Size and other determinants of capital structure in South African manufacturing listed companies
- Authors: Mgudlwa, Nosipho
- Date: 2009
- Subjects: Capital management and capital structure , Capital , Corporations -- South Africa -- Finance , Business enterprises
- Language: English
- Type: Thesis , Masters , MTech
- Identifier: vital:8941 , http://hdl.handle.net/10948/1192 , Capital management and capital structure , Capital , Corporations -- South Africa -- Finance , Business enterprises
- Description: The importance of the capital structure as a measure of company growth and performance has been at the core of vigorous debate for many years. With the threat of the recession and global competitiveness to the survival of organizations, what constitutes an optimal capital structure had to be interrogated. The focus of the study is to investigate the factors (with more emphasis on size) that influence the capital structure of manufacturing firms in general and South African manufacturing firms in particular. The aim is to advance recommendations on policy formulation so as to improve the financial performance of the manufacturing sector in South Africa, a developing economy. The study is explained within the theoretical framework which relates elements purported to have an influence on the capital structure to the use of leverage/debt by organizations. Leverage is seen to increase the shareholders‟ interest whilst being exposed to financial risk. The size of the organizations as a comparative element defines the extent of accessing the borrowed funds, hence the distinction between the Small, Medium and Micro Enterprises (SMMEs) and large sized enterprises (LSEs). The research evidence indicates that SMMEs are characterized by lower liquidity, use more short-term debt instead of use of long-term debt, and are generally low in debt and basically capital intensive. On the contrary LSEs are highly leveraged. The selected research design is triangulated, with a combination of a case study which is of a qualitative and interpretive nature, as well as a quantitative type survey by means of a structured questionnaire. Twenty five ratios were computed from information derived from the financial statements of organizations and means and medians were determined for comparative reasons. The questions were directed to chief financial officers or managers responsible for the compilation of the financial statements, mainly to expand on the debt policy of iv their respective organizations. The findings confirmed the correlation between gearing and size, asset structure and growth with the exception of profitability. On the relevance of financial policy regarding debt, two factors were proven to be influential to capital structure decisions: the theory and practice of capital structure and the impact of the debt policy, both of which relate to financial flexibility. The study concluded that as much as there are similarities/consistencies between the two size groups, there are fundamental differences confirming that size significantly impacts on the capital structure choice specifically the use of debt. It is, therefore, recommended that the South African government should review its policies with regards to the financial support towards SMME viability.
- Full Text:
- Date Issued: 2009
- Authors: Mgudlwa, Nosipho
- Date: 2009
- Subjects: Capital management and capital structure , Capital , Corporations -- South Africa -- Finance , Business enterprises
- Language: English
- Type: Thesis , Masters , MTech
- Identifier: vital:8941 , http://hdl.handle.net/10948/1192 , Capital management and capital structure , Capital , Corporations -- South Africa -- Finance , Business enterprises
- Description: The importance of the capital structure as a measure of company growth and performance has been at the core of vigorous debate for many years. With the threat of the recession and global competitiveness to the survival of organizations, what constitutes an optimal capital structure had to be interrogated. The focus of the study is to investigate the factors (with more emphasis on size) that influence the capital structure of manufacturing firms in general and South African manufacturing firms in particular. The aim is to advance recommendations on policy formulation so as to improve the financial performance of the manufacturing sector in South Africa, a developing economy. The study is explained within the theoretical framework which relates elements purported to have an influence on the capital structure to the use of leverage/debt by organizations. Leverage is seen to increase the shareholders‟ interest whilst being exposed to financial risk. The size of the organizations as a comparative element defines the extent of accessing the borrowed funds, hence the distinction between the Small, Medium and Micro Enterprises (SMMEs) and large sized enterprises (LSEs). The research evidence indicates that SMMEs are characterized by lower liquidity, use more short-term debt instead of use of long-term debt, and are generally low in debt and basically capital intensive. On the contrary LSEs are highly leveraged. The selected research design is triangulated, with a combination of a case study which is of a qualitative and interpretive nature, as well as a quantitative type survey by means of a structured questionnaire. Twenty five ratios were computed from information derived from the financial statements of organizations and means and medians were determined for comparative reasons. The questions were directed to chief financial officers or managers responsible for the compilation of the financial statements, mainly to expand on the debt policy of iv their respective organizations. The findings confirmed the correlation between gearing and size, asset structure and growth with the exception of profitability. On the relevance of financial policy regarding debt, two factors were proven to be influential to capital structure decisions: the theory and practice of capital structure and the impact of the debt policy, both of which relate to financial flexibility. The study concluded that as much as there are similarities/consistencies between the two size groups, there are fundamental differences confirming that size significantly impacts on the capital structure choice specifically the use of debt. It is, therefore, recommended that the South African government should review its policies with regards to the financial support towards SMME viability.
- Full Text:
- Date Issued: 2009
An investigation into employee empowerment strategies for Small, Medium, and Micro Enterprises (SMMEs)
- Authors: Pandle, Nolubabalo Leeanne
- Date: 2006
- Subjects: Employee empowerment , Business enterprises , Small business -- Management , Affirmative action programs
- Language: English
- Type: Thesis , Masters , MTech
- Identifier: vital:9344 , http://hdl.handle.net/10948/d1012138 , Employee empowerment , Business enterprises , Small business -- Management , Affirmative action programs
- Description: Employee empowerment is a strategy that small business managers can deploy to add value to the business. This strategy is aimed at cultivating the power and ability of employees in their jobs. A business is a business by people working in it though they differ in many ways their contribution to the success of the organization is very important. However, these people are not often recognized as value contributors in the success of the business and for this reason they do not intend to add value to the business and they become demotivated to do their jobs properly. People are the business storehouse of knowledge and they are central to the organization's competitive advantage. Well educated, coached, and highly motivated people are critical to the development and execution of strategies, especially in today's fast-paced market, where top management can no longer assure the business competitiveness in isolation. In the business world, almost all businesses are doing the same, small businesses should strive to do things differently, and the only way that they can achieve that uniqueness is through instilling frankness and liberty to employees so that they act as if the business also belongs to them. The reason behind this success is the strategy the business is using to get into the heart of its customers, and this strategy is “employee empowerment”. People are the business's most underutilized resource; involvement in an organization is no longer a one-way road. In today's corporate environment a manager must work towards engaging the organization forcefully enough to achieve its objectives. New knowledge-based enterprises are characterized by flat hierarchical structures and a multi-skilled workforce. Managers assume more leadership and coaching tasks and work hard to provide employees with resources and working conditions they need to accomplish the goals they have agreed to. In brief, managers work for their staff, and not the reverse and this makes employees feel valued. Small business owners should tap into a new dimension of utilizing employee empowerment strategies in their businesses as these are proficient and are not costly. This paper investigates employee empowerment strategies that can be used by small, medium and micro enterprises (SMME's). An important reason for this investigation is that small businesses have incompetent skilled labour force due to the fact that they operate under a limited budget from which it would be difficult to get skilled workers who will demand higher salaries, as a result they need to put their energies rather on equipping and educating their employees through empowerment, which could at the end make them feel valued and part of the business. It is imperative to firstly assess the current situation of small business commitment to employee empowerment strategies; to what extent do they use employee empowerment strategies in their businesses In terms of the empirical study it was determined that small businesses were not aware of the concept of employee empowerment, but are in actual fact practicing employee empowerment strategies that have been theoretically revealed, according to the researcher’s observation, they were not aware of the impact of employee empowerment in the organization and that they can be implemented into the business. Therefore, by introducing the concept of employee empowerment and the strategies that can be used in small businesses, SMME's can enhance their services to customers, increase productivity and contribute to the welfare of employees to add value to the individual, the business and the country.
- Full Text:
- Date Issued: 2006
- Authors: Pandle, Nolubabalo Leeanne
- Date: 2006
- Subjects: Employee empowerment , Business enterprises , Small business -- Management , Affirmative action programs
- Language: English
- Type: Thesis , Masters , MTech
- Identifier: vital:9344 , http://hdl.handle.net/10948/d1012138 , Employee empowerment , Business enterprises , Small business -- Management , Affirmative action programs
- Description: Employee empowerment is a strategy that small business managers can deploy to add value to the business. This strategy is aimed at cultivating the power and ability of employees in their jobs. A business is a business by people working in it though they differ in many ways their contribution to the success of the organization is very important. However, these people are not often recognized as value contributors in the success of the business and for this reason they do not intend to add value to the business and they become demotivated to do their jobs properly. People are the business storehouse of knowledge and they are central to the organization's competitive advantage. Well educated, coached, and highly motivated people are critical to the development and execution of strategies, especially in today's fast-paced market, where top management can no longer assure the business competitiveness in isolation. In the business world, almost all businesses are doing the same, small businesses should strive to do things differently, and the only way that they can achieve that uniqueness is through instilling frankness and liberty to employees so that they act as if the business also belongs to them. The reason behind this success is the strategy the business is using to get into the heart of its customers, and this strategy is “employee empowerment”. People are the business's most underutilized resource; involvement in an organization is no longer a one-way road. In today's corporate environment a manager must work towards engaging the organization forcefully enough to achieve its objectives. New knowledge-based enterprises are characterized by flat hierarchical structures and a multi-skilled workforce. Managers assume more leadership and coaching tasks and work hard to provide employees with resources and working conditions they need to accomplish the goals they have agreed to. In brief, managers work for their staff, and not the reverse and this makes employees feel valued. Small business owners should tap into a new dimension of utilizing employee empowerment strategies in their businesses as these are proficient and are not costly. This paper investigates employee empowerment strategies that can be used by small, medium and micro enterprises (SMME's). An important reason for this investigation is that small businesses have incompetent skilled labour force due to the fact that they operate under a limited budget from which it would be difficult to get skilled workers who will demand higher salaries, as a result they need to put their energies rather on equipping and educating their employees through empowerment, which could at the end make them feel valued and part of the business. It is imperative to firstly assess the current situation of small business commitment to employee empowerment strategies; to what extent do they use employee empowerment strategies in their businesses In terms of the empirical study it was determined that small businesses were not aware of the concept of employee empowerment, but are in actual fact practicing employee empowerment strategies that have been theoretically revealed, according to the researcher’s observation, they were not aware of the impact of employee empowerment in the organization and that they can be implemented into the business. Therefore, by introducing the concept of employee empowerment and the strategies that can be used in small businesses, SMME's can enhance their services to customers, increase productivity and contribute to the welfare of employees to add value to the individual, the business and the country.
- Full Text:
- Date Issued: 2006
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