. Moreover, the findings suggested that the size of a company did not influence EI, but the age of companies showed a negative relationship with EI, degree of entrepreneurship and the internal antecedents to CE. It appears that as companies become older, their internal environments become less supportive of entrepreneurial behaviour. The most important contribution of this study is the testing of CE-theories in the South African context. The managerial implications of the behavioural model tested in the study are that top and middle management could create a supportive environment for CE, while munificent environments encourage entrepreneurial behaviour. Measurement instruments have been developed, which may be used by managers, consultants and other researchers to measure these phenomena in future. Furthermore, the findings suggest that there are country differentials with regard to CE, while opportunities for further research were also identified.
Evaluating value based financial performance measures
(Stellenbosch : University of Stellenbosch, 2008-03) Erasmus, Petrus Daniel; De Villiers, J. U.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Business Economics.
The primary financial objective of a firm is the maximisation of its shareholders’ value. A problem faced by the shareholders of a firm is that it is difficult to determine the effect of management decisions on the future share returns of the firm. Furthermore, it may be necessary to implement certain monitoring costs to ensure that management is focused on achieving this objective. A firm would, therefore, benefit from being able to identify those financial performance measures that are able to link the financial performance of the firm to its share returns. Implementing such a financial performance measure in the valuation and reward systems of a firm should ensure that management is aligned with the objective of shareholder value maximisation, and rewarded for achieving it. A large number of traditional financial performance measures have been developed. These measures are often criticised for excluding a firm’s cost of capital, and are considered inappropriate to be used when evaluating value creation. Furthermore, it is argued that these measures are based on accounting information, which could be distorted by Generally Accepted Accounting Practice (GAAP). Studies investigating the relationship between these measures and share returns also provide conflicting results. As a result of the perceived limitations of traditional measures, value based financial performance measures were developed. The major difference between the traditional and value based measures is that the value based measures include a firm’s cost of capital in their calculation. They also attempt to remove some of the accounting distortions resulting from GAAP. Proponents of the value based measures present these measures as a major improvement over the traditional financial performance measures and report high levels of correlation between the measures and share returns. A number of studies containing contradictory results have been published. On the basis of these conflicting results it is not clear whether the value based measures are able to outperform the traditional financial performance measures in explaining share returns. The primary objectives of this study are thus to: • Determine the relationship between the traditional measures earnings before extraordinary items (EBEI) and cash from operations (CFO), and shareholder value creation; • Investigate the value based measures residual income (RI), economic value added (EVA), cash value added (CVA) and cash flow return on investments (CFROI), and to determine their relationship with the creation of shareholder value; • Evaluate the incremental information content of the value based measures above the traditional measures. The information content of the traditional measures and the value based measures are evaluated by employing an approach developed by Biddle, Bowen and Wallace (1997). The first phase of this approach entails the evaluation of the relative information content of the various measures in order to determine which measure explains the largest portion of a firm’s market-adjusted share returns. The second phase consists of an evaluation of the incremental information content of the components of a measure in order to determine whether the inclusion of an additional component contributes statistically significant additional information beyond that contained in the other components. The study is conducted for South African industrial firms listed on the Johannesburg Securities Exchange for the period 1991 to 2005. The data required to calculate the measures investigated in the study are obtained from the McGregor BFA database. This database contains annual standardised financial statements for listed and delisted South African firms. It also contains EVA, cost of capital and invested capital amounts for those firms listed at the end of the research period. Including only these listed firms in the research sample would expose the study to a survivorship bias. Hence these values are estimated for those firms that delisted during the period under review by employing a similar approach to the one used in the database. The resulting sample consists of 364 firms providing 3181 complete observations. Since different information is required to calculate the various measures included in the study, different samples are compiled from this initial sample and included in the tests conducted to evaluate the information content of the measures. The results of this study indicate that the value based measures are not able to outperform EBEI in the majority of the relative information content tests. Furthermore, the measures EVA, CVA and CFROI are also not able to outperform the relatively simple value based measure RI. The results from the incremental information content tests indicate that although some of the components of the value based measures provide statistically significant incremental information content, the level of significance for these relatively complex adjustments is generally low. Based on these results, the claims made by the proponents of the value based measures cannot be supported. Furthermore, if a firm intends to incorporate its cost of capital in its financial performance measures, the measure RI provides most of the benefits contained in the other more complex value based measures.
Foreign investment and South African real estate investment trusts (REITs)
(Stellenbosch : Stellenbosch University, 2018-12) Carstens, Margaretha; Freybote, J.; De Villiers, J. U.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH SUMMARY : Real estate investment trusts (REIT) were introduced in South Africa in 2013 and follow the global REIT standard that originated in the US during the 1960s. The previously existing South African property investment vehicles, property unit trusts (PUTs) and property loan stocks (PLSs) were transformed to REITs. One of the main motivations for the introduction of REITs in South Africa was to make the listedproperty sector more attractive to foreign investors. This dissertation investigated three research questions in the context of foreign investments in SA REITs. First, it analysed whether SA REITs are attractive to foreign investors from a portfolio point of view. Using quadratic programming and the perspective of a foreign investor with US REIT investments, this study found that adding SA REITs to a portfolio of US REITs has diversification benefits in terms of a reduced portfolio variance and an increased Sharpe ratio. However, SA REITs with predominantly foreign holdings, particularly in Europe, have superior diversification benefits to foreign investors compared to SA REITs with predominantly South African holdings. Second, this dissertation investigated the macroeconomic, capital and property-market factors that drove foreign investments in SA REITs after May 2013 (REIT period) and in the alternative listedproperty vehicles prior to May 2013 (pre-REIT period). The results suggest that the impact of country-specific pull and non-country-specific push factors on foreign REIT investor behaviour changed over time, with push factors driving SA REIT investment in the REIT period and pull factors determining investment in the pre-REIT period. The impact of these factors on foreign REIT investments further differs for REIT market capitalisation (cap), with push factors driving large-cap REIT investments and pull factors affecting small-cap REIT investments. Thus, the attractiveness of SA REITs to foreign investors was not only driven by factors specific to South Africa, but also by factors specific to other countries, particularly the US and Europe. Third, this dissertation aimed to answer whether the introduction of REITs in South Africa has met the objective of attracting more foreign investors and improved the liquidity in the listed-property market. Results suggest that, following the introduction of REITs, foreign investors have indeed had a significant impact on REIT share liquidity as captured by activity measures (turnover and trading volume). On the other hand, the introduction of REITs has eliminated the negative impact foreign investors had on the friction dimensions of liquidity (bid-ask spread and price impact). The findings of the three chapters in this dissertation contribute to the literature on international REIT investment, and investment in emerging markets such as South Africa in particular. In addition, the study has implications for REIT investors, SA REITs and policymakers concerned with attracting foreign portfolio investment and developing listed-property markets. Other emerging economies that are contemplating the adoption of the REIT structure are likely to benefit from the increasing knowledge regarding foreign REIT investments, particularly with regard to liquidity implications and foreign investment drivers.

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