Graduate School of Business and Leadership

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Guidelines for the development of comprehensive marketing policies for municipal electricity undertakings, with particular emphasis on load management.
(1986) Breytenbach, Christiaan Joseph.; Venter, Joop.
It is expected that South Africa will have to construct as much generating capacity in the next five years as has been constructed over the past 50 years. Industrialization and urbanization dictates that the larger portion of this increase will be required in the supply areas under the control of Municipal Electricity Undertakings, which means that these undertakings will have to anticipate rapid growth in their infrastructures. This will put a tremendous strain on their resources of revenue, materials and labour, and it is obvious that comprehensive and co-ordinated policies are required to be developed to enable these undertakings to deliver the electrical energy to the final consumers at the lowest possible cost. The Electricity Undertaking is a business organization with unusually difficult managerial problems in all its functional areas. Its personnel are adversely affected by the vast area of supply and by the resulting difficulty of direct supervision and control. The capital cost of electrical equipment is high, and there may be a tendency to reduce the initial cost by ignoring the long term costs associated with the selection of equipment. Electricity pricing is very difficult, as electricity is not a uniform product. The consumption patterns of the consumers causes severe peaking of loads to occur, resulting in very low utilization )f the capital equipment involved, and which can threaten to overload existing networks. These problems are compounded by the fact that the undertaking is a monopoly and as such is not driven by the free-market motivating forces, such as a profit motive and the constant need to improve to meet competition. There is thus no motive to seek optimum solutions to the many problems. It is shown that the Load Factor is an indication of the efficient use of scarce resources, and that it is similar to measurements of profitability, such as Return-on-Investment, etc. It is therefore possible to replace the missing drive for profit and product improvement by the need to constantly improve the load factor. By making this the main objective of the undertaking many of the stated problems are put in their correct perspective. Maintenance becomes important, as power failures adversely affect the load factor. More care is exercised in equipment selection, as long term energy losses are taken into account. Electricity pricing and its effect on consumer consumption patterns becomes important. The concerted effort to improve the load factor is referred to as load management. Due to the tremendous increase in electricity consumption which is expected over the next decade it is certain that load management will play an ever increasing role. Load Management is defined as the sustained attempt at modifying the load curve. Soft load management refers to pricing policies and incentive schemes designed to induce users to shift their loads .out of the peak periods. Hard load management physically switches customer loads. This thesis examines the results obtainable from various methods of load management including off-peak incentive tariffs, on-peak-reduction rebates, the use of current limiters, peak load reduction by means of voltage reduction and remote control of water heater cylinders. It is shown that whereas Sasolburg saves around R7S0 000.00 p.a. and Randburg saves over Rl,5-million p.a.,other towns such as Pretoria and Pietermaritzburg find their geyser control systems ineffective, and are phasing them out. It has hitherto not been possible to determine the actual savings which would result from the installation of a geyser control system, or to determine the optimum number of controlled geysers. The result was that some undertakings would install a control system at considerable expense which resulted in minimal savings, while other towns forego the opportunity to save hundreds of thousands of rands in reduced demand charges. In this thesis, the author develops a feasibility study model which permits the system load curve to be analysed and the viability of a geyser control system to be determined. The model was tested against the controlled and uncontrolled load curves of Somerset West, and was found to be accurate. It was shown that a geyser control scheme is a very viable proposition for those undertakings where the feasibility study shows a contribution of more than 0,5 KVA per geyser towards peak load reduction. This forms the basic guideline for the selection of an appropriate form of load mangement, and guidelines are presented to develop supporting policies in all fields of the undertakings' functions. In order to facilitate correct decision-making and to assist in the development of comprehensive policies, a database of concepts and models is presented in the various fields and various misconceptions are dicussed. The guidelines have been applied by several electricity undertakings. By using the Feasibility Study Model it was shown that the proposed installation of 4000 geyser control units at Oudtshoorn, at a cost of over RI-million, was not viable. The Feasibility Study Model permits the savings to be calculated for different numbers of geysers and it was shown that the system saturates at about 1500 controlled geysers. By reduci ng the number of controlled geysers to around 1500 the installation cost will be reduced by about R500 000.00 and the system will show a net operating savings , " of RI05 540.00 in the first year, increasing as ESCOM increases its tariffs. The application of these principles conceivably prevented the needless expenditure of RI-million on a system that would have run at an operating loss of over R17 000.00 p.a. The feasibility study model was applied to the Stanger load curve to determine the correct selection of load management. The results indicate excellent response to geyser control, and showed that a system controlling 2500 geysers, costing R498 500.00 would show a gross savings of R297 000.00 in the first year, rising to RSI0 000.00 within 5 years if ESCOM increases its tariff by 10% p.a. Based on these results and recommendations the Department of Finance gave ad hoc approval to the Borough of Stanger for the additional expenditure in the current financial year to install the control equipment. The guidelines indicated a similar result for Tongaat, where the gross savings would be R360 000.00 in the first year, increasing to R637 680.00 within 5 years if ESCOM increases its tariff by 10% p.a. The estimated cost of the control equipment is R493 649.00. In complete contrast, the feasibility studies for geyser control undertaken on the Ballito load curve showed a contribution of less than 0,5 KVA per geyser, which indicated that the alternative forms of load management should be implemented. The results are contained in the case studies.
Production/inventory management in a flow production environment.
(1991) Hermelin, Victor.; Hermelin, Victor.; MacDonald, John.; MacDonald, John.
A modular model named "Total Inventory Planning and Flow Control" is developed to better plan and control a manufacturing environment. The research into the philosophies, ideas and tools used by two apparently conceptually different manufacturing systems Manufacturing Resource Planning and Just-In-Time - shows that: * The main goals of Manufacturing Resource Planning and Just-In-Time are very similar; * There appears to be different tools used by the two systems, Manufacturing Resource Planning and Just-In-Time; * The two systems have different approaches to some of the manufacturing factors; * Both, Manufacturing Resource Planning and Just- In-Time, have "blind spots" in their system; * By combining selected complementary philosophies, ideas, concepts and tools from the two systems, a synergistic affect is created that overcomes the differences between the systems and covers the "blind spots" which occur in each system separately.
A study of the attitudinal and behavioural dimensions of Indian consumers to brand loyalty.
(1993) Brijball Parumasur, Sanjana.; Thomson, Elza.
This study examines the attitudinal and behavioural dimensions of Indian consumers, in the Chatsworth area, to brand loyalty. A survey was undertaken in the designated area and data for the investigation was obtained from a sample of 237 households, drawn by means of the stratified random sampling technique. The data was qualitatively and quantitatively analysed using numerous descriptive and inferential statistical techniques. The findings indicate that Indian consumers are more brand loyal to food than to non-food products. This result reflects that the type of merchandise involved and the relative strength of brands have an important influence on brand loyalty. Furthermore, Indians are rational buyers, who evaluate the cost and benefits of products, and increasingly consider the purchases of house brands as opposed to branded products. The determinants of brand loyalty for products in general. was found to be quality, whilst the main product evalutation criteria for food items is freshness, followed by nutritional value. The majority of consumers do not base their judgement of quality on price. Finally, non-brand loyal buyers assign higher ratings to product attributes on most of the specific products studied, than brand loyal consumers.
The perceptions of management and workers on worker participation programmes.
(1995) Mokgoro, Ellen Moakohi.; Thomson, Elza.
The main objective of this study was to investigate different forms of worker participation programmes and their implementation in selected countries including South Africa. Another objective was to study perceptions of managers and workers on forms of participation at two mining companies in South Africa, namely Vaal Reefs and Ergo Mines. The two mines were selected because they had dissimilar characteristics which would affect attitudes differently. Vaal Reefs Mine had a well established trade union movement whereas Ergo Mine was not very strongly unionised. The study focused on a comparison between the attitudes of managers and supervisors toward worker participation, at both mines. At Ergo Mine there was no statistically significant difference between the mean scores of managers and supervisors on a large number of variables which was not the case at Vaal Reefs Mine. The results seem to indicate that at Vaal Reefs, supervisors tended to identify with workers on the shop-floor. Workers at Ergo Mine seemed to prefer direct forms of participation whereas the workers at Vaal Reefs Mine seemed to want to participate in management decision through trade union representation and other forms of indirect participation. The main conclusion was that the form of worker participation in a particular environment depends to a large extent, on historical and prevailing conditions.
Forecasting with time series analysis.
(1998) Armstrong, Graham Dobie.; MacDonald, John.; Diegel, A.
This thesis was undertaken with the intention of applying forecasting with time series analysis, in a manufacturing context. This involved two phases: the updating of existing forecasting techniques, and the application of these techniques to a manufacturing firm. The existing techniques, developed mainly by Brown in the 1960's, had to be adapted for computer application, to allow fast and objective computation of forecasts. This required an investigation into the derivation of each algebraic model, previously computed by hand, and translating those intuitive steps into routine ones. Furthermore, the revision of each forecast in the light of new data had to be dealt with mechanically. As for the application, the data supplied by the client, a large South African manufacturing firm, did not permit a successful application. This concerned both the manner in which the data were recorded (inconsistent time intervals), and the volume of data readily accessible. This then led the thesis in an unanticipated direction to overcome these difficulties. To do this objectively, it became necessary to generate test data with known characteristics, then to study how many data were required to recover those characteristics. Generating data required an investigation into random number generation, real data consisting of both true changes as well as a percentage of random fluctuations. A random data series was, therefore, added to the series with known characteristics. Such characteristics are unknown for genuine data, such as those supplied by the client. Empirical experimentation with the generated data, led to the determination of the number of data required to recover coefficients of various complexity. This number was found to be contrary to the statements made by Brown on this topic, significantly more data being required than was previously thought. Finally, an attempt was made to select an appropriate model for the client's data, based on the knowledge gained from investigating generated data.
A systems approach to TQM for integrating quality and environmental management.
(1998) Von Solms, Sebastian Heinrich.; McEwan, Tom.
Total Quality Management (TQM) is both enthusiastically praised and severely criticised in the management literature. The current study discusses various problems related to TQM and suggests a model for TQM to attempt to alleviate these problems. This model integrates quality and environmental management basing the system on a combination of the ISO 9002 and ISO 14001 standards. A number of perspectives, which are consequences of the model, are discussed, including integration, participation and multi-criteria decision making. Different strands of Systems Theory are presented as providing insights that should assist in successfully addressing these perspectives. General Systems Theory is described as providing perspectives regarding integration and Soft Systems Thinking as providing perspectives regarding participation. Multi-Criteria Decision Making (MCDM) methodologies are not normally seen as part of Systems Thinking but the compatibility of these two approaches is argued and the utility for TQM of the link between MCDM and Systems Thinking indicated. Critical Systems Thinking is suggested as providing the theoretical perspectives to define a multimethodology framework linking three methodologies, Soft Systems Methodology (SSM), Strategic Assumptions Surfacing and Testing (SAST) and Analytic Hierarchy Process (AHP). This framework is suggested as providing the diversity of perspectives needed to promote participation in the process and to give a sense of direction in the multifaceted management intervention on the problem of progressing toward a combined ISO 9002114001 system. T!Us framework was implemented at Mondi Kraft, Richards-Bay Mill via three workshops following an Action Research based process. This process is described and the data emanating from the workshops analysed and discussed. The process succeeded in the objective of promoting organisational learning on two levels. First, the introduction of the three new methodologies increased management knowledge by providing extra problem solving methods. Second, the issues and models discussed during the workshops heightened management awareness of quality and environmental matters across a wide front and, through the AHP ratings, management was able to prioritise these issues for later action. A number of recommendations and items for possible further research flowed from this study and are discussed.
An empirical study of capital asset pricing model anomalies on the JSE.
(2000) Lyes, Paul.
The introduction of the Capital Asset Pricing Model in 1964, and its subsequent study by hundreds of thousands if not millions of people at universities throughout the world, has had far reaching consequences in terms of the way portfolios were constructed for many insurance and pension funds. It has affected the investment philosophies of large numbers of investors as well as influenced the calculations of firms costs of capital. Countless investment proposals have been accepted or rejected based on what the Capital Asset Pricing model has calculated the minimum return demanded by shareholders to be. This dissertation looks at the empirical evidence supporting the debate about the usefulness of the Capital Asset Pricing model, as well as presenting evidence as to any possible anomalies to this model on the JSE.
An e-business strategy for the South African automotive industry.
(2000) Parker, Mark Alistair.
Unlike any technology before it, the Internet has almost overnight achieved a broad level of global awareness, both for businesses and individuals. Global e-commerce will reach approximately $1.3 trillion by 2003. Current market research data supports that the most rapid growth to come, both for B2C and B2B segments will occur outside of the United States. B2B e-business revenues will dominate, with over 85% of transactions occurring between businesses. To support the unique demands of designing and building e-Business sites, professional services companies are exploding, and are forecasting to generate well over $60 billion in just the next few years. According to most market observers, most companies severely underestimate the challenges of building and maintaining the global e-business. Whether a dot.com, Global 1000 or a small enterprise, effectively building robust e-business architecture that is able to address the global challenge requires a strategic outlook. The ability to grasp not only complex interrelationships between the various systems and platforms, but more importantly, the impact of using technology to help meet customer needs in any corner of the globe is required. Because ultimately the real benefit of the Internet is to closely connect company to customer, wherever each may be. Therefore for industry and organisations to embark upon e-business strategy to effectively meet the needs of customers and at the same time reach operational efficiency within their supply chains and add insurmountable value should be the goal of all organisations.
An exploratory study on post-merger performance and accrual of benefits in the Wayne Rubber merger.
(2000) Singh, Ashok.; Miller, Jean.
No abstract available.
An investigation into the use of generic medicines by family practioners.
(2001) Purohit, Jigna R.; Bhowan, Kantilal.
Background. Good health care is becoming increasingly unaffordable. A wider use of generic medicines offers significant cost savings. As the family practitioner is the gatekeeper in prescribing medicines, his attitude towards generic medicines is crucial. The factors that influence family practitioners' prescription of pharmaceuticals require investigation. Objectives. The primary objective of this study is to assess attitudes and perceptions that family practitioners have towards generic medicines and evaluate factors that influence its prescription. The secondary aim is to assess the individual characteristics and personality traits of family practitioners that may impact on generic prescription. Methods. This study is a convenient sample of 198 family practitioners that are surveyed by means of a questionnaire. Responses were based largely on a Likert scale and evaluated by factor analysis. Results. Using factor analysis, five factors identified in the order of importance are as follows: 1) Patient factors: It is primarily the patients' disease profile and their financial capacity that determines the use of generic versus ethical drugs. 2) Clinical autonomy of the family practitioners: Family practitioners resent their clinical decisions being challenged by managed care organisations. 3) Strategies promoting generics: Improved marketing by the generic pharmaceutical industry and the provisions of acceptable financial incentives are likely to promote wider use of generics. 4) Cost of medicines: Most family practitioners are price-sensitive. A further reduction in the price of generic medicines is therefore likely to increase the use. 5) Specialists' opinion: Specialists use fewer generics and their choice of medication is respected by family practitioners. A wider use of generic medicines by specialists will positively impact on generic prescription by family practitioners. Personality traits and individual characteristics of the family practitioners do not affect their prescription of generic medicines. It is noted that most family practitioners have encountered specific instances of reduced efficacy, an increased side-effect profile, substandard packaging, erratic availability and poor patient confidence with the use of generic drugs. Conclusion. In order to bring about a reduction in the healthcare costs by promoting wider use of generics, different stakeholders in the industry need to act synergistically. All stakeholders need to increase the awareness of generic medicines by continuing health education. Specific recommendations for the generic pharmaceutical industry include increased marketing, further reduction in the price of generics and implementation of research and surveillance studies to ensure satisfactory clinical efficacy of their drugs. Medicines Control Council need to closely monitor the number and quality of available generic medicines. Managed care organisations need to respect the clinical autonomy of family practitioners and work closely with them. Finally, acceptable and ethical incentives need to be considered for family practitioners, the gatekeepers, to achieve the objective of wider use of generic medicines.
A study on failure prediction models as enhancements to the credit evaluation procedure in a South African corporate bank.
(2001) Reeves, Jonathan Douglas.
Abstract not available.
Are we losing leaders or managers ? an exploratory study of the propensity amongst MBA students of KwaZulu-Natal, as future skilled professionals, to emigrate and to ascertain the orientation - leadership or management - of the potential emigrant.
(2001) Kaihar, Anup.; Coldwell, David A. L.
The brain-drain phenomenon was first reported in the 1960s in India, where skilled professionals were voluntarily leaving India to settle abroad in western countries. Thereafter, most developing countries have reported witnessing brain-drain in some form or the other. In South Mrica, with the advent of the post-apartheid government, the country saw a drastic change in its social fabric. The brain-drain phenomenon has gathered momentum since, and with every passing year, more and more people continue to emigrate from the country. With skill distribution already highly skewed to the emigrating white minority, the problem of emigration attains more serious proportions as more and more white South Mricans contemplate leaving their motherland. Owing to grey emigration it is very difficult to report the exact number of skilled South Mricans that have emigrated to Australia, UK, Western Europe, and the US, however, the best estimates indicate the number to be around 233 000. While many brand these emigrants as being 'unpatriotic', the phenomenon of emigration may be occurring because of valid reasons. While many whites may claim that with a non-white government in power, their and their country's future well-being could be in jeopardy and hence the desire to emigrate, such claims may not be baseless after all. Recent studies have shown that the rate of crime and violence are increasing, and that many of the emigrants have sighted concerns of safety as their primary reason for leaving. And it should be borne in mind that the phenomenon, which is perceived to be a 'white-only' phenomenon, has lost ground as many Asians and Africans have shown an equal desire to leave, predominantly due to concerns of personal safety. Studies, newspaper reports, and magazine articles, have shown that the country is losing valuable skills in the Information Technology sector, Finance and Banking sector and in the Medical Field. These three sectors play a vital role in the development of any developing economy and loss of valuable skills in these sectors evoke serious concerns. This skill loss, while a worrisome factor, stands to be compounded if more and more highly qualified professionals actually emigrate. The study on the emigration of Masters of Business Administration (MBA) students is scant and, knowing their demand in the market and the contributions that they make to the country's economy, their loss could well seal the fate of this country. MBA students contribute to a country's economy in several ways. Firstly, they are seen as the future business leaders of the country. Through knowledge gained in their business schools (Bschools), MBAs not only manage departments but are also known to lead organisations into a better future. They contribute to their respective organisations by streamlining work flow, ensuring that productivity per person is always on the up, surveying the market to introduce products that will improve the prospects of the company and thereby, bring about growth. In the process, they create jobs that aid in the betterment of the economy. Secondly, they are involved in exports of their products to countries that demand their goods, thereby bringing in the much-needed foreign exchange. Furthermore, when foreign countries decide to set up operations locally, they rely on the skills and talents of the MBAs to spearhead operations. Needless to mention, as these foreign companies grow they again create much-needed jobs that benefit the economy. MBAs also train fresh graduates to obtain the required exposure and experience as one day these very graduates will be spearheading their own projects. Many corporate heads are also assisting the government in developing the economic and commercial policies of the country. Many MBAs, entrepreneurial in nature, venture into business themselves. This entrepreneurial flair has added to the development of many small and medium enterprises. Today's fast-paced business environment and breakthrough technological developments have necessitated greater reliance on the MBA to make critical decisions that impact upon the future of the organisation and the lives of many employees. The MBAs of today are needed to be visionaries and to lead by example. They are entrusted with the onerous task of being agents of change, to be able to see the changing business horizons and make proper investments in skills, technology and other requirements for the benefit and survival of the organisation. Indeed it may seem a daunting task, but then the salaries they receive commensurate the requirements of the job. The contribution they make is invaluable and definitely their loss can have serious ramifications for the country. The purpose of this dissertation is to study the emigration phenomenon vis-a-vis the MBA students. Looking at a sample of MBAs that is representative of the Kwa-Zulu Natal MBA programmes, this research looks into ascertaining the emigration potential of MBA students. Furthering to that, the research probes into the management orientation and leadership orientation of these emigrants. The underlying assumption is that if the potential MBA emigrant has management orientation, then the loss for the country is not all that much, as compared to the potential emigrant having a leadership orientation. This is argued by the fact that it is much easier to take a mind and train it to run a department, as most managers do, than tryiIlcg to create a mind to lead. While it is still disputed whether leadership can totally be taught, one indisputable fact is that there are aspects that can be taught and those that cannot be taught. While one can be taught interpersonal skills, communications skills and other skills, there are certain traits intrinsic to leadership that just cannot be taught, e.g. risk taking, judgement and challenging the status quo. Some have even gone to state that leadership is a life-long learning process, and most leaders have had a difficult childhood that has led to their need to prove something to the world. It is for this reason that many authors have written that leaders are 'twice born.' Anyhow, the point is that, it is easier to teach someone to manage a department than it is to teach someone to run an organisation. The third part of the research looks at the view-point of the MBA students towards their institution's orientation, i.e. are their business schools preparing them to be managers or are they being prepared to be leaders. After all, if the business community needs leaders to take over the helm of companies, and if the need of the hour is students who can work under intense pressure trying to tie decision-making with the fast-paced technological developments, the ever increasing pace of competition and the intensity with which globalisation is affecting domestic markets, then the business schools need to produce that calibre ofMBA graduates. If the students feel that their business schools have only equipped them with managerial know-how, then these very business schools are being negligent in producing leaders and need to gear their faculties and curricula towards a greater leadershiporientation. This research will indicate whether the country needs to worry about the future of their corporations being in good hands, and whether emigration is really going to sap the remaining skills that the country's business sector needs desperately. It will also reveal if there is a leadership gap in the market that business schools need to address, i.e. a demand for MBAs with leadership orientation and an under-supply of such students coming out of the current business schools. This research could be an eye-opener for business schools to realise that they are falling short in providing quality products to the market. Gone are the days of yore when the market was forced to buy what organisations produced. In today's world, the choice empowered consumer (the business community at large) will seek the desired product of their choice (MBAs that are qualified with the required skills and competencies) and if they are unable to obtain it from the current suppliers (the recognised business schools they currently depend on), they will have no option but to look elsewhere. This could well be taken as a warning sign for business schools that if the very organisations that allow select business schools to have top rankings in the country, were to take away their support and start recognising and recruiting from other, at the moment, lesser recognised B-schools, the fate of the current Bschools could well be sealed. After all history is fraught with examples, and it is a well known fact that has received much attention from consultants, business school professors and management gurus, that if external change outpaces internal change, then only one future awaits such organisations, 'doom'!
Federal Mogul Valves, the motor industry development program and component manufacture in South Africa.
(2001) Seaward, Craig.; Kohler, Marcel Rene Anton Robert.
Federal Mogul Valves manufacture automotive components for customers in both the domestic and export markets. For the components that are exported, they receive a government funded export subsidy. This subsidy is progressively being reduced each year and will, at this point in time, be discontinued in 2007. While Federal Mogul Valves' ability to export these components is not totally dependent on this export subsidy, the subsidy is certainly contributing to the profits that they are achieving. If they simply continue with their present strategy they will experience reduced margins as the export subsidy is reduced and eventually removed completely. If however they alter their strategic approach to the business to take into consideration the changes that they are faced with, they can introduce changes that will compensate for the reduction in profits that they will experience when the export subsidy is removed.
The effects of globalisation on the empowerment of women in middle management.
(2001) Mpanza, E. D.; Coldwell, David A. L.
This study investigated the effects of globalisation on the empowerment of women in middle management positions. The first aim of the study was to determine the effects of globalisation on the empowerment of women in middle management. The second aim of the study was to establish if there is a correlation between perceptions of globalisation and empowerment for women in middle management. The third aim of the study was to describe the perceptions of women in middle management of globalisation. Globalisation and empowerment scales were used to achieve the objectives of the study and to measure the impact of globalisation on women. The measuring instruments were administered to groups of women in middle management. Fifty questionnaires were analysed. The sample consisted of twenty-five (25) respondents of women from private and twenty-five (25) from public organisations. The results of the factors analysed according to the aims of the study were as follows: • That there were significant differences between women in the private and the public sector with regard to perceptions of both globalisation and women's empowerment and that there were more women in the private sector than in the public sector who were positive about both the globalisation and women's empowerment. • That there was a significant positive correlation between women's perceptions of globalisation and empowerment. • That women from both sectors agreed that globalisation had a positive effect on their social, political and economic lives. That there was a need to provide women with self empowerment and training programmes that will equip them with the necessary skills so that they may occupy senior positions and be able to a make a meaningful contribution to the decision making process.
Mergers and acquisitions : do they create shareholder value?
(2001) Aves, Bridget.; Lord, Jeremy William.
The topic of mergers and acquisitions, and their ability to create shareholder value, is one that continues to raise a fair amount of debate. Many studies have been carried out, both locally and abroad. They have attempted to analyse the wealth effects of mergers and acquisitions on both the shareholders of the acquiring and acquired firms. In some instances the findings have been fairly consistent across companies on the various stock exchanges, while other have produced controversial results. Generally the findings regarding the acquired firms have been consistent, across most studies, but the results regarding the acquiring firms has been less straightforward. This paper discusses the various types of mergers and acquisitions that a company may undertake, as well as the possible rationale for undertaking such investments. Some of the more recent and well-known studies that have been undertaken are then discussed, and an attempt is made to find a common thread amongst all the various studies. Further factors which "research has found to have an impact on the success or failure of mergers and acquisitions are then discussed, with the purpose of trying to identify the key reasons for merger failure, and hence the failure to create shareholder value for the acquiring firm. In other words, what are the traits or key factors that lead to successful mergers and acquisitions, ones that do not destroy shareholder value? Finally, the area of divestitures is discussed, because it is often believed that they are a key admission of the failure of past merger activity. Trends in merger and divestiture activity are also examined. Finally, a conclusion is drawn from the various studies and readings that have been done. The basis of this paper is primarily a secondary literature review. Two case studies are then undertaken; one which focus's on acquisitions by an IT Company which fail to create shareholder value, and the second examines an unrelated acquisition and subsequent divestiture by a listed company in the transport sector. A significant limitation that was encountered in doing research on the topic was the lack of availability of recent studies undertaken. The majority of the work done on this subject was researched during the 1960's to 1980's. With the only significant South African study being conducted by Aftleck-Graves et al in 1988. Although recent articles and commentary on the subject have been written in the late 1990's, I was unable to find any recent studies. The majority of research undertaken has also been done in the American and European markets, with as mentioned, only one or two studies being conducted on the JSE.
An empirical study of the international Fisher effect.
(2001) Singh, S. H.; Kohler, Marcel Rene Anton Robert.
The international Fisher effect is identified as part of the four-way equivalence model. This model outlines a relationship between exchange rates, interest rates and inflation rates. The international Fisher effect, specifically, states that the difference in interest rates between two countries is an indicator of the expected change in exchange rates of their currencies. The aim of this paper is to test the validity of the international Fisher effect between South Africa and the UK. The understanding of the exchange rate movements is vital for management decisions, investment activity and policy making for central banks and government. Data has been collected for a sampling period beginning in July 1995 and ending in April 2001. Interest rates in the UK and South Africa are recorded for this period. A record of exchange rate movements for the same period has also been compiled. Using this data, a simulation of an uncovered interest arbitrage was carried out. This was done by taking £100 from the UK, converting it to Rands and investing those Rands in a South African bank. At the same time, £100 was also invested in a UK bank. As interest accrued over the test period, interest rates in both countries changed, exchange rates fluctuated and the balance in the South African account was compared to the balance in the UK account. According to the model, the real balances in both the accounts should remain equivalent over the sampling period. It was found that interest rates in SA were higher, more volatile and less cyclic than those in the UK. As predicted by the model, the exchange rate (in R/£) constantly increased over the sampling period. Reasons for the higher interest rates in SA include a low national savings rate, high inflation, the South African economies vulnerability to events in the international market and the reserve bank's monetary policies. The simulated arbitrage was found to be profitless and the balances of the two simulated investment accounts were found to be statistically similar. There were, however, some short term deviations from the theory. The value of the SA account was lowest during times of high interest rates in SA, when there was volatility in the forex market and when the exchange rate was at peaks in the cycle. Nevertheless, the exchange rate - interest rate relationship always returned to equilibrium. The risk and unpredictability associated with the international market is high while only small chances exist to achieve economic gain from borrowing from low interest rate environments (or investing in countries where the interest rates are high). It was concluded that the international Fisher effect, between the UK and South Africa, for the period studied, had significant short term deviations but is valid over the medium term. The implication for business practice is that stakeholders should be conservative when faced with risk associated with foreign exchange exposure unless, as is the case with speculators, it is their core competence to predict macroeconomic trends and profit from beating the market.
Capital structure.
(2001) Herbert, Bruce C.
No abstract available.
Bases for segmenting clients in the contract cleaning service industry.
(2001) Heckroodt, P. R.; Bhowan, Kantilal.
A survey was undertaken for a contract cleaning company in Durban. In order to preserve the confidentiality of the information contained in this dissertation, a fictitious name, Kleen Co, has been used. The aim of the survey was to find further similarities within the existing segments. At present, the traditional geographic and industry-type bases of segmentation (namely healthcare, hospitality, offices and shopping centres in various regions) are used. Recent literature suggests that similarities can be sought in three areas: 1. expectations of service; 2. perceptions of service; 3. unique benefits of the service. In the survey, clients were asked to rate their expectations and perceptions for six attributes (price of the cleaning service, customer service, quality of cleaning, innovativeness of cleaning methods, assessment of cleaning requirements, and consistency of the cleaning service) . They were also asked to rate the relevance of four reasons for outsourcing (cheaper to outsource, need for specialised cleaning, company policy to outsource, and labour problems). The results indicate that price and innovation can be used as further bases for segmentation for the following segments: • offices and healthcare have the same high expectation for price; healthcare and hospitality have the same high expectation for innovation; • shopping centres and hospitality have the same low expectation for price; • offices and shopping centres have the same low expectation for innovativeness; • healthcare and hospitality have the same high perceptions for price and innovation; • offices and shopping centres have the same low perceptions for price and innovation. For outsourcing are concerned, the following reasons were found: • offices: all reasons are relevant except for price of service. • healthcare: need for specialised cleaning and labour problems are relevant; price of service and company policy are irrelevant; • shopping centres: price of service and company policy are relevant; need for specialised cleaning and labour problems are irrelevant. • hospitals: all reasons are relevant except company policy to outsource. Although the main aim of the survey was to identify new segments, client satisfaction was also measured. Clients were asked whether they had raised a complaint with the company and, if so, how satisfied they were with the outcome. This was done in order to test the loyalty of clients, the hypothesis being that the longer the client had been with Kleen Co, the more satisfied they would be with the outcome of their complaints - and more loyal. However, the data reflect that clients who have been with the company for more than four years are no more satisfied in this regard than clients who have been with the company for shorter periods of time.
The mean variance efficiency of the JSE all share index (ALSI) and it's implications for portfolio management.
(2001) Roopanand, Rahul.; Lord, Jeremy William.
The use of proxies in the CAPM model to determine assets expected return has implications for portfolio management. An inefficient proxy can result in the lowering of beta estimates due to a weak regression relationship resulting in the misallocation of capital. For the CAPM equation to be satisfied would require that the proxy should at least have an alpha that centred on zero over a period of time. This would allow the linearity of the model to hold and we would advocate a passive portfolio strategy. If the proxy were mean variance inefficient would indicate that alpha values are present in asset returns that can allow us to rebalance portfolios using optimisation techniques. We test the hypothesis that alpha averages around zero using the market model by regressing Industrial and Gold index excess returns on the market premium. When tested from the SA investor perspective we find that the alpha of the ALSI regression is not zero for the Gold Index but centred on zero for the Industrial Index. The implications are that SA investors would get a fair return holding the ALSI index instead of trade in industrial shares. The result warrants a passive strategy. However, portfolio optimisation demonstrates that a higher return can be achieved by rebalancing the portfolio The regression using the Gold index produced a negative alpha implying that investors should actively sell Gold shares from their portfolios. The ALSI was not an adequate proxy of risk to the SA investor for gold shares. Overall the ALSI is inefficient since it has a nonlinear relationship to one sector of the lSE. Portfolio analysis and rebalancing is required to attain an optimal return. The Markowitz model recommends that all SA investment capital should be fully weighted in the Industrial index only. Introducing an international investment proxied by the Dow Jones significantly improved the returns to SA investors. This is evident in the improved Sharpe ratio achieved by the rand adjusted Dow Jones available to the SA investor. In the absence of exchange restrictions the model recommends that 87% of local investors assets should be moved abroad under the present investment conditions. When tested from the US investor's perspective using dollar returns the data estimates achieved from the regression analysis were: The alpha value of the Industrial index is non-zero and the Gold index alpha centres on zero. The results are a reversal of the Rand tests of the SA investor. Gold shares priced fairly in dollar terms as opposed to Industrial shares. Currency effects of Rand depreciation priced into the dollar return of Industrial shares led to their non-participation in the US investors' portfolio. Due to trade of gold in dollars, the gold shares were priced to provide a fair return to the dollar-adjusted ALSI as opposed to the rand denominated test. Overall, the ALSI was inefficient due to the Industrial sector pricing in dollars resulting in abnormal alpha values over time. Currency depreciation resulted in the distortion ofthe CAPM relationship between the INDI and ALSI. The US investor's domestic index, the Dow Jones was found to lie on the efficiency frontier for tests using the ALSI and the INDI. There was no reason to invest in SA, but if the US investor did chose to invest in SA shares then gold had the lowest beta and the lowest correlation to the Dow Jones. The beta values of the SA indices were all significant and the alpha values were negative when regressed against the Dow Jones. The implication of this would be to invest as much as possible in the international index portfolio as possible. Regression Statistics ALSIXS I:\DIXS GOLDIXS P-values ntercept a 1.18E-05 0.001992 1.51 E-OS DOWJONES 9.87E-15 1.32E-11 5.27E-05. Coefficients intercept a -0.09833 -0.07281 -0.15206 DOWJONES 1.082276 0.985812 0.831916. The Dow Jones introduces a significant diversification benefit to the SA investor's portfolio by increasing returns significantly per unit of risk. The Markowitz model recommends that 87% of SA investor's portfolio should be in the Dow Jones and 13% in the Industrial index. Due to independent pricing of the gold and industrial sectors, the former by international markets in dollars and the latter in rands in SA, a dichotomy is created in the local market. From an SA investor's point of view the CAPM would not capture the correct return of gold shares. It would overstate the expected return since beta of the SA market premium will not include dollar returns. The ALSI is an incorrect proxy for the SA investor analysing gold shares. The Gold sector is only correctly priced from the US investor's perspective once the ALSI is dollar adjusted. The industrial index can use CAPM analysis reliably with the ALSI as market proxy but higher returns are achievable through portfolio rebalancing. Active portfolio management is recommended. Nevertheless, this will not produce results significantly different to the CAPM once standard errors of the mean are accounted for. The results found currency depreciation of the Rand as a major factor contributing to the exodus of SA capital. The dollar had an expected mean return of 12,6% p.a. This substantially increased the rand adjusted Sharpe ratio of the international portfolio compared to its dollar return. The increased Sharpe ratio of the rand denominated international portfolio resulted in a substantial shift of the optimal portfolios weighting away from the domestic portfolio and towards the Dow Jones. International investors optimal portfolios were similarly impeded due to the depreciating currency.
A case study analysis of UEC Technologies (PTY) Limited with a focus on the growth strategies adopted.
(2001) Drieselmann, Kurt F.; Thomson, Elza.
This dissertation is a focused qualitative case study analysis of UEC Technologies (Pty) Limited (UEC). UEC is a wholly owned subsidiary of the JSE listed telecommunications, multimedia and technology (TMT) group, Allied Technologies Limited (Altech). UEC is the only South African based TV set-top box (STB) developer and manufacturer. The focus of the case study analysis centres around UEC's strategies of growth and globalisation in the global set-top box industry. The research took the form of a qualitative case study based on in-depth personal interviews with key decision-makers at UEC. The research was supported by a detailed study of secondary data relating to the STB industry as well as documentation prepared specifically for UEC relating to its business practice and business methodology. The case study focused particularly on the concentric diversification strategy adopted by UEC. This strategy was analysed with specific reference to the acquisition process followed by UEC during the negotiations with Zenith Network Systems (ZNS), a division of the American electronics giant, Zenith. The research culminates in the formulation of a company-specific analysis model (figure 4.1) which is proposed to be used by UEC when analysing future potential acquisitions. This company specific analysis model takes into account the current academic theoretical stance on both growth and globalisation strategy while fine tuning the process by adopting the specific requirements for both the STB industry and UEC's current business position. The aim of this model is to analyse potential concentric diversification growth opportunities by analysing elements of the spheres of industry environment, operating environment and internal environment. The industry environment is influenced by the barriers to entry into the industry and the size of the market and industry. The operating environment is influenced by globalisation and the need for growth. The internal environment is influenced by access to new markets and clients as well as the need for new technologies and products. The research dissertation culminates in a discussion of the model and the design, as well as an evaluation thereof. The discussion in regard to the model concludes that the model is in line with current academic as well as strategic thinking. Furthermore that the model is meticulously designed to cater for UEC's unique requirements and the specific requirements of the STB industry. In conclusion to the dissertation, it is postulated that the model would be of considerable benefit to UEC when analysing future acquisition opportunities. The model is an ideal analytical tool as its elements are made up from corporate strategy, has been crafted to align with UEC's specific requirements. This model provides a formal framework for assessing acquisitions and thus enabling UEC to compare multiple potential acquisitions against a fixed criteria model.

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