Corporate failure and ethical resources: a case study of Steinhoff and Carillion
- Authors: Mthombeni, Seyijeni Koos
- Date: 2023-10-13
- Subjects: Corporate governance , Business ethics , Steinhoff International (Firm) Corrupt practices , Carillion (Firm) Corrupt practices , Business failures , Accounting fraud
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/419165 , vital:71621
- Description: This study aimed to investigate the impact of disregarding ethical resources on company performance, with a particular focus on Carillion and Steinhoff as case studies. A pragmatist research philosophy was employed using a mixed methods approach, utilizing deductive inferencing to produce archival research. Data was collected from annual financial statements and existing literature on Steinhoff and Carillion's corporate failures. Both content analysis and statistical analysis were employed to analyse the data. The study found that both Carillion and Steinhoff were at the top of their respective industries when they began to underperform due to poor governance. On the part of Carillion, much of its failure can be attributed to aggressive bidding, while for Steinhoff, its failure was due to unscrupulous accounting practices. Corruption and fraud at the top echelon of each of these respective companies began to trickle down to the bottom of the hierarchy. Additionally, Steinhoff used a two-tier board system that promotes information asymmetry between a management board and a supervisory board. This gave Steinhoff’s management board leverage to manipulate company reports and hide information from the supervisory board. Steinhoff equally violated the board’s independence by making former management executives part of the supervisory board, who could potentially be lenient to the management board due to past relationships. This was further exacerbated by the CEO duality, which contributed to Steinhoff’s lack of board independence. Furthermore, Steinhoff’s board was reported to have served as board members for a long time, eventually leading them to create a group culture that negatively affected its board’s independence. Different from Steinhoff, which lacked board independence and board diversity, at face value, Carillion appeared to have a predominantly independent board with diverse experience and external commitments. However, Carillion also lacked board independence in a different way, as some of its board members were previously employed by KPMG. KPMG was also the external auditor of Carillion. This created a scenario where Carillion and KPMG were conniving, which may have affected the objectivity of the external audits on financial performance. Further to this, the CEO held outsized power over the board, which could have also resulted in a lack of independence. This, in turn, facilitated corrupt behaviour within the organisation, which may have contributed to its corporate failure. iv The findings of the study highlight the following three conclusions: i) profits that are premised on reckless, irregular, and fraudulent business and accounting practices are not sustainable; ii) governance structures that do not adhere to sound corporate governance principles result in impaired board independence and negatively affect firm performance; and iii) companies that reach the pinnacle of their success through unethical conduct are ultimately short-lived. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2023
- Full Text:
- Date Issued: 2023-10-13
- Authors: Mthombeni, Seyijeni Koos
- Date: 2023-10-13
- Subjects: Corporate governance , Business ethics , Steinhoff International (Firm) Corrupt practices , Carillion (Firm) Corrupt practices , Business failures , Accounting fraud
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/419165 , vital:71621
- Description: This study aimed to investigate the impact of disregarding ethical resources on company performance, with a particular focus on Carillion and Steinhoff as case studies. A pragmatist research philosophy was employed using a mixed methods approach, utilizing deductive inferencing to produce archival research. Data was collected from annual financial statements and existing literature on Steinhoff and Carillion's corporate failures. Both content analysis and statistical analysis were employed to analyse the data. The study found that both Carillion and Steinhoff were at the top of their respective industries when they began to underperform due to poor governance. On the part of Carillion, much of its failure can be attributed to aggressive bidding, while for Steinhoff, its failure was due to unscrupulous accounting practices. Corruption and fraud at the top echelon of each of these respective companies began to trickle down to the bottom of the hierarchy. Additionally, Steinhoff used a two-tier board system that promotes information asymmetry between a management board and a supervisory board. This gave Steinhoff’s management board leverage to manipulate company reports and hide information from the supervisory board. Steinhoff equally violated the board’s independence by making former management executives part of the supervisory board, who could potentially be lenient to the management board due to past relationships. This was further exacerbated by the CEO duality, which contributed to Steinhoff’s lack of board independence. Furthermore, Steinhoff’s board was reported to have served as board members for a long time, eventually leading them to create a group culture that negatively affected its board’s independence. Different from Steinhoff, which lacked board independence and board diversity, at face value, Carillion appeared to have a predominantly independent board with diverse experience and external commitments. However, Carillion also lacked board independence in a different way, as some of its board members were previously employed by KPMG. KPMG was also the external auditor of Carillion. This created a scenario where Carillion and KPMG were conniving, which may have affected the objectivity of the external audits on financial performance. Further to this, the CEO held outsized power over the board, which could have also resulted in a lack of independence. This, in turn, facilitated corrupt behaviour within the organisation, which may have contributed to its corporate failure. iv The findings of the study highlight the following three conclusions: i) profits that are premised on reckless, irregular, and fraudulent business and accounting practices are not sustainable; ii) governance structures that do not adhere to sound corporate governance principles result in impaired board independence and negatively affect firm performance; and iii) companies that reach the pinnacle of their success through unethical conduct are ultimately short-lived. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2023
- Full Text:
- Date Issued: 2023-10-13
A quantitative analysis of the relationship between the 12 components of the Index of Economic Freedom (IEF) and the Human Development Index (HDI) scores within the 16 Southern African Development Community (SADC) nations
- Authors: Peel, Brendon Robert
- Date: 2021-10-29
- Subjects: Southern African Development Community , Quantitative research , Economic development Developing countries , Economic development Africa, Sub-Saharan , Economic development projects Africa, Sub-Saharan , Heritage Foundation (South Africa) , United Nations Development Programme , Index of Economic Freedom (IEF) , Human Development Index (HDI) , Resource Based Theory (RBT)
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10962/191841 , vital:45171
- Description: Nations in Sub-Saharan Africa tend to experience some of the worst levels of human development and economic freedom in the world. Previous research has shown that there is a positive and significant correlation between these two macroeconomic facets. Further research has shown that if nations' policy-makers can manage their resources and capabilities appropriately, then this could improve their economic freedom and human development levels. This study aims to analyse the relationship between the scores of the 12 different components of the Index of Economic Freedom (IEF) and the overall Human Development Index (HDI) scores of Sub-Saharan African nations. The specific selection of nations utilised in the study are the 16 countries that make up the Southern African Development Community (SADC). Based on a review of the literature on human development, economic freedom, and the Resource Based Theory (RBT) on a macro-level, a correlational study was conducted to determine the relationship between the relevant variables. The information was collected from the Heritage Foundation and the United Nations Development Program (UNDP), respectively. The data and scores collected and used in the study are from the years 2015 to 2019. The correlational results demonstrated that nine of the 12 components of the IEF has a positive and significant correlation with HDI within the selected African nations. The strongest correlation being between 'Property Rights' and HDI. Therefore, it is likely that if the property rights within a nation are upheld, said nation would have higher levels of human development. The three components that proved to have an insignificant result with HDI were; 'Tax Burden', 'Government Spending', and 'Fiscal Health'. The results indicate that all components that fall under the category of 'Government Size' share no significant correlational relationship with human development. It is recommended that governments and policy-makers take this into consideration when managing their resources and capabilities to improve the nation's human development. Further research is required to identify the specifics on how this management and allocation of resources can be utilised effectively to improve the human development and economic freedom in Sub-Saharan Africa. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2021
- Full Text:
- Date Issued: 2021-10-29
- Authors: Peel, Brendon Robert
- Date: 2021-10-29
- Subjects: Southern African Development Community , Quantitative research , Economic development Developing countries , Economic development Africa, Sub-Saharan , Economic development projects Africa, Sub-Saharan , Heritage Foundation (South Africa) , United Nations Development Programme , Index of Economic Freedom (IEF) , Human Development Index (HDI) , Resource Based Theory (RBT)
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10962/191841 , vital:45171
- Description: Nations in Sub-Saharan Africa tend to experience some of the worst levels of human development and economic freedom in the world. Previous research has shown that there is a positive and significant correlation between these two macroeconomic facets. Further research has shown that if nations' policy-makers can manage their resources and capabilities appropriately, then this could improve their economic freedom and human development levels. This study aims to analyse the relationship between the scores of the 12 different components of the Index of Economic Freedom (IEF) and the overall Human Development Index (HDI) scores of Sub-Saharan African nations. The specific selection of nations utilised in the study are the 16 countries that make up the Southern African Development Community (SADC). Based on a review of the literature on human development, economic freedom, and the Resource Based Theory (RBT) on a macro-level, a correlational study was conducted to determine the relationship between the relevant variables. The information was collected from the Heritage Foundation and the United Nations Development Program (UNDP), respectively. The data and scores collected and used in the study are from the years 2015 to 2019. The correlational results demonstrated that nine of the 12 components of the IEF has a positive and significant correlation with HDI within the selected African nations. The strongest correlation being between 'Property Rights' and HDI. Therefore, it is likely that if the property rights within a nation are upheld, said nation would have higher levels of human development. The three components that proved to have an insignificant result with HDI were; 'Tax Burden', 'Government Spending', and 'Fiscal Health'. The results indicate that all components that fall under the category of 'Government Size' share no significant correlational relationship with human development. It is recommended that governments and policy-makers take this into consideration when managing their resources and capabilities to improve the nation's human development. Further research is required to identify the specifics on how this management and allocation of resources can be utilised effectively to improve the human development and economic freedom in Sub-Saharan Africa. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2021
- Full Text:
- Date Issued: 2021-10-29
Simulating the economic impact emerging from the strategic decision-making of firms: A macroeconomic agent-based model
- Giovannoni, Amalio Dino John
- Authors: Giovannoni, Amalio Dino John
- Date: 2021-10-29
- Subjects: Decision making Economic aspects , Industrial management Decision making , Industrial management Computer simulation , Knowledge economy , Technological unemployment , Economic development Computer simulation , Employees Training of
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10962/191887 , vital:45175
- Description: The key research problem addressed in this project is: how does the strategic decision making of firms affect an economy? While this is a difficult question to answer, insights may be gained through the use of computational techniques such as agent-based modelling (ABM). An agent-based model is developed that simulates micro-level economic interactions between individuals and _rms in different markets, resulting in emergent macro-level features. Technological progress is an important determinant of economic growth and has been decomposed into two complementary factors: knowledge and technological sophistication. The model is used to explore the long-term, macroeconomic consequences of _rms investing more heavily in knowledge development. The simulations show that a shift towards a knowledge-based economy (KBE) has an insignificant impact on GDP over the long-term. However, the shift does produce a significant increase in unemployment. The higher unemployment is shown to be particularly high for the unskilled sectors of the population. It is therefore paramount that companies embark on skills development, training and educational initiatives when following a path of technological and knowledge innovation. A transformation of the education system to one that is inclusive, focused on quality, adaptive, encourages creativity, aligned with the needs of industry, and stimulates R&D is crucial. Without a coordinated strategy between industry, academia, and government in attempts to achieve a KBE, economic growth may be constrained, while the levels of unemployment, inequality and poverty may deteriorate. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2021
- Full Text:
- Date Issued: 2021-10-29
- Authors: Giovannoni, Amalio Dino John
- Date: 2021-10-29
- Subjects: Decision making Economic aspects , Industrial management Decision making , Industrial management Computer simulation , Knowledge economy , Technological unemployment , Economic development Computer simulation , Employees Training of
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10962/191887 , vital:45175
- Description: The key research problem addressed in this project is: how does the strategic decision making of firms affect an economy? While this is a difficult question to answer, insights may be gained through the use of computational techniques such as agent-based modelling (ABM). An agent-based model is developed that simulates micro-level economic interactions between individuals and _rms in different markets, resulting in emergent macro-level features. Technological progress is an important determinant of economic growth and has been decomposed into two complementary factors: knowledge and technological sophistication. The model is used to explore the long-term, macroeconomic consequences of _rms investing more heavily in knowledge development. The simulations show that a shift towards a knowledge-based economy (KBE) has an insignificant impact on GDP over the long-term. However, the shift does produce a significant increase in unemployment. The higher unemployment is shown to be particularly high for the unskilled sectors of the population. It is therefore paramount that companies embark on skills development, training and educational initiatives when following a path of technological and knowledge innovation. A transformation of the education system to one that is inclusive, focused on quality, adaptive, encourages creativity, aligned with the needs of industry, and stimulates R&D is crucial. Without a coordinated strategy between industry, academia, and government in attempts to achieve a KBE, economic growth may be constrained, while the levels of unemployment, inequality and poverty may deteriorate. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2021
- Full Text:
- Date Issued: 2021-10-29
The effects of education on economic growth and global competitiveness: a statistical approach
- Mbatha, Erica Isabel Tavares Da Silva
- Authors: Mbatha, Erica Isabel Tavares Da Silva
- Date: 2020
- Subjects: Economic development -- Effect of education on -- South Africa , Education, Higher -- South Africa , Educational attainment -- South Africa
- Language: English
- Type: text , Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10962/147558 , vital:38649
- Description: This thesis investigates whether there is a relationship between education, economic growth and global competitiveness and whether there is a relationship between South Africa’s current throughput rates in institutions of higher education, and its economic growth and global competitiveness. Economic growth is defined as a country’s ability to improve the life of its average citizen based on the strength of its economy. As such, it is increasingly important for a country to assess the factors that contribute to the improvement of their economy, which will ultimately result in its economic growth. Global competitiveness is an indication of how countries are able to provide for their people internally, as well as participate in the international market. To this end, economic growth and global competitiveness are two proxies that can be used to demonstrate the economic wellbeing of a country. Considering that prosperity under economic growth and global competitiveness of a country are driven by its people, one of the aims of this thesis was to investigate whether there is a relationship between education and economic growth and global competitiveness. Considering the recent demand in free education in South Africa, it is also important to understand whether there is a relationship between South Africa’s current throughput rates at higher education institutions and its economic growth and global competitiveness. Bearing in mind the political past which has led to inequality in the country, it is important to understand which types of education contribute to the economy and which types need to be further supported in order to increase the country’s economic productivity. Therefore, an additional aim of the thesis was to determine the relationship between South Africa’s current throughput rates in institutions of higher education, and its economic growth and global competitiveness. To address the aforementioned aims, data were collected from various open access online repositories. All the data were collated and numerous general linear models were constructed and tested to determine the different relationships as per the two aims. The results reveal that secondary school education had the highest impact on economic growth and global competitiveness on a global scale. This could be attributed to the fact that secondary school graduates tend to make up the largest part of the general workforce and as such, would make up a substantial proportion of the economy. Regarding South Africa, the only significant relationships were between green cluster universities (universities that focus on both research and technical training) and global competitiveness. Overall average throughput rates in all academic institutions were low; this could indicate that perhaps there are issues within the higher education system itself that need to be addressed in order to increase the throughput rate. From a managerial perspective, the results of this research stress the importance for the government to further investigate this area of study, as the call for free education becomes more prominent. The low throughput rates seem to suggest that the government is spending substantial amounts of money on students who do not always complete their studies. More research needs to be done to assess the root of the problem in South Africa’s tertiary education system, in order to ensure that this aspect increases its positive contribution towards the country’s economic growth and global competitiveness.
- Full Text:
- Date Issued: 2020
- Authors: Mbatha, Erica Isabel Tavares Da Silva
- Date: 2020
- Subjects: Economic development -- Effect of education on -- South Africa , Education, Higher -- South Africa , Educational attainment -- South Africa
- Language: English
- Type: text , Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10962/147558 , vital:38649
- Description: This thesis investigates whether there is a relationship between education, economic growth and global competitiveness and whether there is a relationship between South Africa’s current throughput rates in institutions of higher education, and its economic growth and global competitiveness. Economic growth is defined as a country’s ability to improve the life of its average citizen based on the strength of its economy. As such, it is increasingly important for a country to assess the factors that contribute to the improvement of their economy, which will ultimately result in its economic growth. Global competitiveness is an indication of how countries are able to provide for their people internally, as well as participate in the international market. To this end, economic growth and global competitiveness are two proxies that can be used to demonstrate the economic wellbeing of a country. Considering that prosperity under economic growth and global competitiveness of a country are driven by its people, one of the aims of this thesis was to investigate whether there is a relationship between education and economic growth and global competitiveness. Considering the recent demand in free education in South Africa, it is also important to understand whether there is a relationship between South Africa’s current throughput rates at higher education institutions and its economic growth and global competitiveness. Bearing in mind the political past which has led to inequality in the country, it is important to understand which types of education contribute to the economy and which types need to be further supported in order to increase the country’s economic productivity. Therefore, an additional aim of the thesis was to determine the relationship between South Africa’s current throughput rates in institutions of higher education, and its economic growth and global competitiveness. To address the aforementioned aims, data were collected from various open access online repositories. All the data were collated and numerous general linear models were constructed and tested to determine the different relationships as per the two aims. The results reveal that secondary school education had the highest impact on economic growth and global competitiveness on a global scale. This could be attributed to the fact that secondary school graduates tend to make up the largest part of the general workforce and as such, would make up a substantial proportion of the economy. Regarding South Africa, the only significant relationships were between green cluster universities (universities that focus on both research and technical training) and global competitiveness. Overall average throughput rates in all academic institutions were low; this could indicate that perhaps there are issues within the higher education system itself that need to be addressed in order to increase the throughput rate. From a managerial perspective, the results of this research stress the importance for the government to further investigate this area of study, as the call for free education becomes more prominent. The low throughput rates seem to suggest that the government is spending substantial amounts of money on students who do not always complete their studies. More research needs to be done to assess the root of the problem in South Africa’s tertiary education system, in order to ensure that this aspect increases its positive contribution towards the country’s economic growth and global competitiveness.
- Full Text:
- Date Issued: 2020
An analysis of barriers to employee adoption of workplace health and safety standards at Eskom, Makhanda (Grahamstown)
- Authors: Makholwane, Nobubele
- Date: 2019
- Subjects: Eskom (Firm) -- Employees -- South Africa -- Makhanda , Eskom (Firm) -- Management -- South Africa -- Makhanda , Industrial hygiene -- South Africa -- Makhanda , Employee motivation -- South Africa -- Makhanda
- Language: English
- Type: text , Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10962/93898 , vital:30968
- Description: Workplace fatalities and injuries are a concern around the world, with over 2 million deaths because of workplace related activities. This makes safety culture in the workplace crucial to the sustainability of individuals, businesses and the society in general. Safety culture includes everything in the workplace, and is understood as common sense awareness and practice relating to safety. Central to developing a safety culture in an organization, is a good understanding of what safety problems existed in the past; what safety problems exist in the present, and what caused them, as well as what could be done to deal with those causes. The goal of this thesis, therefore, was to understand what barriers potentially exist for Eskom employees in Makhanda (Grahamstown) to understanding and adopting the company’s safety policies and measures. A secondary aim was to explore different strategies for addressing these barriers. In order to get to the goal, it was important to; first, understand which aspects of Eskom’s health and safety standards do employees have difficulty adopting. Second, it was important to investigate the specific barriers to employees’ non-adoption of health and safety standards, by understanding their perceptions of safety issues in the workplace. Third, based on the findings, the study aimed to propose recommendations for improving the adoption of safety policies and measures by employees of Eskom. The key findings of the study include the fact that car accidents are the company’s and employees major concern, but the employees also have many other concerns that they see as needing the company’s attention (e.g. dealing with attacks on employees by customers; focusing on incentives rather than harsh enforcement for violators of safety policies). However, it is also clear that most employees do see safety as their responsibility as well. The two key areas of recommendations are, first, that leadership of Eskom adopt alternative leadership styles that focus more on ethical leadership, rather than transactional leadership that focus on profit margins more than it does on people. Second, it is recommended that Eskom provide incentives for compliance with safety policies; more training and education about safety; encouragement for Eskom to not put so much pressure on employees, who can lead fatigue; rather they should employ more people to do the jobs that the high pressure. To conclude, this research argues that neither do employees not employers think death and injuries are good for anybody. This is why this researcher is hopeful that this will get better, not worse, in terms of having a firm safety culture at Eskom as a workplace environment.
- Full Text:
- Date Issued: 2019
- Authors: Makholwane, Nobubele
- Date: 2019
- Subjects: Eskom (Firm) -- Employees -- South Africa -- Makhanda , Eskom (Firm) -- Management -- South Africa -- Makhanda , Industrial hygiene -- South Africa -- Makhanda , Employee motivation -- South Africa -- Makhanda
- Language: English
- Type: text , Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10962/93898 , vital:30968
- Description: Workplace fatalities and injuries are a concern around the world, with over 2 million deaths because of workplace related activities. This makes safety culture in the workplace crucial to the sustainability of individuals, businesses and the society in general. Safety culture includes everything in the workplace, and is understood as common sense awareness and practice relating to safety. Central to developing a safety culture in an organization, is a good understanding of what safety problems existed in the past; what safety problems exist in the present, and what caused them, as well as what could be done to deal with those causes. The goal of this thesis, therefore, was to understand what barriers potentially exist for Eskom employees in Makhanda (Grahamstown) to understanding and adopting the company’s safety policies and measures. A secondary aim was to explore different strategies for addressing these barriers. In order to get to the goal, it was important to; first, understand which aspects of Eskom’s health and safety standards do employees have difficulty adopting. Second, it was important to investigate the specific barriers to employees’ non-adoption of health and safety standards, by understanding their perceptions of safety issues in the workplace. Third, based on the findings, the study aimed to propose recommendations for improving the adoption of safety policies and measures by employees of Eskom. The key findings of the study include the fact that car accidents are the company’s and employees major concern, but the employees also have many other concerns that they see as needing the company’s attention (e.g. dealing with attacks on employees by customers; focusing on incentives rather than harsh enforcement for violators of safety policies). However, it is also clear that most employees do see safety as their responsibility as well. The two key areas of recommendations are, first, that leadership of Eskom adopt alternative leadership styles that focus more on ethical leadership, rather than transactional leadership that focus on profit margins more than it does on people. Second, it is recommended that Eskom provide incentives for compliance with safety policies; more training and education about safety; encouragement for Eskom to not put so much pressure on employees, who can lead fatigue; rather they should employ more people to do the jobs that the high pressure. To conclude, this research argues that neither do employees not employers think death and injuries are good for anybody. This is why this researcher is hopeful that this will get better, not worse, in terms of having a firm safety culture at Eskom as a workplace environment.
- Full Text:
- Date Issued: 2019
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