The impact of BBBEE on small and medium–sized businesses in the Sedibeng region

Abstract

Since the first democratic election in South Africa in 1994, there have been various policies aimed at empowering previous disadvantaged people. In an effort to become part of the global economy and develop the previous disadvantaged people created the need to restructure the economy of South Africa. The first democratic election in 1994 was won by the African National Congress (ANC). The African National Congress made it very clear that there its intension was to transform the economy of South Africa. The aim from the start was to develop the previous disadvantaged people of South Africa. In an effort to transformed and address the imbalances of the past, Black Economic Empowerment (BEE) policies followed with the hope that sustainable development and prosperity for all would be achieved through the participation of the previously disadvantaged people of the country. The Employment Equity Act was promulgated in 1998. The affirmative action measures aimed to address the discrimination experienced by designated groups. These actions must ensure to correct equitable representation in the workplace. The Legislation was passed with accompanying codes of good practice that provide clear and practical guidelines on how Employment Equity should be planned, implemented, monitored and reported on. The primary objective of this study is twofold, firstly to investigate the impact of Broad–Based Black Economic Empowerment on Small– and Medium–Sized Businesses in the Chemical and Engineering Sector and secondly, to make practical recommendations to these Small– and Medium–Sized Enterprises on the management of these issues. The research was conducted by means of a literature and empirical study. The study focus on Broad–Based Black Economic Empowerment and highlighted aspects such as: the history, policy, objectives and the policy instruments used to achieve Broad–Based Black Economic Empowerment. A major focus of the section on Broad–Based Black Economic Empowerment was the codes governing qualifying Small and Medium–Sized Enterprises. The literature study formed the basis for the assessment of the impact of Broad–Based Black Economic Empowerment on qualifying Small– and Medium–Sized Enterprises in the Chemical and Engineering sector. Specific indicators were empirically tested in practice by means of a questionnaire where–after the results were assessed. Based on the findings of the study, it was concluded that the majority of owner managers of Small– and Medium–Sized Enterprises in the Chemical and Engineering sector do not believe that there are substantial advantages in the implementation of Broad–Based Black Economic Empowerment. Business owners are motivated to take part in entrepreneurship, but they do not get enough support from Government. There are many homogeneous obstacles that businesses face, such as financial support and business skills. The development of Small– and Medium–Sized can improve the economic status of the country. Practical recommendations were also made to guide and support owner–managers through this highly emotional, but critical important issue that can ultimately ensure the future of the Small– and Medium–Sized businesses in South Africa.