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- South African Journal of Economic and Management Sciences
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- Volume 16, Issue 3, 2013
South African Journal of Economic and Management Sciences - Volume 16, Issue 3, 2013
Volumes & issues
Volume 16, Issue 3, 2013
Source: South African Journal of Economic and Management Sciences 16, pp 231 –243 (2013)More Less
This paper analyses the impact of ownership on performance by SMEs formed as Spanish-Moroccan international joint ventures (IJVs). In such SMEs, the functions and persons involved at different levels of governance - ownership, board and managers - often overlap. The results obtained from 210 SMEs suggest that owners often exert control by participating in the other mechanisms of governance. Their participation as members of the board has a positive influence on performance and thus the success of the IJV, but when owners form part of the management team (a less frequent situation), the influence on performance is negative and not significant. Participation by owners in the management team is not associated with the IJV's performance.
Source: South African Journal of Economic and Management Sciences 16, pp 244 –257 (2013)More Less
The aim of the study is to investigate undergraduates' perceptions of the comparative worth/utility of studying Business Science disciplines at a prominent South African University in terms of: (i) internal factors comprising aptitudes, values and interests; and (ii) external factors comprising job attractiveness (job prospects, earning potential, non-salary benefits and work-life balance), and (iii) university and discipline academic reputations. The study utilises a specifically designed instrument to measure internal and external factors impinging on career choice. A purposive non-random sample, consisting of 130 second and third year students in Human Resource Management (HRM) and Management, is used. Findings suggest that, while perceptions of aspects of careers, such as job and career prospects generally dominate the choice of major subjects, students studying HRM majors hold community orientated values that distinguish them from their peers. Many students are found to make choices primarily on the basis of their perceptions of 'external factors', rather than their interests. The findings are discussed in terms of extant theory and potential practical outcomes.
Source: South African Journal of Economic and Management Sciences 16, pp 258 –278 (2013)More Less
This paper investigates the manner in which private equity and venture capital firms in South Africa assess investment opportunities. The analysis was facilitated using a survey containing both Likert-scale and open-ended questions. The key findings show that both private equity and venture capital firms rate the entrepreneur or management team higher than any other criterion or consideration. Private equity firms, however, emphasise financial criteria more than venture capitalists do. There is also an observable shift in the investment activities away from start-up funding, towards later-stage deals. Risk appetite has also declined post the financial crisis.
Source: South African Journal of Economic and Management Sciences 16, pp 279 –297 (2013)More Less
There is an on-going debate on the use of technology as an alternative to business travel, with industry and academia differing in their views on such substitution. This study investigates the trend towards substitution and identifies the factors and barriers that play a role in either supporting or limiting such substitution. The results provide management with an evaluation of the benefits of replacing business trips with videoconferencing and other alternatives, against the potential disadvantages of using these alternatives.
Product innovation of private health insurers in South Africa and the impact of entrepreneurial orientationSource: South African Journal of Economic and Management Sciences 16, pp 298 –315 (2013)More Less
Recognising that health insurer product innovation plays a critical role in aligning incentives among all stakeholders in the healthcare value chain, this study investigates the relationship between the level of health insurer product innovation and entrepreneurial orientation (EO). Taking cognisance of the importance of external collaboration between health insurers and healthcare service providers, the study is able to diagnose perceptions of strategic regulatory factors and their impact on levels of EO. The focus of the study is on the demand (financing) and supply (healthcare delivery) structures of the healthcare value chain, incorporating health insurers, health insurer administrators and healthcare service providers. A conceptual model is formulated on the basis of literature and tested using confirmatory factor analysis. The results indicate that EO at organisational level is a strong predictor of health insurer product innovation and that external collaboration between health insurers and healthcare service providers is a weak predictor of health insurer product innovation. Practical implications are that both the supply and demand side structures indicate that the restructuring of relationships between health insurers and healthcare service providers is a necessary driver for collaboration in terms of health insurer product innovation progress and success. Healthcare executives need to work with, and actively lobby regulators to ignite both demand and supply side innovation activities in the healthcare value chain of the private healthcare industry of South Africa.
Source: South African Journal of Economic and Management Sciences 16, pp 316 –328 (2013)More Less
This article tests the separation of ownership and control in South African-listed companies that leads to the divergence of interest between shareholders and directors. Where listed companies are owned by so many shareholders that their diffused shareholding results in negligible control over the directors who manage the assets of the company, it is likely that the directors will manage and direct the company to maximise their self-interest to the detriment of the interest of the shareholders. The separation of ownership and control and the maximisation of self-interest are central themes in the agency theory. Researching their validity in a South African context where the market is less liquid and the stock exchange is significantly smaller can add a valuable contribution to the continuing debate on corporate governance in the country.
The article analyses 186 listed South African companies using data extracted over four years to test whether there is separation of ownership and control and whether such separation leads to the maximisation of self-interest. Data were extracted for the years 2005 and 2006, using the shareholding in 2006 to determine control, and for the years 2009 and 2010, using the shareholding in 2010 to determine control. Directors' remuneration as a percentage of assets was used as a proxy for the maximisation of directors' interest, and profit attributable to shareholders as a percentage of assets was used as a proxy for the maximisation of shareholders' interest. These proxies were used to test the impact of control during the two controlling periods, namely 2006 and 2010.
The article finds that the majority of listed companies in South Africa are controlled by a dominant shareholder. However, there are still a significant number of companies where the directors have de facto control. Contrary to the expectation that companies controlled by directors will aim to maximise directors' remuneration, or companies controlled by shareholders will aim to maximise profit attributable to shareholders, this article finds the opposite to be true. This is possibly an indication that the controlling parties might consider factors other than their direct financial self-interest, or that there is an inherent cost associated with control.
Author Douw G.B. BoshoffSource: South African Journal of Economic and Management Sciences 16, pp 329 –346 (2013)More Less
This paper presents a Listed Real Estate Investment Valuation Model that was developed to investigate the movement in indirect real estate investment through the consideration of the underlying assets of property loan stock companies. Specific reference is given to information that is made available to shareholders by way of annual financial statements in order to determine the extent to which shareholders can make investment decisions based on this information. The study enhances the knowledge of direct vs. indirect real estate investment behaviour and provides more insight into price discovery in the property sector.
Author Robert W. VivianSource: South African Journal of Economic and Management Sciences 16, pp 347 –364 (2013)More Less
Nicolas Bernoulli suggested the St Petersburg game, nearly 300 years ago, which is widely believed to produce a paradox in decision theory. This belief stems from a long standing mathematical error in the original calculation of the expected value of the game. This article argues that, in addition to the mathematical error, there are also methodological considerations which gave rise to the paradox. This article explains these considerations and why because of the modern computer, the same considerations, when correctly applied, also demonstrate that no paradox exists. Because of the longstanding belief that a paradox exists it is unlikely the mere mathematical correction will end the myth. The article explains why it is the methodological correction which will dispel the myth.
Export promotion. A decision support model approach, Ludo Cuyvers and Wilma Viviers (Eds.) : book reviewAuthor Patrick De PelsmackerSource: South African Journal of Economic and Management Sciences 16 (2013)More Less
Export promotion officials are under increasing pressure to allocate their scarce resources in a way that strengthens their countries' existing exports while also focusing on new opportunity areas. A key component of a successful export promotion drive is the ability to identify the right foreign markets. To this end, Export Promotion - A Decision Support Model Approach offers a refreshingly practical, yet empirically sound and finely tuned, approach to export market selection.