Department of Business Management

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Active management and the cost of active management of South African general equity unit trusts
(Stellenbosch : Stellenbosch University, 2017-03) Coetzee, Ruan; De Villiers, Johann U.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH SUMMARY : Investors have various investment options available to provide future wealth. One of the options is to invest in unit trusts. On 31 December 2015 there was a total of R 1 656 448 million invested in South African unit trusts, making this a large investment vehicle. The objectives and constraints of investors should determine in which type of unit trust they invest. This study examines general equity unit trusts in South Africa. Many investors do not know how actively their active unit trusts are managed, what portion of the management cost is attributable to the active component of the unit trust and how much is attributable to the passive component of the unit trust. The focus of this study was to determine how active general equity unit trusts in South Africa are managed, whether the active management delivers enhanced risk-adjusted returns, and how much investors are paying for active management. The study was conducted over eight years, from 1 January 2008 to 31 December 2015. The primary objective consisted of two sections. Firstly, the study set out to classify general equity unit trusts in South Africa according to how actively they are managed. This is done through calculating the active share and tracking error for the unit trusts. The results indicated that most (71%) of the analysed general equity unit trusts had an active share lower than 50% and a tracking error lower than 8%. These active funds invested more than 50% of their assets similar to the index. Secondly it was determined how the classifications of unit trusts performed on a risk-adjusted basis. This is calculated through means of five risk-adjusted performance measures. The study found that the amount of active management does not influence risk-adjusted returns in a statistically significant manner. The secondary objective investigated the cost of investing in general equity unit trusts. The unit trusts were divided into an active and a passive component based on active share and tracking error. The total expense ratio (TER) of the unit trusts was compared to the active and passive components of the unit trusts to determine how much of the TER is attributed to active management. The average fund TER was 1.55%, with the average cost on the active component being 3.85%. The average alpha for the active component was -1.54%. This means that investors are paying a substantial amount more for the active component of the unit trust than for the passive component, without receiving the benefit of a higher return.
Die allokasie van hulpbronkoste as deel van 'n begrotingstoedelingsmodel vir hoer onderwysinstellings
(Stellenbosch : Stellenbosch University, 2008-03) Joubert, Francois Jacobus; Lambrechts, I. J.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
Universities manage their administrative and financial operations traditionally by means of cost centres in the form of faculties, departments and divisions. In these cost centres financial performance is purely measured by comparing actual expenses with drawn up budgets. During performance measurement only direct costs allocated to cost centres are taken into account. Often, indirect costs are not taken into account which leaves an erroneous impression about the real cost of a certain cost centre. However, it is of importance for education managers to take cost management into consideration as a primary tool to manage institutions of higher education. Accurate cost information is an indispensable management aid, especially in a changing and dynamic environment. During budget allocations mostly only direct costs are taken into account. This also happens when the financial performance of academic departments, faculties and other entities are measured. The utilisation of a full cost approach could add substantial value to current management information. The starting point of this study is by placing a perspective on problems arising from the utilisation of cost allocation techniques by means of a case study from which activity based costing and responsibility centre management can solve the problem. Throughout this study it was attempted to emphasise the relevance between activity based costing and responsibility centre management and the focus was on how both budget allocation models could be applied in an integrated context. During the allocation of income and indirect costs the question normally arises on which basis these components are to be allocated to faculties and departments at a university. Attention has been given to both these components to establish which method / basis is the most applicable for the allocation thereof. The aim was to generally keep cost drivers as simple as possible. The cost drivers used need to bear the approval of deans to ensure the credibility of the budget allocation model. However, cost drivers could well be investigated continually to consider their applicability against alternative cost drivers. The allocation of budget amounts to faculties stemming from the main budget of a university is normally a dilemma. Therefore, a budget allocation model has been developed taking the financial performance of faculties into consideration to determine the budget allocation of each individual faculty.
An analysis of the current nature, status and relevance of data mining tools to enable organizational learning
(Stellenbosch : Stellenbosch University, 2002-12) Hattingh, Martin; Leibold, M.; Stellenbosch University. Faculty of Economic & Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: The use of technological tools has developed rapidly over the past decade or two. As one of the areas of business technology, Data Mining has been receiving substantial attention, and thus the study defined the scope and framework for the application of data mining in the first place. Because of the wide area of application of data mining, an overview and comparative analysis was given of the specific data mining tools available to the knowledge worker. For the purposes ofthe study, and because the goals of data mining involve knowledge extraction, the concept of organizational learning was analysed. The factors needed to facilitate this learning process were also taken into consideration, with a view towards enabling the process through their improved availability. Actual enablement of the learning process, through the improved factor availability described above, was analysed through the use of each specific tool reviewed. The salient conclusion of this study was that data mining tools, applied correctly, and within the correct framework and infrastructure, can enable the organizational learning process on several levels. Because of the complexity of the learning process, it was found that there are several factors to consider when implementing a data mining strategy. Recommendations were offered for the improved enablement of the organizational learning process, through establishing more comprehensive technology plans, creating learning environments, and promoting transparency and accountability. Finally, suggestions were made for further research on the competitive application of data mining strategies.
An analysis of the solar service provider industry in the Western Cape
(Stellenbosch : Stellenbosch University, 2012-12) Votteler, Roman Gunter; Hough, Johan; Venter, Chanel; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: Scientists agree that the rising electricity usage of the rapidly growing human race to improve its standard of living is negatively affecting the environment. To create a sustainable environment for future generations, renewable and environmentally friendly resources have to be exchanged for the present finite resources. In South Africa, coal plants are responsible for more than 90% of the electricity production. This means that action has to be taken now to start a process of change to sustainable electricity resources. This study focused on the South African solar industry. Due to the high sun radiation levels, solar technology is one of the renewable energy sources with the greatest potential. The industry is in its infancy, characterised by accelerated growth expectancy and fuelled by factors such as government subsidies, the fluctuations of fossil fuel prices and the increasing focus on economical long-term sustainability. The expected growth necessitates a focus on the market positioning of solar service providers in the Western Cape with the aim of taking full advantage of the opportunities associated with this industry. The main objective of this study was to determine the current structure of the solar service provider value chain and subsequently areas of improvement to increase growth, stakeholder satisfaction and sustainability. A literature review was conducted to address the research objective, relevant approaches and the broader electricity industry. Porter’s Value Chain approach was used as a foundation for the adaptation to the solar service provider value chain. Porter’s Five Forces model was also used as a secondary approach, which analysed the competitive environment of the solar service provider industry in the Western Cape. The methodology entailed a qualitative research approach in the form of semi-structured interviews. All respondents were general managers or owners of a solar service provider, who were interviewed face to face. The study focused on the entire population of solar service providers in the Western Cape. Seventy-seven different service providers were targeted, of which 18 were interviewed. The interviews were transcribed and analysed using content and frequency analysis. To guarantee reliability, a pilot study was conducted to ensure that the questionnaire was understood by the respondents. The validity of this study is gauged as high as the entire population was targeted and the results can be broadly generalised. The findings show that customer service is the foremost value driver for solar service providers. This entails the actual installation of the product as well as the people skills of the installation team. As most customers only have to be served once due to the long life span of the products, marketing also plays an obvious role in attracting new customers. The most important outcome of this study is the determination and a better understanding of the solar service provider value chain in South Africa. The recommendations, especially with regard to marketing and service elements, could improve the performance of solar service providers. The consequence could be an increase in stakeholder satisfaction and an enhanced usage of solar energy in South Africa. Future research should focus on customers to reveal preferences and opportunities for marketing approaches.
An analysis of trust amongst customers of independent community pharmacies
(Stellenbosch : Stellenbosch University, 2018-03) Pelser, Almeri; Theron, Edwin; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH SUMMARY : “Trust is the glue of life. It's the foundational principle that holds all relationships.” – Stephen Covey Healthcare involves an element of uncertainty and risk for the vulnerable individual who is reliant on the competence and intentions of the healthcare provider. Therefore, trust in community pharmacies is particularly important since customers may easily question whether a pharmacy's intention is to grab their money or to enhance their health and well-being. This study analysed trust amongst customers of independent community pharmacies by investigating the influence of five employee-related dimensions on three types of customer trust. Based on a comprehensive review of the literature, the five identified employee-related dimensions include; perceived expertise, likeability, familiarity, communication skills and customer-orientation. Also, customer trust was conceptualised as encompassing three different types, namely, affective trust, cognitive trust and contractual trust. Three models were evaluated in the context of independent community pharmacies through findings from a survey which was personally administered to 299 respondents. Structural Equations Modelling (SEM) with Partial Least Squares (PLS) analysis was conducted to examine the quantitative data collected specifically amongst customers of Essential Health Pharmacy Group across eight pharmacies in both rural and urban areas. The five employee-related dimensions differently impact the respective types of trust. However, the key findings indicate that customers‟ perception of employees' expertise and communication skills most significantly influence overall customer trust. An interesting finding indicated that familiarity does not have a significant impact on cognitive trust. Overall, employee-related factors play a significant role in affecting customer trust. Moreover, specific factors can be managed to such an extent that it will contribute to overall customer trust. Finally, this study contributes to marketing literature, specifically in the fields of relationship and services marketing, through the theoretical and managerial implications of these findings.
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
The application of fundamental indexing to the South African equity market for historical data dating back to 1996
(Stellenbosch : University of Stellenbosch, 2009-03) Ferreira, Rickus; Krige, J. D.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Business Management.
Measuring the performance of any financial portfolio is only relevant if compared relative to another similar portfolio. Over the years the norm in the industry has been to use market capitalisation indices as benchmarks to measure performance. Market capitalisation indices, such as the FTSE/JSE ALSI, create a natural return drag because of the overweighting of overvalued stocks and the underweighting of undervalued stocks. It is this return drag that led to the creation of the Fundamental Indexing concept by Research Affiliates in 2005. Fundamental Indexing weights stocks based on their economic footprint in the market rather than their market capitalisation. The Fundamental Indexing approach uses four metrics, namely sales, book values, dividends and cash flows to calculate this economic footprint. The Fundamental Index is referred to as the RAFI (Research Affiliates Fundamental Index) Index The Fundamental Index concept delivered very good results when applied to the South African stock market. The South African RAFI Composite Index outperformed the FTSE/JSE All Share Index by 5.55% p.a. compounded annually during the period 1995 to 2006. This return was achieved with a similar risk profile as the FTSE/JSE All Share Index. This index also had similar turnover rates relative to the FTSE/JSE All Share Index. The South African RAFI Composite Index also outperformed the FTSE/JSE All Share Index by 5.48% p.a. compounded during the measurement period when investment income is included. The Fundamental Index outperformance clearly disproves the efficient market hypothesis. According to modern portfolio theory it is impossible to earn abnormal profits in excess of a market capitalisation index. The success of Fundamental Indices proves that market capitalisation indices are not optimal and deliver sub-optimal returns. Specifically, it can be seen that the South African market is inefficient and that the FTSE/JSE All Share Index is not the best tool for measuring the performance of the financial markets in South Africa.
The application of new product development principles in the pharmaceutical industry : a comparative study of marketing practitioners' perceptions
(Stellenbosch : Stellenbosch University, 2001-03) Venter, Gertruida Helena Christina; Terblanche, N. S.; Stellenbosch University. Faculty of Economic & Management Sciences . Dept. of Business Management.
ENGLISH ABSTRACT: New products are indispensable to the growth of the modem business enterprise. Increased global and local competition, better informed consumers, rapidly changing technology and the short life span of products are typical of the reasons why it is necessary to develop new products. Traditionally new product development took place in accordance with a rigid new product development process where a next phase was dependent on the completion of preceding phases. The increased pressure to produce new products in shorter time spans has led to the development and application of less streamlined and rigid processes for the development of new products. The pharmaceutical industry has certain unique characteristics important for new product development. It spends more than five times than the average of all industries on research and development. New product development in the pharmaceutical industry largely depends on the discovery of new clinical entities and the development process is furthermore also highly regulated by governments. The focus of product evaluation in the pharmaceutical industry has also undergone a major shift. Traditionally the industry dealt with diseases which were defined broadly and as such the focus was on diseases and not individuals. The result was that consumer acceptance was virtually never evaluated. The shift is now to consumer acceptance because consumers become increasingly better informed and take part in decisions regarding their health and medical care. A further reason for the consumer focus lies in the genetic understanding of patients and this enable pharmaceutical companies to segment patients on the basis of pharmaco-genomic descriptions. The objectives of the study are twofold. In the first instance, the study assesses whether marketing practitioners in the South African pharmaceutical industry agree with the fundamental principles of new product development which are identified in academic literature. The responses from marketing personnel were obtained and analysed to establish their beliefs regarding new product development. The fundamental principles of new product development which form the focus of this study, were those that Calantone, Di Benedetto and Haggblom (1995) used in their research. The second objective of the study is to compare the findings in respect of the South African pharmaceutical industry with those of the study undertaken by Calantone, Di Benedetto and Haggblom in 1995. The purpose of the study is to establish whether the new product development principles taught in marketing management courses are relevant for the pharmaceutical industry. The method of investigation was divided into two sections, i.e. a literature overview and an empirical study. The literature study commenced with research on new product development in the South African Pharmaceutical Industry and other parts of the world. The Calantone, Di Benedetto and Haggblom (1995) questionnaire was also used in this study for data collection. The 91 pharmaceutical companies listed in Volume 34 of the 1999 MIMS Desk formed the population of the study. After contacting these companies a more accurate list was set up. After taking into account all the mergers that took place, 65 companies eventually constituted the population. Twenty nine of the questionnaires sent were returned and could be used. This represents a response rate of 44.6%. The organisations involved were responsible for 69.4% of the annual turnover of the total pharmaceutical industry in 1998 and their responses could therefore be regarded as representative of the pharmaceutical industry of South Africa. The questionnaire attended to the following principles of new product development: • Product innovation • New product development and launch tasks • Product diffusion • Interface between marketing, research and development • Organisational issues The information collected in respect of each pharmaceutical company was the following: • Annual turnover • Number of products manufactured and marketed • Number of employees • Number of new products launched during the past five years The findings of this study indicate that marketing staff in the South African pharmaceutical industry strongly agreed with those fundamental principles of new product development which were identified in academic literature. There was also a significant correlation between this study and the study undertaken by Calantone, Di Benedetto and Haggblom with respect to the percentage agreement on the various statements. It may thus be concluded that new product development principles taught in marketing managing courses are relevant for and are applied by marketing staff in the pharmaceutical industry in South Africa.
Approaches to environmental marketing in large enterprises, with specific reference to marketing programming
(Stellenbosch : Stellenbosch University, 1995-02) Blacklaws, Dean; Leibold, M.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: The environment, and environmental issues, are set to increase in prominence as increasing pressure is placed on the earth's natural resources and ecosystems. As general awareness for the environment grows, companies are finding that not only are their products being examined for environmental friendliness but also the processes by which these products are made. Furthermore, companies are recognising that environmental stewardship is not only a business responsibility but a marketing growth opportunity.
Are consumers’ quality perceptions influenced by brand familiarity, brand exposure and brand knowledge? results from a wine tasting experiment
(AOSIS, 2017) Priilaid, D.; Human, G.; Pitcher, K.; Smith, T.; Varkel, C.
Theory posits that, over time, placebo-type brand-equity effects may develop through the process of wine purchase and consumption. This being so, the extent to which factors like brand familiarity, brand exposure and brand knowledge combine to inform and reinforce such brand-equity effects remains still largely unexplored. With the aim of modelling this potentially mediating dynamic, we present a two-stage wine tasting experiment employing the combined reportage of fourteen experimental groups, each consecutively tasting seven Sauvignon Blanc wines first blind, and then, afterwards, sighted. Results demonstrate how brand familiarity mediates the effect of brand exposure on the sighted assessment of wine both directly, and via its relation to brand knowledge. This novel finding extends the literature on the consumer response to brand information, suggesting that conventional mass media marketing strategies aimed merely at imparting brand knowledge may prove insufficient unless they also create a degree of brand familiarity in the minds of their customers.
Are South African equity investors rewarded for taking on more risk?
(AOSIS, 2019-09-25) Steyn, Johannes P.; Theart, Lomari
Orientation: It is rational for investors to expect additional compensation for an increased risk exposure. This positive risk–return relationship is in line with traditional financial theory; however, this relationship does not always hold in empirical research. Research purpose: The aim of this article was to investigate the prevalence of the low-risk anomaly in the South African equity market. Motivation for the study: If there is evidence of a low-risk anomaly, where low-risk shares outperform high-risk shares, then the additional return expectation of investors may be misplaced. Research design/approach and method: A unique sampling procedure and an extended time frame were employed in a quintile portfolio analysis methodology. Main findings: The article presents evidence that South African listed shares with low historical volatility earned higher risk-adjusted returns over the period July 2004 to September 2018. Low-volatility shares delivered a Sharpe ratio of 1.10 compared to 0.65 produced by the Financial Times Stock Exchange / Johannesburg Stock Exchange Shareholder Weighted Index over the same period. Practical/managerial implications: The assumption that return in an investment portfolio could be enhanced by taking on more risk could be wrong. It seems that fund managers could potentially enhance returns and decrease risk in their portfolios by focussing on shares with low historical volatility. Contribution/value-add: The negative relationship observed between volatility and return is inconsistent with theoretical expectations. Therefore, the results of this article suggest that investors are not rewarded for assuming higher levels of risk.
Assessing brand fit using conjoint analysis
(Stellenbosch : University of Stellenbosch, ) Bucker, Silke; Gerber, C.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: Many studies have been conducted on the occurrence of brand image transfer, but very few of them have focused on one of the most important determinants of such transfer namely, brand fit. Brand image transfer is the transfer of brand associations, attributed to another entity, to the brand, while brand fit has been defined as a consumer learning process that seeks to match those brand associations held of the relevant brands involved. This study proposes to assess brand fit. Since a variety of brands were involved in this study, conjoint analysis was used as a method of assesing brand fit. In particular, choice-based conjoint analysis was singled out because of its capability to allow the relative advantage of brands considered jointly to be ascertained. Brands might not be able to be measured if taken one at a time. Both qualitative and quantitative research methods were employed in order to assess brand fit using conjoint analysis, which was the main reason for this study. Rugby sponsorships were chosen to asses brand fit, as this particular game is the second most-watched sport in South Africa, with the highest monetary value attached to its sponsorships at the time of this study. The qualitative research was accomplished by using focus groups to determine which brands were typically perceived to be associated with the Springbok rugby brand. The different industries and brands used in the focus groups were selected on the grounds of their being current, previous, and potential sponsors of the Springbok rugby brand. The quantitative research was conducted by means of an online questionnaire, sent via a link in an email to a chosen database on the social networking site, ‘Facebook’. A screening question served to ensure that only rugby supporters would be eligible to complete the survey. The information was captured in ‘real time’ in the conjoint analysis software, thereby determining which brands were perceived to best fit the Springbok rugby brand. The realised sample was composed of a younger, more male-dominated group. All respondents were also Springbok supporters who possessed sufficient knowledge on the Springbok brand and sponsors. There were six brands identified to fit the Springbok rugby brand, namely, Castle, Vodacom, SASOL, Canterbury, Nike, and Adidas. These identified brands proved that the study did indeed assess brand fit using conjoint analysis. Conclusions were drawn that brand fit could be established in a variety of ways. The most dominant ways were by leveraging the sponsorship, and also by sponsoring on a continuing basis. These two ways serve to inform consumers of the sponsorship, making them aware of the brands, and building the basis of brand fit in their minds. Brand fit was also achieved based on similar brand images of the two different brands. It was found that brand fit was absolutely essential for a successful brand image transfer. Before undertaking a sponsorship, it is important to establish if a perceived brand fit between the various brands will be perceived. If not, additional leveraging of the sponsorship, by means of a marketing campaign, should be used to teach consumers the basis of the brand fit between the various brands.
Assessing brand image transfer in sponsorship
(Stellenbosch : University of Stellenbosch, 2010-12) Morris, Andrea Leigh; Gerber, Charlene; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: Marketing literature has revealed that sponsorship is a key marketing communication tool used to break through promotional clutter. Sponsorship is a means by which marketing managers are able to transfer knowledge about organisational offerings to consumers and communicate how organisations are able to satisfy consumers‟ needs. Satisfying consumers‟ needs is a key philosophy of marketing, thus, it is an important objective for marketing managers to transfer knowledge to consumers about their need-satisfying capabilities. Research has shown that knowledge is transferred to consumers by first creating awareness of brands, then building consumers‟ knowledge of brands, and finally establishing and enhancing consumers‟ perceptions of brand image. According to marketing literature, the process of building brand awareness, brand knowledge and brand image ultimately contributes toward the enhancement of brand equity. Previous research has shown that establishing brand awareness is an initial and crucial objective of sponsorship endeavours. Little research, however, has been done on the importance of brand image objectives and strategies in sponsorship. Researchers agree that brand image can be transferred between a sponsor brand and sponsored event, thereby enhancing the brand image of the respective parties. The purpose of this study was therefore to assess brand image transfer in sponsorship. The research problem considered the question whether the brand image of sponsor brands is transferred to the brand image of sponsored events, and whether the brand image of sponsored events is transferred to the brand image of sponsor brands. Fictitious brands were designed to assess the transfer of brand image, namely FruityBliss (sponsor brand) and the ProFriz Frisbee Challenge (sponsored event). Four brand image attributes were selected to assess the brand image of the sponsor brand and the brand image of the sponsored event. These included physical product and price (sponsor brand) and status and size (sponsored event). The four brand image attributes were manipulated in sixteen experiments and the brand image scores of the sponsor brand and sponsored event were subsequently measured. Results of the study showed that brand image scores of the sponsor brand were significantly higher than the brand image scores of the sponsored event. It was therefore concluded that brand image transfer does occur from a sponsor brand to a sponsored event and vice versa. Furthermore, product and price appeared to have a greater influence on the brand image scores of the sponsor brand and the sponsored event, than did status and size of the sponsored event. It was thus concluded that although brand image transfer does occur from a sponsor brand to a sponsored event and vice versa, the sponsor brand is influenced more by the sponsorship than the sponsored event. In other words, a stronger brand image transfer takes place from a sponsored event to a sponsor brand than from a sponsor brand to a sponsored event. From the research results, a number of recommendations were made. It was emphasised that organisations should make use of sponsorship as a means to break through promotional clutter. Sponsorship is an effective technique in enhancing brand images, and ultimately enhancing the brand equity of organisations. Organisations should therefore take careful consideration in developing sponsorship strategies; sponsor products should be affiliated with sponsored events and vice versa.
Assessing the attitudes and perceptions of councillors and officials on integrated development planning : a case study-the Municipality of Stellenbosch
(Stellenbosch : Stellenbosch University, 1999-09) Ceasar, Niklaas; Theron, Francois; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Sustain. develop plan and management
ENGLISH ABSTRACT: Local Government in South Africa had undergone radical changes since the first democratic Local Government elections were held in 1995 and 1996. It was generally known that Local Government in South Africa during the apartheid era was racially fragmented. This resulted in historical and socio-economic imbalances. The emergence of a negotiated settlement for a new dispensation paved the way for a process of developmental local government in order to enhance the quality of life of the people. Challenging approaches confronted municipalities to utilise the options and tools at their disposal to make themselves more developmental. Integrated Development Planning (IDP) as a statutory obligation on all municipalities is considered pivotal to the planning of Local Govemment within post-apartheid South Africa. It is a vehicle to work in close collaboration with the local community to find sustainable ways to meet the socio-economic and material needs of all residents. Fundamental transformation is needed to bring about this new vision. Municipalities will have to be proactive and innovative in order to facilitate the change and secure the maximum synergy between the different roleplayers at the local level and the available resources. Councillors and municipal officials have to work together with the public, as stakeholders and partners, to identify and address new priorities. Against this backdrop the study aims to assess the attitudes and perceptions of councillors and officials with regards to lOP within the Municipality of Stellenbosch.
Assessing the business case for environmental, social and corporate governance practices in South Africa
(Stellenbosch : Stellenbosch University, 2018-04) Solomons, Ruth; Mans-Kemp, Nadia; Erasmus, Pierre D.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH SUMMARY : Firms, their stakeholders and society at large are increasingly confronted with sustainability-related challenges, such as climate change, the depletion of natural resources, and energy security. In the wake of these challenges, investors have shown increased interest and consideration of pertinent non-financial information during their investment analyses. Responsible investors in particular incorporate environmental (E), social (S) and corporate governance (G) (ESG) aspects in their investment analyses and ownership practices. These investors realise the potential positive and long-term impact of sound ESG risk management on corporate financial performance (CFP). Despite the growing interest in sustainable corporate practices, limited ESG-related research has been conducted in South Africa, with most existing studies focusing specifically on responsible investment practices and corporate governance. Against this background, the primary objective of this study was to assess the business case for ESG practices of selected Johannesburg Stock Exchange (JSE) listed firms over a six-year period, from 2011 to 2016. A combination of convenience and judgement sampling was utilised to draw a sample of 66 companies from six JSE sectors. The study adopted a positivistic research approach. Selected accounting-based (return on assets [ROA] and earnings per share (EPS]) and market-based (earnings yield [EY] and total shareholder return [TSR]) CFP measures were employed. While accounting-based measures are typically used to reflect on short-term CFP, market-based measures provide an indication of investors’ perceptions regarding past performance and the future financial prospects of a firm. The study expanded on the work of previous researchers in the emerging market context by including value-based CFP measures (return on invested capital [ROIC], market value added [MVA], the spread, and cash return on invested capital [CROIC]). The required data were sourced from the Bloomberg and IRESS databases. The resulting panel dataset was analysed by means of descriptive and inferential statistics. The descriptive statistics revealed a growing trend in the overall ESG disclosure by the considered firms. When the individual ESG aspects were examined, it was evident that the E- and S-disclosure scores contributed mostly to the overall increase in ESG disclosure. Although an increase in E-disclosure was observed over the study period, it was at a slow pace. The disclosure of social considerations, however, revealed a more notable increase. Corporate governance disclosure remained relatively consistent over the study period. The panel regression analyses conducted between the individual ESG disclosure scores and CFP revealed significant associations for EPS and TSR. A significant negative relationship was found between E-disclosure and EPS. In contrast, a significant positive association was observed between S-disclosure and EPS. When S-disclosure scores were lagged for one-year, the significant relationship persisted. A statistically significant negative relationship emerged between S-disclosure and TSR. Significant relationships were also noted at the sector level between the individual E-, S- and G-disclosure scores and various accounting-based, market-based and value-based CFP measures. Based on the results of this study, the researcher recommends that corporate managers, directors and investors should not only focus on the traditional financial-performance approach, but also incorporate pertinent ESG aspects in their decision-making and investment analyses. Furthermore, corporate managers should acknowledge that ESG risk management forms part of the core business function of firms. Since ESG risks and sustainability concerns often differ among sectors, the JSE could set sector-specific E- and S-targets. Finally, given their ownership rights and responsibilities, more shareholders should engage with companies on ESG concerns, be it in public or in private.
Assessing the business case for environmental, social and corporate governance practices in South Africa
(AOSIS, 2019-11-28) Johnson, Ruth; Mans-Kemp, Nadia; Erasmus, Pierre D.
Background: By focusing on sustainable financial and environmental, social and corporate governance (ESG) returns, companies and investors can do well by doing good. Despite growing interest in sustainable corporate practices, limited ESG-related research has been conducted in South Africa. Previous researchers have mainly focused on corporate governance. All three ESG aspects should, however, be addressed to ensure corporate sustainability. It is possible that the consideration of a composite ESG measure can conceal varying levels of consistency in the individual aspects. Aim: The main objective was to investigate the relationship between ESG and corporate financial performance (CFP) measures. Setting: Firms listed on the Johannesburg Stock Exchange between 2011 and 2016. A total of 66 firms were considered from six sectors. Methods: Data for the sample (359 firm-year observations) were analysed by conducting panel regressions. In line with international research, ESG was considered as the independent variable, while eight measures of CFP were individually considered as the dependent variables. Composite and individual ESG disclosure scores were obtained from Bloomberg. The respective accounting-based, market-based and value-based CFP measures were sourced from IRESS. Results: Two main trends emerged from this study. The majority of the significant relationships identified between variables were only observed: (1) once the composite ESG disclosure score was disaggregated and (2) when a distinction was made among sectors. Conclusion: The empirical evidence suggests that ESG aspects are not homogeneous across sectors. Firm leaders should hence employ a differentiated approach to address the most important risks relevant to their operating environments.
Assessing the role that perception of corporate identity and corporate social responsibility practices play in the investment intention of potential individual investors
(Stellenbosch : Stellenbosch University, 2020-12) Nel, Kara; Erasmus, Pierre D.; Mans-Kemp, Nadia; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: Worldwide, an increasing number of companies are using corporate social responsibility (CSR) activities as a business tool to promote financial returns, cultivate a favourable reputation, and enhance workforce productivity. Given the growing importance of sound CSR practices and considerable corporate investment in CSR activities, it is essential to understand how these activities impact on decisions made by different stakeholders. Previous researchers mainly focused on the effects of CSR on customers’ intent to purchase. Very limited research has been conducted to understand the effect of CSR on other key stakeholders, including investors. While traditional finance theories are based on the assumption that rational investors evaluate investment decisions purely on risk-return considerations, behavioural finance theory proposes that investors’ attitudes towards a particular firm could influence their decision to invest in the firm. This study was undertaken to address the identified knowledge gap by assessing the role that perception of corporate identity and CSR practices play in the investment intention of potential individual investors, by adapting a dual-process model that was developed based on consumer behavioural constructs. The first part of the model accounted for the bond between an investor and the selected company (Nedbank) in terms of corporate identity. The second part of the model incorporated investors’ perceptions of the specific CSR practices of Nedbank. The model was assessed by an electronic questionnaire distributed to all students registered at Stellenbosch University during the second semester of 2019. In response to this invitation, 1 649 usable questionnaires were received. The descriptive statistics revealed that the respondents had a positive perception of Nedbank’s corporate identity. They perceived Nedbank to perform better on the corporate expertise than the corporate values dimension. Although the respondents had a very favourable attitude towards CSR initiatives in general, they were concerned that Nedbank performed poorly regarding some of their CSR practices. The results furthermore indicated that the respondents were not really familiar with Nedbank’s CSR practices. The partial least square structural equation modelling inferential analysis indicated that discretionary and relational CSR practices had more predictive relevance towards corporate values than corporate expertise, while moral CSR practices strongly predicted the perception of both dimensions. In turn, the perception of both corporate values and corporate expertise strongly predicted investment intention. Although corporate expertise and corporate values acted as mediators between all the types of CSR practices and investment intention, the significance was weak. The effect of CSR familiarity on investment intention was neither mediated by corporate values nor corporate expertise. The results revealed that CSR familiarity had a strong positive direct effect on investment intention. Based on the results, the researcher recommends that CSR programmes should effectively be communicated and promoted to investors as it plays a significant role in their investment decision-making. Furthermore, companies are encouraged to commence their CSR journey by addressing moral CSR practices as it was shown to be the most beneficial in enhancing potential investors’ perceptions of corporate identity and, therefore, their investment intention. Companies should continuously focus on their CSR behaviour to attract potential investors.
An assessment of consumers’ subconscious responses to frontline employees’ attractiveness in a service failure and recovery situation
(AOSIS Publishing, 2017) Boshoff, Christo
Background: Initial analyses of the impact of physical attractiveness in a business context have supported the ‘what is beautiful is good’ contention. However, in circumstances characterised by negative emotions, duress and stress, very little is known about how human beings respond at the subconscious level to the attractiveness of frontline service providers. Aim: The purpose of this study was to assess whether consumers who complain to a frontline service provider about a service failure respond differently at the subconscious level when the service provider involved in the service encounter is attractive compared with one who is less attractive. Method: Forty respondents were exposed to a video clip of a service failure and service recovery situation. While viewing the hypothetical scenario, two neuro-physiological measurements were used to collect data at the subconscious level, namely galvanic skin response (GSR) and electroencephalography (EEG). Results: The results suggest that, at the subconscious level, customers respond differently to the service recovery efforts depending on the attractiveness of the frontline service provider who attempts to rectify the service failure. Conclusion: The results seem to suggest that the physical attractiveness of a frontline service provider moderates (or softens) the negative emotions that a complaining customer might experience during a service failure and complaint situation – consistent with the ‘what is beautiful is good’ contention.
Assessment of how supporters become attached to a sports team
(Stellenbosch : Stellenbosch University, 2012-03) Pressinger, Gabbi Michelle; Gerber, Charlene; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management.
ENGLISH ABSTRACT: In social psychology, social scientists have become interested in explaining social behaviour: how and why individuals become attached and why they pursue on-going close relationships. The investment model was developed that suggests how attachment to a relationship is formed. It has been suggested that the investment model can be applied to a wide variety of interpersonal relationships. In the same way as a relationship is formed between two individuals, the attachment that supporters have to a sports team is also formed. To understand the psychological connection supporters have to a sports team, the Psychological Continuum Model (PCM) was developed. PCM suggests supporters first become aware of a sports team, then supporters may become attracted, this leads to attachment to the sports team and allegiance to the sports team may then occur. Past research has focused on different aspects of the PCM. However, very few studies have yet explained how supporters become attached to a sports team. This study combines the PCM and the investment model to assess how supporters become attached to a sports team. Understanding the psychological connection that supporters have to a sports team was required thus, the Psychological Continuum Model (PCM) was used. How supporters become attached (based on the PCM) to a sports team was further understood by the investment model variables. Thus, the PCM was adapted and applied with the investment model. The study comprised of a 2x2x2 full factorial experimental research design. For the purposes of the study, respondents were first made aware of the sport, fistball. Respondents completed a questionnaire that was used to measure their attraction and attachment to a fistball team. During the interview, respondents were shown one of eight treatments, in the form of a newspaper clip on a poster that was manipulated using the investment model variables. The eight posters comprised of fictitious fistball teams to avoid any bias that may have been formed had another sport been chosen. There were 36 respondents per treatment group, ensuring that respondents could be split between the different levels of supporters. A repeat group was also conducted to ensure the validity of the study. The realised sample comprised of 318 respondents. The target population was South African supporters in LSM groups 8 to 10. Judgement sampling was used as no sampling frame exists for supporters. Respondents were selected in shopping malls in Gauteng due to the culturally diverse nature of the province. The results revealed that based on the level of support, attachment to a sports team varies. The results suggested that low supporters have a higher attraction than high supporters. High supporters are already attached to a sports team, and are not necessarily interested in being attracted to a different sports team. It would be recommended to attract high supporters by having initiatives that involve teams, where supporters‟ attachment to the team already exists. High supporters were considered to be those who were attached to a sports team. To package and deliver products and/or services most effectively, sport marketers should appeal to high supporters‟ attitudes, as it is their attitude that guides their behaviour. Based on the findings, there is an opportunity for sport marketers to encourage low supporters to become attached to a sports team by using the investment model variables. By incorporating social psychology with sport consumer behaviour, a better understanding of sport supporters was attained. In the same way that a dating relationship has various stages of courtship that may eventually lead to marriage, the relationship that supporters have with a sports team also goes through stages which may lead supporters who show allegiance. The study reveals that, similarly to a dating relationship where an attraction to an individual first needs to be formed, the type of sport plays a role in attracting supporters to a sports team. Likewise, whether an individual pursues a relationship depends on the investment model variables, which is also the case for supporters.

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