Broad–Based Black Economic Empowerment (B-BBEE) as a competitive advantage in conducting business in South Africa

Abstract

Government develop policies and promulgate laws that are aimed at promoting economic growth initiatives and help the growth of companies or enterprises. When government policies are implemented effectively, they determine the overall success of its economic growth vision. Successful economic development is determined amongst others by the policies of the government and their implementation. For businesses to influence economic growth, they need to influence the architecture of government policy, and that should be organised collectively and strategically. It became evident in this study that for the business to operate in the growing economy that is characterised by political and social stability, they should act in a manner that promotes government actions that are geared in the best interest of businesses and their definition of growth. The advent of transformation, specifically the Broad-Based Black Economic Empowerment (B-BBEE), has introduced the requirements that enterprises will need to comply with B-BBEE to get licenses, concessions, or authorisation from the state and to provide goods and services to the organ of state or to enter into a partnership with the state (Meyer, 2007). The organ of state and public entities use their Black Economic Empowerment (BEE) status or levels as measured under the B-BBEE Codes of Good Practice to enter into a business transaction. Private businesses, in dealing with each other, they also require the B-BBEE scorecard, as this has an impact on their scorecard and ultimately their B-BBEE compliance levels. This paper outlines the transformation processes and argues that B-BBEE has an impact on the competitiveness of businesses and the level of BEE compliance influences the winning of business opportunities. The research methodology adopted for this study is qualitative. The existing literature and practices of organisations have been systematically reviewed and synthesised.