BEE Partner, South Africa Economy Watch

There are three answers to this question. A Black-owned business would obviously take the points. A white-owned business needs to consider how much benefit it can derive through incorporating Black ownership. Businesses contracting directly with government are going to receive benefit from having Black ownership. Apart from direct dealing with government, where a Black party can bring new value to a business, it then makes economic sense to sell to a Black participant and score on the ownership points. Read the rest of this entry »

Faced with both domestic and international pressures, the South African state was “substantially weakened” by the late 1980s and early 1990s. As Pierre du Toit notes, many activities were beyond the reach of state control: corruption, dirty tricks, and clandestine murder among them. Thus the prospect of a negotiated settlement brought great risk (the potential loss of hegemony) as well as opportunity (the prospect of stemming economic losses and maintaining political control) for the government, as it did for the ANC. Nonetheless, both parties anticipated that they might use their positions and the perceived weakness of the other party to gain from negotiation. Read the rest of this entry »

The procurement recognition level refers to each supplier’s BEE procurement recognition level as determined by that supplier’s BEE status level. The table below is sourced from Statement 000. Suppliers should be able to provide the purchasing business with a BEE certificate from a verification agent. The certificate will contain the BEE status level and probably the BEE procurement recognition level. Read the rest of this entry »

Tax law is dynamic. Any tax commentary could be outdated After the final Codes have been approved as law, time will reveal inconsistencies with the application of BEE and the Tax Act.

Private parties will probably make submissions to National Treasury on amending tax law to accommodate BEE. The point is that it is too early to give conclusive advice on BEE and tax. Further, the nature of tax advice varies according to the base of the company, making it a difficult topic to discuss conclusively in this format. Read the rest of this entry »

South African local Chinese are in the “black people” which is designed to benefit previous apartheid disadvantaged groups. Are they are fully black now? Do they really benefit all the advantages of BEE Act? According to the report this morning, Chinese are not fully black.
Johannesburg - The National African Federated Chamber of Commerce and Industry (Nafcoc) has slammed a high court ruling that defines Chinese South Africans as black and gives them the full benefits of affirmative action legislation, claiming the black economic empowerment (BEE) “cake” was too small to share. Read the rest of this entry »

The strength of a country and/or a business organisation, and therefore the strength of its strategy, is created by its human capital. At the heart of strategic thinking lies the purpose of preserving the environment: at the macro-level, preservation of the economy, whilst, at the micro-level, preservation of the industry participants. Few firms think about this. Individual agendas focus on maximising profits and, in neo-liberal market economics, maximising shareholder value at the expense of social values. Yet contributing towards industry and economic preservation benefits a nation in the long term and gives it economic strength, as well as the wherewithal for competing on the global stage. Read the rest of this entry »

If South Africa wishes to become a highly successful emerging nation, one that can seriously challenge for position in the world economic rankings and have its business corporations develop _agreater sense of competitiveness, a change in strategic outlook at both government and corporate level is required. This aims to outline the kind of approach an emerging nation like South Africa needs in order to enhance its competitive prowess at both national and corporate level.

Before a home-grown business organisation in an emerging economy can achieve a higher level of competitiveness, the condition_sin that country have to be conducive to competitive thinking.’ Read the rest of this entry »

Investment No.1: Invest in time and resources that take a global viewpoint

This does not necessarily mean having business representation in multiple geographies, but it does mean treating the world globally and not multi-domestically. South African business organisations need to take a global view of their business and understand the global dynamics of their industries, especially in relation to the development and implementation of company strategy and the search for competitive advantage. Even companies that are operating purely in the domestic business environment have to take this approach, as globalisation will impact on the way they do business. Part of this global viewpoint is being realistic. Read the rest of this entry »

One of the major problems facing strategic thinkers is the whole issue of competitive advantage. According to strategy guru Richard D’Aveni, in most industries the days of permanent competitive advantages are long gone, because of the nature of what he calls `hypercompetition’.² D’Aveni contends that the best one can hope for is an ongoing series of temporary advantages, and that that is wh_atstrategists should be aiming at. This has led many organisations to move from seeking immediate competitive advantage to the development of long-term relationships with customers in the belief that opportunities for the creation of advantage will arise within the relationship. Allied to this is the belief that customers are company assets that need nurturing, rather than income sources that are there to be exploited. Also, more organisations are beginning to place greater value on customer advocates than on powerful management teams. In terms of customer loyalty, greater emphasis is being placed on moving customers up the loyalty ladder, until they becom_e advocates of the company and its products.’ Read the rest of this entry »

The problem in most organisations seems to be that value innovation is kept at the corporate level and does not permeate the entire organisation. Employees need to see themselves as a critical resource in the job that they do, not just for the organisation, but also for themselves. Put simply, if an organisation creates an environment in which value innovation is encouraged and rewarded, the participating individual’s self-worth will improve, which in turn will have a positive spin-off on job satisfaction, job involvement, and, ultimately, customer satisfaction and loyalty. Read the rest of this entry »

8. Share wealth

According to holistic health guru Deepak Chopra, one of the fundamental universal principles is that of giving.” This principle works through a form of universal reciprocity, whereby the act of giving, in whatever form it may take, is returned to the giver. This reciprocity may not come from the recipient, but may find its way to the original giver via another source. In a business context, sharing wealth, particularly with one’s employees, in whatever form that may take, is a form of giving. The new breed of South African manager will find it particularly beneficial to enhance the talents, willpower and motivation of his or her employees by sharing the company’s wealth with them. South African companies have to have as many of their people as possible feel part of the company’s strategic initiative if it is going to be successful in tackling the opposition. Sharing the wealth of the company with employees rewards them for their endeavours and spurs them on to achieve even greater feats. Read the rest of this entry »

5. Leverage diversity

One of the most powerful tools of innovative thinking in the South African workplace is that of diversity. In South Africa, with its apartheid past, the temptation is to focus on cultural diversity in order to try to forge a clearer understanding between the various cultures of South Africa. The Rainbow Nation is well represented in business organisations, thereby presenting our companies with a great opportunity for the generation of ideas. However, the prudent manager will appreciate that workplace diversity also covers age, ethnicity, ancestry, gender, physical abilities and qualities, race, sexual orientation, educational background, geographical location, income, marital status, military experience, religious beliefs, parental status and work experience, amongst others. Read the rest of this entry »

3. Support meritocracy

Local companies coming from a previously isolated and uncompetitive economy that now find themselves competing with the world’s best need to develop a culture of recruiting and retaining the best brains available. They also have to consistently reinvest in their human capital. Global players such as Unilever, Shell, Toyota, SABMiller and the Fortune 500-listed organisations, which are pretty well entrenched in the global arena, have a larger pool of talent available to them because of the size of their operations and global reach. For home-grown South African organisations, the competition for human capital intensifies, as the brightest stars either emigrate or join the global players, who can give them access to their new employer’s global network. Read the rest of this entry »

In addition to all of this, the development and application of strategic thinking is dependent not only on the manner in which the manager views his or her company, industry and competition, but also on how he or she actually views business per se, and the world in general. All organisations function within the greater universe. How a manager views our universe will have an impact on how a strategy is developed. For example, if business is seen purely as a means of making money, then one’s overall thinking will reflect that view. If, on the other hand, a broader context is applied, such as a business as a means of providing employment and/or making a contribution to the development of one’s community or country, then broader-based thinking will result. Read the rest of this entry »

Much strategic thinking in this country is also one-dimensional in nature. Many managers often go ahead and develop what they term a ‘strategy‘ from one perspective only — usually their own, and in terms of what they would like to achieve. The result is often a set of glorified objectives, or a vision established in emotive terms with scant regard for the opposition. Managers may take into accou_ntcertain aspects of the business environment, but few know how togather and utilise the information required to move their organisatio_ninto a position of superiority. The result is strategic myopia. Read the rest of this entry »

The global challenge currently facing every single South African business organisation will test their ability and endurance at competing in the global environment. Faced with competition from global firms whose managers are used to competing at the highest level, the new breed of South African manager, which is slowly beginning to emerge, will need to be `sharper, ^,flicker and more strategically, competent than his or her predecessors, who had very little competition to contend with. To give managers any chance of success, companies are going to have to overhaul their approach to strategic thinking. Read the rest of this entry »

SUGGESTIONS FOR THE FUTURE

A number of salient issues and suggestions have emerged, which could form the basis of debate on the future of our country’s prosperity in the global arena:

Suggestion 1

Make The Art of War compulsory reading for all South African political and business leaders. It should also be part of the curricula in our business schools and universities, to help teach students to think strategically and competitively. Read the rest of this entry »