The Mediating Role of Knowledge Sharing on Social Capital and Product Innovation among Tourism SMEs

Purpose: The aim of this study was to investigate the mediating role of knowledge sharing on social capital and product innovation among tourism SMEs in Zimbabwe. Design/methodology/approach: A quantitative approach was adopted in this study and data was collected using an online survey, from owners and managers of small and medium enterprises in the tourism industry. The respondents were drawn using a simple random sampling technique from a database created and maintained by the Zimbabwe Tourism Authority of Sanganai/Hlanganani World Tourism Expo participants. Covariance-based structural equation modelling was used to analyse the data and test the hypotheses proposed. Findings: The study found that both interorganisational trust and social reciprocity enhance product innovation in the tourism sector. It was also revealed that knowledge-sharing capability partially mediates the relationship between interorganisational trust and social reciprocity and product innovation. Research limitations/implications: By focusing on interorganisational trust and social reciprocity, this study was limited to the relational dimension of social capital, and this offers scope for future research. More research needs to be undertaken to explore the role of interorganisational trust and social reciprocity across other dimensions of social capital other than the relational attributes. It is also necessary to conduct longitudinal studies to capture variations in time and across sectors using more robust measures. Originality/value: The study expands on the existing line of scholarly work by providing a social dimension of the antecedents of product innovation. The findings suggest in the wake of resource limitation, firms in Zimbabwe may rely on interorganisational trust and social reciprocity to foster superior product innovation. In this knowledge-intensive business environment, this study also adds value by providing empirical evidence for the mediating role of knowledge-sharing capability in the relationship between interorganisational trust and social reciprocity, and product innovation.

The Municipal Audit Committee Self-review Threat: The South African Dilemma

Context: Corporate governance in South African municipalities is severely lacking and retrograding. The audit committee should essentially be an oversight committee that acts on behalf of the municipal council to ensure that key controls are operating, ethical practices are reinforced, key accounting estimates and judgements are properly made, and that internal and external audits are effective. However, the Municipal Finance Management Act requires that the audit committee acts in an advisory capacity to among others, the municipal management. This statutory requirement is in contrast to international governance code best practice for audit committees. Purpose: The aim of this study was to establish how municipal audit committee members perceive their role and whether they realise the self-review threat brought about by the role conflict between legislation and internationally accepted best practice. Design: A web-based survey questionnaire was used to collect primary data from municipal audit committee members. Findings: The study found that municipal audit committee members seem to be unaware of the self-review threat their perspectives on their role hold. Practical implications: Results of the study may assist policy makers and other stakeholders in drafting regulations and legislation governing the functioning and establishment of independent municipal audit committees in South Africa. Originality: Although the conflicting roles of assurance (oversight) and consulting (advisory) have received attention in the disciplines of external auditing and internal auditing, similar attention is needed in the case of South African municipal audit committees.

Assessment of the Financial Reporting Quality of South African and Indian Listed Companies

Purpose/objectives: The purpose of this paper is to investigate the quality of financial reporting in South Africa and India. The accounting profession has been placed in the spotlight as a result of the high number of public failures and corporate collapses. The importance of high-quality financial reporting has been demonstrated not only by past corporate failures, but also due to the scarce level of capital that is required to be allocated within capital markets. Design/methodology/approach: The study employed a 21-index scorecard developed by Beest, Braam, and Boelens (2009) to score the application of the qualitative characteristics in the financial statements of 50 entities from the Johannesburg Stock Exchange (JSE) and Bombay Stock Exchange (BSE). The entities were selected based on the highest market capitalisation entities for the 2017 year-end. Findings: The main finding of this study is that South African companies apply the qualitative characteristics of financial reporting to a higher degree than Indian companies. However, timeliness was a characteristic where India outperformed South Africa. Originality/value: Studies have focused on the type of information presented in annual reports rather than on the quality of information. The need for high quality information is imperative, given the role played in capital allocation particularly in emerging economies. As such, the study contributes to the body of knowledge regarding the quality of financial information with a focus on emerging economies.

Reflecting on Corporate Governance in South Africa: Lessons Learned and the Way Forward

Background: South Africa is a corporate governance pioneer. The King Reports have offered guidance to listed companies in the country since 1994 and unlisted entities since 2016. In the drive for corporate change, attention is increasingly placed on the role of activist shareholders, in particular institutional investors, given the size of their investments. Purpose/objectives: This study aimed to gauge institutional investors’ views on the differences between the King III and IV Reports related to positive aspects and room for improvement. Design/methodology/approach: Semi-structured interviews were conducted with selected institutional investors. Themes were then derived by conducting an interpretive thematic analysis. Findings: Interviewees commended the format and scope of the latest King Report but suggested that outcomes-based training should be offered to directors to ease implementation. Executive remuneration, director independence and auditor independence were highlighted as areas that require attention. Some interviewees questioned whether the current non-binding vote on executive remuneration is sufficient. They suggested that executive remuneration should be tied to performance outcomes across the triple bottom line. Participants recommended that director independence should be considered on a case-by-case basis, instead of strictly applying King IV’s suggested tenure guideline. Furthermore, mandatory audit firm rotation could enhance auditor independence, and hence transparency. Stakeholders are encouraged to demand enhanced transparency on corporate matters to enable more informed decision-making.

Determinants of Sustainability-Oriented Entrepreneurial Intentions of University Students

Entrepreneurship is no longer about only economic growth but also about social and environmental performance. This has led to the development of sustainable entrepreneurship as a field in entrepreneurship research. The study discussed in this article investigated the determinants of sustainability-oriented entrepreneurial intentions (SOEI) of university students by extending the theory of planned behaviour (TPB). Four personality traits were added to the TPB to develop a predictive model of SOEI. The moderating effect of gender in the relationships between the determinants and SOEI was also examined. The study adopted a quantitative research design. The cross-sectional survey method was used for data collection from final year business management students in three South African universities. Structural equation modelling (PLS SEM) was used for data analysis. The findings indicated significant positive relationships between attitude; perceived behavioural control; internal locus of control; perceived creativity; proactive personality, and SOEI. Overall, 55.9% of the variance in SOEI was explained by the expanded TPB model. The moderating effect of gender was not found to be significant. Theoretically, the study used personality traits to extend the TPB in order to develop a unique model of the antecedents of SOEI. Practically, recommendations to promote the SOEI of university students are suggested. The study contributes towards the understanding of SOEI of university students in South Africa. While the conventional entrepreneurial intention of university students has stimulated many studies, research on SOEI is sparse. Based on the TPB, the study developed and tested a unique multi-dimensional model that incorporates personality traits as antecedents of SOEI.

Direct vs. Indirect Impact of Fuel Price on Wages in South Africa

The international oil price has been increasing significantly, but consumers react more to the announcement of the increase in fuel (pump) price, than an increase in international oil prices. This study, therefore, investigates the direct effect of fuel prices on the inflation rate and wages in South Africa, on the one hand, and the domestic price pass-through from fuel prices to wages (indirect effect) on the other. The impulse-response function of the vector autoregressive (VAR) technique was used to examine the direct and indirect effects of fuel prices on the inflation rate and wages, as well as the domestic prices pass-through from fuel prices to wages in South Africa. Quarterly data from 2001Q1 to 2018Q2 were utilised. The empirical results showed that inflation and wages responded positively to the shock in the fuel price. The results indicated that although wages increased because of a shock in the inflation rate—depicting the pass-through from the fuel price—the direct impact of the fuel price on wages is more significant. This study departs from the usual studies that examine the exchange rate pass-through of international oil prices to the inflation rate. The conclusion drawn was that the pass-through effect was not as strong and did not contribute as much as the direct effect of the fuel price. Therefore, the indirect shock of fuel prices, via inflation, does not so much cause an increase in wages as its direct shock. The study concludes with policy recommendations.

The impact of changes in audits and penalties on tax compliance behaviour: evidence from South Africa

Tax revenue is a major source of public revenue in South Africa, and it plays an integral role in creating the fiscal space to provide public services and infrastructural development. Tax collection is however impeded by evasion. In its 2014 interim report, the Davis Tax Committee (a tax review committee appointed by the government to inquire into the role of South Africa’s tax system) suggested that South Africa loses a substantial amount of revenue through evasion. To enhance compliance, the government has made several changes to existing tax penalty structures, and introduced new ones as well. The question arises whether these deterrence measures effectively reduce evasion. International empirical evidence on the efficacy of such policies is mixed, and mainly drawn from developed country applications. Hence, evidence from developing countries is limited. This study employed a laboratory experiment to examine taxpayers’ behavioural responses to changes in audit and penalty rates in South Africa. Results showed that both audits and penalties influenced salaried and non-salaried taxpayers to increase their compliance levels. However, the effect was higher on non-salaried taxpayers. We also found that audit and penalty rates had a negative joint effect on both salaried and non-salaried compliance rates. The impact was larger on salaried taxpayers. These findings suggest that, although audits and penalties are effective enforcement measures, the manner in which they are applied must be given careful consideration.

Managing Employee Creativity and Innovation in Selected Zimbabwean Manufacturing Companies

The economic situation in Zimbabwe is worsening rapidly. Proper managing of employee creativity and innovation gives organisations a competitive edge. This study explored the managing of employee creativity and innovation in two manufacturing companies in Zimbabwe. An exploratory research design and a qualitative research method were utilised. Face-to-face interviews were conducted. Qualitative content analysis was used to analyse the data. The findings indicate that rewards, benchmarking, training, sense of belonging, engagement, feedback, teamwork and collaboration form part of the enabling factors in managing employee creativity and innovation. The identified employee creativity and innovation barriers were fear, punishment, lack of funding, lack of research and development in Zimbabwe, limited technology, and bureaucracy. Only two manufacturing companies in Zimbabwe were included in this study. The focus of this study was on employee creativity and innovation. However, there are other themes that could also have been investigated in the rapidly worsening economic Zimbabwean context. If managers do not give the necessary attention to employee creativity and innovation on a personal level of an employee, on an operational roll-out level, as well as on the bigger arena of the organisation, it might be that the companies lack competitiveness and do not contribute to the improvement of the economic situation in Zimbabwe. The contribution of this study lies in the in-depth explication of employee creativity and innovation in a rapidly worsening economic Zimbabwean context.

Talent Development Practices Predict the Employee Engagement of Human Resource Professionals

There is little evidence to indicate the association between talent development practices and the employee engagement of human resource (HR) professionals. The aim of this study was to examine if talent development practices predict the employee engagement levels of HR professionals. The study was conducted by means of a quantitative survey research design based on a sample of 354 HR professionals. A stratified random sampling technique was applied and data were collected by means of the Survey Monkey internet tool and analysed by means of multiple regression analysis. The results indicate that self-development behaviour is not a significant predictor of organisational engagement, while developmental relationships and support as well as development assignments are significant predictors. These results suggest that managers should provide developmental support and assignments to enhance employee engagement.

Supply Chain Risk Management Strategies: A Study of South African Third-Party Logistics Providers

The purpose of this study was to determine the supply chain risk management (SCRM) strategies that South African third-party logistics (3PL) service providers use to mitigate risks, the extent to which they adopt these strategies and the benefits derived thereof. An exploratory and descriptive method technique was adopted. The empirical study comprised of email surveys administered to 398 supply chain managers employed by South African 3PLs. The findings reveal that respondents place greater importance on risk identification than on the other SCRM strategies. Risk assessment attained the lowest rating, implying that 3PL providers placed the least importance on this risk assessment strategy. Risk response and risk monitoring, reporting and control are all adopted to a significantly lesser extent. The findings also revealed that 3PL providers derive significant benefits from all SCRM strategies. A limitation of this study is that not all 3PL providers affiliated with SAAFF participated. In addition, because only members of senior management were included in the study, the opinions of operational and tactical staff were not obtained. The study contributes to the current body of knowledge on SCRM by exploring how 3PL providers in a developing country, such as South Africa, assess supply chain risks, the strategies they have in place to respond to these risks, and the mechanisms in place to monitor and control SCM risks.