The perception of broad-based Black economic empowerment (BBBEE) in Small and Medium enterprises

Abstract

Since the end of apartheid the democratically elected ruling party of South Africa, the African National Congress (ANC) implemented legislation as a measure of correcting historical injustices and enabling equity that includes equal access to education, training, and other opportunities formerly restricted to the white minority population. One of these measures is the policy broad-based black economic empowerment (BBEEE), also commonly referred to as black economic empowerment (BEE). The overall mandate of BEE is to increase the number of black people who own, manage and control businesses and black employment in the South African economy. The BEE Act was introduced 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 the study is to investigate whether BEE is perceived, by employees of Small and Medium Enterprises (SME), to have a positive or negative effect on SMEs when measured against the proposed outcomes and goals set out by the South African Government and to make recommendations for both SMEs and Government. Research was conducted by means of a literature and empirical study. The literature study focused on BEE and emphasized aspects such as: the history, policies, objectives and the policy instruments used to achieve participation of BEE by the South African economy. Data was collected from employees of SMEs by means of an anonymous online survey and analysed by means of statistical software. The study showed that employees of SMEs have a mostly neutral perception about several factors of BEE that can be viewed as negative for the BEE policy, because not only was the policy created to right the wrongs of the past, but to reduce unemployment and increase economic growth and inclusivity for black entrepreneurs. Based on the results of the survey 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.