M.Comm. / The primary objective of this dissertation is to perform an analysis of supplier relationship management practices in Eskom. Currently, Eskom is facing pertinent challenges such as a diminished reserve margin, increased unplanned generation plant outages as well as coal supply and quality constraints coupled with ever-rising primary energy costs. Since 1994, the demand for electricity has grown significantly on the back of robust economic growth. As a result, Eskom’s power system has an inadequate reserve margin which is at an all time low of around 8% and this does not compare well with the international standard of 15%. It is therefore evident that, as a national asset Eskom cannot overcome the current challenges successfully without strong partnerships with key suppliers. Impact of global expansion in the power sector has seen increased demand for utility specific commodities, and the resultant implication is the increased pressure on utilities to secure supply. Significant energy pressures are impacting on traditional procurement systems; as supply tightens it is vital for Eskom to intensify their efforts to build and sustain long-term collaborative relationships with key suppliers. With a more strategic view of procurement, companies are increasingly finding that different types of supplier relationships should be managed differently to achieve maximum value. Supplier relationship management has become increasingly sophisticated; buyer and supplier preferences are driven by circumstances in any relationship. The relationship portfolio analysis as explained by Cox, Sanderson and Watson (2000) demonstrates that buyer and supplier relationships centre on power, interdependence, and independence and they agree that relationships can be of an arms’ length, adversarial and collaborative nature depending on the power and style of management. Electricity is an important sector in the South African (SA) economy, despite its relatively small share of the Gross Domestic Product (GDP). Eskom has a capital expenditure budget of R800-billion for the next 20 years (Venter, 2007). An overview of the electricity industry in SA covering key highlights on the evolution of thinking on energy developments in the country and the resultant implication for supplier relationship management is discussed. Eskom supplies about 95 percent of South i Africa's electricity, and the recent power crisis had far-reaching implications for the economy. Some economists say that Eskom’s power crisis could slice two percentage points off SA’s growth rate, sending it below 3% for the first time in a decade.

Factors such as globalisation, intense competition and ever-changing rules make change a must. What used to be traditional markets have been eroded and competitors have flooded most of the markets. This brings new challenges. Organisations that seek growth and survival keep up with the changing environment. Organisations that ignore the changing environment choose to do so at the risk of failure because what works today is not guaranteed to work in future. For an organisation to achieve its objectives, everyone in that organisation needs to contribute and pull in the same direction. As such, leaders and employees are important to the change process. Management’s understanding of where the organisation must go and how it could get there is crucial to take the whole organisation through the change process. Managers have to learn new skills as operational skills are often not enough when it comes to leading people. Leaders have a critical role to play to ensure effective change management. The study is aimed at establishing how the change process is managed at Eskom. This is explored through finding out the leadership style applied at Eskom in effecting change. Quantitative research was done within Eskom by means of e-mail survey to a random sample of employees at middle management. 980 questionnaires were sent out with a response rate of 21.5%. Having identified issues affecting effective leadership and change management in the organisation certain deficiencies or areas of possible improvement will be identified. Recommendations will be made on addressing leadership and change management process to create an environment for facilitation of change efficiently given the stress, discomfort and dislocation associated with change. “Change is a very fickle mistress. No sooner has one fresh new idea swept through the business world, than other better way of doing things is hot on its heels”. Anonymous / Mr. T.F.J. Oosthuizen

Supply Chain Management (SCM) has an overwhelming impact on firms as it directly impacts on sales and costs. Therefore, it must be a core competency for any organization and thus SCM expertise is highly valued in organisations. Procurement of goods and services has a major impact on the successful execution of the project. Procurement can help the business, ensuring that all the goods and services they buy will be of the right quality, quantity and price, and they will be delivered ‘just in time’. The application of procurement policies and practices, using fair and open procedures, is crucial not only for attracting efficient contractors and suppliers, but also to safeguard the principle of accountability and the cost-effective use of funds. Before awarding a tender, there is a substantial amount of work to be undertaken by the project manager, contracts manager, end user, buyer, and authorising committees. Commitment from personnel involved in contract awarding is not adequate. Furthermore, the Eskom governance process sometimes contributes to delays in awarding a contract. before the enquiry and tender documentation is sent out to the suppliers on the tender list, the core team involved in the procurement process verifies that the enquiry is complete and correct. Should there be contractual or legal issues during the execution of the project in the form of say a contract that has been issued with unsuitable clauses, solving the problem becomes difficult. Contractors will sometimes use contract clauses to suit themselves, and take advantage of the employer, causing cost overruns due to the difficulties in managing the contract. Eskom’s commercial activities are governed by the Public Finance Management Act (PFMA) and Constitution of South Africa, which states that an organisation such as Eskom should have in place “an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive, and cost-effective.” This can eliminate irregularities in contracts, since they can have a serious economic impact, interfere with fair competition, and destroy confidence in the integrity and functioning of public administration Such irregularities may lead to costs overruns on projects where incompetent contractors are awarded a contract. Incorrect financial forecasting is a very serious issue, and needs to be addressed in order to help strengthen the cash flow and forecasting within Eskom. This research strategy is intended for quantifying observations of human behaviour, with the emphasis on exact measurements. The primary data for this study was generated through the administration of a structured questionnaire survey conducted among engineers, project managers, contract managers, and forensics personnel. The secondary data for the present study was gathered from literature in the form of open ended questionnaire from the same personnel. Poor commitment of buyers and chain approval meetings being shifted affect the delays in awarding of contracts. Lack of training of contract managers, absence of legal representative’s advice and squad checking meetings not being represented properly contributes to contracts being awarded with unsuitable clauses. Managers specifically forcing contracts to be awarded to a specific contractor, nepotism or favoritism, politics and contractor greediness, relate to irregularities in contracts. Lack of experience, revision of scope (unclarified scope), project delays, less effort being made when forecasting and unforeseen circumstances, such as strikes, and forces of nature, relate to incorrect financial forecasting. Continuous training and commitment of all personnel involved in the project environment is important, therefore Eskom personnel in the project environment should work as a team in an integrated way. Adequate time should be spent, and thorough checks made, to ensure that documents sent out for tendering conform to requirements. Involvement of all the supporting functions must be maximised. Code of ethics training and application is very crucial in the project environment, and the current governance policies should be adhered to by all stakeholders in the project.

M.A. (Business Administration) / The government is busy with the privatisation of all the parastatals. This is done in stages with the intention to better the lives of all South Africans through the exposure to global competitors, technology, economic markets and strategic alliances. This report looks at privatisation in general, the different definitions and the different models of privatisation that can be applied by South Africa. It then looks at Eskom as it undergoes privatisation and tries to establish if there are benefits that ensue from that and how do the stakeholders feel about privatisation. The Eskom method and policies supporting Black Economic Enterprises are visited. The questionnaire is circulated to stakeholders in Eskom to gauge attitude towards privatisation. The results are then statistically analysed using the Statistical Package for Social Science II to arrive at the conclusive deduction. The researcher tries to see the positive things about privatization to encourage stakeholders to take advantage of the process and thereby securing all the possible benefits from privatization. The psychological perspective is that the government is going to implement privatisation to conform to the requirements of the international communities anyway, they are not asking for concerns to influence the decision whether to privatize or not to. The questionnaire circulated indicated that stakeholders think alike when it comes to different issues surrounding privatization. What is good is that there is a fair balance between those who are positive about privatization and those who are negative. The final recommendation of the report is that Eskom should privatize for pragmatic reasons using the French Model of Privatising whereby the total control of the enterprise still rest with the trusted members of the community.

M.Comm. / South Africa's demand for electricity is expected to outstrip the industry's generation capacity by 2010. If the government wants to avoid this situation, the construction of new plants must commence. At the moment this task has been delayed because the Government is at loggerheads with COSAU and Eskom about restructuring the electricity supply industry. This debate will remain unsolved unless the government can substantiate why exposing the industry to competition will improve its performance. Unfortunately this task is not as simple as it seems. Even though competition is one of the most widely used terms in economics, it still remains an elusive concept. The ambiguity regarding tl1e meaning of competition arises from the failure to divorce the concept of competition from a market structure; as a consequence an operational meaning of what it means to compete \n terms of contemporary business behaviour does not exist. As a result activities associated with industrialisation, such as a changing production function, the development of new products and t~chniqu'::s and business structures are not related to the concept of competition. In order to develop n clear understanding of "what it means to compete", this dissertadon uses a behavioural definition of competition to determine why exposing firms to. competitive pressure improves their performance, reflected in superior static and dynamic efficiency levels. Based on this conceptual framework, Schumpeter' s approach to competition, which emphasises innovation, profits and the entrepreneur as the agent of improvement combined with the idea that it is the uneven development of knowledge that matters in the process of creative destruction", is accepted (Metcalfe & Ramlogan &Uyarra: 2001). Based on the above notion of competition, competitive pressure positively influences firms' performance, improving their static and dynamic efficiency levels. A micro-economic analysis of a C!)IDp.etitive electricity industry is conducted in order to test the abov~ assumption. This case study demonstrates that the competitive process ultimately improves thr: integration of knowledge throughout the supply chain, which is used an input to stimulate innovation within firms and exploit new technologies (Murphy, 2002:21). As a result, firms facing competition will try to retaii1 their market position 2 by exploiting all knowledge and exploring all avenues of technological invention, before selecting the best method (Khan: 1998). In addition, this case study illustrates that stimulating dynamic efficiency goes beyond developing and implementing "hardware" (computers, CCGT plants, fuel cells etc). Although technology plays an important role in shaping industrial organisation, it is not the catalyst that drives innovation and change. Rather organisational innovation changes market participants' schemas, breeding new ideas that become the input to create technology. Therefore organisational innovation has profound efficiency consequences (Williamson, 1994: 183). If technological and organisational inncvation is intertwined, then innovation is a complex evolutionary process, which occurs over time. Furthermore innovation cannot occur in a vacuum, but is interconnected, interwoven and interdependent with an industry's physical and institutional context (Perez, 2000). Based on the stylised facts a competitive market provides the institutional context that stimulates innovation, and therefore it might be worth incurring the transactions costs and short-term losses in order to create these opportunities.

M.Ing. (Engineering Management) / The turbo-generator unit is very important equipment for electric power production, which has a high rate of failure. As the capacity increases, condition monitoring and fault diagnostic play a crucial role to guarantee safe operation and cost efficiency. The Eskom generator fleet is fast approaching the end of the original designed life. Also in view of the recent constrained reserve margin, outage downtime, maintenance costs, resource management, and maintenance inherent problems, a systematic approach is required to optimise scheduled time-based maintenance to improve reliability and availability. The subject of turbo machine condition monitoring requires the development of new technologies to diagnose the turbo-generator problems. Condition is an underlying factor in the performance of machines. It is also an important predictor of future performance that the machine is in a good condition and will be reliable and perform better. It provides a reference for maintenance engineers on the current condition of the turbo-generator. Trends in condition monitoring can be used to determine whether turbo-generators are being maintained and that are meeting their expected service lives or whether their performance is deterioration faster than expected. In the industry, traditional maintenance philosophies have taken two approaches; the first approach is to perform fixed time interval maintenance, where the system engineers take advantage of relaxed production cycles to fully inspect all aspects of the turbo-generator. The second route is for engineers to simply react to the generator failure as and when it happens. All too many utilities operate largely in the reactive run-to-failure mode. The old phrase, “if it aren’t broken don’t fix” is perennial run to failure argument. Nonetheless, making use of today’s technology, a new scientific methodology is becoming popular to maintenance management. For the purpose of investigating the management of condition-based monitoring and diagnostic technology to optimise timed-based maintenance of large turbo-generators, Eskom Units installed with condition monitoring techniques were considered. The minidissertation culminated in the compilation of case histories based on Eskom turbo-generator fleet where the technology is being rolled out. The literature survey looked at current industry practices in areas such as total productive maintenance (TPM), technology management and support systems, return on investment (ROI) and maintenance management to compare what Eskom is doing to what in others in the field are doing. There is no research work currently that has been done that links maintenance to maintenance technology deployment enablers. The research incorporates a number of operational experiences where some Eskom turbo-generator units continue to operate with a known fault. Regular maintenance interventions introduce faults into the machine due to human error, the opening of units and the handling of components. Attention is given to the impact of two-shifting or cyclic operation on turbo-generators that were originally designed for base load condition. The time–based maintenance of these units is not taking advantage of condition monitoring information. Also, the installed condition monitoring techniques fall short of addressing twoshifting monitoring requirements. A number of lessons were learnt from the implementation of the condition-based maintenance technology on Eskom generator fleet. The theory of maintenance management underscores establishment of a good relationship between system engineers, maintenance personnel and the technology provider which is key to success of the technology. It further indicates that this relationship must go deeper than the mere technology provider and the end user of the technology service agreement. The maintenance engineers are taking key business decision for the well-being of machines and maintenance technology needs to demonstrate that it is creating value for the business. From the people perspective attention is required to staff motivation and providing balanced job satisfaction, whilst ensuring that employees feel part of an integrated organisation maintenance strategy rather than of being under thread of disempowered by the technology. A myriad of considerations have been identified to affect the effective execution of conditionbase maintenance strategy on Eskom generator fleet. There are multiple dashboards or standards indicators that can be used for maintenance management improvement. It has been established that the success of the implementation of condition-based maintenance rests in the concept of total productive maintenance approach. Within the ambit of TPM, the entire process of maintenance must be managed on the basis of maintenance programmes plan, which will have function of connecting the various maintenance programmes.

M.Phil. (Economics) / Please refer to full text to view abstract

The recent global economic challenges have drastically impacted several economic sectors across the world. As such, Eskom, the South African electricity utility, has experienced a number of changes, ranging from the organisational structure to the functional processes or models, to meet the demands of the volatile global market. This research acknowledges that the Eskom Transmission organisation, a division within Eskom, has interrelated departmental processes. However, the transition from the conceptual phase to the execution (implementation) phase had a number of misalignments. These manifested in the following challenges, amongst others: late execution and completion of projects which often results in cost overruns; poor quality completed projects; a high number of projects at execution stage with inadequately defined scope of work which led to scope changes during implementation; and a high staff turnover, particularly of project managers. As such, the project lifecycle model was adapted to address these challenges. This research focused on the change management principles that were followed in realising the new Eskom Transmission lifecycle model, and investigated the impact that this had on the people “living” with the new model as well as the inter-departmental relations, control mechanisms, attitude towards the management, and organisational performance. Available literature on change management, as well as some aspects of organisational behaviour, such as organisational performance, were utilised to try and provide an understanding of the above-mentioned areas of interest. The chosen and most appropriate methodology for collecting data was the qualitative approach as it allowed for descriptive and extensive information gathering. The researcher sought subjective information through human interpretation. For data collection, a comprehensive questionnaire for all the stakeholder groups was used, as well as documentation analysis. The data was then analysed and interpreted, which allowed for pertinent findings and recommendations to be made. The findings included the establishment that Eskom Transmission adapted Kotter’s (1988) eight stage model in implementing its new lifecycle model. The impact of Eskom Transmission’s new lifecycle model on the people “living” with this model was found to be premature to measure. However, an improvement has been noted in the definition of the scope of work for projects, possibly owing to more effective interactions between employees during project meetings and is an indication that the new model is a contributor towards improving Eskom’s organisational performance. Further findings included inadequate stakeholder consultation, which rendered the followed implementation strategy non-optimal; as well as varied stakeholder views on the support of the new lifecycle model for Eskom Transmission’s goals and vision. The latter suggests an opportunity for Eskom Transmission management to review the lifecycle model to improve its alignment to the division’s goals and vision in order to encourage commitment levels which, amongst others, impact organisational effectiveness. / Thesis (M.Com.)-University of KwaZulu-Natal, Westville, 2010.

We are living in an era of inconceivable knowledge, skills and talent paucity as technology continue to revolutionise the world, creating new and diverse economic opportunities and changing the perception of work, its environments and the skills and knowledge demanded in organisations. This phenomenon has resulted in global competition for skilled and knowledge workers as the new world of work morphs enigmatically, leaving organisations vulnerable, and unable to deal with this complex issue. Organisational leaders are cognisant of the changes, but are grappling with the problems of managing, retaining, and creating a resilient workforce. If talent is put onto the back burner and left unattended, it has the potential to create overwhelming turmoil in the South African economy and the economies throughout the world. The global changes will impact directly on how we approach workforce challenges in the future. Today, human capital is regarded as the distinct wealth contributor and creator for economic and organisational prosperity (Meyer, 2004). Hence, Human Capital Planning is crucial for every organisation, including Eskom, to ensure that its strategic objectives are met through the effective management and utilisation of its human resources in order to maintain its competitive advantage and ensure its sustainability into the future. Globally, as well as in South Africa, various contributing factors have resulted in skills shortages throughout the energy industry. Eskom has embarked on several growth initiatives requiring additional manpower, diverse specialist knowledge and skills-sets, and a more robust pipeline of technically qualified employees across all levels in the organisation firstly, to sustain itself, and secondly to embed the transition of a high performing organisation by attracting and acquiring the right skills and talent in the right jobs (Eskom Business Plan, 2010). Human Capital Planning is therefore crucial especially for Eskom Distribution, Southern Region to ensure that its strategic objectives are met through the effective management and optimisation of its human resources, whilst simultaneously cognisant of the changing landscape both internally, viz. within the region and the broader Eskom, and externally in South Africa and the global markets.

Every year, more and more management positions are being filled by engineers and other technical personnel in spite of dual or parallel path systems for promotions in many companies. In spite of the centrality of engineers and management in industrial organizations and modern society, engineers are generally viewed to be unsuccessful in management roles due to the following shortcoming of skills: inadequate managerial education during engineering studies, administrative skills, interpersonal skills, personality and career orientation, management knowledge. This research argues that there is a difference in leadership style between experienced and inexperienced engineers in South Africa. It was found that experienced engineers in Eskom are more transformational and more transactional compared to inexperienced post-graduated engineering students at the Rand Afrikaans University. To demonstrate this in the study, the researcher used the Multifactor Leadership Questionnaire to identify leadership style. The argument is substantiated by the results of a statistical analysis of leadership style for experienced and inexperienced engineers. The findings of this research indicate the theory that successful managers tend to grow into their jobs over an extended period (Bennett, 1996 and Sedge, 1985). The findings also support the arguments of O’Connor (1994) and Badaway (1995) that engineers have no typical career path to prepare them for the management role. It is therefore imperative that inexperienced engineers prepares themselves for management and obtain knowledge about management and development management skills during their formal studies. / Dr. L. Naude