Southern African Business Review - latest Issue
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Volume 20, Issue 1, 2016
Author C.W. CallaghanSource: Southern African Business Review 20, pp 1 –28 (2016)More Less
Drawing from knowledge management theory, this paper argues that the knowledge aggregation problem poses a fundamental constraint to knowledge creation and innovation, and offers a potential solution to this problem. Specific consequences of innovation failure include the failure of research and development to deliver new medicines to address threats such as widespread and increasing antibiotic resistance, the rise of airborne multidrug-resistant or totally drug-resistant tuberculosis, as well as a lack of new drugs to deal with emerging threats such as Ebola. Persistent constraints to knowledge creation exist in the form of market failure, or the failure of profit-seeking models of innovation to internalise the positive externalities associated with innovations, as well as academic failure, or the failure of academic research to provide much needed innovations to address societal problems. However, a lack of theory exists as to how to transcend these constraints to knowledge aggregation. This paper presents a probabilistic theoretical framework of innovation, suggesting that the 'wisdom of the crowd', or emergent properties of problem-solving, may emerge as a function of scale when crowdsourcing principles are applied to research and development. It is argued in this paper that the consequences of a lack of knowledge of innovation failure are already upon us, and that a radical new approach to knowledge management and innovation is needed.
Relationship intention and satisfaction as predictors of wholesale and retail customers' loyalty towards their training providersSource: Southern African Business Review 20, pp 29 –50 (2016)More Less
It is not surprising that service providers are increasingly attempting to establish customer loyalty as competition intensifies in service industries. Building long-term relationships and satisfying customer expectations could be an effective strategy to follow according to research that suggests strong relationships between customer relationships, customer satisfaction and customer loyalty. However, some researchers suggest that service providers should direct their marketing efforts only towards customers who have relationship intentions. It is thus essential for service providers to consider customers' relationship intentions and satisfaction when drafting strategies aimed at building customer loyalty. The purpose of this study was to determine the extent to which relationship intention and satisfaction predict customer loyalty within the wholesale and retail training sectors. Data were gathered from 185 wholesale and retail skills development decision-makers located across South Africa, who were involved in the selection of their organisations' training providers. Using hierarchical multiple regression analysis, the findings indicate that relationship intention and satisfaction significantly predict customer loyalty towards wholesale and retail training providers. Wholesale and retail training providers thus need to understand that establishing customer loyalty depends on their ability to develop strong relationships with customers who are receptive to relationship marketing efforts, and to ensure that these customers' needs are met.
Author M.J. MalebanaSource: Southern African Business Review 20, pp 51 –70 (2016)More Less
This paper investigated the relationship between social capital and entrepreneurial intention using the theory of planned behaviour (TPB). The study was carried out by means of a cross-sectional survey and included 329 final-year commerce students at a rural university in the Limpopo province. A structured questionnaire was used to collect the data. The results show that social capital is significantly related to entrepreneurial intention, the attitude towards becoming an entrepreneur and perceived behavioural control. The findings indicate that the TPB is a valuable model for understanding the relationship between social capital and entrepreneurial intention. The results indicate that individuals are more likely to form intentions to start a business when they think that their decision to do so would be approved of by those close to them, when entrepreneurial activity is positively valued in the society, when they know other people who are entrepreneurs and successful entrepreneurs, and believe that they would be supported by those close to them when starting a business. This study contributes to the body of knowledge by shedding light on the role of social capital in the formation of entrepreneurial intention in a South African context.
Source: Southern African Business Review 20, pp 71 –93 (2016)More Less
Since the 20th century, corporate governance mechanisms have been developed globally to curb the negative effects of the agency problem. South Africa was a pioneer with the publication of the first King Report on corporate governance in 1994. Given the paucity of research on corporate governance in the country, the researchers set out to investigate the corporate governance practices of 230 companies listed on the Johannesburg Stock Exchange over the period 2002 to 2010. Annual corporate governance scores were compiled by means of content analysis of the sample companies' annual reports. The empirical findings revealed an increasing compliance trend towards 2010. Although the sample companies tended to improve the disclosure of their corporate governance practices over time, their practices were not per se acceptable (where acceptability implies meeting the King II recommendations). Inexperienced directors and managers might benefit from more training to enhance their understanding of the application of corporate governance principles.
Source: Southern African Business Review 20, pp 94 –117 (2016)More Less
This paper explores the dynamics of inflation in the dollarised Zimbabwean economy using the auto regressive distributed lag (ARDL) model with monthly data from 2009:1 to 2012:12. The main determinants of inflation were found to be the US dollar/South African rand exchange rate, international oil prices, lagged Zimbabwean inflation rate and South African inflation rate. During the local currency era, inflation dynamics in Zimbabwe were explained by excess growth in money supply, changes in import and administered prices, unit labour costs and output (Chhibber, Cottani, Firuzabadi & Walton 1989). According to Makochekanwa (2007), hyperinflation during the same era was attributed to excess money supply growth, lagged infl ation and political factors. Coorey, Clausen, Funke, Munoz & Ould-Abdallah (2007) affirmed these findings by identifying excess money supply growth as a source of high inflation in Zimbabwe during the local currency era. In essence, the findings of this study point to a shift in inflation dynamics in Zimbabwe. This shift in inflation dynamics means that policies, which were used to respond to both internal and external shocks that have an impact on price formation, might not be applicable in a dollarised economy.
Source: Southern African Business Review 20, pp 118 –136 (2016)More Less
The purpose to this study was to describe and explore the difference in the board composition and characteristics of sustainability performing companies compared with other companies in terms of gender, ethnicity, affiliation and, uniquely, the inclusion of directors from a non-business background. This exploratory study used a cross-sectional design in the form of a quantitative comparative analysis, and a longitudinal design in the form of a trend analysis to compare the differences in board composition between a sample of sustainability performing companies and a sample of other companies listed on the FTSE/JSE All Share Index between 2004 and 2010. Inclusion on the Social Responsibility Investment (SRI) Index was used as a proxy for sustainability performance. The study provided support that director background as a board attribute may be linked to overall sustainability performance. It further provided insight into who board members should be, namely non-executive directors with non-business backgrounds. The findings of this study suggest that the nomination committees of companies wanting to improve sustainability performance should consider the recruitment and appointment of non-executive directors from non-business backgrounds on to their boards. The study provides grounds for further empirical studies on the causal relationship between board compositions and sustainability performance.
Author R.G. DuffettSource: Southern African Business Review 20, pp 137 –158 (2016)More Less
The social media have grown at an exponential rate in recent years, especially amongst the youth (known as Millennials) in South Africa, who access social media primarily via mobile devices; these have served as an additional catalyst to fuel this growth. The rapid advancement of social media is also attributed to the Millennials' desires for social interaction connectedness, information, entertainment and convenience. Millennials portray a difficult market to reach with advertising due to the large fragmentation of media, diverse range of interests and demographical differences, but this lucrative market cannot be ignored owing to their huge purchasing power. Mxit is a popular social medium in South Africa and provides numerous advertising opportunities for organisations and their brands. The purpose of this study was to examine Millennials' cognitive attitudes towards advertising on Mxit, and assess the influence of certain usage and demographic factors. The research surveyed 1858 young adults in the Western Cape who were between the ages of 18 and 30 years. Millennials maintained favourable cognitive responses towards Mxit advertising. All of the usage elements and a demographic factor, gender, were also found to have a significant influence. The results provide both academia and organisations with fresh insights and a greater understanding of social network advertising.
Personality dimensions and service failure severity : a cross-sectional study in the cellular industryAuthor L. KrugerSource: Southern African Business Review 20, pp 159 –182 (2016)More Less
Service providers base service recovery efforts to retain consumers on service failure severity. A good understanding of possible effects on service failure severity is therefore necessary, and so this study examined the effects of personality dimensions on service failure severity. A hierarchical regression analysis was performed on data collected from 564 respondents through convenience sampling. The results indicated significant effects of Extraversion and Agreeableness on perceived service failure severity. In terms of theory, this study extends the influence of the trait theory of personality to service failure research. Furthermore, practical recommendations for cell phone network providers' service recovery strategies include combining restorative and apologetic strategies.
Source: Southern African Business Review 20, pp 173 –207 (2016)More Less
Small and medium enterprises are increasingly considered as playing an important role in the economy of many countries, including South Africa. Unfortunately, home-based businesses in particular, such as most of the custom-made clothing businesses, are exhibiting high failure rates. The purpose of this study was to explore female customers' satisfaction/dissatisfaction with the quality of custom-made clothes, the accompanying emotions resulting from the dissatisfaction and their coping strategies in the form of complaint behaviour. A survey-based research design was followed. The sample consisted of 209 females older than 18 years, residing in Tshwane, South Africa, who had had custom-made clothes made by small urban-based custom-made clothing businesses during the previous 12 months. Customers in this study had high expectations for most performance features of the custom-made garments, especially the sensory and emotional performance features, with which they were ultimately not as satisfied as they had expected to be. Most of them blamed the business for the dissatisfaction. They did, however, not contact the business to complain but rather told others about the experience and decided no longer to support the business. They also experienced high levels of negative emotions such as disappointment, frustration and sadness. The results have implications for small custom-made clothing businesses.
Determinants of enhanced risk disclosure of JSE top 40 companies : the board risk committee composition, frequency of meetings and the chief risk officerSource: Southern African Business Review 20, pp 208 –312 (2016)More Less
Risk disclosure practices have received increasing attention in the wake of the 2008 global financial crisis. This study investigated possible determinants relating to the composition of the board committee responsible for risk management, the frequency of board risk committee meetings and whether the company employs a chief risk officer, which could manifest in an enhanced level of risk-related disclosure. Based on the possible determinants identified in the literature, nine hypotheses were developed in order to investigate which of these determinants relate to an enhanced level of risk disclosure by the selected companies. The first required integrated reports of non-financial companies in the Top 40 index of the JSE Securities Exchange were investigated in this study. Regarding one area of investigation, namely the level of risk management disclosure, it was found that the disclosure of companies whose risk committee met more frequently and the disclosure of companies that employed a chief risk officer, were of a relatively higher standard. With regard to the other area of investigation, namely the level of risk identification and mitigation disclosure, no clearly significant determinant of enhanced disclosure was identified.
Source: Southern African Business Review 20, pp 236 –258 (2016)More Less
3Financial literacy is a crucial factor affecting individuals, households, financial institutions and the broader economy of South Africa (Oseifuah 2012: 23-24). Lack of financial literacy has been cited by various commentators (Brink 2011: 3, Schüssler 2014: 1-2; Dempsey 2015: 1-3) as the main reason for poor saving rates, increasing consumer debt and inadequate retirement planning among South Africans. The purpose of this study was to investigate the financial insight and behaviour of household consumers in Port Elizabeth. Economists have urged South Africans to start living within their means, improve their money management skills and ensure they eliminate debt, which can be viewed as the symptoms of mediocre financial insight and behaviour. Addressing these problems requires empirical evidence. A research model guided the investigation. A field survey (n = 560 consumers) was conducted in Port Elizabeth. The survey revealed six factors for financial behaviour and one for financial insight. The negative results for most factors confirmed the need for improved financial literacy of Port Elizabeth consumers. Significant relationships between demographical variables and financial behavioural factors were further observed for the sampled population. Educators and training facilitators should focus in their financial literacy programmes on financial planning, executing, vigilance, discipline, control and outsourcing personal financial services. Marketers and providers of credit should act responsibly when dealing with consumers with inadequate financial literacy.
Source: Southern African Business Review 20, pp 259 –285 (2016)More Less
The purpose of this study was to analyse the antecedents to supplier performance by examining the relationship between information sharing, information quality, institutional trust, supply chain collaboration and supplier performance in small and medium enterprises (SMEs). A quantitative design was adopted in which a survey questionnaire was administered to 400 owners and managers of SMEs based in the southern part of Gauteng, South Africa. Respondents were selected using a non-probability convenience sampling technique. Data was analysed using a combination of the Statistical Packages for the Social Sciences (SPSS version 22.0) and Analysis of Moment Structures (Amos version 22) software. The psychometric properties of the measurement scales were ascertained using confirmatory factor analysis (CFA). Hypotheses were tested using structural equation modelling (SEM). Information sharing exerted a positive influence on both institutional trust and supply chain collaboration. Information quality exerted a strong positive influence on institutional trust but had an insignificant influence on supply chain collaboration. Institutional trust was statistically insignificant, whereas supply chain collaboration was statistically significant in influencing supplier performance. The results of this study validate the roles performed by the constructs examined in facilitating the improvement of supply chain activities among SMEs and their suppliers.
Source: Southern African Business Review 20, pp 286 –312 (2016)More Less
A survey of 52 smallholder fresh produce farmers was conducted in the Gauteng province of South Africa to grasp how risk and its management affect the mainstreaming of smallholder farmers into formal, high-value markets. The study employed a supply chain analysis approach, which focused on the functions and risks that occur along the fresh produce chain. The results highlight the risks that impede the participation of smallholder farmers in formal, high-value chains. At the production level, risk is prominent from input procurement through to the post-harvest stage of the chains. At the retail and consumption level, risks are linked to the adherence to quality and quantity standards, including prescribed packaging, grading, labelling and traceability and transport requirements. As a result of these risks across the formal chain, smallholder farmers often resort to distributing their products in low-value informal markets. The consequence is that smallholder farmers tend to remain trapped in poverty, in part, because of their risk appetites and their ability to bear risk. Further research is required in the areas pertaining to smallholder farmers' risk appetite and risk-bearing ability and mechanisms to deal with the particular risks in the value chain that impede their all-round ability to escape the "smallholder dilemma".