Assessment of BEE progress in the petroleum industry and its role in creating value for the players within the industry.

Assessment of BEE progress in the petroleum industry and its role in creating value for the players within the industry.

The Broad-Based Black Economic Empowerment (B-BBEE) Act 53 of 2003 sought to redress the socioeconomic imbalances caused by South Africa’s apartheid laws. The Act included different strategies to give preference to previously disadvantaged individuals on such aspects as ownership, management, employment, enterprise development, preferential procurement, skills development and socio-economic development. This thesis does not explore the plausibility of the regulations but rather the possible gap between intended benefits and the impact of B-BBEE. It is intended to establish the administrative impact of Black Economic Empowerment (BEE) certification,1 using a case study of a medium-sized tourism enterprise. The findings of this administrative impact are juxtaposed with the policy intentions as established through policymakers. The primary question is ‘What is the administrative impact of BEE certification on tourism enterprises in South Africa?’ The main propositions are that the administrative costs of BEE certification have had a significant negative impact on the profitability and competitiveness of medium-sized tourism enterprises; that tourism enterprises are not aware of the full extent of the administrative costs of BEE certification; and that policymakers are not aware of the unintended impacts caused by BEE certification on tourism enterprises. The research was undertaken through two interrelated phases, the first of which was exploratory in nature and sought to establish the administrative impact of BEE certification through the case study organization. The second phase sought to present the findings regarding the administrative impact of BEE certification to policymakers, with the aim of establishing policymakers’ awareness of the gap between policy intentions and policy impacts. Multiple methods have been used in order to gather data that informs this thesis. Primary data was obtained through semistructured interviews. The thesis focused on a case of one medium-sized organization, which was selected using convenience sampling. An in-depth interview was conducted with the Head of Administration and Finance in the organization, as the key person responsible for overseeing the process of BEE certification. Since the thesis focuses on a single entity, the data pool was too small to allow for the generalization of findings, but sufficient for a series of in-depth explorations and assessments of the topic. Secondary data was obtained from various sources such as journals, periodicals, and reports, particularly in relation to regulatory impact assessments as well as on certification issues in the tourism sector. The main findings are that the administrative costs of BEE certification have had a minimal impact on the profitability and competitiveness of medium-sized tourism enterprises, especially from the second year of conducting the annual audits as the systems are already in place for oncoming audits. It is only about 0.01% of turnover. 1 An activity that stems from one of the regulations linked to B-BBEE Act. It is an annual certification to demonstrate the companies’ achievement as far as B-BBEE is concerned, and entails an audit process executed by South African National Accreditation System (SANAS) registered agencies. Page 3 of 3 However, the psychological burden associated with the stress of administrative preparations for audits makes it seem more costly. The tourism enterprises are unaware of the extent of the administrative costs of BEE certification in that they overestimate the cost implications by at least 75%. The policymakers are unaware of the unintended impacts caused by BEE certification on tourism enterprises, especially as they relate to the administrative costs. In conclusion, the administrative impact of BEE certification on medium-sized enterprises is minimal as far as costs are concerned; however the psychological burden, although not measurable, is substantial. Moreover, the policymakers are oblivious to any possible impacts that might have been caused by BEE certification on enterprises, thus making the gap between policy intentions and the policy impact more than it could have been had they had the awareness. Awareness at the least gives an option to rectify where possible, thus ignorance of situation can to a certain extent exacerbate the situation.

The study is concerned with evaluating the growth strategy of MBSA Consulting which is primarily aligned to the key principles of Black Economic Empowerment (BEE). As a black owned company practising in the field of civil engineering consulting, there is strong competition from both established companies and other BEE companies. The literature review included the general overview of South African legislation and regulation related to BEE and has also revisited the academic framework in the field of strategic management. According to the findings of the study, clients of MBSA which are mainly government departments and institutions are generally satisfied with the work of MBSA. However, they felt that MBSA should incorporate non-Historically Disadvantaged Individuals in order for them to compete with established companies which generally are owned and managed by non-HDls. The findings of the study revealed that the employee satisfaction level of MBSA employees is good and that can translate to employee encouragement to stay longer with the firm. Finally, the study concluded that MBSA's growth strategy is feasible and there is potential for this company although the issue of skills shortage in the country remains a problem. / Thesis (MBA)-University of KwaZulu-Natal, 2006.

The political processes with regards to black economic empowerment creates a very favourable business environment both for start-ups and already established black companies The service industry is the fastest growing industry around the world. In South Africa, the demand for technically skilled technicians in the information and communication industry is huge. III The challenge facing most black start-up is the sustainability of these companies in view of changing economic, political, social.and indeed technological environment. Franchising has been hailed as the best business growth strategy in many countries and particular for black owned small businesses in South Africa. The Franchise Association of South Africa is the authority with regards to franchising in South Africa. The Association has developed detailed and easy to follow guidelines towards franchising. Outsourcing non-core business activities enables a company to focus on its core business. Once a company focuses on its core business, it is then able to save on operational costs, focus on developing new products and offering better services. Both business-format-franchising and outsourcing are not perfectly suitable for Qinos ,and/or sustainable in the long run. The recommended strategic option is outsourcing with a mentoring programmed embedded in the strategy implementation, herein referred to as the hybrid strategy. The hybrid strategy suggests the creation of a network of subcontractors to whom Qinos shall out source some of its activities. The Subcontractors Network shall be a strategic alliance offield service providers in the ICT sector based in KwaZulu-Natal, initiated and mentored by Qinos. Qinos shall manage outsourced operations on behalf of companies that are outsourcing their field maintenance services, in the ICT sector, to these credible SMEs. The Subcontractors Network are small, owner-managed black owned companies that can provide the basic infrastructure for running a field maintenance service in the ICT sector. They have the competencies or are able to acquire the vendor-required competencies within a short period of time not exceeding six months. They provide world-class service quality, are profitable and sustainable. / Thesis (MBA)- University of Kwazulu-Natal, 2004.

This study sets out to test the hypothesis that the Eskom Black Economic Empowerment, as implemented by the Transmission Division of Eskom Holdings Limited, has had only limited success in fostering sustainable businesses. Although Eskom Transmission has been reporting excellent achievements in terms of the programme, the author argues that the performance measures are flawed in that they do not distinguish between small black owned businesses and large international businesses which conform to the Eskom definition of a Black Economic Empowerment supplier. Large companies with at least a 10% black shareholding, and meeting other criteria in terms of skills transfer, black management and procurement from other black owned suppliers could qualify as a Black Economic Empowered supplier. By including spend on such suppliers together with the Transmission spend on small, black owned suppliers, distorts the effects of the programme. The research has highlighted the following concerns: • The most important reason that employees support the BEE programme is because it is a policy requirement; • No development of suppliers apart from the indiscriminate use of price matching and setting aside of contracts; • Supplier assessments are inconsistent and are not always transparent; • Contract conditions and contracting methods are not always conducive to growth and development of small suppliers; • Minimal performance evaluation of suppliers is conducted; • The BEE programme is perceived as being most successful in enriching a few elite black individuals. In addition, it is perceived as having been successful in the creation of non value adding agents for white owned companies;Henk Langenhoven - MComm UKZN 2005 • Very few respondents to the survey indicated that they spend any time on the development of or giving advice to suppliers; • There is a 50% impression that BEE suppliers are capable of taking part in Eskom Transmission business; • A very low percentage of Small Medium and Micro Enterprises and Black Woman Owned suppliers applying for listing in the database are qualified to supply Eskom Transmission; • The very same suppliers tend to win contracts all the time, hence the indication is that there are few new entrants; • Historically, the indication is that the suppliers have generally have been on the database since before the implementation of the BEE programme. They have continuously changed ownership to keep pace with the changing requirements of policy; • The support ofBWO suppliers has come at the direct expense ofSMME suppliers. Recommendations derived from this research include: • Continuing with the current BEE reporting which is external to Eskom, but • Enhancing Key Performance Indicators to include measurements and targets for job creation as well as support of both SMME and BWO suppliers; • Structured supplier development programme with dedicated resources to take ownership of the programme; • Consideration is to be given to the methods of contracting when dealing with SMME and BWO suppliers; • Supplier performance evaluation is to be enhanced for inclusion of a wider spectrum of suppliers and end users. / Thesis (M. Com.)-University of Kwazulu-Natal, 2008.

Republic of South Africa underwent through very significant changes. The discriminatory laws and provisions were cancelled, there were free elections maintained. The government is trying to empower black people. Black Economic Empowerment (BEE) is governmental strategy which seeks to diminish differences between white and so called historically disadvantaged inhabitants. This master thesis provides broad survey of this strategy and analyses its current results.

South Africa is listed among the world's top ten countries with the highest unemployment levels (World Bank, 2018). The National Development Plan (2013) envisioned that by 2030, 90% of new jobs in the country will be created by small and growing enterprises. Worryingly however, South Africa lags in meeting its target for job creation as set out in the National Development Plan despite some effort made by the government to promote and grow small businesses. Globally small and medium enterprises have been acknowledged for their key role in driving economic growth, job creation and poverty alleviation. Despite this important role, South Africa still has one of the highest small and medium enterprise (SME) failure rates in the world (Global Entrepreneurship Monitor, 2014). To circumvent this challenge, the South African government established development strategies including the notable Broad-Based Black Economic Empowerment (BBBEE) to drive the growth and expansion of small and medium enterprises (SMEs). BBBEE is intended to drive enterprise and supplier development (ESD) and improve the development and long-term growth of SMEs. Notably, large private corporations in South Africa have made significant investments in ESD; however many SMEs fail to survive past three years. This study therefore investigates the extent to which integration into a large corporate value chain promotes the sustainability of a SME. The study also examines the impediments that inhibit the growth of SMEs that are integrated in large corporate value chains. The research was conducted using an explanatory qualitative methodology. Five SME owners and six large corporate managers were interviewed to assess their perspectives and opinions on the SME-Corporate relationship. The research results concluded that corporate initiatives on ESD are of a significant benefit to SME growth, however challenges such as negative corporate perception and access to external funding remain a hindrance to SME growth. The study proposed recommendations to improve the successful integration of SMEs into corporate value chains.

Customer experience in retail banking has become a key source of differentiation. Increased competition in the financial services industry and the global financial crisis caused financial institutions to find themselves in a difficult operating environment. A sustainable competitive advantage in the current environment cannot be achieved only through excellent service delivery, service quality and prices, but through the creation of memorable customer experiences. The current study expands on the conceptual framework for the creation of customer experience proposed by Verhoef, Lemon, Parasuraman, Roggeveen, Leonard and Schlesinger (2009). In this paper the nature and extent to which the determinants discussed by Verhoef et al. impact on the customer experience is assessed. Using a quantitative method, a survey questionnaire measuring customers’ perceptions about their experiences with the retail banking firms, was distributed to 1043 employees of the air transportation company. The study finds that the past experiences, brand and prices impacts more on customer experience than other determinants identified. The study also evaluates the impact of transformation and Black Economic Empowerment on customer experience. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

The ANC government has implemented various mechanisms to promote inclusivity of all economic citizens over the past 15 years. The main objectives of all the policies was to promote economic transformation in order to enable meaningful participation of black people in the economy and to change the racial composition of ownership and management structures of existing and new enterprises. The purpose of the research was to determine the contribution of Broad-Based Black Economic Empowerment (BBBEE) to the financial performance of companies on the Johannesburg Stock Exchange (JSE) during the economic recession. The underlying assumption was that companies with greater overall BBBEE compliance rating should outperform companies with a lower overall BEE compliance rating. The top BBBEE rated companies on the JSE were analysed to determine whether these companies outperformed that sector indices. Market-to-book-value, Price-Earnings Ratio and Annual Return were used as financial performance measures. The results showed that there was a positive correlation between the companies’ BBBEE rating and the financial performance. On further investigation it was revealed that on average the companies with greater BBBEE ratings did not outperform companies with lower BBBEE ratings nor did they outperform the sector indices Copyright 2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Van Heerden, JH 2011, Contribution of broad-based black economic empowerment to the financial performance of companies listed on the JSE during a recession, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03202012-121101 / > F12/4/211/gm / Dissertation (MBA)--University of Pretoria, 2011. / Gordon Institute of Business Science (GIBS) / unrestricted