The purpose of this study is to investigate the role of Operational Risk Management (ORM) in the successes of Small Medium Enterprise (SME’s) and to establish whether ORM has a direct correlation to the survival rate of SME’s, which have been operational for a minimum period of five years. The study was limited geographically to Gauteng South Africa, in particular the Kya Sands Industrial area. The South African Government is focusing on promoting small business to reduce the high unemployment rate and to increase the growth of the economy through developing SME’s. Statistics states that South Africa currently has an unemployment rate of 25.5 per cent, in the third quarter of 2015 (Statistic South Africa, 2015), which is the worst rate since the first Labor Forces Survey in 2008. It is well known that SME’s contribute significantly to the world’s economy. After conducting a significant literature review, it was found that no applicable research has been done globally or locally regarding ORM in SME’s as per NG & Kee (2012). Most research in ORM is focused on large organisations, specifically the banking industry. The need for this study arose as literature reviews reveals a high rate of SME failures, regardless of various financial assistance programs from Government for starting and assisting SME’s. In determining the impact of ORM by addressing the high probability of failure of SME’s in emerging markets this research will be the first step in determining the value and trajectory of additional insights for SME sustainability . Thus ORM could indirectly provide assistance in undertaking and addressing the unemployment and economic freedom challenges in South Africa. This is unique and new knowledge generating ground breaking finding s as ORM was not regarded nor researched, as a critical contributing success factor for smaller companies. This research had a positive approach and was of a quantitative and exploratory nature to investigate the research question and problem statements. The research instrument was a self-designed semi-structured enumerated questionnaire. Personal ii interviews were conducted with willing participants in order to obtain first hand data. This was an avant-garde study. The results based on the facts and perception of the owners and managers indicated the extent of implementation of ORM in the various business departments of the SME’s. It was found that ORM is a contributing factor regarding the success of SME’s. As a result, the main research problem and sub- problems were answered. Therefore ORM definitely plays a vital role in the survival rate of a SME and can be regarded as a critical success factor for SME’s if implemented and managed. Through identifying the facts and perceptions of the owners and managers of SME’s regarding ORM, further research can be conducted to identify the extent that ORM can have on the SME’s successes. / Graduate School of Business Leadership (SBL) / M.Tech. (Business Administration)

Thesis (MA)--University of Stellenbosch, 2003. / ENGLISH ABSTRACT: Instability in foreign political and social systems, changing power structures in international relations, and growing demands by host countries for a greater control over the operations of multinational enterprises (MNEs) have all led to the necessity of an improved way in which to determine foreign investment opportunities. Not surprisingly therefore, political risk assessment has become one of the fastest growing fields of study. Being concerned with the identification, analysis, management, and reduction of socio-political risks for foreign investors. The focus of this study is that of political risk analysis and the way in which it impacts on investor perception and consequently determines levels of foreign direct investment received by a particular country. Numerous definitions for the term "political risk" exist. Consequently, no specific definition is regarded as being completely correct since consensus still needs to be reached. One of the definitions used within this study is that political risk analysis is the analysis of the possibility that factors caused or influenced by governmental political decisions or other unforeseen events in a country will affect business climates in such a way that investors will lose money or not make as much profit as they expected when the initial decision to invest was made. These factors can be of internal (from inside the host country) or external origin, and can pose macro or micro risks. Foreign Direct Investment in brief is an investment involving a long-term relationship and reflecting a lasting interest and control of a resident entity in one economy in an enterprise resident in an economy other than that of the foreign direct investor. This study is a comparative between South Africa and Nigeria. South Africa and Nigeria share many similarities, they are both resource based, African countries. They are both fairly recent democracies, although some may contest the status of Nigeria as being a democracy. They are also both heterogeneous states, both consisting of various ethnic groups. Nigeria offers investors a low-cost labour pool, abundant natural resources, and a large domestic market. However, Nigeria suffers from an inadequate and poorly maintained infrastructure, confusing and inconsistent regulations, endemic corruption, and a lack of confidence in the rule of law. Despite all of this, Nigeria alone accounts for a quarter of FDI flows to Africa. In comparison, South Africa's FDI potential has not been fully exploited. This study will discuss the possible reasons why this is the case. The labour market in both countries and the challenges they face are discussed in depth within this study. Due to the fact that aside from investment, the economic growth within a country is dependent on a variety of factors, the backbone of which is the labour market. In determining levels of risk within both South Africa and Nigeria, this study made use of a political risk model. Although the intention has been to be as accurate and as thorough as possible, it should be noted that as yet, no generalised systematic method of conducting political risk assessment exists. Results, although extensively substantiated, remains the interpretation of the researcher and as such remains open to debate. / AFRIKAANSE OPSOMMING: Onstabiliteit in buitelandse politieke en sosiale stelsels, veranderende mag strukture in internasionale betrekkinge, en die groeiende behoeftes van gasheer lande om meer beheer uit te oefen oor die funksioneering van buitelandse maatskappye het alles gelei na die noodsaaklikheid van 'n beter manier om buitelandse investering te bepaal. Dus is dit nie verbasend dat politieke risiko analise deesdae een van die vinnigste ontwikkelende onderwerpe is wat bestudeer word nie. Politieke risiko analise is belangrik vir die identifikasie, analise, bestuur en vermindering van sosio-politieke risiko vir buitelandse investering. Hierdie studie fokus op die impak wat politieke risiko' analise het met betrekking tot belegger waarneming en hoe dit dan ook moontlik die bedrag van buitelandse investering wat 'n land ontvang, kan bepaal. Daar is verskeie definisies wat die term "politieke risiko" beskryf en gevolglik moet konsensus nog bereik word oor 'n "korrekte" een. Een van die definisies wat in hierdie studie gebruik word is dat politieke risiko die analise is van die moontlikheid dat sekere faktore wat veroorsaak is of wat beïnvloed is deur die regering se politieke besluite, asook ander onvoorspelbare gebeurtenise in 'n land wat die investerings klimaat so kan beïnvloed dat die buitelandse beleggers moontlik geld kan verloor of miskien nie die verwagte winste behaal wat hulle aanvanklik gereken het, sou behaal nie. Hierdie faktore kan of intern (binne die gasheer land) of ekstern van aard wees en kan dus makro of mikro risiko behels. Direkte buitelandse investering in 'n land is 'n belegging wat In lang termyn verhouding insluit en dit reflekteer ook 'n blywende belangstelling en beheer van 'n buitelandse maatskappy in 'n gasheer land in. Hierdie studie is 'n vergelykende studie tussen Suid-Afrika en Nigerië. Suid-Afrika en Nigerië deel baie ooreenkomste. Beide lande is ryk aan natuurlike bronne en beide is nog "jong" demokratiese lande. Sommige mense stem nie saam dat Nigerië wel aan al die vereistes van 'n demokrasie voldoen nie. Suid-Afrika en Nigerië is ook heterogene state wat uit verskeie etniese groepe bestaan. Nigerië bied vir die buitelandse belegger billike arbeid, oorvloedige natuurlike bronne, asook In groot binnelandse mark. Ten spyte hiervan, moet dit ook in ag geneem word dat Nigerië onder onvoldoende en In swak instandhouding van infrastruktuur, wispelturige regulasies, korrupsie en ook In swak regsisteem ly. Ten spyte van al hierdie faktore, ontvang Nigerië In kwart van alle buitelandse investering in Afrika. Suid-Afrika se buitelandse investerings potensiaal in vergelyking met ander lande moet nog ontwikkel word. Hierdie studie sal die moontlike redes vir Suid Afrika se oneksploiteerbare buitelandse investerings potensiaal bespreek. Die arbeidsmark en die uitdagings wat gestel word het In groot invloed op buitelandse investering. Hierdie studie het ten doelom beide lande se arbeidsmark te bespreek en te vergelyk met betrekking tot buitelandse investering. Om die moontlike risiko in altwee lande te bepaal, maak hierdie studie gebruik van In politieke risiko analise model. Die navorser het gepoog om so deeglik en akkuraat as moontlik te wees. Dit moet ook in ag geneem word dat daar nog geen veralgemeende metode van politieke risiko analise ontwikkel is nie.

Value and size related equity investment strategies are supported by a large body of empirical research that shows a persistent premium, both longitudinally and crosssectionally. However, the competing rational and behavioural finance explanations for the success of these strategies are a subject of debate. The rational explanation is that the premium earned on value shares or shares of small companies can be attributed to higher risk. Behaviouralists argue that such shares are not riskier and attribute the premium to cognitive errors and biases in human decision making. The purpose of this study is to determine, firstly, whether the value and size premium exist in South Africa during the period July 2006 to June 2012, which includes one of the worst equity market crises in history. Secondly, this study sets out to determine whether the premium earned on value and size strategies are adequately explained by the principles of rational finance theory. To provide evidence regarding the existence of the value premium and size effect, returns are analysed, cross-sectionally, on portfolios of shares sorted by value and size. For evidence of a rational explanation, returns are regressed on value and size variables, and the relative riskiness of value and small companies is analysed. The results show evidence of a value premium in portfolios of small companies, but not big companies. The size effect is found not to be statistically significant. While regressions do show significant relationships between value and size variables and returns, these variables are found not to be associated with higher levels of risk. The conclusion is that the evidence does not support a rational, risk based explanation of the returns

The agricultural sector plays an important role in the South African economy through job creation and earning foreign exchange. The role of agricultural co-operatives increased substantially over the last few decades. The research focuses firstly on the identification of derivative instruments in the market and their applicability to mitigate financial risks co-operatives experience. Secondly, research is conducted about the extent to which co-operatives use these derivatives to hedge financial risks. The research shows that most co-operatives are exposed to financial risks through different activities. It is, however, evident that although the derivative instruments are available, not all co-operatives make use of these instruments. Recommendations for further research include the development of a risk management framework and determining the different economic factors that have an influence on the use of derivatives by South African agricultural co-operatives. / Business Management / M.Comm.

The agricultural sector plays an important role in the South African economy through job creation and earning foreign exchange. The role of agricultural co-operatives increased substantially over the last few decades. The research focuses firstly on the identification of derivative instruments in the market and their applicability to mitigate financial risks co-operatives experience. Secondly, research is conducted about the extent to which co-operatives use these derivatives to hedge financial risks. The research shows that most co-operatives are exposed to financial risks through different activities. It is, however, evident that although the derivative instruments are available, not all co-operatives make use of these instruments. Recommendations for further research include the development of a risk management framework and determining the different economic factors that have an influence on the use of derivatives by South African agricultural co-operatives. / Business Management / M.Comm.