Entrepreneurial Challenges in South Africa

ABSTRACT

This purpose of the research was to examine how entrepreneurs experience and deal with ethical dilemmas. In so doing, the author also uncovered some interesting aspects of entrepreneurial life in South Africa. This was a phenomenological study, based on interviews with seven entrepreneurs in established service-oriented ventures. For the purposes of this research, an entrepreneur was defined as a person who has created something of value and assumed the risk of establishing and managing a business around it. Each of the participating entrepreneurs was asked to describe their business, any dilemmas they've experienced, how they were handled, and what challenges they experience as an entrepreneur in South Africa today. This paper focuses on how entrepreneurs in South Africa view the challenges facing them. These include overcoming the legacies of apartheid, containing crime, fostering an acceptable business ethic, dealing with diversity, and facilitating reconciliation between ethnic groups.     

Long- and Short-run Relationship Between Firm Creation and the Ease and Cost of Doing Business

Abstract

To promote private-sector growth, many countries have implemented reforms aimed at making it easier and less costly to do business. Using data from Philippine cities and municipalities from 2011 to 2015, this paper tested for the relationship between business creation and the ease and cost of doing business. The results provide evidence that the overall ease and cost of doing business is indeed associated with business creation, but the relationship becomes more apparent with disaggregation. In particular, lower cost of doing business is found to be a much stronger predictor of business creation than ease of doing business. The specific indicators that drive this relationship are minimum wage, price of electricity, price of water, and price of land from the “cost” dimension, and number of days to process a new business permit from the “ease” dimension. These relationships have implications on policy making, especially in designing programs that target firm creation.     

Introduction to the Special Issue: Management in Africa in the Global Context 1

ABSTRACT

The primary focus of this introductory article is to provide a synoptic peek into the challenges and opportunities facing the countries of Africa in today's global economy and in their attempts to develop their national economies to achieve what is commonly termed the Millennium Development Goals. While foreign direct investment (FDI) is seen as a way to attain these goals, FDI flows to African countries remain extremely low. If Africa is to attract diversified FDI inflows, not just those focused on extractive/natural resources, African countries need to develop a system of management that is effective and efficient, internationally oriented and nationally focused, culturally inclusive and institutionally supportive and reliable, and one that promotes business growth and economic development with a sense of social responsibility.     

Transforming Business Models in Fast-Emerging Markets–Lessons from India

There is a need for understanding the entrepreneurship and business models in the emerging economies, especially the fast-expanding ones, from a different perspective as compared to the developed economies. The consistent gross domestic product (GDP) growth rate, significant socioeconomic potential, untapped needs of the population, and economic growth potential in the fast-expanding emerging economies like the BRIC nations (Brazil, Russia, India, and China) have changed the paradigm for investment, thereby creating a new economic development reality and focus for the global companies. However, achieving success in these emerging markets has its own unique mix of challenges. This requires a transformative and innovative mind-set toward conceptualization of a working business model that can fit into the reality of the socioeconomic and cultural challenges of these emerging markets. Further, the business model changes and alignment in these emerging markets require closer analysis and understanding of the global trends as well as ability to leverage the emerging technologies and linkages. The objective of this article is to explore the magnitude of opportunities and emerging business models transforming the socioeconomic landscape in fast-expanding emerging markets. In doing so, the article attempts to provide an overview of the emerging business model typologies and patterns that will enable the global companies to make better-informed decisions and build their presence in the fast-expanding emerging markets. © 2015 Wiley Periodicals, Inc.     

Perceptions of Governance in Africa

Abstract

This paper reviews a survey of 800 business leaders and civil servants in Ghana, Kenya, Madagascar, Malawi, Senegal, Tanzania, Uganda, and Zambia. Like most African countries, these eight countries have undertaken governance reforms over the past decade, trying to include a wider range of views expressed by organized interest groups in the formulation of economic and commercial policies. This survey aimed to learn how business and government leaders perceive those recent governance reforms.

First, do managers and civil servants see local trade associations successfully representing the broader business point of view with decision makers, and keeping their members informed of current and proposed public policies? Second, to what extent do perceived principal/agent tensions divide companies from “their” business associations? Third, how does industry structure affect perceptions of business association perfor mance? A fourth issue is whether perceptions exist of “bureaucratic capture” or of excessive state power over business associations in the sample countries.

Most respondents see major problems with governance, though across countries they report the impression of improvement and expect further gains. This raises the risk of unmet expectations should the pace of reform slacken. Business associations are reported to work reasonably well as policy advocates for better governance. They are seen as doing a fair job of keeping members updated on the policy environment. There was little difference in opinion between larger and smaller companies, and surprising overlap between the public and private sectors. These findings are grounds for wary optimism about business-government relations in the region.

Progress will not occur automatically, however. Companies in Africa need to redouble their government relations and policy advocacy activities. The region's industry and trade associations are promising vehicles for expressing the interests of the business community.     

Corporate Social Responsibility and Business Value of Multinational Companies: Lessons from a Sub-Saharan African Environment

ABSTRACT

The issue of corporate social responsibility (CSR) as an approach for businesses to independently take actions that lead to better levels of societal development as well as higher value creation for the business, particularly in developing countries has gained much advocacy. Thus, the purpose of this study is to examine the relationship between CSR and business value of multinational companies (MNCs) in sub-Saharan Africa. The study adopted quantitative research methodology and using multiple regression analysis, findings show that CSR can positively and significantly predict business values in the multinational subsidiaries. These values include direct (economic value) and indirect (human capital value and reputational business value). This paper therefore contributes to a novel CSR index from the perspective of business value and sustainability of MNCs in the Sub-Saharan Africa (SSA) environment. Thus, the paper recommends MNCs operating in Africa to enhance their social investment through their CSR strategy with the aim that CSR must not be regarded as a cost center, but an investment instrument that can accrue various dividends.     

The Role of Multinational Enterprises in West African Regional Economic Integration

Abstract

Studies on regional economic integration in West Africa have concentrated on conventional accounts, which focused primarily on the activities of states and their agencies. The role and activities of actors who play a key function in the political economy of the integrating states and in the integration process are largely ignored or given limited attention. This paper contributes to a better understanding of the integration process in West Africa by exploring the role and the activities of multinational enterprises (MNEs) in the development and growth of the Economic Community of West African States (ECO-WAS). Further, this paper contends that MNEs are never passive in market integration. And through their membership in business associations, they participate in the creation, development and growth of the regional scheme. As the winds of economic liberalization and political reforms sweep across the West African subregion, it will become ever more crucial to forge partnerships between multinational enterprises and the host countries with the desire of fostering regional economic     

What drives the capital flows into BRICS economies?

Understanding what drives the capital flows has important policy implications for countries in managing the direction and magnitude of such flows. This paper empirically investigates the main drivers of capital flows into the fast‐growing BRICS countries, in the backdrop of their growing inward capital flows. Employing a fully balanced panel for the period 1995–2015, we focus on, among others, the hitherto commonly untested variables: sovereign credit ratings, economic freedom and ease of doing business ranking of these countries. In searching for the relevant interaction and causality among the drivers of capital flows, we employ the panel Granger causality test to arrive at the policy implications. The results suggest that market size is a significant driver of capital flows. In addition to infrastructure, economic freedom in the host countries, ease of doing business ranking and sovereign credit ratings are the main drivers in the long‐run growth of capital flows.     

A Prototype System Developed for Digital Rights Management in Electronic Commerce

ABSTRACT

The Internet provides a new way of doing business, but ease of copying and of sharing valuable digital information illegally across the Internet undermines many viable business models. This paper investigates Digital Rights Management (DRM) as a means to provide safe protection and proper delivery of digital contents through the Information highway. First, we briefly summarize the current endeavor of DRM technical development and its standardization process in key technical working groups. Then, the paper provides a generic architecture for a DRM framework and shows the implementation of a prototype DRM system incorporating key conceptual and technical standardization development. This study emphasizes the importance of developing the DRM architecture that provides the proper protection and safe transformation of digital contents in electronic commerce.     

Aligning Private Business Development and Economic Growth in Nigeria

Abstract

This paper examines the different factors that have influenced the development of new types of entrepreneurship in Nigeria since 1986. It analyzes the problems Nigerians confront in trying to run small businesses as a result of the structural adjustment policy that was proposed by the World Bank and International Monetary Fund, and adopted by the military government in 1986. The major questions addressed in this study are: what are the economic and political situations in Nigeria between 1980-1997 and how have these situations forced the people of the nation to be entrepreneurs? What obstacles do entrepreneurs face in starting small businesses in Nigeria? What are the different types of entrepreneurship that have resulted in Nigeria due to the structural adjustment policies of this period?

The paper demonstrates that economic difficulties were the major reasons for those who started their business between 1986 and 1995 in Nigeria. This supports the notion that entrepreneurship should not be viewed as a function of opportunity but rather as a function of cultural perception of opportunity and the need to maintain continuous family income. Policy implication and topics for future research are discussed.     

Tobacco Business and Regulation in the Developing Markets

Abstract

This paper compares BAT's business environment in Kenya and Uganda in light of the World Health Organization's (WHO) tobacco control initiative. It also illustrates the use of tobacco tax by Sub-Saharan African countries to address tobacco related conundrums. The comparison revealed elements of government ambivalence towards tobacco business and a possible recourse to tobacco tax to mollify global pressure against big tobacco. The paper uses the partial correlations between tobacco tax and basic economic development indicators across Sub-Saharan Africa and previous World Bank data as indicative of tobacco tax efficacy in controlling consumption in the region. It suggests that Sub-Saharan Africa may find regionally designed tax-based policy guidelines a palatable strategic alternative to global firms (such as BAT) that face a hostile global business environment. A united policy front that fits within the region's institutions can reduce complexity and create efficiencies through lower administrative costs across the region. Such action will make the region relatively more attractive (than it is currently) to foreign investors.     

An Investigation into the Formal Institutional Constraints that Restrict Entrepreneurship and SME Growth in Russia

The impact of institutions on the ease of doing business in transition economies has attracted considerable interest in recent years. The literature suggests that institutional quality is crucial in determining levels of entrepreneurship and SME development in such countries. Our research explores the perceptions of Russian SME owners regarding the quality of the institutional environment that they face making use of semi-structured interviews for data gathering purposes. We identify the political, economic and regulatory barriers that restrict entrepreneurship and SME growth in contemporary Russia, together with entrepreneurs’ views as to what reforms are needed for greater business growth in future.     

Preparing the Human Capital for the New Millennium Using Information Technology

Abstract

Information technology is transforming the economy at a breathtaking speed. The effect of technology on global business practices is profound and pervasive. These trends are changing and shaping the global economic landscape in the new millennium. These developments have major implications for the knowledge skills required for success in business in the information age. Students must be prepared for the challenges and opportunities that each of these trends represents. Therefore, the new knowledge economy demands changes in the models of global business education. Based on our experiences at our respective universities, this article describes how we are changing not only the way we teach, but also what we teach-as well as altering the way our universities do business.     

Market entry into Africa: Acquisitions and international joint ventures. Studies of foreign firms' market entry strategies,challenges, and performance in Africa

While the interest in investing in Africa is rising, the know‐how of business on the continent is very limited. There have been only recently few special issues focusing on sub‐Saharan Africa in the top international business journals: “Sub‐Saharan Africa at a key inflection point” (Thunderbird International Business Review 2009); “Contemporary developments in the management of human resources in Africa” (Journal of World Business 2011); “Contemporary challenges and opportunities of doing business in Africa” (Journal of Technological Forecasting and Social Change 2016); “Critical perspectives on international business in Africa (Critical Perspectives on International Business 2016); “Strategic Management in Africa (Global Strategy Journal, 2017); and “The internationalization of African firms (Thunderbird International Business Review 2016). The aim of this special issue is to advance understanding of international business in Africa and specifically focus on how foreign firms enter African markets via acquisitions and international joint ventures and extend knowledge of these market entry strategies and performance in Africa for research and for foreign firms intending to, or currently doing business in Africa. This guest editorial provides a summary of the five articles and one book review in this special issue categorized into three broad thematic issues: International joint ventures and acquisitions as market entry strategies in Africa; cross‐border investments of African firms; and theoretical underpinnings.     

Economy of Mutuality: Merging Financial and Social Sustainability

The article posits the concept of economy of mutuality as an intellectual mediation space for shifts in emphasis between market and social structures within economic theory and practice. Economy of mutuality, it is contended, provides an alternative frame of reference to the dichotomy of market economy and social economy, for inquiry about what business is for and what values it presupposes and creates. The article centers around the objective of gaining a broadened understanding of business so as to include not just market economy, but social enterprise and social economy. In pursuit of this objective, a range of various archetypes of business enterprise are considered in light of higher ends of economic life. The highest telos of business encompassing all such archetypes, it is argued, is founded on reciprocity and integral human development. The article concludes that, compared to market economy per se, economy of mutuality provides a better conceptual framework for business in undertaking the challenges of sustainability.     

可持续发展经济条件下的政府功能

在可持续发展经济条件下,需要明确可持续发展经济学的基本逻辑起点是什么、在可持续发展经济中如何界定人类与自然的关系、经济可持续增长与可持续发展有何区别。并且在这种新的经济发展模式下,需要重新审视定位和充分发挥政府的功能,政府应在提高公众的可持续发展意识与理念、建立绿色GDP体系以及完善有利于经济可持续发展的产权制度、产业政策和法律法规体系等方面大有作为。     

Mobile Telephony and Economic Growth in Africa

This article analyzes the impact of mobile telephony on economic growth in Africa. It uses panel data on 36 African countries over the period 1995 to 2010, and estimates an econometric model made up of two equations–one expressing output as a function of mobile telephony, and the other, a demand function, reflecting the possibility of a reverse causation from the former to the latter. Given the importance of telecommunication in the development process and the dire state of fixed‐line telephones in Africa, the explosive growth in mobile telephony on the continent could potentially contribute to addressing some of the important challenges it faces today, including the lack of robust economic growth and of poverty alleviation. Employing panel data estimation procedures, this study finds evidence that supports the view that increased mobile penetration contributes to the growth rate of real gross domestic product (GDP). However, the increase in mobile telephone use was not found to have been significantly influenced by GDP growth. © 2014 Wiley Periodicals, Inc.     

Designing and Delivering Business Ethics Teaching and Learning

The recent corporate scandals in the United States have caused a renewed interest and focus on teaching business ethics. Business schools and their faculties are reexamining the teaching of business ethics and are reassessing their responsibilities to produce honest and truthful managers who live lives of integrity and ethical accountability. The authors recognize that no agreement exists among business schools and their faculties regarding what should be the content and pedagogy of a course in business ethics. However, the authors hold that regardless of one’s biases regarding the content and pedagogy, the effective teaching of business ethics requires that the instructor in designing and delivering a business ethics course needs to focus particular attention on four principal questions: (1) what are the objectives or targeted learning outcomes of the course? (2) what kind of learning environment should be created? (3) what learning processes need to be employed to achieve the goals? and (4) what are the roles of the participants in the learning experience? The answers to these questions provide the foundations for any business ethics course. The answers are major determinants of the impact of a business ethics course on the thinking of students and the views on the ethical and professional accountabilities and responsibilities of managers in the workplace.