Theses and Dissertations (Graduate School of Management)

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A proposed model for measurement of capital generation by small business as a contribution to economic development
(University of Pretoria, 2006-12-15) Pretorius, Marthinus W.; jolivier@garnett-adamsconsult.co.za; Olivier, Johan-Paul
Economic development is a relatively new field of economics that started only thirty years ago. Many of the measurements applied in measuring the effectiveness of small businesses in South Africa are based on measuring growth, which is not always related to development. Using capital generation as one of the measurable parameters in economic development, a model was designed to measure the contribution of small business towards capital generation and, subsequently, development. The model considered the contribution of small businesses towards capital generation by measuring growth in assets, owners. incomes, employees. incomes and taxes paid. For these parameters to contribute to growth, additional capital needs to be generated by businesses. Job creation was also measured as an important parameter used to calculate employees. and owners. incomes. The model was tested with actual data gathered through personal interviews with businesses and analyses of the financial information of the businesses. The data were collected to cover a five-year operational period. The model contributed to an understanding of the ability of small businesses to support development in South Africa. The model was used to test the capital contributions of businesses of different age groups and sizes as well as within different manufacturing environments and locations in Gauteng and North West. Reducing the high failure rate of small businesses will play an important role in any future developmental interventions to increase the contributions of these small businesses. If the high failure rate is ignored and if only successful businesses are considered, it is seen that small businesses contribute to job creation. Small businesses, in general, increased employment below the total employment growth rate for the areas of the study, although the businesses which employed fewer than ten people outperformed the industry average. The data suggest that small businesses generally do contribute to capital generation. Small businesses, which employed fewer than 20 people, contributed positively to all aspects of capital contribution, compared to businesses which employed more than 20 people. These businesses performed positively only in tax contribution. It is positive that small businesses invest in, and increase, assets, but it is concerning that tax contribution growth outperforms all other capital generation parameters. Employees. incomes, and especially owners. incomes, showed a negative growth contribution to capital generation. There were definite trends in the data that businesses which employ the most assets, with large salary bills, large owners. payments and large tax contributions showed slower growth than did businesses employing smaller total capital contributions in these parameters. The motor industry, which showed phenomenal growth over the past few years, did not manage to increase the capital it used taking into account the effect of the consumer price index, excluding interest rates on mortgage bonds. This was also clear in the different regions which support the industry. The industry data can be used to study the different industries in more detail. Although more businesses contributed to growth in the four parameters, the net contributions in certain instances, or parameters, were negative. The results show that small business contributes both to economic development and to growth. It is also clear that the model can be used to analyse business contributions to development. It is unclear whether small business is the best way of stimulating development based on growth in capital contributions. The results and the analyses show that the model can be used as a successful management tool to stimulate development-related initiatives.
The critical success factors in township establishment through the process of the Provincial Land Use Ordinance 15 of 1986
(University of Pretoria, 2011-11-28) Pretorius, C.J.; Henderson, Morné
A study, as part fulfilment of the MBA requirements, was undertaken to establish the critical success factors within the township establishment process through the Townplanning and Township Ordinance 15 of 1986. The study included a literature survey and evaluation of current practises to get a thorough understanding of the present requirements and procedures available to developers to do township establishment. This created a knowledge base from which a guideline was extracted to determine what activities are critical to the township establishment process in terms of the Township Ordinance. This was supported by personal interviews and questionnaires with experienced relevant role players i.e. developers, project managers, engineers and town planners to draw on their experiences with regard to the factors which they deem critical to the successful establishment of a township. The study found that there are four critical success factors that can have a detrimental impact on the profitability of a project. These factors include the quality of the professional team, preliminary investigations, geotechnical and environmental investigations. However, with the current skill shortages and lack of enthusiasm experienced within the local and external governmental bodies, obtaining statutory approval from these authorities seems to have a more significant impact on the timely transformation of land into residential, commercial or industrial stands. The findings of the study concluded that the crux of a successful township application lies in the pro-active management, integration and coordination off all activities within the scope of the professional team, local and external bodies: Obtaining statutory approval from local and external authorities is becoming increasingly difficult as local authorities lack the necessary expertise and enthusiasm to facilitate the application process. This places further emphasis on the pro-active management of all activities to optimize the township establishment process in order to minimize the risk of project delays, cost overruns and loss of income. It is therefore recommended that careful consideration supported by further research be conducted to identify the managerial activities and requirements to manage the township establishment process successfully within the present environment of an uncoordinated approach, acute shortage of skills, lack of knowledge and even corruption as a new simplified bill will not necessarily remove all the present short comings. This should include the structures required to develop the necessary capacities within the governmental authorities to facilitate the process. Copyright
Effective supply chain management in the furniture retail industry
(University of Pretoria, 2004-02-12) De Wit, P.; pretoriusj@coin.co.za; Pretorius, S J J
The thesis "Supply Chain Management in Furniture Retail Industry" tries to determine the current status of an integrated supply chain management in the furniture industry. The importance of the supply chain in the modern economy is discussed as well as the difficult economical conditions for furniture dealers, with consumers spending more on cellphones, the national lottery and transport. The importance of the supply chain as a vehicle to optimize shareholder funds is stressed. The literature study sets out to prove that as a result of the new paradigm that exists within the organisational system, that the supply chain system needs new ideas, thought process and structures to ensure that the full potential is realised. In order to maximise returns from the supply chain business process, re-engineering and design will have to take place. Organisations must be willing and able to radically re- think and re-design the existing process. A paradigm shift is absolutely essential to obtain the maximum returns for the organisation. Certain pre-designed supply chain models are discussed and advantages and disadvantages are analysed. The models are the, the Growth Model, the Supply Chain Management Systems Framework, the Semantic Model for Internet Supply Chain Collaboration and the Supply Chain Operations Model. The models differ in their approaches and is an effort to expose the reader to current best practises in integrated supply chain management. Thirdly, key factors for supply chain success are discussed. Research has shown that if organisations fail to meet certain basic requirements, any attempts at influencing or improving the process are doomed. Internal excellence is a basic requirement followed by external integration and excellence. Two other important issues are supplier relationships, and the critical importance of information technology in assisting organisations to obtain supremacy. The literature study ends with the discussion of a financial model for measuring the success of supply chain interventions. The final word in any change process is financial. If Economic Value is not added, then the process can be seen as a failure. Chapter Three discusses the methodology that was followed in conducting the research. Chapter four analysis the findings and make certain recommendations for the furniture industry in South Africa that will assist in improving supply chain management.
Risk management in the application of the systems development life cycle
(University of Pretoria, 2011-09-28) Leonard, A.C. (Awie); Dalton, L.; Cronje, Danie
The purpose of this report is to make a contribution to the South African Post Office Technology division. This is achieved by starting with a number of fundamental theoretical principles in related disciplines. Risk management is proposed to the management in an attempt to increase the success rate of information technology projects. Concentrating on methodology is not the only answer. Management should accept that risks are part of the development process and should be managed. Even though risks appear throughout the development life cycle, management should realise that the starting phase of any systems development life cycle is one of the most crucial events. There is a saying in Afrikaans: "Goed begin is half gewin". Meaning that if a project starts on a healthy basis, the rest should be clean sailing. This report should provide a useful starting point for further empirical analysis since it provides an overall theoretical framework for the systems development life cycle.
Liquidity premium and investment horizon : a research report on the influence of liquidity on the return and holding period of securities on the Johannesburg Stock Exchange
(University of Pretoria, 2008-10-02) Ward, Mike; vorsterc@ampath.co.za; Vorster, Barend Christiaan
Liquidity is a measure of the ease with which an asset can be converted into cash. In a perfectly liquid market, conversion is instantaneous and does not incur costs. Amihud and Mendelson (1986:224) proposed that illiquidity increases the expected return on an investment (liquidity premium) and simultaneously lengthens the holding period. These two effects are known respectively as the “spread-return relationship” and the “clientele effect” and have theoretical as well as practical implications. From a theoretical perspective it may help to explain the gap between the capital asset pricing model (which assumes that markets are perfectly liquid) and the associated empirical evidence; which thus far has been rather poor. From a practical perspective, liquidity will influence stakeholders’ decisions and market competitiveness (Amihud&Mendelson, 1991:61-64). The relevant stakeholders are governments, stock exchange regulators, corporations, investors and financial intermediaries. Emerging economies such as the South African economy typically have less liquid markets than the developed world. While this may be attractive for investors looking for higher returns, Amihud and Mendelson (1991:61) are of the opinion that liquid markets are more generally favoured by investors. Constantinides (1986:842-858), also proposes a model for liquidity, but found the liquidity premium to be of lesser importance than that proposed by Amihud and Mendelson (1986:223-231) but also supports the suggestion that investors will favour liquid markets. Although it is by no means a perfect proxy, a security’s bid-ask spread has been found to be an attractive and effective measure of liquidity. It has been found to correlate with beta as well as market capitalisation and several other variables commonly used in capital markets research. Because of this correlation the effect of the bid-ask spread cannot be studied in isolation when regression techniques are employed (Ramanathan, 1998:166). This is particularly problematic because empirical evidence for beta, which is arguably the most important independent variable in financial cross sectional relationships, is weak. Beta has to be estimated and so it is not clear if real markets do not support CAPM theory or if beta cannot be estimated with the required accuracy. All of the common independent variables used in empirical capital markets research are correlated to beta, and for this reason it cannot be established if these variables have a real effect or if they are simply serving as a proxy for the difference between the real and the estimated beta. Various strategies have been proposed to increase the accuracy of beta estimation and these are discussed in detail in this research. Successes with these strategies have been mixed. A second problem encountered in the empirical research base relating to the CAPM is that in the theory the cross-sectional relationship is between expected market return (which cannot be observed due to the vast number of real investments beyond those listed on exchanges) and beta, whereas empirical research makes use of actual return on a market proxy and beta. In order for the actual return to approach the expected return, empirical studies have to be conducted over extended periods. Accurate data for such periods are generally lacking and severe macro-economic changes such as wars, may also affect rational economic behaviour. It has to be kept in mind that the entire CAPM theory flows from the simple assumption that investors aim to achieve the highest return per unit of risk, and so a rejection of beta is a rejection of rational investor behaviour. Liquidity however, addresses one of the assumptions of CAPM, namely that markets are perfectly liquid; which obviously is not met in real markets and so CAPM models expanded for liquidity should be a reasonably fundamental starting point for all empirical capital markets research. The current empirical evidence for the spread-return relationship is inconclusive. While some researchers have found a significant relationship, others have questioned the ability of the methodology to differentiate a true relationship from the ‘proxy for errors in the estimated beta’ problem. Deductions (as explained in section 4.3) that have been made from the research of Marshall and Young (2003:176-186) in particular, provide strong evidence that at least some of the relationship is due to the ‘errors in estimated beta’ problem. Little empirical work has been done on the clientele effect. Atkins and Dyl (1997:318-321) found a significant relationship between holding period and bid-ask spread, although their approach was somewhat unorthodox in the sense that portfolio formation was not done and the effect of beta was not tested. This study tests empirically both the spread-return relationship and the clientele effect on the Johannesburg Stock Exchange over the period stretching from January 2002 to June 2007. The methodology of Fama and Macbeth (1973:614-617) as well as the aggregated beta of Dimson (1979:203-204) were mainly used, with some modifications as suggested by other researchers. With regard to the spread-return relationship, the findings of this study do not support theoretical expectations. This may be due to the short time period that was used as well as the difficulty in estimating beta. To the contrary, very significant evidence for the clientele effect was found, with little to no influence from market capitalisation and beta, which is as expected. Further investigation into the spread-return relationship is required. If a liquidity premium is not present, foreign investors will favour liquid developed markets above the JSE. This implies that efforts of exchange regulators and the government to decrease illiquidity will lead to foreign portfolio investment inflow into the South African economy.
A TOC based manufacturing system for Robor Tube
(University of Pretoria, 2010-08-04) Pretorius, Pieter J.; johang@robor.co.za; Grobler, Johannes Gerhardus
No abstract available.
An analytical accident investigation model for the South African mining industry
(University of Pretoria, 2007-06-25) Alberts, N.F.; Marx, Carl
Plese read the abstract in the section 00front of tis document
The Strategic Migration of Telephony into an Internet Protocol World : a South African Perspective
(University of Pretoria, 2006-09-13) Kruger, Cornelius Johannes; kepha@telkomsa.net; Adams, Pieter
Internet Protocol Telephony (IPT), also known as Voice over Internet Protocol (VoIP), has evolved from a niche technology to one that is adopted fairly well in developed countries. The aim of this research report was to determine whether IPT will also be a success in the Republic of South Africa, which is one of many developing countries. The technology was analysed and it was found that cost reduction, increased productivity and enhanced applications were the most valuable benefits the technology could offer. Particular interesting impediments of the technology were discovered and it was found that there existed both hard issues like security and quality problems, as well as softer issues like internal politics, that could hinder the global success of the technology. The adoption rate of South Africa was compared to that of industrial countries and it was found that South African organisations overall posed a wait-and-see attitude towards IPT. Various implementation models were discussed and it was found that a hybrid approach would be the most viable option for local organisations. The South African environment were analysed and it was discovered that the biggest obstacle for success in South Africa was the regulatory environment. But it was also found that the environment would soon change and that competitors, including Black Economic Empowerment companies, should use the opportunities available. Social factors like HIV/AIDS and theft as well as economic factors like the exchange rate could hamper the competitiveness of local companies using IPT. IPT technology can only be a success in South Africa if it is intensely supported by Government, implemented in the correct manner and adopted aggressively by the local market.
Advances in behavioural finance
(University of Pretoria, 2012-04-24) Lambrecht, H.A.; Du Plessis, Jaco J
A key question in behavioural finance is why prices in financial markets change. The field of behavioural finance evolved in an attempt to understand better and explain how cognitive errors and emotions influence investors' decision-making processes. Behavioural finance is the study of the psychological effects of market events on investors that affect finance decisions. It is not a new field of study, but more emphasis has been placed on this field of finance in the past two decades. Behavioural finance explores the irrational nature of investors' decisions. The primary objective of the research was to provide an understanding of the psychological impact of people on prices in financial markets. The secondary objectives are

to provide a brief history of behavioural finance;

to show that there are alternatives to the efficient markets theory; and

to demonstrate the impact of popular models on prices.
The report was compiled based on a literature study on the topic of behavioural finance. The purpose of the literature study was to provide sufficient information to meet the objectives of the study as set out above. The following sources were used:

published articles;

textbooks; and

the Internet.

The efficient market hypothesis and the CAPM are challenged by behavioural finance. Prices of speculative assets do not always reflect fundamental values. The perceptions of investors play an important role in the determination of prices. Hence, when there are market crashes on the equities markets, the contagion effect amongst investors should not be underestimated. It is shown in this report that portfolio insurance is an important contributing factor to the magnitude of any crash on equities markets. Dividends are an important determinant for the fundamental value of shares. This contrasts with the revenue model that is used to value new economy shares, such as Internet companies. It is also clear that investors expect to receive a dividend. In this report, various theories strongly suggest investors' preference for dividends. These include the self-control and prospect theories, regret-aversion and the clientele effect. Changes in dividends affect share prices. A decrease in the dividend of a company is a clear signal to investors that the share price is overvalued. Movements in share prices are therefore at least partially the result of changes in dividends. Investment strategies that can be followed by investors include the following:

It may help to acquire closed-end fund shares at the listing of a new fund. The research shows that initially closed-end funds trade at a premium of up to ten per cent, but within 180 days, the premium evaporates and the fund starts to trade at a discount.

The optimal strategy for sophisticated investors is a strategy that involves market timing with increased exposures to shares that have fallen, and decreased exposure to shares after they have risen in price.

Individual investors should follow a buy-and-hold strategy, as opposed to a trading strategy, as the cost of trading is excessive.

Arbitrageurs (professional investors) can earn higher than normal returns on markets that are excessively volatile. However, they need to be cautious, as they can also lose significant amounts of money when markets are volatile.

Careful consideration should be given to what shares to trade, as the cost of trading is expensive, as much as six per cent. Furthermore, it is important to have stop-loss limits in place and to sell shares once they breach the lower limit that has been set. The notion that losing shares in a portfolio will somehow turn into winning shares is, in most cases, incorrect. Copyright 2003, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Du Plessis, JJ 2003, Advances in behavioural finance, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-04202012-125738 / > F12/4/321/gm
An Alignment Strategy for SANDF Engineering Programmes
(University of Pretoria, 2003-06-19) Steyn, Peter G.; dblyth@intekom.co.za; Blyth, David Holborn
The key mission of a defence force is the ability to execute successful operations. If it is unable to do this, it is only a liability to the nation, and its right to exist ceases. The White Paper on defence requires the South African National Defence Force (SANDF) to be an affordable, small and technologically advanced force. The engineering technical family (ETF) is an integral part of this organisation and must contribute to its success. This study investigates how the ETF can enable the SANDF to be both successful and meet the requirements of the White Paper on defence. The success factors of a defence force are assumed to be based on the thirteen principles of war defined for the SANDF. This study proposes the ETF's contributions to the principles of war to increase the success of operations. The profiles of artisans, technicians, technologists and engineers, which are members of the ETF, are defined in terms of their technical and concomitant competences. This determines their roles. The ETF's competences are mapped to the requirements of the weapon systems during their life-cycle phases. This finding determines the mix of the ETF required over a typical weapon system's life. The strategy for aligning the ETF effort with the SANDF's core business is then developed. The ETF is divided into the technical services who ensure the readiness of weapon systems for the war-fighters, and the engineering services that change the baselines of the weapons systems to meet the changing demands of the the environment. Copyright 2001, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Blyth, DH 2001, An Alignment Strategy for SANDF Engineering Programmes , MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03202002-122729 / >

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