"Global since Gold" The Globalisation of Conglomerates: Explaining the Experience from South Africa, 1990 - 2009

The internationalisation of enterprises is one of the essential ways to strengthen the competitiveness of firms from developing countries (UNCTAD, 2005c: 3). Strong growth in outward foreign direct investment (OFDI) from developing countries has become the distinguishing feature of the twenty-first century. This OFDI flows from state-owned enterprises, sovereign wealth funds (SWF) as well as private enterprises operating as multinational companies from a home base or as free-standing companies. Multinational corporations have commenced activities since the 1960s by moving operations to resource-rich, low-cost labour and capital markets (Wilkins, 1970; 1974; 1988; Jones, 1994; 2005). The first wave of OFDI during the 1960s and 1970s was motivated by efficiency and market-seeking factors. This wave was dominated by firms from Asia and Latin America. A second wave of OFDI followed in the 1980s, led by strategic assetseeking enterprises from Hong Kong, Taiwan, Singapore and South Korea (Dunning et al., 1996; UNCTAD, 2005b: 3s). Since the 1990s China, Brazil, India, Russia (the so-called BRIC countries) Malaysia, Turkey and South Africa are among the countries expected to add significantly to OFDI growth (UNCTAD, 2005c: 4). The flow of investment funds from developed countries was expected, but the reverse trend displayed the emerging capacities in countries and firms outside the core of the international economy, which challenged the dominance of developed countries and companies from developed countries. These developments have prompted several questions: how do developing country firms succeed in entering global markets? Do these firms improve their competitiveness through OFDI? This paper investigates this phenomenon from the experience of South Africa. The emergence of EMNC (Emerging Market Multinational Corporations) prompted extensive analysis and debates about the nature of and motives for EMNCs, but has also led to more in-depth analysis of specific country characteristics and firm-specific reasons for OFDI.overseas foreign direct investment internationalisation business history conglomerates competitiveness industrial protection management strategy

South in Africa, metropolitan in culture : industrial development trajectory of South Africa

Abstract: Industrialisation in South Africa followed the resource determined forward and backward linkages in Rostowian fashion. From the nineteenth century agro-industries established the initial foundation of Schumpeterian entrepreneurial changes to agrarian life. The transition into industrialisation occurred within the Polanyian state intervention in the market to drive industrial development. The context of the mineral- agrarian economy determined state mitigation of the high cost structure of the economy. Geographical location, factors of production (labour, capital) and policy directives determined a market intervention. Import-substitution as strategic policy option as proposed by Prebisch, was followed, but the state refrained from full socialism or central market planning. The industrialisation of the South African economy gained momentum since the 1920 under protectionist state industrial policies. Powerful business groups, corporate entrepreneurs, especially from the mining sector, collaborated with state protectionism. The Gerschenkronian latecomer effect indeed played itself out in South African industrialisation, but local human capital developed innovative technology locally to enhance the industrialisation process. The trajectory of South African industrialisation reflects the establishment of a near first-world industrial base, grounded in a mix of scare factors of production (capital, entrepreneurship, skilled labour) and abundant factors of production (unskilled labour, natural resources). Weberian traits of the Protestant work ethic is a significant driver of economic, and specifically industrial development in South Africa. The specific context of a European minority population controlling the political economy, eventually impacted negatively on the modernisation and progress of the industrial sector in South Africa by the end of the twentieth century

Latecomer Challenge: African Multinationals from the Periphery

Multinational corporations have commenced foreign direct investment (FDI) activities since the 1960s by moving operations to resource-rich, low-cost labour and capital markets. Successive waves of outward foreign direct investment (OFDI) since the 1960s and 1970s were motivated by efficiency and market-seeking factors. Since the 1990s, China, Brazil, India, Russia (the so-called BRIC countries), Malaysia, Turkey and South Africa are among the countries expected to add significantly to OFDI growth. The emergence of Emerging Market Transnational Corporations (EMTNCs) makes up a growing proportion of outward FDI, and they acquire an increasing share in foreign affiliates from developed markets conducting business in their regions. This chapter reflects on the transformation of businesses and business practice in Africa, from isolated peripheral actors to global players. This chapter investigates the history of leading emerging market multinational corporations from Africa since the 1980s and points to the implications for future globalisation of EMTNCs

The development of diversified conglomerates: Federale Volksbeleggings - a case study

Leaders of the Afrikaner community, from church leaders, cultural leaders through to the few emerging business leaders, met in Bloemfontein in 1939 for an "Ekonomiese Volkskongres" (an economic conference for the nation). The main driving force was persistent poverty and powerlessness of Afrikaners in the country. Despite attempts by the National Party government since 1924 to address the question of the "poor whites" by means of labour legislation, poverty had not been eradicated completely and the question of economic power remained unaddressed

“Global since Gold” the globalisation of conglomerates : explaining the experience from South Africa, 1990-2009

The internationalisation of enterprises is one of the essential ways to strengthen the competitiveness of firms from developing countries (UNCTAD, 2005c: 3). Strong growth in outward foreign direct investment (OFDI) from developing countries has become the distinguishing feature of the twenty-first century. This OFDI flows from state-owned enterprises, sovereign wealth funds (SWF) as well as private enterprises operating as multinational companies from a home base or as free-standing companies. Multinational corporations have commenced activities since the 1960s by moving operations to resource-rich, low-cost labour and capital markets (Wilkins, 1970; 1974; 1988; Jones, 1994; 2005). The first wave of OFDI during the 1960s and 1970s was motivated by efficiency and market-seeking factors. This wave was dominated by firms from Asia and Latin America. A second wave of OFDI followed in the 1980s, led by strategic asset seeking enterprises from Hong Kong, Taiwan, Singapore and South Korea (Dunning et al., 1996; UNCTAD, 2005b: 3s). Since the 1990s China, Brazil, India, Russia (the so-called BRIC countries) Malaysia, Turkey and South Africa are among the countries expected to add significantly to OFDI growth (UNCTAD, 2005c: 4). The flow of investment funds from developed countries was expected, but the reverse trend displayed the emerging capacities in countries and firms outside the core of the international economy, which challenged the dominance of developed countries and companies from developed countries. These developments have prompted several questions: how do developing country firms succeed in entering global markets? Do these firms improve their competitiveness through OFDI? This paper investigates this phenomenon from the experience of South Africa. The emergence of EMNC (Emerging Market Multinational Corporations) prompted extensive analysis and debates about the nature of and motives for EMNCs, but has also led to more in-depth analysis of specific country characteristics and firm-specific reasons for OFDI

The accounting profession and education : the development of disengaged scholarly activity in accounting in South Africa

Abstract: Purpose - This paper examines how the actions of the accounting profession, the state, universities and accounting academics have inhibited the development of South African accounting research. Design/methodology/approach - A multiple history approach of traditional archival material and oral history is used. Findings - Since the late nineteenth century, a network of human and non-human (including regulation and transformation) ‘actants’ ensured that accounting education retained a technical focus. By prescribing and detailing the accounting syllabi required for accreditation, the South African Institute of Chartered Accountants and its predecessors exercise direct control over accounting education. While the professional body claims to support accounting research, this is conditional on it meeting the professional body’s particular view of scholarship. Research limitations/implications – The limitations associated with this research is that it focuses on one particular professional body in one jurisdiction. However, the South African situation provides a cautionary tale of how universities, particularly those in developing countries, should take care not to abdicate their responsibilities for setting of syllabi or course content to professional bodies. Accounting academics, particularly those in a developing country that is experiencing major social, political and economic problems, are in a prime position to engage in research that will benefit society as a whole. Originality – Although Actor Network Theory has been widely used in accounting research and in particular to explain accounting knowledge creation the use of this particular theoretical lens to examine the construction of professional knowledge is limited. This study draws on Callon’s (1986) four moments to explain how various human actors including: the accounting profession; the state; universities; accounting academics, and non-human actors including: accreditation; regulation; and transformation, have brought about South African academic disengagement with the discipline

Central banking in Africa : the case of the Bank of Mozambique. 1975-2010

Abstract: The history of financial institutions in decolonising countries and newly independent states, especially in Africa, shows the political contentious nature of control over financial institutions, especially the central bank. This article investigates the particular circumstances around the emergence of a central bank in Mozambique: how local conditions influenced the shaping of new financial institutions in Mozambique. The question is: How did an independent central bank emerge in Mozambique after independence? The article explains the impact of the metropolitan identity of Portuguese financial institutions in Mozambique, the political economy of the new political leadership and finally the formation of a central bank

Context and strategy : managing Sanlam for and in change, 1945-2013

Abstract: Business sustainability of corporations a hundred years old, is not a regular occurrence in Africa. A qualitative historical study of the development of an insurance company succeeding on the trajectory of adapting to challenging context constitutes the core of this study. The historical analysis illustrates the role of social context, international political economy and management agency in negotiating a successful company to overcome contextual constraints. The South African Life Assurance Company (Sanlam) arrived at the end of the Second World War in 1945 with a basic business strategy focusing on sustaining its growth since 1918. Dynamic contextual changes mandated strategic management changes in the business focus, empowerment strategy and strategic vision of the company. This article explains how management responded to change, relying on international management practices to secure a century of African business success

Savings and economic growth: a historical analysis of the relationship between savings and economic growth in the Cape Colony economy, 1850-1909

Abstract: The savings-development nexus is a topical issue in current development literature.No study has yet explored this relationship in nineteenth-century ‘SouthAfrican’ colonies. An historical analysis of the development of the savings’ trends in South Africa may assist in understanding development trends in the twentieth century. Apart from general descriptions of the nature of economic activity in the Cape Colony very little is known about the role of savings and financial sector development in the growing colonial economy. This paper describes and surveys the nature of financial markets in the Cape Colony between 1850 and 1909 and seeks to explain the relationship between savings and economic growth. Savings is defined in the broad sense of monetary and non-monetary savings and would be assumed to be a proxy for financial development in the Cape Colony. This paper contributes to the economic history literature on the colonial past of South Africa by using recently compiled data on the GDP (Greyling & Verhoef 2015) as well as monetary savings and non-monetary savings (livestock) to test whether the general view that ‘financial development is robustly growth promoting’ can be substantiated in the last half of the nineteenth-century Cape Colony. The Johansen vector error correction model technique is applied to determine the relationship between savings and economic growth. It is found that despite the expectations in the literature that financial deepening contributes to economic growth, the Cape Colony did not display such causal relationship in the period under review

The management discourse: collective or strategic performance drive?

Abstract: Purpose – The purpose of this paper is to engage with the discourse on the assumed existence of an distinct “African management” model. It critically deconstructs the concepts and submits an alternative strategy to address the need to understand what is happening in management of business in Africa. Design/methodology/approach – Qualitative critical text analysis is used to understand the discourse on the nature of “African management” from the extant literature. The identity theory informs the understanding of the references to “African” as fundamental to identify a distinct management model. This analysis is supplemented by empirical case study research into successful African business. Findings – Scholars failed to conceptualise what is “African”, and subsequently also what constitutes “African management”. This conceptual void undermines the critical reconstruction of a single African management model. Empirical research into actual management practices emerge as fundamental to systematic progress in this discourse. This research points to diverse management traditions converging into pragmatic practices. Research limitations/implications – Only a limited number of case studies were conducted into management history in Africa. This paper argues for an extended research programme, but this is future work. Practical implications – It suggests a research strategy for scholars in African business studies, business history and management history to collaborate towards making a solid contribution to the economic development of our continent. Social implications – This research has the potential of forging collaboration in business among all of the people in Africa. Originality/value – A critical text analysis is used to expose the conceptual lacunae that undermines progress in the discourse. This paper contributes to the literature on “African management” by systematically deconstructing the concept of “African identity” as a prerequisite to the management discourse. By signalling ethnic nostalgia, the critical reconceptualisation of Africanness offers an intellectually creative strategy out of the stalled discourse