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- Volume 18, Issue 2, 2015
South African Journal of Economic and Management Sciences - Volume 18, Issue 2, 2015
Volumes & issues
Volume 18, Issue 2, 2015
Source: South African Journal of Economic and Management Sciences 18, pp 143 –154 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a1More Less
Intellectual capital is among the new, advanced management notions developed to overcome the inadequacy of previous administrations, to adapt to new situations and forge ahead of the competition. Intellectual capital means the information, experience and skills that offer advantage in competition and reveal the values existing within the structure of an enterprise. These values also exist in the relationship between the enterprise and the environment and with the employees. Although some research studies on intellectual capital (IC) have been conducted, to date no research has been carried out on the effects of IC on qualitative and quantitative organizational performance. For this reason, IC and its effects on firm performance (both qualitative and quantitative) were evaluated in this study. Following the evaluation of the intellectual capital and its sub-elements, the differentiation of the sub-elements is made. Then the reliability and validity of these sub-factors are calculated. The intellectual capital model has been tested by the structural equality model (SEM). According to research results, IC explains 92 per cent of a firm's performance. The effect of IC on qualitative performance is 0,84, while on quantitative performance it is 0,72. RC impresses qualitative performance with coefficient 0,94, quantitative performance with coefficient 0,60; HC impresses qualitative performance with coefficient 0,92, quantitative performance with coefficient 0,54 less; SC impresses qualitative performance with coefficient 0,90, quantitative performance with coefficient 0,53. According to the results of the research, IC affects both the qualitative and the quantitative performance of firms by supplying extensive knowledge to the managers.
Source: South African Journal of Economic and Management Sciences 18, pp 155 –176 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a2More Less
The purpose of this paper is to provide an overview and comparison of three related methods for modelling the short-run economic impact of events, namely the partial Input-Output (I-O), Social Accounting Matrix (SAM) and Computable General Equilibrium (CGE) models. An analysis of strengths and limitations of these different methods suggests that it may be considerations such as the underlying assumptions specific to each model, data collection, expected output, research objectives, and costs involved that determine the choice of modelling framework. Data from surveys conducted at the Aardklop National Arts Festival during 2010 were used in the comparative analyses, which were executed by means of two regional (i.e. provincial-level) models and one small-region (i.e. place-specific) model constructed for the small town.
Individual shareholders' understanding of the content of interim reports of South African listed retail companiesSource: South African Journal of Economic and Management Sciences 18, pp 177 –189 (2015)More Less
A number of studies conducted, and reports published, by international and local accounting bodies have found that the proliferation of disclosures in financial reports has hampered users' understanding of these reports. The reports by accounting bodies also indicate that these users prefer more concise financial reports. These findings, in conjunction with a dearth of recent questionnaire-based research on whether individual shareholders understand the content of financial reports, resulted in this study on whether individual shareholders understand the content of interim reports. The study provides empirical proof that a sound knowledge of business, accounting and economic matters is a prerequisite for understanding interim reports in the case of individual shareholders. The results of the study indicate that individual shareholders have a limited understanding of the content of interim reports as a whole, and that a good knowledge of business and economic matters and of accounting results in an improved understanding of the content of interim reports. In particular, specialisation in accounting in undergraduate and postgraduate degrees, professional qualifications, and work experience in the financial field improve the understanding of individual shareholders.
Source: South African Journal of Economic and Management Sciences 18, pp 190 –205 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a4More Less
Equity is important to most individuals and its perceived absence may impact negatively on individual and organisational performance. The concept of equity presupposes fair treatment, while discrimination implies unfair treatment. The perceptions of discrimination, or being treated unfairly, may result from psycho-social processes, or from data that justifies discrimination and is quantifiable. Objectives : To assess whether differences in post grading and remuneration for males and females are based on gender, rather than on quantifiable variables that could justify these differences. Method : Biographical information was gathered from 1740 employees representing 29 organisations. The data collected included self-reported post grading (dependent variable) and 14 independent variables, which may predict the employees' post gradings. The independent variables related primarily to education, tenure and family responsibility. Results : Males reported higher post gradings and higher salaries than those of females, but the difference was not statistically significant and the practical significance of this difference was slight. Qualification types, job specific training, and membership of professional bodies did not affect post grading along gender lines. The ways in which work experience was measured had no influence on post grading or salary for either males or females. Furthermore, family responsibility, union membership and the type of work the employees performed did not influence the employees' post grading. The only difference found concerned the unfair treatment of males, particularly those who were well-qualified. Conclusions : Objective evidence of unfair gender-based discrimination affecting post grading and salary is scarce, and the few differences that do occur have little statistical and practical significance. Perceptions of being discriminated against may therefore more often be seen as the result of psycho-social processes and are not necessarily the result of justifiable differences in education, tenure and family responsibility.
Source: South African Journal of Economic and Management Sciences 18, pp 206 –217 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a5More Less
The objective of this research was to perform an exploratory study on the knowledge and understanding of the King III code among Human Resources (HR) managers in South African companies. The King III code is a comprehensive international corporate governance regime which addresses the financial, social, ethical and environmental practices of organisations. HR management plays a role in managing corporate governance by using the King III code as a guideline. The main research questions were: Does HR management know, understand, apply, and have the ability to use the King III code in terms of ethical decision-making? What role does HR management play in corporate governance? A random sample of available HR managers, senior HR consultants and HR directors was taken and semi-structured interviews were conducted. The results indicated that the respondents had no in-depth knowledge of the King III code. They did not fully understand the King III code and its implications nor did they use it to ensure ethical management. The themes most emphasised by the participants were: culture, reward and remuneration, policies and procedures and performance management. The participants emphasised the importance of these items and HR's role in managing them.
Revisiting the relationship between different financial risk measures and the market return on ordinary shares in South AfricaAuthor Elda Du ToitSource: South African Journal of Economic and Management Sciences 18, pp 218 –231 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a6More Less
The main aim of this study was to test whether there is a positive relationship between different financial risk measures and the expected return of a share. This study was performed in 1995 by Brümmer and Wolmarans, who obtained results contrary to those of a similar study in the United States of America in 1988. The reasons for the difference were not established. This study follows up the one by Brümmer and Wolmarans to determine whether the passing of 19 years could have brought about any difference in the results. This process was initiated by testing a set of variables from a sample size of 107 JSE-listed companies from 2002 to 2012 for linearity. As there was no such linear relationship between any of the variables, no assumptions can be made about any relationship between share return and the risk measures tested here. If investors were risk averse, one would expect a positive relationship between different financial risk measures and the expected return of a share. This is not the case in the South African market.
Author Mark BussinSource: South African Journal of Economic and Management Sciences 18, pp 232 –244 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a7More Less
The topic of executive pay-performance sensitivity has resulted in mixed research findings. Literature related to executive remuneration constructs, company performance measures and the underlying theories is critically reviewed in this article. The literature is compared to research findings within the South African context pre, during and post the Global Financial Crisis of 2008. The researcher found similar results in the South African context compared to research in other countries and industries. The research challenges the notion that there is one dominant theory driving CEO compensation. The principal-agent theory, supported by the optimal contract theory, are foremost during periods of strong economic performance, while the influence of managerial power and other behavioural theories appear to prevail during periods of weak economic performance. This article proposes some critical considerations in order to manage this tension.
Influences on happiness and subjective well-being of entrepreneurs and labour : KwaZulu-Natal case studySource: South African Journal of Economic and Management Sciences 18, pp 245 –259 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a8More Less
Globally, individuals seek happiness, but not everybody is happy. Economic reasoning suggests that rising incomes with expansions in GDP enhance the quality of life and subjective well-being. This paper examines the influences on individual happiness, using ordinal logistic regression and chi-square analyses. Based on the findings of a small case study, the chi-square test indicated that a significant relationship exists between gender, education, ethnicity, children, marital status, employment relations, income and self-reported happiness. The study also found that, on average, happier people tended to be educated, married with children, and treated fairly at work. But having too many children produced a decrement in individual happiness. The ordinal regression results indicate that an individual's education, gender, age distribution and work environment are influential in producing higher levels of happiness. Entrepreneurs were found to have a significantly higher mean level of happiness than employees. In the workplace, individuals who experienced personal growth and were able to contribute their ideas tended to be happier, relative to others who perceived themselves to be 'restricted'.
The influence of entrepreneurial intensity and capabilities on internationalisation and firm performanceSource: South African Journal of Economic and Management Sciences 18, pp 260 –276 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a9More Less
International entrepreneurship represents the process of discovering and creatively exploiting opportunities that exist outside a firm's national borders in order to obtain a competitive advantage. Firms in emerging economies are increasingly looking towards internationalisation since they are faced with rising competition in their domestic markets and attracted to opportunities in foreign markets. This article investigates international entrepreneurship by examining how the influence of entrepreneurial intensity and capabilities at the firm level influence performance, while at the same time considering environmental influences on this relationship. Based on past theoretical and empirical findings, hypotheses are formulated and then tested using correlational and regression analysis. Generally, the results support the hypotheses where both entrepreneurial intensity and capabilities are positively related to internationalisation and firm performance, while weak evidence is found for environmental hostility as a moderating influence. Several recommendations are made in light of the findings, where it is suggested that firms foster higher levels of innovativeness, risk-taking and proactiveness while developing human, social and technology related capabilities in order to enhance their performance and increase their levels of internationalisation.
Source: South African Journal of Economic and Management Sciences 18, pp 277 –290 (2015) http://dx.doi.org/10.17159/2222-3436/2015/v18n2a10More Less
This study adds to Modern Portfolio Theory (MPT) by providing an additional measure to market beta in constructing a more efficient investment portfolio. The additional measure analyses the volatility spill-over effects among stocks within the same portfolio. Using intraday stock returns from five top-40 listed stocks on the JSE between July 2008 and April 2010, volatility spill-over effects were estimated with a residual-based test (aggregate shock [AS] model) framework. It is shown that when a particular stock attracted fewer volatility spill-over effects from the other stocks in the portfolio, the overall portfolio volatility decreased as well. In most cases market beta showcased similar results. Therefore, in order to construct a more efficient risk-adjusted portfolio, one requires both a portfolio that has a unit correlation with the market (beta-based), and stocks that showcase the least amount of volatility spill-over effects amongst one another. These results might assist portfolio managers to construct lower mean variance portfolios.