Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy

Twum-Darko, Michae (Ed.) Book — Published Version Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy Provided in Cooperation with: African Online Scientific Information Systems (AOSIS) Suggested Citation: Twum-Darko, Michae (Ed.) (2016) : Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, ISBN 978-1-928396-17-8, AOSIS Publishing, Durbanville, https://doi.org/10.4102/aosis.2016.icbmd10 This Version is available at: https://hdl.handle.net/10419/191565 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-sa/4.0/ Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy Hosted by: Journal of Business and Management Dynamics Cape Peninsula University of Technology 1 Head Office AOSIS (Pty) Ltd, Postnet Suite #110 Private Bag X19 Durbanville 7551 South Africa Tel: +27 21 975 2602 Fax: +27 21 975 4635 Email: [email protected] Website: http://www.aosis.co.za © Michael Twum-Darko 2016. Licensee: AOSIS (Pty) Ltd The moral rights of the authors have been asserted. First Edition published in 2016 Impression: 2 Indexed by Google Scholar. Some rights reserved. This is an open access publication. 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Enquiries outside the terms of the Creative Commons license should be sent to the Rights Department, AOSIS, at the above address or to [email protected] Published in South Africa by AOSIS (Pty) Ltd, 15 Oxford Street, Durbanville, Cape Town, 7550. Book Title: Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy ISBN: 978-1-928396-17-8 (pdf) ISBN: 978-1-928396-18-5 (e-book) DOI: http://www.dx.doi.org/10.4102/aosis.2016.icbmd10 How to cite this work Twum-Darko, M. (ed.), 2016, Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, AOSIS, Cape Town. https://doi. org/10.4102/aosis.2016.icbmd10 Printed and bound by PRINT ON DEMAND, South Africa Cover artwork by The publisher accepts no responsibility for any statement made or opinion expressed in this publication. Consequently, the publishers and copyright holder will not be liable for any loss or damage sustained by any reader as a result of his or her action upon any statement or opinion in this work. Links by third party websites are provided by AOSIS in good faith and for information only. AOSIS disclaims any responsibility for the materials contained in any third party website referenced in this work. Every effort has been made to protect the interest of copyright holders. Should any infringement have occurred inadvertently, the publisher apologises and undertakes to amend the omission in the event of a reprint. 2 http://www.icbmd.org Open Access iii Page iii of xii Index vii xii 3 9 17 27 36 49 54 62 71 80 Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy Notes on Contributors Foreword Part 1: Finance and Management Accelerating economic performance through foreign direct investment: Empirical evidence from Namibia Cyril Ogbokor Namibia University of Science and Technology, North-West University Dynamics obstructing public financial management, good governance and accountability in South Africa Nyaniso Mfusi Zonke Cape Peninsula University of Technology The relationship between leadership style, organisational climate, innovation and organisational performance: An investigation into research methodology used T. Sethibe, R. Steyn University of South Africa Personal branding: A systematic review of the research and design strategies used reported in journal articles relating to critical elements of personal branding Esme Mohammed, Renier Steyn University of South Africa An approach to Six Sigma implementation in Cape Town enterprises L.B. Nguenang Cape Peninsula University of Technology Part 2: Entrepreneurship and Economics Negative country of origin effect and customer perception of locally-made goods in Nigeria Joy E. Akahome, Mamorena Lucia Matsoso Federal University Otuoke, Bayelsa State, Cape Peninsula University of Technology Societal marketing concept and energy poverty eradication: An evidence from Nigeria Henry N. Ozuru, Joy E. Akahome University of Port-Harcourt, Federal University Otuoke, Bayelsa State Formal project management adoption readiness of emerging contractor firms in the Mangaung Metropolitan Municipality Julius Akaba, Patient Rambe, Edem Korku Agbobli Central University of Technology Part 3: Information Systems/Information Technology/Information Management Institutionalising knowledge sharing in an organisation: A case of a selected organisation in the Western Cape, South Africa Henri-Vincent Ndjave-Ndjoy, Michael Twum-Darko Cape Peninsula University of Technology Big data: Evaluation criteria for big data analytics technologies Regis Muchemwa, Andre de la Harpe Cape Peninsula University of Technology http://www.icbmd.org Open Access iv Page iv of xii Index 87 95 Factors affecting agritourism growth in rural communities of Lesotho Konosoang Mpiti, Andre de la Harpe Cape Peninsula University of Technology Effect of evaluation on SMMEs’ new technology decision-making processes Ayodeji Afolayan, Andre de la Harpe Cape Peninsula University of Technology Page v of xii Editorial Board http://www.icbmd.org Open Access v Editorial Board Conference Scientific Committee/Editorial Board Conference Chair Mr Willem Lotter, Cape Peninsula University of Technology, South Africa Editor-in-Chief Dr Michael Twum-Darko, Graduate School of Business Management, Faculty of Business and Management Sciences, Cape Peninsula University of Technology, South Africa Editor Ms Mamorena Lucia Matsoso, School of Accounting Sciences, Faculty of Business and Management Sciences, Cape Peninsula University of Technology, South Africa Board Members Dr Ephias Ruhode, Cape Peninsula University of Technology, South Africa Prof. Prakash Singh, Nelson Mandela University, South Africa Dr Ben-Piet Venter, United International College, China Dr Bingwen Yan, Cape Peninsula University of Technology, South Africa Dr Sibongiseni Tunzelana, Cape Peninsula University of Technology, South Africa Dr Chuks Eresia-Eke, University of Pretoria, South Africa Prof. Maurice Dassah, Cape Peninsula University of Technology, South Africa Prof. Stephen Hoskings, Cape Peninsula University of Technology, South Africa Dr Zoran Mitrovic, Cape Peninsula University of Technology, Mitrovic Development and Research Institute, South Africa Prof. Cyril Ayetuoma Ogbokor, Namibia University of Science and Technology, Namibia Dr Andre van der Bijl, Cape Peninsula University of Technology, South Africa Prof. Krishna Tummala, Kansas State University, United States Prof. Lorenda Naylor, University of Baltimore, United States Dr Noluthando Matsiliza, Cape Peninsula University of Technology, South Africa Prof. Rozenda Hendrickse, Cape Peninsula University of Technology, South Africa Dr Grafton Whyte, Namibia University of Science and Technology, Namibia, Namibia Dr Andre de la Harpe, Cape Peninsula University of Technology, South Africa Dr Henrie Benedict, Cape Peninsula University of Technology, South Africa Dr Peter Kamala, Cape Peninsula University of Technology, South Africa Prof. Andy Bytheway, Information Systems, University of the Western Cape, South Africa Prof. Anton du Toit, Monash University, South Africa Prof. Charl de Villiers, University of Waikato, United States Prof. Christian Enyinda, Canadian University of Dubai, United Arab Emirates Dr Bhekithemba Mngomezulu, University of KwaZulu-Natal, South Africa Dr Lebogang Merriam Seoketsa, Tshwane University of Technology, South Africa Dr Michael Twum-Darko, Graduate School of Business Management, Faculty of Business and Management Sciences, Cape Peninsula University of Technology, South Africa Prof. Collins Ngwakwe, University of Limpopo, South Africa Dr Michael Fakoya, University of Limpopo, South Africa Prof. Chux Iwu, Cape Peninsula University of Technology, South Africa Prof. Sunday Samson Babalola, University of Venda, South Africa Prof. Charles B.U. Uwakwe, University of Ibadan, Nigeria Dr Aliyu Olayemi Abdullateef, Swinburne University of Technology, Malaysia Mr Willem Lotter, Cape Peninsula University of Technology, South Africa Dr Lawrence Mpele Lekhanya, Durban University of Technology, South Africa Dr Shaban Ngole, Institute of Finance and Management, United Republic of Tanzania Dr Simon Radipere, University of South Africa, South Africa Dr Darlington Onojaefe, Cape Peninsula University of Technology, South Africa Dr Robertson Tengeh, Cape Peninsula University of Technology, South Africa Mr Stanley Fore, Cape Peninsula University of Technology, South Africa Prof. Charles Allen-Ile, University of the Western Cape, South Africa http://www.icbmd.org Open Access vi Page vi of xii Conference Declaration Conference Declaration Theme: Sustainable economies in the information economy Purpose: To share the quality academic papers presented at the International Conference on Business and Management Dynamics (ICBMD) held from 7 to 8 September 2016 at African Pride Crystal Hotel and Spa in Cape Town. As grey literature, the proceedings are the contributions made by researchers at the conference and are considered the written record of the work that was presented to fellow conference delegates. Methodology: The methodology used varies from researcher to researcher but are suitable for the studies conducted. Thus, on the one hand, studies that were subjective in nature used the interpretive paradigm, where the qualitative approach adopted made used of the interview method to collect data. On the other hand, studies that were objectively inclined adopted the positivist philosophy and used survey questionnaires to collect data. However, there were some academic papers which used mixed methodology because of the nature of the study. Whatever methodology used adhered to the ethos of the philosophies underpinning the methodology. Contribution made to scholarship: The articles come from individual researchers and each article in the proceedings is unique. Mostly, there is no general argument leading from one contribution to the next. However, it is interesting to note that in the area of economic performance it was evident that real exchange rate and net foreign direct investment contribute more towards innovations in economic growth. With regard to human capital development, papers presented evidence that there exists a definite need to explore the phenomenon of personal branding as limited scientific academic research has been done within the field of personal branding or on elements of the topic. Thus, the outcome argues that personal branding has an influence on leadership style which in turn impacts on organisational performance and related hygiene factors. Furthermore, it was demonstrated that current methods or strategies for enforcing institutionalisation of knowledge sharing within an organisation have not been successful, and, as such, new strategies are needed to reinforce efforts to nurture and invigorate the institutionalisation of knowledge sharing within an organisation. With regard to technology and big data impact on organisational performance, it was evident that system performance, memory consumption and CPU utilisation can be used as criteria to compare and evaluate big data technologies to improve organisational performance. Most of the articles’ contribution reemphasised technology education and training as a means of digitising business and improving effectiveness. Target audience: The target readership is academic researchers and business leaders who require access to the latest developments in the fields of economics, information management, business, education, development studies, social sciences and technology. It is also for policymakers and other stakeholders who need a better understanding of the impact of new developments on existing policies and regulations for their review or amendment. Peer Review Declaration The Publisher (AOSIS) certifies that the contributions selected from the International Conference on Business and Management Dynamics (ICBMD) published in these conference proceedings were evaluated in a two-step review process. An initial selection review process by the chief editor, followed by in-depth double-blind peer reviews by members of the ICBF under the auspices of the editor-in-chief Professors Michael Twum-Darko and Mamorena Matsoso (both affiliated with the Cape Peninsula University of Technology, South Africa). Three peer reviewers were selected due to their academic expertise in Business Management. Page vii of xii Notes on Contributors http://www.icbmd.org Open Access vii Notes on Contributors Cyril Ayetuoma Ogbokor Dr Cyril Ayetuoma Ogbokor is an associate professor of economics in the Faculty of Management Sciences, Namibia University of Science and Technology (NUST), Windhoek, Namibia. He is currently the acting Dean of the Faculty of Management Sciences at NUST and was also recently appointed as an extraordinary professor at North-West University, Vaal Triangle Campus in South Africa. His research areas are macroeconomics, development economics and international economics. He has written and published several peer-reviewed research articles and mimeographs in these areas by employing econometric methods. He serves as a reviewer for a number of scholarly journals. He is actively involved in community service, especially through electronic press media interviews. He is always enthusiastic about imparting his research knowledge to colleagues who are in need of such support. He has won the Faculty of Management Sciences (NUST) best researcher award four times since its inception. Nyaniso Mfusi Zonke Nyaniso Mfusi Zonke started studying at the Cape Peninsula University of Technology in 2009 as a part-time student. At that time he was a security guard and continued to study, although his personal circumstances were difficult and often caused him to turn up late for class. He is now working as a caretaker in the same institution, where he has been employed since 2010. Being employed has helped him financially, especially regarding his fees, and this has helped him to dedicate himself to his studies. He completed a diploma within the stipulated period, after that the BTech and completed the MTech within the period of two years. He is now registered for the DTech in Public Management at the same institution. The amazing part is that he is still working as a caretaker. Because of his studies and his work responsibilities, he was unable to present this paper at the 2015 Global Business and Technology Association (GBATA) Conference. Tebogo Sethibe Tebogo Sethibe is a DBL candidate and a part-time academic staff member at UNISA Graduate School of Business Leadership. He holds the following qualifications: BSc (Wits University), BSc Honours, MIT (University of Pretoria) and MBL (UNISA SBL). Tebogo’s research interests include leadership, strategic ICT management, innovation and entrepreneurship. He has published papers in peer-reviewed journals and has presented his work at local and international academic conferences. His academic achievements include the best presentation at the UNISA Research & Innovation Week. He is the recipient of the Best MBL Research Paper in 2013 and has represented UNISA at the interuniversity research project competition held at Savitribai Phule Pune University (SPPU), India. Renier Steyn Renier Steyn is a registered research psychologist and worked for 18 years as a psychologist in the public service. He is presently a professor of leadership and organisational behaviour at the UNISA Graduate School of Business Leadership. He obtained a PhD in industrial and personnel psychology (2002) as well as a DLitt & Phil in psychology (2006). He also holds a PhD in business administration (2014). He completed a course in leadership development at Harvard Business School (2015). He was a post-doctoral research fellow at the University of California (UCLA) as well as a member of the UNISA International Fellowship Programme. He is passionate about research supervision and has supervised more than 100 students in completing their dissertations. His most recent publications focus on gender issues and particularly gender differences. He has also done research on HRM practices and has a particular 2 http://www.icbmd.org Open Access Page 1 of 6 Original Research Author: Cyril Ogbokor1,2 Affiliations: 1Namibia University of Science and Technology, Windhoek, Namibia 2North-West University, Vanderbijlpark, South Africa Correspondence to: Cyril Ogbokor, cogbok[email protected]; ay[email protected] How to cite this article: Ogbokor, C., 2016, ‘Accelerating econcomic performance through foreing direct investment: Empirical evidence from Namibia’, in M. Twum-Darko (ed.), Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, pp. 3–8, AOSIS, Cape Town. https://doi. org/10.4102/aosis.2016. icbmd10.01 Copyright: © 2016. The Authors. Licensee: AOSIS. This work is licensed under the Creative Commons Attribution License. Introduction A burning empirical question facing development economists in today’s modern economies concerns the impact of foreign direct investment (FDI) on the economic performance of lessdeveloped countries (LDCs). Indeed, the empirical literature succinctly acknowledges the potential benefits arising from FDI on the part of the host country. Biswas (2002) points out the following as constituting the benefits of FDI on the part of host countries: It improves the competitiveness of the host countries’ economies in the international arena, as well as better access to global markets. Further, FDI improves the quality of products and processes across sectors. Besides these, profits generated by FDI contribute to corporate tax revenues of the host country. Employment opportunities are created, especially in sectors that are heavily driven by labour-intensive technologies. The agriculture sector is a case in point. In addition, FDI in manufacturing will, in most cases, boost the level of productivity in the local economy. Also, contributing to this discussion, the Bank of Namibia (2006) maintained that FDI allows the transfer of technology, particularly in the form of capital inputs, which cannot be achieved through financial investments or trade in goods and services. Upon the attainment of independence in 1990, the Namibia Investment Centre (NIC) was established under the Foreign Investment Act No. 27 of 1990 specifically to promote, attract, encourage and facilitate FDI to Namibia. Indeed, this investment centre has so far succeeded in attracting a number of FDIs to Namibia, especially through the export processing zones scheme of the country. Figure 1 depicts Namibia’s FDI inflows and outflows for the period 1990–2012, whilst Figure 2 reflects net FDI in Namibia for the same period. An examination of Figure 1 reveals that FDI outflows as a percentage of gross domestic product (GDP) were more stable compared to FDI inflows during the period under review. In particular, there was a rapid increase in FDI inflows between the periods 2000 and 2003. This was ascribed mainly to the increased borrowing on the part of subsidiaries from their parent companies abroad. The establishment of the Ramatex manufacturing company, as well as the Scorpion zinc mine, also contributed significantly to the rise in FDI inflows to Namibia between the years 2000 and 2003. In a dissimilar fashion, FDI outflows from Namibia between 1990 and 2012 in most cases Documented empirical studies in the literature on the impact of foreign capital, whether in the form of foreign direct investment or foreign portfolio investment on economic growth, are numerous. This article attempts to estimate the impact of foreign direct investment on economic growth using Namibia as a test centre. The Vector Autoregression method employed incorporates the following procedures: unit root tests, co-integration tests, estimation of the long-run equation and diagnostic checks for autocorrelation, heteroscedasticity, normality, causality tests as well as the forecast error variance decomposition analysis. Quarterly data covering 1990–2014 were employed. The study found cointegrating relationships amongst the four variables that were investigated. Moreover, no causality was found between net foreign direct investment and growth. Also, amongst the three explanatory variables used in the estimated model, real exchange rate and net foreign direct investment contributed more towards innovations in economic growth during the forecast horizon compared to the openness index. The study concludes by crafting possibilities for further inquiries concerning the issue under consideration. Accelerating economic performance through foreign direct investment: Empirical evidence from Namibia Note: This article was originally presented as a paper at the 2016 International Conference on Business and Management Dynamics (ICBMD). Read online: Scan this QR code with your smart phone or mobile device to read online. 3 Page 2 of 6 Original Research http://www.icbmd.org Open Access were negative. This was principally because investors generally preferred to reinvest their profits in Namibia instead of transferring them to other destinations during the period under review. Further, net FDI in Namibia during the period under consideration, as presented in Figure 2, displays many fluctuations. In particular, the years 1993, 1998, 2000, 2001, 2004, 2005, 2006 and 2008 recorded low net FDI flows, whilst the years 1990, 1991, 1992, 1994, 1995, 1996, 1997, 1999, 2000, 2003, 2007, 2009, including 2011 and 2012, registered high net FDI flows. A combination of developments on the domestic and international fronts contributed to these fluctuations in net FDI in Namibia during the period under scrutiny (Government of Namibia 2012). Despite the huge amount of FDI that Namibia has been receiving since its independence in March 1990, the exact impact of these capital flows on the country’s economic performance is still open to speculation. Therefore, this study sets to investigate whether FDI has made any impact on economic growth in Namibia for the period 1990 to 2012. The Vector Autoregression method employed incorporates the following procedures: unit root tests, co-integration tests, estimation of the long-run equation and diagnostic checks for autocorrelation, heteroscedasticity, normality, causality tests as well as the forecast error variance decomposition analysis-econometric time series met. This article unfolds as follows: the literature review presents the empirical literature, whilst ‘Data sources, model specification and Source: Author’s construct from Namibia Statistics Agency Bulletin 2013 FIGURE 2: Net foreign direct investment (FDI) in Namibia 1990−2012; Gross domestic product (GDP). 0 1 2 3 4 5 6 7 8 FDI (% of GDP) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YEARS Source: Author’s construct from Namibia Statistics Agency 2013 FIGURE 1: Foreign direct investment (FDI) inflows and outflows in Namibia 1990−2012; Gross domestic product (GDP). -1 0 1 2 3 4 5 6 7 8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 FDI (% of GDP) YEARS 4 Page 3 of 6 Original Research http://www.icbmd.org Open Access definition of variables, details data sources. The ‘Discussion of the econometric results’ concerns the analysis of econometric results, whilst the ‘Conclusion and policy implications’ concludes and directs on future research opportunities. Literature review Documented published empirical studies concerning the issue under investigation are wide ranging. A few such studies are reviewed in chronological order. Li and Liu (2005) assessed the relationship between FDI and economic growth through the application of co-integration procedures and found firstly a direct relationship between FDI and growth. Secondly, a negative relationship was observed when FDI was regressed over an existing technological gap between the source and host economy in the face of an increased sample size. Also, contributing to the existing literature, Blonigen and Wang (2005), using two samples drawn from developed and developing countries estimated the impact of FDI on growth. The authors found evidence of a positive connection between FDI flows and growth for developing countries, whilst the developed world presented a contrary result. This result is very surprising considering the widely acknowledged contribution of FDI in the industrialisation process of the developed countries. In a related study, Ayanwale (2007) empirically analysed the determinants of FDI using Nigeria as a laboratory test centre. The author combined both single and simultaneous equations to carry out the inquiry. The study found market size, infrastructural development and responsive macroeconomic policies as the main inducing factors of FDI to Nigeria. The author also found a positive connection between FDI and growth in Nigeria. The use of a three stage least squares (3SLS) technique would have potentially improved upon the results obtained by the study, at least from an econometric perspective. Vu and Noy (2009) examined the relationship between FDI and growth for selected developed countries within a sectoral framework. More elaborately, the authors attempted to ascertain whether each of the sectors identified for purposes of the study has a direct link with FDI. The study found conflicting results across countries and economic sectors. This result reinforces the outcome of the research work of Blonigen and Wang (2005). Karimi and Zulkornain (2009) estimated the causal relationship between FDI and growth in Malaysia by employing econometric time series approaches. The study found a positive and significant relationship between these two variables. Indeed, the study found that FDI could be used to explain the growth pattern that has taken place in the economy of Malaysia over time. Therefore, the need for Malaysia to pay particular attention to FDI cannot be overstressed. Ruxanda and Muraru (2010) investigated the possibility of an endogenous relationship between FDI and economic performance in the Romanian economy within the framework of a simultaneous equation model. The study found a bidirectional relationship between FDI and economic performance. This implies that FDI can lead to economic growth and vice versa. Chaitanya and Tamazian (2010) assessed the causal link between FDI and growth for 22 selected Latin American countries covering the period from 1980 to 2006. The authors made use of an econometric time series approach in probing into this relationship. The findings of the study indicate a positive relationship between these two variables as suggested by the correlation coefficient value. Correspondingly, the two variables failed to pass the statistical significance test, which could be interpreted to imply a weak link between FDI and growth in the various economies used for the study. Emin (2011) explored the possibility of a long-run relationship amongst economic growth, FDI, trade and inflation for Turkey, using macroeconomic time series datasets covering the period 1970–2006. The findings imply that FDI, trade surplus and inflation have both a positive and a statistical significant impact on economic growth. Agrawal and Khan (2011) analysed the impact of FDI on economic growth using five selected countries. The study made use of panel data for the period 1993–2009 and obtained the following findings: Firstly, the study found that FDI indeed promotes economic growth. Secondly, a 1% rise in FDI would lead to a 7% increase in economic growth across the five countries investigated. Farkas (2012) tested the FDI-growth nexus for selected developing countries for the period of 1975–2000 by employing co-integration methods. The result indicates that FDI had a significant, positive influence on economic growth over the period covered by the study. The study, however, maintained that the extent of the impact of FDI on economic growth would depend on the level of a country’s human capital development as well as developments occurring in its financial markets. The study also suggested that FDI should be seen as a complementary variable to other sources of growth in developing countries. Ray (2012) attempted to measure the relationship between FDI and economic growth for India for the period 1990–2011 by applying co-integration procedures. The findings suggest a bidirectional relationship between FDI and economic growth. There is a possibility that the study would have potentially obtained a superior result from an econometric point of view, if the datasets used were increased to cover a longer period of time. Iamsiraroj and Doucouliagos (2015) investigated the success of economic growth in attracting FDI for a number of countries cutting across developed and developing countries. 5 Page 4 of 6 Original Research http://www.icbmd.org Open Access The authors applied the meta-regression technique to 946 estimates from 140 empirical studies. The study attained the following results: Firstly, a robust positive association between growth and FDI was found. In particular, significantly larger correlations were established for single country case studies in relation to cross-country analysis. Furthermore, it also seems that growth is more associated with FDI in developing countries compared to developed countries. It is pertinent to note that, whilst most of the existing literature reviewed so far suggest a positive relationship between FDI and economic growth, a few of them did present conflicting, inconsistent, disputatious and acrimonious results. In this article, an attempt is made to investigate the FDI-growth nexus for Namibia by applying appropriate econometric time series methods. Data sources, model specification and definition of variables The following served as vital sources for the collation of macroeconomic data that were used in this study: The Bank of Namibia’s statistical publications, the Namibia Statistical Agency’s bulletins, the World Bank statistical publications as well as Namibia’s National Planning Commission bulletins. The annual macroeconomic data used in the study stretched from the period 1990–2012. All the data used in the estimation process were first converted into quarterly datasets and after that transformed into their respective natural logarithms so as to help with the process of determining the responsiveness of the dependent variable to changes in respect of the explanatory variable. Further, all the data used in the study were deflated using appropriate and relevant deflators in order to control the unwarranted effect of inflation. The Vector Autoregression method relied upon for purposes of estimating the impact of foreign direct investment on Namibia’s economic performance incorporates the following procedures: unit root tests, co-integration tests, estimation of the long-run equation and diagnostic checks for autocorrelation, heteroscedasticity, normality, causality tests as well as the forecast error variance decomposition analysis. Based on empirical literature, theoretical economic knowledge and the driving objective of the study, the following variables are included in the econometric model for purposes of estimation: Real gross domestic product (RGDP), which serves as the dependent variable, whilst real exchange rate (RER), openness index (OPI) and net foreign direct investment (NFDI) are used as the explanatory variables. In consideration of this, the empirical model to be estimated can be written in its general form as: RGDPt = (RERt, OPIt, NFDIt) [Eqn 1]. In specific terms, the equation [1] can be rewritten as: LnRGDPt = b0 + b1LnRERt + b2LnOPIt + b3LnNFDIt + U [Eqn 2]. Where: bo= numerical constant; b1, b2 and b3 = coefficients of the regressors; RGDPt = regressand; RERt, OPIt and NFDIt = regressors; t = time period; Ln = natural logarithm and U = disturbance term. RGDP is macroeconomic measure of the value of economic output in respect of a country for a given period adjusted for price changes. RER refers to the price, strength or value of a local currency in relation to another country’s currency adjusted for price changes, whilst NFDI is used to describe the difference between capital inflows and outflows. OPI refers to the sum of a country’s export and import of goods and services divided by its gross domestic product at a given time period. Discussion of econometric results The discussion pertaining to the estimated results followed the following pathway: Unit root tests, co-integration tests, estimation of the long-run equation and diagnostic checks for autocorrelation, heteroscedasticity, normality, causality tests as well as the forecast error variance decomposition analysis. Unit root tests The empirical estimation process regarding the study began with testing for unit roots. In this regard, the study employed the Augmented Dickey-Fuller (ADF) procedures in testing for unit roots. Table 1 summarises the unit root test results. Upon inspection of Table 1, it was observed that net foreign direct investment attained a stationary status in levels, whilst real gross domestic product, real exchange rates and the openness index only became stationary after first differencing. Co-integration tests The study resorted to the use of the Johansen co-integration test in determining the existence of long-run relationships amongst the variables in the model. The results are reported in Table 2. It is apparent from the results reported in Table 2 that the variables under investigation are cointegrated. Therefore, there is every reason to suspect the existence of a long-run relationship amongst the four variables under investigation. TABLE 1: Unit root tests: Augmented Dickey-Fuller (ADF) test. Variables ADF stat Remarks Levels First difference lnRGDP -0.671170 -3.621812aI (1) lnNFDI -4.404844aa -4.696419aa I (0) lnRER -2.848827 -2.854002aa I (1) lnOPI -1.668310 -3.053193aa I (1) Source: Author’s own work aImplies rejection of the null hypothesis at the 5% level. 6 Page 5 of 6 Original Research http://www.icbmd.org Open Access Estimating the long-run equation Afterwards, the study proceeded with the estimation of the long-run equation which yielded the following result: ∆InRGDP = -2.385002-0.051201∆InNFDI + 1.047525∆InOPI + 0.399553∆InRER [Eqn 3]. Equation 3 confirms a long-run relationship amongst the dependent and independent variables used in the study. Indeed, all the independent variables except one, namely, net foreign direct investments, were positively related to real gross domestic product. A further scrutiny of the estimated model suggests that a 1% increase in net foreign direct investment leads to approximately 0.05% decrease in economic growth. Similarly, a 1% increase in openness is also expected to lead to approximately 1% jump in economic growth. Furthermore, a 1% increase in the real exchange rate will result in an approximately 0.4% rise in economic growth. Diagnostic checks The study tested for serial correlation, conditional heteroscedasticity and normality. The results confirm the absence of serial correlation and heteroscedasticity. Besides, the model was also found to be normally distributed. The results are reported in Table 3. Causality tests Next, the study reports on the pairwise Granger-causality tests. In this context, the Granger-causality results are displayed in Table 4. Surprisingly, none of the pairs demonstrated causality relationships amongst themselves. This is so because all the computed probability values are consistently greater than 0.05. Therefore, the study accepted all the null hypotheses of no evidence of Granger-causality as a matter of econometric necessity. Forecast error variance decomposition analysis Next, the study reports on the forecast error variance decomposition results. The variance decomposition results are displayed in Table 5. Table 5 presents forecast error variance decompositions for each variable in the model over a 10-period forecast horizon. The results depict that consistently, economic growth itself accounted for most of the changes or innovations that occurred with respect to economic growth for the period under consideration. Indeed, the results show that in the first period the fluctuations in economic growth are 100% purely driven or explained by economic growth itself. This result conforms to theoretical expectations. Amongst the three explanatory variables used in the model, real exchange rate and net foreign direct investment TABLE 5: Forecast error variance decomposition. Period Variance decomposition of LOGRDGP LnRGDP LnRER LnOPI LnNFDI 1 100.00 0 0 0 2 99.28290 0.281495 0.071123 0.364485 3 97.46371 1.284279 0.136139 1.115870 4 94.65897 2.864612 0.193056 2.283358 5 91.33872 4.697347 0.239095 3.724842 6 88.09487 6.468595 0.264418 5.172114 7 85.38043 7.992371 0.264418 6.363508 8 83.39757 9.216015 0.241161 7.145258 9 82.12562 10.16893 0.208114 7.497334 10 81.41215 10.91085 0.176826 7.500174 Source: Author’s own work RGDP, real gross domestic product; RER, real exchange rate; OPI, openness index; NFDI, net foreign direct investment. Ln implies the respective natural log values of the macroeconomic data used for the study. When data is transformed into its respective natural logarithm, it becomes easy to determine how economic growth reacts to changes arising from that particular variable. TABLE 4: Pairwise Granger-causality test results. Null hypothesis Observation Probability LnRER does not Granger Cause LOGRGDP 87 0.2962 LnRGDP does not Granger Cause LOGRER 87 0.7481 LnNFDI does not Granger Cause LOGRGDP 87 0.1050 LnRGDP does not Granger Cause LOGNFDI 87 0.1163 LnOPI does not Granger Cause LOGRGDP 87 0.1617 LnRGDP does not Granger Cause LOGOPI 87 0.0672 LnNFDI does not Granger Cause LOGRER 87 0.1690 LnRER does not Granger Cause LOGNFDI 87 0.4594 LnOPI does not Granger Cause LOGRER 87 0.6875 LnRER does not Granger Cause LOGOPI 87 0.7862 LnOPI does not Granger Cause LOGNFDI 87 0.1567 LnNFDI does not Granger Cause LOGOPI 87 0.2916 Source: Author’s own work aMeans the rejection of the null hypothesis at the 5% level. TABLE 3: Diagnostic checks. Test Null hypothesis t-statistic Probability Lagrange multiplier No serial correlation 11.99615 0.7442 Jarque-Bera (JB) There is normality 7.245 0.083 White (Chi-square) No conditional heteroscedasticity 20.21451 0.075 Source: Author’s own work TABLE 2: Johansen co-integration test. Maximum Eigen test Trace test H0: rank = rHa: rank = Statistic 95% Critical value H0: rank = rHa: rank = Statistic 95% Critical value r = 0 r = 1 34.14090 27.58434 r = 0 r = 1 66.78759 47.85613 r ≤≤ 1 r = 2 23.29428 21.13162 r ≤ 1 r = 2 32.64669 29.79707 r ≤ 2 r = 3 9.287694 14.26460 r ≤ 2 r = 3 9.352412 15.49471 r ≤≤ 3 r = 4 0.064718 3.841466 r ≤ 3 r = 4 0.064718 3.841466 Source: Author’s own calculation HO refers to null hypothesis, whilst Ha refers to alternative hypothesis. The null hypothesis is always tested against the alternative hypothesis as a matter of econometric necessity. The moment HO is rejected, H1 is accepted. r implies cointegrating relations among the variables being tested. Both Maximum-Eigen test and Trace test shows two co-integrating equations at the 5% level. 7 Page 6 of 6 Original Research http://www.icbmd.org Open Access contributed more towards innovations in economic growth during the forecast horizon. The openness variable consistently made the weakest contribution towards explaining economic growth for the forecast period. Conclusion and policy implications The study sets out to investigate the possibility of a causal relationship between FDI and growth, using Namibia as a test hub. In this context, econometric time series methods and quarterly datasets covering 1990–2014 were employed to probe into this issue. The specific time series procedures that the study made use of incorporate the unit root tests, cointegration tests, estimation of the long-run equation and diagnostic checks for autocorrelation, heteroscedasticity, normality, causality tests as well as the forecast error variance decomposition analysis. The main findings arising from the study are presented as follows: Firstly, the study found cointegrating relationships amongst the four variables that were investigated. Secondly, the study found some degree of positive association between FDI and growth. Thirdly, no causality was found between net foreign direct investment and growth, an indication that other factors could be playing a pivotal role when it comes to the promotion of economic growth in Namibia. Fourthly, amongst the three explanatory variables used in the model, real exchange rate and net foreign direct investment contributed more towards innovations in economic growth during the forecast horizon compared to openness. Indeed, these findings are in agreement with the outcome of the studies of Chaitanya and Tamazian (2010) and Iamsiraroj and Doucouliagos (2015). The role of FDI in the promotion of growth in Namibia seems to have been exaggerated over the years in view of the findings of this study. One apparent implication arising from the findings of the study is the need for Namibia to explore other ways of catalysing its process of economic growth, whilst correspondingly exercising caution in the selection of foreign direct investments. Moreover, the study would like to point out that future research into the issue under examination should explore the following possibilities: Firstly, the number of explanatory variables used should be increased. Secondly, disaggregated data should be considered. In addition, sectoral impact analysis should be incorporated. Also, the need to employ other competing methods in future inquiries cannot be overstated. References Agrawal, G. & Khan, A.M., 2011, ‘Impact of FDI on GDP growth: A panel data study’, European Journal of Scientific Research 57(2), 257–264. Ayanwale, A.B., 2007, FDI and economic growth: Evidence from Nigeria, AERC Research, Paper 165, African Economic Research Consortium, Nairobi. Bank of Namibia’s Annual Symposium Report, 2006, The assessment of foreign direct investment versus domestic investment in Namibia, No 8, pp. 9–10. Biswas, R., 2002, ‘Determinants of foreign direct investment’, Review of Development Economics 6(3), 500–502. http://dx.doi.org/10.1111/1467-9361.00169 Blonigen, B. & Wang, M., 2005, ‘Inappropriate pooling of wealthy and poor countries in empirical FDI studies’, in T.H. Moran, E. Graham & M. Blomstrom (eds.), Does Foreign Direct Investment Promote Development? Institute of International Economics Press, Washington, DC. Chaitanya, V.K. & Tamazian, A., 2010, Growth effects of foreign direct investment and economic policy reforms in Latin America, MPRA Paper, No. 14133, viewed n.d., from https://mpra.ub.uni-muenchen.de/14133/ Emin, E.M., 2011, ‘Growth, foreign direct investment, tradefdit and inflation: An empirical application on Turkey’, Middle Eastern Finance and Economics, Euro Journals 9, 137–147. Farkas, B., 2012, Absorptive capacities and impact of FDI on economic growth, DIW Berlin German Institute for Economic Research, pp. 1–2, viewed n.d., from https://www.diw.de/documents/publikationen/73/diw_01.c.396264.de/dp1202. pdf Government of Namibia, 2012, Annual economic development report, pp. 87–131, John Meinert Printing, Windhoek. Iamsiraroj, S. & Doucouliagos, H., 2015, Does growth attractga FDI? pp. 1–5, viewed 19 March 2016, from http://www.economics-ejournal.org/economics/ journalarticles.pdf/2015-19 Karimi, M.S. & Zulkornain, Y., 2009, FDI and economic growtheg in Malaysia, Munich Personal RePEc Archive (MPRA), Paper 14999, viewed n.d., from https://mpra. ub.uni-muenchen.de/14999/ Li, X. & Liu, X., 2005, ‘Foreign direct investment and economic growth: An increasingly endogenous relationship’, World Development 33(3), 393–407. http://dx.doi. org/10.1016/j.worlddev.2004.11.001 Ray, S., 2012, ‘Impact of Foreign Direct Investment on Economic Growth in India: A cointegration analysis’, World Science Publisher 2(1), 187–201. Ruxanda, G. & Muraru, A., 2010, ‘FDI and economic growth: Evidence from simultaneous equation models’, Romanian Journal of Economic Forecasting 1, 45–57. Vu, T.B. & Noy, I., 2009, ‘Sectoral analysis of foreign direct investment and growth in the developed countries’, Journal of International Financial Markets Institutions Money 19, 402–413. http://dx.doi.org/10.1016/j.intfin.2008.04.002 8 http://www.icbmd.org Open Access Page 1 of 8 Original Research Read online: Scan this QR code with your smart phone or mobile device to read online. RETRACTED Author: Nyaniso M. Zonke1 Affiliation: 1Department of Public Management, Cape Peninsula University of Technology, South Africa Correspondence to: Nyaniso Zonke, zonk[email protected] How to cite this article: Zonke, N.M., 2016, ‘Dynamics obstructing public financial management, good governance and accountability in South Africa’, in M. Twum-Darko (ed.), Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, AOSIS, Cape Town. pp. 9–16, https://doi. org/10.4102/aosis.2016. icbmd10.02 Copyright: © 2016. The Authors. Licensee: AOSIS. This work is licensed under the Creative Commons Attribution License. Introduction South Africa has put in place a chain of policies, procedures and Acts to advance financial management in government departments, but the limited achievement of these strategies thus far is shown by the small number of clean, qualified audits from the Auditor General. Audits of many government departments demonstrate that the requirements of the Public Finance Management Act, Act 1 of 1999 (hereafter the PFMA), the legislative oversight bodies and the broader legal framework governing public finances have been partially or wholly disregarded. If the challenge of public financial management in the public sector is not addressed, it will impinge on government service delivery programmes, as sound financial management is essential for government programmes. Government departments require managers who can administer finances properly. One of the trials confronted by the South African public service is how to recruit, develop and retain competent leaders and managers. Public service managers have the important task of transforming the strategic vision, goals and objectives of government into operative service delivery. Given the responsibilities delegated to these managers and the demands made upon them, it is important to maintain a certain level of stability in the country’s public service leadership so that the momentum with which government’s programmes are delivered is not compromised by frequent changes in leadership at executive or administrative levels. Delivery of services, reduction of poverty, economic development and sustainability depend on availability and prudent management of financial resources. Sound, ethical financial management is crucial in the public sector: without public funds to ensure functioning and capital costs and without appropriate personnel, no public institution can render adequate services. This article analyses dynamics that obstruct public financial management, good governance and accountability in South Africa. Several dynamics hamper public financial management, good governance and accountability: the high turnover rate of accounting officers and parliamentary committees such as the Standing Committee on Public Accounts (SCOPA) or a lack of political will. Although South Africa has suitable oversight bodies, policies, procedures and Acts, the poor state of financial management in South African government departments is evident from the low number of objective qualified audits that meet the requirements of the Public Finance Management Act, Act 1 of 1999, the legislative oversight bodies and the wider legal framework governing public finances. In this article, a conceptual and/or literature review was employed to collect data. Data collection comprised in-depth focus groups, interviews and questionnaires. This article defined which dynamics obstructed public financial management, good governance and accountability in South Africa, using a triangulation and a literature review design. In this design, the researcher collected both types of data about a single phenomenon at the same time to compare and contrast different findings and to produce well-validated conclusions. This article looked at the high turnover rate of DGs and the implications for public finance. This study provides guidance to government on possible interventions available to counter the negative consequences of turnover. The findings show an unacceptably high turnover rate: adequate accountability is not provided by departments. Global trends suggest that South Africa is not unique in this turnover rate. As in other countries encountering similar difficulties, rigorous intervention is required to ensure that there is greater continuity of office. Dynamics obstructing public financial management, good governance and accountability in South Africa Read online: Scan this QR code with your smart phone or mobile device to read online. Note: This article was originally presented as a paper at the 2016 International Conference on Business and Management Dynamics (ICBMD). 9 Page 2 of 8 Original Research http://www.icbmd.org Open Access RETRACTED In understanding these problems in the public service, this article examines dynamics thwarting public financial management and accountability in South Africa. It examines the high turnover rate of Directors General and its bearing on public finance. The study seeks to provide guidance to government on possible interventions needed to reduce the negative effects of turnover on the stability of the public service. The current system of appointing and retaining Directors General is looked at: how specific interventions may assist in ensuring greater functionality in the overall systems. Legislative framework Since the adoption of the Constitution of the Republic of South Africa, 1996 (hereafter the Constitution), a number of milestones have been reached in public service financial management. One of these was the promulgation of the PFMA in 1999 to advance financial management and accountability. The PFMA aims to create a culture of performance by employing managers who are accountable for the utilisation of allocated resources in delivering services. More than a decade after the PFMA was promulgated, however, there are still many, if not an increasing number, of cases of poor financial management and other factors debilitating public financial management and accountability in South Africa. The PFMA, as part of the South African government’s budget and financial management reform agenda, represents a radical departure from the old Exchequer Act, Act 66 of 1975, which was concerned mainly with procedural accountability for finances (Erasmus 2008:60). The PFMA places great emphasis on accountability for results and locates budgeting and financial management within a performance management framework. The PFMA aims to create a culture of accountability, openness and transparency in public administration and advocates value for money in the procurement of goods and services in, and by, the public service (Madue 2007:306). Public institutions are judged by their ability to deliver goods and services and show accountability. The PFMA aims to improve accountability by requiring that managers take responsibility for their actions and achievements in exchange for greater managerial discretion over their inputs (Momiat 1999:57). Managers have to take responsibility for their performance. Madue and Mahwai (2008:360) claim that, since its introduction, the PFMA has improved the management of financial resources in the public sector and enforced the involvement of non-financial managers in the management of finances. These improvements demonstrate that financial management is not a secret art to be practised solely amongst financial officers and the Treasury. The number of cases of officials deliberately ignoring the PFMA on a daily basis, however, is on the rise. The PFMA, as a policy document, is well written but its implementation and enforcement are not satisfactory. Custodians of public financial management are the Directors General of various government departments who fulfil the role of accounting officers responsible and accountable for ensuring that departmental finances are managed according to legal requirements and principles of good governance. Accountability and requirement as governance principles Good governance is fundamental in the public sector. Overseas investors baulk at investing in a country that is not committed to good governance. Elements of good governance and adherence to governance principles must be understood in the public service; absence of financial probity can destroy a country’s economy and administrative system. Siswana (2007:181–182) points out that poor governance manifests itself when the relevant systems and structures do not function, or do not exist. Equally, good governance is found where those systems and structures function as intended. Menocal (2011:52) lists elements or criteria of good governance. The first criterion is participation, which is met in South Africa, where the voice of the public is important in decision-making. Public participation is required, according to Section 195(e) of the Constitution, which states that the public must participate in policy-making to ensure transparency. Transparency is crucial to effective governance in broadspectrum terms and particularly in finance. Transparency refers to the disclosure of information to the general public and clarity about government rules, regulations and decisions. Transparency in the public service ensures access to information, and the public right to information means public access to information and a degree of legal enforceability on the provision of information (Menocal 2011:52). For these reasons, laws that prevent access to information are contrary to public good (Asian Development Bank 2004). In South Africa, transparency is guaranteed by the Promotion of Access to Information Act, Act 2 of 2000, which promotes transparency by giving effect to the constitutional right of access to any information held by the states, and information held by any other person required for the exercise or protection of any rights. The South African Parliament, however, has passed a controversial Bill, the Protection of State Information Bill 2010, which is seen by many as contradictory to the Promotion of Access to Information Act 2002. The Bill has not yet been signed into law by the President. The rule of law is a significant criterion for good governance. The law guarantees that government officials are monitored correctly and that they apply rules correctly. The rule of law reinforces and delivers assistance in improving and strengthening the legal and judicial systems, which ensure effective application of rules in all parts of the country and at all levels of society. Effectiveness and efficiency, as part of governance principles, structures and processes should produce results that meet various needs: making the best possible use of resources. ‘Effectiveness refers to the extent to which structures and policies meet their intended objectives, whilst efficiency refers to minimising the resources used without compromising 10 Page 3 of 8 Original Research http://www.icbmd.org Open Access RETRACTED on quality’ (Lussier 2006:10). Policies and procedures can be effective only if they are able to achieve their intended objectives. Section 38(b) of the PFMA states that accounting officers are responsible for the effective, efficient, economic and transparent use of resources. Although effectiveness and efficiency are important, a strategic vision which keeps managers focused on their organisation’s’ goal is even more important. A strategic vision spells out long-term organisational aims and moulds organisational identity. A strategic vision points an organisation in a particular direction and charts a strategic path for it to follow (Thomson & Strickland 2011:6). It provides direction for organisations and legislative bodies. When officials are appointed to specific positions, they are answerable for observing and applying policies and procedures to achieve objectives. Taking charge entails acceptance of consequences arising from decisions, actions or inactions. Being responsible comprises the capacity to distinguish between right and wrong and to act accordingly (Cloete 1996:55). Section 45 of the PFMA outlines responsibilities of public office bearers and how they should be held accountable. Throughout the PFMA and accompanying Treasury regulations, as they appear in the Government Gazette, individuals are made responsible for ensuring the flow of funds and establishing systems. Checks and balances have been instituted to ensure that these individuals undertake their responsibilities correctly. The PFMA designates heads of departments (HoDs), heads of constitutional institutions and boards of public entities as accounting officers or accounting authorities. The PFMA grants the responsibility for the effective, efficient, economical and transparent use of resources in accordance with the Appropriation Act (the annual Act of Parliament that authorises the executive to spend against their allocations). Although officials can delegate responsibility to their subordinates, accountability cannot be delegated. Accountability is a concept in ethics (Day & Rudolf 1987:33): it is often used in conjunction with concepts such as responsibility, accountability, enforcement, blameworthiness, liability and other terms related to the expectation of accountgiving (Huddlestone 1992:32). Accountability, as defined by Pauw et al. (2009:119), is a key concept in modern management theory and practice. Similarly, Klein (in Borman & Kroukamp 2008:31) defines accountability as an obligation to account or to answer for the responsibility that has been conferred upon a person by an electorate. Accountability is a key element of good governance in determining characteristics of a modern democratic government (Cameron 2004:59). It requires political officebearers to act in the public interest. Gildenhuys (1999:35) points out that one of the traditional cornerstones of democracy is the fact that each political representative, and each public official, is subject to accountability. Accountability in the public sector is the mechanism whereby the public exercises its right to be given account of efficient, transparent utilisation of state funds in the process of achieving the mandate given to public representatives (Gildenhuys 1999:35). In order for the South African Parliament to safeguard accountability and responsibility, the principles mentioned must be adhered to. Parliament must guarantee that there is maximum citizen participation, that the rule of law is used to enforce compliance, and that those found deserting government policies at the expense of the public face appropriate disciplinary procedures. A strategic vision is important: it points the organisation in a particular direction. Visionary leadership is required in the South African Administration and the public service. Government departments are responsible for the policy implementation process and Parliament must hold them to account. Concept of good governance Good governance, in broad terms, signifies the exercise of political, economic and administrative authority to manage a nation’s affairs, which comprise the complex range of mechanisms, processes, relations and institutions through which citizens and groups articulate their interests, exercise rights and obligations or mediate differences. Good governance is not the sole prerogative of the states, but its functions can be assumed by, or delegated to, specified institutions and organisations in the private sector and the civil society. Such organisations operate in a legal or policy framework defined by the states having an autonomous existence and exercising political, economic and administrative authority. There is consensus amongst international development organisations that good governance is the basic prerequisite for sustainable economic development. In fact, capacity building for effective and sound governance is a primary goal of programmes for reducing poverty. Considering the diversity of attributes of physical and financial resources possessed by different developing countries and transitional economies, as well as their own perceptions of sustainable economic development, there are different approaches to the question of appropriate governance strategy for these categories. The expression ‘sustainable economic development’ has been defined in the Brundtland Commission Report (1987) as the meeting of the needs of the present generation without compromising the needs of future generations. The United Nations Development Programme (UNDP) regards human development as a process of enlarging choices for all people in society, and the UNDP gives the highest priority to poverty reduction, productive employment, social integration and environmental regeneration. The concept of good governance in the context of sustainable economic development comprises efficient government, effective civil society and a successful private sector. Good governance has many characteristics. Good governance systems are participatory in that the members of governance institutions have a voice in the decision-making process 11 Page 2 of 10 Original Research http://www.icbmd.org Open Access will ultimately lead to improved organisational performance, and, because of poor understanding of these strategic variables, organisations may fail to achieve sustainable competitive advantage. The debate on the nature of the aforementioned relationship is still in its early stages, and the methods appropriate to the empirical investigation of this relationship are not clearly defined. In this article, the aim is to report on and critically evaluate the methods used to study the relationship between leadership style, organisational climate, innovation and organisational performance. This is done against the backdrop of standard or traditional methods used in business research. This report will thus inform future researchers about standard practices in such research as well as highlighting the possible pitfalls. Importance of the research The importance of understanding the relationship between leadership style, organisational climate, innovation and organisational performance was introduced above. Although some research has been conducted in this field, the findings were inconclusive, with some studies (Likar, Kopac & Fatur 2014; UI Hassan et al. 2013; Yang et al. 2014) showing a positive relationship, whilst others (Forsman & Temel 2011; Kannebley, Sekkel & Araújo 2008; Koellinger 2008; Martin, Baby & Banga 2012) showed no relationship. Rubera and Kirca (2012) point out a number of possible reasons for these unconvincing findings, which include, inter alia, the methodology used to conduct the study. It is therefore important for the advancement of the field to adopt research strategies based on previous research. This article aims to provide a structure for how research in this area should be undertaken by future researchers to draw on and to provide information about the challenges identified by earlier researchers. Literature review The literature review defines the four constructs that are the focus of this article and delineates the manner in which reporting on research methods is done. This is followed by a brief description of what the standard research method structure entails. Leadership style Leadership entails mastering three critical management skills that should be practised consciously, namely, (1) strategic thinking skills, (2) innovative thinking skills and (3) situation management skills (Wilkins & Carolin 2013). The three fundamental skills may require leaders to adopt different leadership styles, depending on the circumstances. For instance, in transactional leadership theory, compensation is regarded as a motivating factor for employees (Golla & Johnson 2013; Yukl 2010) and revolves around an exchange involving the trade of goods or services. In contrast, the influence of transformational leaders does not stem from exchange benefits, but from the logical result of a complex cluster of behaviours and techniques (Swanepoel et al. 2003). At the heart of transformational leadership theory is the basic belief that a leader needs to articulate a clearly defined vision to transform the organisation and energise followers to adopt a new paradigm by appealing to issues that are fundamental to their existence (Eustace & Martins 2014). Research has demonstrated that transactional leadership is suitable when the goal is to instil a culture of innovation (Golla & Johnson 2013), whereas transformational leadership is more suitable when the goal is to articulate and communicate a coherent vision and strategy to the organisation (Wilkins & Carolin 2013; Yang et al. 2014). Organisational climate According to Pirola-Merlo et al. (2002), organisational climate refers to a set of norms, attitudes and expectations that individuals perceive to operate in a particular social context. As such, organisational climate can be defined as a set of characteristics of an organisation’s internal environment that are influenced by its policies and practices (Zhang & Begley 2011). It is in this context that Chang, Chuang and Bennington (2011) argue that organisational climate conveys a message about the life within the organisation and serves to uphold and perpetuate a particular view of reality shared by members of the organisation. In other words, organisational climate is constituted by recurrent patterns of behaviour, attitudes and feelings that characterise life in the organisation (Björkdahl & Börjesson 2011). Innovation The term ‘innovation’ is defined within the organisational context as the ‘management of all the activities involved in the process of idea generation, technology development, manufacturing and marketing of the new or improved product, process or equipment’ (Trott 2012:23). Innovation can be incremental or radical. Incremental innovation is based on extending existing technologies and improving features of existing products, services and processes, whereas radical innovation is about creating dramatic change in technology, processes, products or services and ultimately transforming the existing markets and industry, or giving rise to new markets (Miller, Miller & Dismukes 2005). Radical innovations are generally considered to be risky as they require time, financial resources and expensive knowledge (Cainelli, Evangelista & Savona 2006). It is in this context that Jenssen and Åsheim (2010) emphasise the importance of distinguishing between different typologies of innovation because this helps to identify the antecedents of innovation. Organisational performance The concept of organisational performance is central to the understanding of organisational success and the elements responsible for that variation (Hoopes, Hadsen & Walker 2003). It is important to note that scholars who embark on empirical studies often employ a number of different measures to evaluate financial performance (Berger & Bonaccorsi di Patti 2006), whilst others go further and include 18 Page 3 of 10 Original Research http://www.icbmd.org Open Access non-financial performance, such as job satisfaction, productivity and market share (Battor & Battor 2010; Huang et al. 2012). To assess financial performance most scholars prefer to use accounting measures such as return on assets (ROA), return on equity (ROE), return on investment (ROI), profitability and sales growth (Cho & Pucik 2005). Similarly, Tobin’s Q is considered by many scholars as the de facto standard with regard to market-related measures (Karanja 2011). The combination of both financial and non-financial measures is viewed by many as the most effective measure of organisational performance. Nonetheless, the exclusive use of either financial or non-financial measures of organisational performance is not implicitly wrong, provided that researchers clearly define which aspects of organisational performance they intend to study (Gentry & Shen 2010). In this study, organisational performance refers to both financial and nonfinancial performance. Research method structure An analysis of the literature on the structuring of a method section of an academic article, reveals repeated inclusion of the following elements, which include subsections such as the research paradigm, research design, sampling, measurements, validity and reliability, data collection, data analysis and interpretation, limitations and ethical considerations (APA 2011; Fabio et al. 2012; Hofstee 2011; Leedy & Ormrod 2005; Mouton 2013; Saunders 2012). The remainder of the literature review is dedicated to explaining these subsections and should guide authors on what should be reported on in a methodology section. Research paradigm A paradigm refers to the entire constellation of beliefs, values and techniques shared by members of a given community (Kuhn 1970). At an abstract level, there are two major concerns when thinking about research philosophy or paradigm, namely, ontology and epistemology. Ontology is concerned with the nature of reality (Saunders 2012). In other words, researchers take a position regarding their perceptions of how things are and how things work (Scotland 2012). Conversely, epistemology concerns what constitutes acceptable knowledge in the field of study (Saunders 2012), in other words, what it means to know (Scotland 2012). As a result, every paradigm is based on its own ontological and epistemological assumptions. Positivism is a common stance in business research and many textbooks in the field refer to this paradigm (Mouton 2013; Olivier 2004; Saunders 2012). According to Creswell (2009), positivists attempt to identify causes which influence outcomes. The ontological position of positivism is the one that assumes that objects have an existence independently of the researcher (Cohen, Manion & Morrison 2007). Furthermore, the positivist epistemology suggests that meaning solely resides in objects, rather than the conscience of the researcher, with the intension of acquiring the meaning (Scotland 2012). It could be expected that a well-written article makes some kind of declaration on the research paradigm. Research design Typically, the research design section begins with a general paragraph describing the study design (Azevedo et al. 2011). According to Hofstee (2011), the research design section is where the overall approach to testing the research question or statement is discussed. There, typology of the research design can be classified into two categories, namely, empirical studies and non-empirical studies (Mouton 2013). Empirical studies derive new knowledge from data, whereas nonempirical studies use the literature review, modelling and the philosophical and conceptual analysis to develop new knowledge. Empirical studies can be qualitative, quantitative or mixed. Non-empirical studies are generally qualitative in nature. According to Marais (2012), qualitative research approaches the phenomena from the perspective of the subject in order to understand the phenomena in their context. In contrast, quantitative research approaches the phenomena from the perspective of the outsider, with the aim to explain and predict the phenomena under study in isolation (Marais 2012). Providing a concise declaration on the design of the research would enable the replication of the conducted research and building on exciting knowledge. Sampling A sample is part of something larger, called a population or universe (Diamantopoulos & Schlegelmilch 2000). Sampling procedure describes the procedure for selecting the participants or sample from the population (APA 2011). When selecting a sample from the target population, probabilistic sampling methods (random) are preferred as they guarantee representativeness of the sample (Azevedo et al. 2011). On the other hand, although non-probabilistic sampling methods such as convenient and conservative systematic sampling do not guarantee representativeness of the sample, they are more common, and they do not necessarily prevent researchers from validly answering the research question (Azevedo et al. 2011). Having knowledge about the sampling followed in previous research projects could guide prospective researchers to select appropriate sample sizes and inform them of what populations are commonly targeted in a particular field of study. Instruments measurements, validity and reliability The process of measurement can be regarded as the assignment of symbols to characteristics of persons, objects or states of events according to certain rules (Diamantopoulos & Schlegelmilch 2000). Researchers can therefore either adopt existing instruments or develop their own instruments. To allow replication of the study, the assessment instruments (measurements) should be described in clear detail. In the same vein, the validity and the reliability of the measurements used in the study should also be described in detail (Fabio et al. 2012). Validity refers to how well the research model investigates (1) what it intends to investigate and (2) to what extent the researcher gains access to the informant’s knowledge and meaning. On the other hand, reliability refers to the consistency and stability of the measurement process (Lee 1999). In other words, reliability 19 Page 4 of 10 Original Research http://www.icbmd.org Open Access is concerned with researchers clearly demonstrating that they have not invented or misrepresented the data collected, and the research can be repeated under the same conditions with approximately the same outcomes (Hofstee 2011). Being in possession of knowledge related to the instruments used by previous researchers would enable researchers to select the most appropriate instruments for their own use and allow them to build on the base set provided by previous researchers. Data analysis and interpretation Data analysis and interpretation can be viewed as three concurrent flows of activity, namely, (1) data reduction, (2) data display and (3) the conclusion deducted from the data (Miles & Huberman 1994). According to Hofstee (2011), if the research follows a quantitative design, then the statistical analysis techniques must be described in this section. For instance, when reporting inferential statistics, test values, degrees of freedom, probability values and effect sizes should be reported (Fabio et al. 2012). Most importantly, for inferential statistics, the decision techniques on the interpretation of the results should be determined prior to the data analysis (Diamantopoulos & Schlegelmilch 2000). In fact, Diamantopoulos and Schlegelmilch (2000) go even further and argue that it is not legitimate to change the level of significance retrospectively (i.e. from 0.05 to 0.01), given that the results of the data change or might change based on the significance level. If the research is qualitative in nature, equally, the researcher should explain how the data are analysed (Hofstee 2011). In qualitative research, the researcher’s own assumptions, bias and subjectivity should be stated upfront (Fabio et al. 2012). Ultimately, the primary aim of the analysis is to understand the various constitutive elements of one’s data through the inspection of the relationship between concepts, constructs or variables, whereas the interpretation involves the synthesis of data into larger coherent wholes (Mouton 2013). Should prospective researchers examine the work of other researchers in the field, their customs regarding analytical techniques as well as the decision rules they apply will become apparent. This will allow for comparison between studies and building a solid base of knowledge on the topic. Limitations The primary purpose of research is to discover the truth (Saunders 2012). However, all methods have some limitations (Hofstee 2011). Therefore, it is advisable to acknowledge the limitations of the research and provide explanations on why the results still validly answer the research question (APA 2011). In fact, according to Diamantopoulos and Schlegelmilch (2000) it is advantageous to be open and frank about limitations inherent to the research study rather than leaving them to the reader to discover. This kind of knowledge is of particular value to prospective researchers as pitfalls and suggestions for improving research are presented here. Ethical considerations Whenever human beings or other creatures with a potential to think, feel and experience physical or psychological distress are the focus of investigation, the ethical implications of what the researcher intends doing must be observed very closely (Leedy & Ormrod 2005). As such, this section is intended to describe in detail what the researcher has done to ensure that the study adheres to ethical guidelines (Hofstee 2011). Research ethics, however, go beyond the protection of human subjects and include elements such as deception in research, permission to use copyrighted material included in the research and permission to use unpublished instruments. It also includes honesty with professional colleagues, such as reporting the findings in a complete and honest fashion without misrepresenting the data or intentionally misleading others about the nature of the findings (APA 2011; Leedy & Ormrod 2005). An analysis of the ethical considerations of those who have published their research can guide aspiring researchers to do their investigations and reports in line with academic standards. The aforementioned structure should allow researchers to provide essential information on how to make sound and justifiable judgements about the validity of the results and conclusions derived from the study (Azevedo et al. 2011). Method This study adopted two generic steps of the systematic literature review methodology, namely (1) a search of the literature and (2) selection of relevant studies by applying inclusion and exclusion criteria. The primary aims of this review were to analyse the methods used in prior studies to investigate the relationship between leadership style, organisational climate, innovation and organisational performance, and to identify emergent themes based on the list of subsections presented in the literature review. The keywords ‘leadership’ (leaders*) or ‘climate’ (climate*) were used in conjunction with ‘innovation’ (innov*; creative*) and ‘performance’ (perform*; finance*; outp*; return*) in the search for published articles. The options (criteria) selected for the search were full-text, peer-reviewed and scholarly journals. Two major academic databases, namely EBSCOhost and ProQuest, were searched. For articles to be included in the analysis, they needed to include all four variables, or leadership with both innovation and organisational performance, or climate with both innovation and organisational performance. On EBSCOhost, 21 databases (Table 1 in Appendix 1) were searched and 17 articles were retrieved. On ProQuest, 1010 databases (Table 2 in Appendix 1) were searched and 14 articles were retrieved. In both cases, the search was not limited to a specific time period. In total, 31 articles were retrieved from both EBSCOhost and ProQuest. However, 7 duplicate articles were identified, resulting in 24 distinct articles retrieved from the search. The abstracts of articles 20 Page 5 of 10 Original Research http://www.icbmd.org Open Access that met the first level of inclusion criteria were analysed in order to identify those studies that treat leadership style and/or organisational climate as well as innovation and organisational performance as variables. Validity was addressed by applying an extensive and exhaustive search strategy and applying appropriate selection criteria for the identification of articles. To enhance the reliability of the search, both the author and co-author were involved in decision-making regarding the inclusion and exclusion criteria. In total 14 articles, as presented in Table 1, met these criteria. The fact that only 14 articles met the inclusion criteria suggests that few studies are designed to trace the effect of innovation on organisational performance by examining the influence of leadership style and/or organisational climate. Interest in this topic seems to be of a contemporary matter, as only 2 of the 14 articles identified were older than 10 years and 7 were published less than 5 years ago. Findings One study (Article 8) included all four variables: leadership style, organisational climate, innovation and organisational performance. The rest of the studies included only three variables. Seven studies (Articles 1, 4, 5, 6, 10, 12 and 13) included leadership style, innovation and organisational performance, whereas six studies (Articles 2, 3, 7, 9, 11 and 14) included organisational climate, innovation and organisational performance. For the sake of clarity, a summary of the findings is presented in Appendix 1, Table 3. By academic standards, the number of articles that met the inclusion criteria seems to be very small, given that a search with ‘leadership’ and ‘innovation’ delivered 377 articles from EBSCOhost and 161 articles from ProQuest. Furthermore, when the keywords ‘innovation’ and ‘performance’ were used, 843 articles were retrieved from EBSCOhost and 361 articles from ProQuest. When the keywords ‘climate’ and ‘innovation’ were used, 255 articles were retrieved from EBSCOhost and 54 articles from ProQuest. It is thus not that the variables do not exist in the academic domain, but the particular grouping of the variables used for this study is limited. The articles that met the inclusion criteria were analysed according to the methodology subsections identified in the literature review (see ‘Research method structure’). The findings are presented below. TABLE 1: Articles that investigate leadership styles, organisational climate, innovation and organisational performance. Article Year Author (s) Title Journal 1 1993 Howell & Avolio Transformational leadership, transactional leadership, locus of control and support for innovation: Key predictors of consolidated-business-unit performance Journal of Applied Psychology 2 2003 Baer & Frese Innovation is not enough: Climates for initiative and psychological safety, process, innovations, and firm performance Journal of Organisational Behavior 3 2008 Crespell & Hansen Work climate, innovativeness, and firm performance in the US forest sector: In search of a conceptual framework Canadian Journal of Forest Research 4 2008 García-Morales, Lloréns-Montes & Verdú-Jove The effects of transformational leadership on organisational performance through knowledge and innovation British Journal of Management 5 2008 García-Morales, Matias-Reche & HurtadoTorres Influence of transformational leadership on organisational innovation and performance depending on the level of organisational learning in the pharmaceutical sector Journal of Organisational Change Management 6 2008 Matzler et al. The relationship between transformational leadership, product innovation and performance in SMEs Journal of Small Business and Entrepreneurship 7 2008 Panuwatwanich, Steward & Mohamed The role of climate for innovation in enhancing business performance Engineering Construction and Architectural Management 8 2010 Charbonnier-Voirin, EI Akremi & Vandenberghe A multilevel model for transformational leadership and adaptive performance and the moderating role of climate for innovation Group and Organisation Management 9 2012 Nybakk & Jenssen Innovation strategy, working climate, and financial performance in traditional manufacturing firms: An empirical analysis International Journal of Innovation Management 10 2012 Overstreet et al. Leadership style and organisational innovativeness drive motor carriers toward sustained performance The International Journal of Logistics Management 11 2013 Choi, Moon & Ko An organisation’s ethical climate, innovation, and performance effects of support for innovation and performance evaluation Management Decision 12 2013 Golla & Johnson The relationship between transformational and transactional leadership styles and innovation commitment and output at commercial software companies The Business Review, Cambridge 13 2013 Noruzy et al. Relations between transformational leadership, organisational learning, knowledge management, organisational innovation, and organisational performance: An empirical investigation of manufacturing firms International Journal of Advanced Technology 14 2013 Nusair The role of climate for innovation in job performance: Empirical evidence from commercial banks in Jordan International Journal of Business and Social Science Source: Authors’ own work 21 Page 6 of 10 Original Research http://www.icbmd.org Open Access Research paradigm None of the 14 articles examined explicitly report on the research paradigm adopted for the study. The general theme that emerges from the articles is that leadership style and organisational climate somehow influence innovation in the organisation, and, in turn, innovativeness leads to superior organisational performance. Therefore, it may be argued that the only paradigm that fits these studies is the epistemology of the positivist paradigm. Research design All 14 articles report on empirical studies. Eleven studies (Articles 2, 3, 6, 7, 8, 9, 10, 11, 12, 13 and 14) adopted a pure quantitative research design approach, whereas the other 3 studies (Articles 1, 4 and 5) adopted a mixed method (qualitative and quantitative) research design approach. For the mixed method studies, researchers used interviews to gather information from key informants to develop constructs for survey questionnaires that were later used to gather quantitative data. Sampling Of the 14 articles analysed, 5 (Articles 4, 5, 10, 13 and 14) explicitly mention that random sampling was used to select the organisations investigated. Four studies (Articles 2, 3, 8 and 11) used purposive sampling and in Article 7 convenience sampling was used. In Articles 1 and 6 the sampling methods were not clearly specified. Articles 9 and 12 used the entire population. The sample size used in the articles is presented in Table 2, divided into three main aspects, namely, the number of companies used in the sample, the target sample and the final sample used Validity and reliability Twelve (Articles 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 13) of the 14 studies were tested for validity and reliability of the measures they used, whereas the other 2 studies (Articles 12 and 14) reused the existing questionnaires that were previously tested for reliability and validity. It was interesting to note that the debate around what an appropriate level of Cronbach’s Alpha should be is ongoing, although Cronbach’s Alpha of greater than 0.6 was acceptable. To test reliability, the majority of authors (Articles 1, 2, 3, 4, 5, 6, 7, 8, 11 and 13) preferred to use the minimum cut-off of 0.7 as acceptable. With regard to validity, authors reported on discriminant validity (Articles 1, 2, 4, 5, 6, 8, 9 and 10), convergent validity (Articles 3, 4, 5, 7, 9 and 10), construct validity (Article A2) and face validity (Article 10). Other authors (Articles 12 and 13) conducted a pilot study to test the validity of the instruments used. Article 14 did not report on the validity of the instruments used. Measurements The techniques used to measure leadership style, organisational climate, innovation and organisational performance in the articles that met the inclusion criteria, are presented below. Leadership style To measure leadership style the authors of three Articles (4, 5 and 13) used a scale developed by Podsakoff, MacKenzie and Bommer (1996). Articles 1 and 12 used a MLQ (Multifactor Leadership Questionnaire) developed by Bass and Avolio (1990). In Article 1 the original version of the MLQ was used, whereas in Article 12 a later version of the MLQ was used (Avolio & Bass 2004). In Article 6 the scale developed by Wang and Ahmed (2004) was used, and in Article 8 the scale developed by Podsakoff et al. (1990) was used. In Article 10 the scale developed by Carless, Wearing and Mann (2000) was used. In other studies (Articles 2, 3, 7, 9, 11 and 14), leadership style was not included as part of the constructs or variables under investigation. Organisational climate Five studies (Articles 2, 3, 9, 11 and 14) adopted existing instruments. Articles 3 and 9 used the scale developed by Amabile et al. (1996), Article 2 used the scale developed by Frese et al. (1997), Article 11 adopted the scale developed by Victor and Cullen (1988), whilst Article 14 opted for the scale developed by Panuwatwanich et al. (2008). The authors of Articles 7 and 8 developed their own instrument to measure organisational climate. Other studies (Articles 1, 4, 5, 6, 10, 12 and 13) did not include organisational climate as a construct or as a variable. Innovation Two of the 14 studies (Articles 4 and 13) used the scale developed by Miller and Friesen (1983) to measure innovation. Article 1 used the scale developed by Siegel and Kaemmerer (1978), Article 3 used the scale developed by Knowles, Hansen and Shook (2008), Article 6 used the scale developed by Wang and Ahmed (2004) and Article 9 used the instrument developed by Crespell and Hansen (2008). The studies in Articles 10 and 11 used the scale developed by Srinivasan, Lilien and Rangaswamy (2002) and Delery and Doty (1996), respectively. Interestingly, in five studies TABLE 2: Sample size summary. Article No. of companies Sample Target Final 1 1 78 78 2 47 269 165 3 1453 1453 219 4N/A 900 408 5 164 164 164 6 97 300 97 7 94 520 94 8 1 464 120 9 36 492 241 10 7 500 158 11 1 36 285 27 577 12 30 104 58 13 106 380 280 14 5 200 200 Source: Authors’ own work 22 Page 7 of 10 Original Research http://www.icbmd.org Open Access (Articles 2, 5, 7, 8 and 12) authors opted to develop their own custom measures of innovation. Organisational performance Four of the 14 studies (Articles 6, 10, 13 and 14) used existing scales. In Article 13 the scale developed by Cho, Ozment and Sink (2008) was used, and in Article 6 the scale developed by Churchill and Peters (1984) was used. In Article 10 the authors opted to use a measure of operational performance (developed by Zelbst, Green & Sower 2010) as well as a measure of financial performance (developed by Inman et al. 2011). In Article 14 the tool suggested by Pushpakumari (2008) was used, whilst other authors (Articles 1, 2, 3, 4, 5, 7, 8, 9, 11 and 12) developed their own measures of organisational performance. Although the majority of authors (Articles 1, 2, 3, 4, 7, 9, 10, 11 and 12) used financial indicators to assess organisational performance, almost all studies used subjective measures (self-reporting) to assess financial performance. In two studies, namely in Articles 10 and 11, the researchers opted to use both subjective and objective measures. Two studies (Articles 8 and 14) used non-financial measures as a sole measure whereas three studies (Articles 5, 6 and 13) opted to assess both financial and non-financial measures. Data analysis and interpretation The most common analysis technique used is Structural Equation Modelling (SEM). Six of the 14 studies (Articles 3, 6, 7, 9, 10 and 13) analysed used SEM, followed by the Partial Least Squares (PLS) multivariate analysis technique (Articles 1 and 11), confirmatory factor analysis (Articles 8 and 12) and recursive non-structured modelling (Articles 4 and 5). Other studies (Articles 2 and 14) used correlation analysis and regression respectively. In SEM, indices such as the Goodness of Fit index (GFI), Adjusted Goodness of Fit (AGFI), Normal Fit Index (NFI), Non-Normal Fit Index (NNFI), Comparative Fit Index (CFI), Root Mean Squared Error of Approximation (RMSEA) and the Standardised Root Mean Squared Residual (SRMR) were reported as being acceptable for the model. With regard to the correlation coefficient, a statistical significance of 0.05 (Articles 2, 3, 4, 6, 8, 9, 11, 12, 13 and 14), 0.01 (Articles 1, 2, 3, 5, 7, 8, 9, 11 and 13) or 0.001 (Articles 4, 7 and 10) was considered to be sufficient. Limitations Several limitations were highlighted in all the articles analysed. The limitation mentioned most frequently was the use of cross-sectional design (Articles 3, 4, 5, 7, 9, 10 and 13), as a cross-sectional analysis does not provide inference on causality. In Article 4 specific reference was made about the time-lag of innovation, which was not properly factored in. Others also referred to the time interval between innovation and measuring organisational performance (Articles 3, 6, 7, 9, 10 and 12). The use of self-reporting (Articles 2, 4, 5, 7 and 13), which may be subject to social desirability bias, is seen as a limitation by some. Linked to this is the lack of multiple observations to supplement the survey data (Article 1) and collecting all instruments data from the same source (Articles 4, 5 and 8) (from managers [Article 3], for example). Some also mention that the focus on the measurement is limited. In Article 4 the concern is that only a few economic sectors (e.g., food, manufacturing, construction and services) were investigated, and in Article 14 the absence of related studies per se is deemed to be a limitation. Others were concerned that only certain elements of leadership were evaluated and other factors were excluded (Articles 1 and 6). On a similar note the use of a one-dimensional perspective of organisation performance, rather than a multi-dimensional perspective (financial, operational and organisational effectiveness) is criticised (Articles 3 and 4). Lastly, Article 5 states that the use of subjective measures of financial performance is a key limitation and suggests that objective measures such as sales growth and earnings per share, amongst others that are assumed to reflect the fulfilment of the firm’s economic goal, should be considered for future research. Ethical considerations Only four (Articles 8, 9, 11 and 14) of the 14 articles analysed explicitly mention how possible ethical issues were addressed. The ethical considerations incorporated by the four articles include requesting permission from the employer to conduct the study in the organisation (Articles 8 and 9), explaining the purpose of the study to participants, allowing them to participate voluntarily (Articles 11 and 14) and assuring participants that the data that they provide will remain anonymous and no names will be reflected on any of the instruments (Articles 11 and 14). Generally, it seems that journal editors are not concerned about ethical requirements (Articles 1, 2, 3, 4, 5, 6, 7, 10, 12 and 13) in investigating these phenomena. Discussion The aim of the study was to analyse the methodology used to investigate the relationship between leadership style, organisational climate, innovation and organisational performance using the methodology framework (research paradigm, research design, sampling, measurements, validity and reliability, data collection, data analysis and interpretation, limitations and ethical considerations) identified in the literature review. In assessing the 14 articles retrieved it was found that the research paradigm is not explicitly reported on. This may reflect indifference or it may be because journal editors in the field are not concerned about explicitly reporting on this. The dominant paradigm used, as deduced through an analysis of the 14 articles, is a positivist paradigm. In assessing the research design, it can be concluded that most scholars prefer to use the quantitative research design, 23 Page 8 of 10 Original Research http://www.icbmd.org Open Access although others opt to supplement the quantitative method with the qualitative research design. None of the studies used a pure qualitative research design. The design of the research was thus reflective of the paradigm. Random sampling is the most popular sampling technique used, followed by the purposive sampling technique, which in turn complements the quantitative research design and the nature of the study. However, authors appear to pay little attention to defining the population or stipulating how samples were extracted. The average sample size is approximately 176, excluding outliers. The unit of analysis included mainly organisations, although some studies use business units within one organisation. In general, authors are diligent in reporting on the reliability and validity of the instruments used, except for two articles which are silent on validity. All studies are explicit about the measuring instruments used. The most common measurement used for leadership style is a scale developed by Podsakoff et al. (1996) followed by the MLQ instrument. However, it is worth mentioning that the scale developed by Podsakoff et al. (1996) focuses primarily on transformational leadership style, whereas the MLQ is designed to measure various leadership styles, including both transformational and transactional leadership styles. Only two studies that assessed both transformational and transactional leadership styles used the MLQ instrument, and five studies focused exclusively on transformational leadership style. In these cases it is thus about the role of transformational leadership rather than about leadership styles. With regard to the measurement of organisational climate, innovation and organisational performance, no commonly preferred measurement scale exists amongst scholars. Scholars choose or develop the measuring instruments based on their preferred definitions of these concepts. The absence of a standardised method of assessing climate, innovation and organisational performance makes it difficult to replicate studies or build on existing knowledge. Worth noting is that none of the studies differentiated between radical and incremental innovation, and very few studies used both financial and non-financial measures to assess organisational performance. Most studies focus on financial aspects of organisational performance. Only one study uses an objective measure of financial performance. Structural equation modelling (SEM) is by far the most preferred analysis technique amongst scholars, although other scholars opt for the Partial Least Squares (PLS) multivariate analysis technique, confirmatory factor analysis, recursive non-saturated model and regression and correlation analysis. Various limitations are highlighted, but the most common and, perhaps, the most important limitations are the use of a cross-sectional design, which provides for the study of a relationship between constructs but prevents the inference on causality, followed by time intervals when measuring organisational performance and the use of self-reporting techniques to gather data. The use of subjective measures of organisational performance is also mentioned as a serious limitation. It is interesting to note that few articles explicitly mention the way in which ethical issues were managed. This may be typical of research in the domain of finance, but should also be considered in this type of research where human subjects are requested to provide information on matters such as leadership style, organisational climate and innovation. Conclusion and recommendation This research reports on the prevailing methods of conducting research on the relationship between leadership style, organisational climate, innovation and organisational performance. Only study 8 (Charbonnier-Voirin et al. 2010), identified in the search, investigated the relationship between all four constructs. Most of the identified studies investigated the relationship between leadership style, innovation and organisational performance, whilst others examined the relationship between organisational climate, innovation and organisational performance. Most of the studies analysed do not, in many respects, meet the standard methodological protocols as set out in the literature. Most evident is the lack of sufficient articulation on research paradigms used, adequate reporting on the nature of the population and sampling methodology, absence of uniform measures of climate, innovation and, particularly, organisational performance. Few guidelines exist on decision-making strategies related to reported statistical results and limited acknowledgement of ethical matters. Notwithstanding, this study is valuable as it clearly sets out the customs in this area. Researchers are urged to acknowledge the different elements of a comprehensive methodology section and apply this to their research. This will assist readers to judge the value of the research process and contribute to systematically building the body of knowledge in this field. It is important for researchers to note that the method section is the most important part of a research paper because it provides the information that the reader needs to judge the validity of the study. Therefore, providing a clear and precise description of each method subsection is a crucial aspect of scientific writing. In the same token, researchers are also urged to take cognisance of the impact of limitations of previous studies on future studies. Implication for practice and direction for future research Although the findings indicate that none of the studies analysed exhibit severe problems, there are many issues that need to be addressed in future research. Firstly, although 24 Page 9 of 10 Original Research http://www.icbmd.org Open Access cross-sectional studies often produce results that can be generalised to all industries, sometimes the results of those studies can be misleading because such studies average the results across multiple industries and sectors: this can lead to a conclusion that is misleading. Therefore, there is a need for future studies to put more focus on specific industries and sectors. Secondly, cross-sectional studies are by nature based on a predetermined time frame. In this regard, a longitudinal study is suggested to overcome limitations presented by cross-sectional studies. Thirdly, in order to be more comprehensive, future research should also consider differentiating between radical and incremental innovation and explore the possibility of using both financial and non-financial measures to assess organisational performance. For studies that focus exclusively on financial measures of organisational performance, the use of objective measures is recommended. Limitations Although the systematic literature review was conducted in a disciplined manner, this study has limitations. Firstly, the review uses only two databases, albeit the most recognised databases of record: EBSCOhost and ProQuest. These databases may have omitted some relevant studies. 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Authors: Esme Mohammed1 Renier Steyn1 Affiliations: 1Graduate School of Business Leadership, University of South Africa, South Africa Correspondence to: Esme Mohammed, esme.mohammed@eskom. co.za How to cite this article: Mohammed, E. & Steyn, R., 2016, ‘Personal branding: A systematic review of the research and design strategies used reported in journal articles relating to critical elements of personal branding’, in M. Twum-Darko (ed.), Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, pp. 27–35, AOSIS, Cape Town. https://doi. org/10.4102/aosis.2016. icbmd10.04 Copyright: © 2016. The Authors. Licensee: AOSIS. This work is licensed under the Creative Commons Attribution License. Introduction Nelson Mandela, Oprah Winfrey, Bill Gates, Donald Trump, Richard Branson, Philip Knight, Henry Ford, Walt Disney, J.K. Rowling, Albert Einstein, Mahatma Gandhi, Mother Teresa, Princess Diana, Michael Jordan, Tiger Woods. What do all these people have in common? All of these individuals used their journey towards success as a basis to build, implement, maintain and cultivate an authentic, distinctive and memorable personal brand. However, what lessons – personal or professional – could be learned from the way these prominent individuals built their brands? Moreover, what exactly does personal branding mean? How can the concept of personal branding assist different individuals within different professions to realise their potential and to reach life and career success. Furthermore, how can academic and scientific research contribute to this topic, thus learning from the marketing field and implementing the lessons to actualise career and life success and satisfaction. Personal branding is a critical element of career and life management. The aim of this article was to identify the research and design strategies and, specifically, the scientific procedures used in research articles about personal branding. The purpose was to identify a current base of scientific research and, specifically, the strategies and procedures followed by previous researchers. A methodological framework inclusive of the critical elements of the conventional academic and scientific research process was employed to analyse the 36 identified articles (published academic journal articles) related to personal branding. In addition to that, a systematic literature review of the research and design strategies was applied to understand the status of any research completed on personal branding. Based on the specific research protocol followed, a considerable neglect of personal branding as a topic of academic articles was identified. After the search strategy was implemented, 56 articles were initially identified of which only 36 articles met the criteria suitable for the analysis. Only two journals had published more than one article on the topic (two articles each), whilst no author published more than one article. Not one of these 36 articles was published by a South African. In total, six articles were quantitative in approach, with a rationalistic stance, whilst five qualitative articles represented a hermeneutic approach. The hermeneutic approach was also used in the position papers, which suggests that the limited academic field of personal branding follows a hermeneutic route to create knowledge. The results of this study indicated that limited scientific academic research has been done within the field of personal branding or on elements of the topic. Furthermore, most of the data available is subjective, without any specific scientific procedure being followed, or in some cases, with incomplete scientific procedures. Based on the outcome of this study, it can be stated that a definite need exits to explore the phenomenon of personal branding. An opportunity has emerged to look into best practices following a recognised and acceptable scientific process and adequately formulated research process. This could result in a better understanding of the topic, a theoretical framework, and lessons learned from role models so that such a framework can continually be improved to be applicable to different professions within the South African context. Personal branding: A systematic review of the research and design strategies used reported in journal articles relating to critical elements of personal branding Read online: Scan this QR code with your smart phone or mobile device to read online. Note: This article was originally presented as a paper at the 2016 International Conference on Business and Management Dynamics (ICBMD). 27 Page 8 of 9 Original Research http://www.icbmd.org Open Access Then again, analysis of the reliability, which is the consistency with which results are presented, was performed based on interrelated, test–retest as well as internal consistency reliability. Furthermore, the authors evaluated the process of data analysis followed in the articles, which could either be quantitative (objective deductive reasoning) or qualitative (subjective inductive reasoning) by nature and, in some cases, a combination could be followed. The authors then went further to identify the limitations of the research articles and evaluated the ethical considerations applied and indicated in the articles. New knowledge relating to the study based on analyses of the articles In total, 56 articles were located based on the search strategy. Only 36 articles were analysed following the inclusion and exclusion criteria. The Journal of Marketing Education as well as the European Journal of Marketing both published two articles each relating to personal branding. No author published more than one article, and no South African author published an article. In total, six articles were quantitative by nature following a rationalistic stand, and five qualitative articles represented a hermeneutic approach. The position papers also followed a hermeneutic approach which suggests that the field of personal branding follows a hermeneutic route to create knowledge. Simple random sampling was used by three research articles; one used proportional stratified sampling and five purposive sampling. It was interesting to note that 26 of the articles did not follow any sampling process. In total, 7 articles made use of measurement scales, namely 5 nominal scales and 2 ordinal scales. The search showed that 29 articles did not indicate any utilisation of measurement scales. Surprisingly, 34 articles did not indicate any utilisation of a specific validity approach, 2 used construct validity and two used content validity. This same trend emerged when it was identified that 32 articles did not report on a specific reliability testing technique, although one referred to composite reliability, one to internal consistency reliability and two to inter-rater reliability. Of the 36 articles, only 5 authors reported and indicated limitations of the research article, and, again, only 5 authors reported on the ethical considerations applied. The results of this study indicated that limited scientific academic research has been conducted within the field of personal branding or on elements of the topic. Furthermore, most of the data available is subjective, without any specific scientific procedure being followed, or in some cases, with incomplete scientific procedures utilised. Based on the outcome of this study, it can be stated that a definite need exits to explore the phenomenon of personal branding. An opportunity has emerged to look into best practices following a recognised and acceptable scientific process and adequately formulated research process. This could result in a better understanding of the topic, a theoretical framework, and lessons learned from role models so that the framework can be continually improved to apply to different professions within the South African context. Notes to future researchers The results of this study indicate that very limited scientific academic research has been done within the field of personal branding. In addition, the scope of the published research on the topic regarding the field and elements of the phenomenon is limited. Furthermore, most information available is based on subjective views and reviews by authors without any specific scientific procedure, or in some cases, incomplete scientific procedures that exclude critical elements of the recognised and accredited research processes to be followed. Based on the outcome of this study, it could be stated that there is a definite need to explore the phenomenon of personal branding. There could be a wealth of knowledge available that refers to individuals who have implemented a personal branding strategy successfully. This knowledge may potentially be studied and formulated into frameworks, models and theories from the perspective of different paradigms. When a recognised and acceptable scientific process and soundly formulated research design is used, it will be possible to identify and study best practices. The field of personal branding provides huge opportunities for future researchers because of the lack of well-formulated scientific research at present. It is likely that personal branding could become more important to the individual in future irrespective of whether the concept will be applied from a personal, professional, entertainment, sport or political space or platform. Therefore, the individual would benefit from applying sound principles in managing, aligning and sustaining his or her life and career. One of the options could be to learn lessons from business principles with a specific focus on marketing and branding to enhance and sustain career and life aspirations and goals. Furthermore, business could benefit from a meaningful understanding and acknowledgement of individuals based on their uniqueness. Personal branding also has the potential to add value on a bigger scale within society from both a skills application and career management perspective. 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Nguenang Affiliation: Department of Operations Management, Cape Peninsula University of Technology South Africa Correspondence to: Lionel Nguenang, [email protected] How to cite this article: Nguenang, L.B., 2016, ‘An approach to six sigma implementation in Cape Town enterprises’, in M. Twum-Darko (ed.), Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, pp. 36–46, AOSIS, Cape Town. https://doi. org/10.4102/aosis.2016. icbmd10.05 Copyright: © 2016. The Authors. Licensee: AOSIS. This work is licensed under the Creative Commons Attribution License. Introduction and background To effectively respond to the constant flexibility of customer demands, many quality initiatives have been developed to assist business organisations in the quest for excellence. Currently, the most used quality concepts by organisations throughout the world are ISO 9001:2008, Total Quality Management, Just in Time, and Six Sigma. Amongst these quality initiatives, Six Sigma has emerged as the most powerful quality improvement strategy that can be applied in every segment of business activities such as manufacturing, service, large, medium or small organisations and all the divisions of the value chain (Antony 2009:274). Six Sigma is a quality improvement philosophy that incorporates management strategies and statistical techniques in a well-structured and disciplined fashion to optimise business activities (Basu & Wright 2012). It focuses on variation reduction in all processes by involving top management and the operating force to achieve customer satisfaction and financial return. Six Sigma was pioneered by Motorola in the late 1980s as a mechanism to streamline organisational performance with the emphasis on minimising quality cost by means of defect reduction. Quality management has evolved over the years from a simple product inspection to a modern management system that requires the involvement of the entire workforce and other stakeholders to work closely toward customer satisfaction. Whilst developed countries have monopolised the world market with higher quality products, developing countries have adopted export promotion as a development strategy, but their performances in the global market remain meagre (Mersha 2000:119). Many factors, including the inability to meet defined quality standards as required by international customers, have contributed to the inadequate performance of the enterprises from developing countries (Mersha 2000:119). In South Africa (SA), business organisations have adopted several quality initiatives to cope with the challenges of globalisation. Six Sigma is one of the quality initiatives that many businesses in SA are using, or are considering, as a mechanism to strengthen their product or service quality. However, Conorado and Antony (2002:92) state that less than 10% of organisations worldwide have recognised the remarkable effects of Six Sigma in boosting their productivity and financial profit. These contrasting results explain the complexity and some critical aspects behind Six Sigma implementation that organisations in SA must recognise when implementing Six Sigma. The primary aim of this research was to develop a structured single alternate process for the implementation of Six Sigma to ensure its successful implementation for organisations in Cape Town. To achieve this aim, a survey method was used to collect data from randomly selected small and large respondents from manufacturing and service organisations located in Cape Town. All the collected data were analysed through the statistical package for social sciences (SPSS). The descriptive statistics are presented in tables and charts. Firstly, from the analyses, it was discovered that the majority of participating organisations that implemented Six Sigma were from the manufacturing sector and employed it before and after the year 2000. Secondly, the main reasons for implementing Six Sigma were to improve product and/or service quality and to reduce costs. Thirdly, the participating organisations gave less consideration to some critical elements of Six Sigma implementation. The study concluded by proposing an alternative approach to implementing Six Sigma for business organisations. The proposed framework consists of some critical and soft elements that play a critical role in the successful implementation of Six Sigma. An approach to Six Sigma implementation in Cape Town enterprises Read online: Scan this QR code with your smart phone or mobile device to read online. Note: This article was originally presented as a paper at the 2016 International Conference on Business and Management Dynamics (ICBMD). 36 Page 2 of 11 Original Research http://www.icbmd.org Open Access Research problem, question and objectives Problem statement Against the above background, the research problem statement for this research reads as follows: Cape Town business organisations that implement Six Sigma do not consider critical implementation issues associated with the quality concept, resulting in either inefficient implementation or a product that does not deliver on expectations. Research question The research question forming the crux of this study reads as follows: ‘Can a structured single alternate process be developed for the implementation of Six Sigma to ensure successful implementation thereof in a business organisation?’ Research objectives The following are the main objectives of the study: • to explore the benefits of the implementation of the Six Sigma quality management system • to determine key factors that can influence the Six Sigma implementation in the context of the Cape Town business organisations • to formulate a structured single process to aid the successful implementation of Six Sigma in the Cape Town business organisations. Six Sigma: A literature review Background to Six Sigma Antony and Banuelas (2002:26) point out that the Six Sigma quality management system was first pioneered at Motorola Corporation (US Electronic manufacturer) in the late 1980s as a mechanism to streamline organisational performance with the emphasis on minimising quality cost by means of defects reduction. As Motorola’s success became popular, Six Sigma was registered as its trademark, and many companies in the USA (General Electric, Raytheon, Allied Signal, Honeywell, Sony, Caterpillar, American Express, Ford and Johnson) adopted this concept and, consequently, returned incredible results (Breyfolgle 2003:5; Senapati 2004:683). Antony (2009:274) found that currently companies across the world ranging from small businesses, private and public to large organisations have adopted Six Sigma to substantially improve quality level, customer satisfaction, market share, employee morale, organisational culture, people development, return on investment and much more. The Six Sigma objective is to reduce a process variation, which will result in no more than 3.4 Defects Per Million Opportunities (DPMO). The 3.4 DPMO are calculated on the basis that every process is likely, or tends to increase its variability over time because of unavoidable assignable causes such as loss of calibration of measuring equipment, wear and tear of machines, operator fatigue, supplier quality variation and variation in temperature (Biehl 2005). Six Sigma defined Six Sigma has various perceptions and is defined in the literature and by people in different ways. According to Raisinghani et al. (2005:491), defining Six Sigma in simple terms is not possible because it consists of a problem solving methodology that focuses on optimising financial returns as well as culture change within an organisation. Furthermore, the research of Kwak and Anbari (2006:708–709) and Antony and Banuelas (2002:21) pointed out that Six Sigma definitions can be categorised in two segments that cover business and statistical explanations. Six Sigma business definitions Antony and Banuelas (2002:21) define Six Sigma as a strategic business improvement mechanism used to optimise profitability, remove waste, reduce cost of quality and enhance the effectiveness and efficiency of all operations to meet, or go beyond customers’ requirements and expectations. Chou and Su (2008:2694), De Mast and Lokkerbol (2012:604) are of the opinion that Six Sigma is a top-down initiative led by top management. Trained personnel who work on projects that are aimed to scale down waste and mistakes, to provide processes that create value and lead to the improvement of product and service quality, and customer satisfaction. Ditahardiyani, Ractnayani and Angwar (2008:178) note that Six Sigma is a business management process for continuous process and product quality improvement that provides tangible business results to organisations and enhances operational excellence. Statistical definition of Six Sigma Black and Revere (2006:259) describe Six Sigma as a methodology used to assess a process capability with regard to its abilities to deliver outputs that meet or exceed customer requirements. Six Sigma is a quality-oriented philosophy that seeks a process of ±6 sigma variation even if a process means shifts by ±1.5 sigma that result in a maximum of 3.4 DPMO (Motwani, Kumar & Antony 2004:273). Antony (2008:107) is of the opinion that Six Sigma is a concept that relies on statistical techniques to identify, analyse and solve problems that result in a noticeable reduction of impediments in all aspects of business organisation. Eckes (2001:11) advocates that Six Sigma is a concept that provides a statistical measurement of a product or service performance by identifying problems, establishing root causes, formulating and testing hypotheses and maintaining processes that search for ways to improve customer satisfaction. Key elements for Six Sigma implementation Companies embarking on Six Sigma implementation programmes have shown contrasting results because of the complexity of this methodology. Therefore, attention must be drawn to the key elements of Six Sigma to make implementation possible. Conorado and Antony (2002) state that: 37 Page 3 of 11 Original Research http://www.icbmd.org Open Access Critical success factors are those factors which are critical to the success of any organization in the sense that, if objectives associated with the factors are not achieved, the organization will fail – perhaps catastrophically. (p. 93) Consequently, the importance given to key input variables for the successful management of a process output can be attributed to Six Sigma critical success factors for an effective completion of a Six Sigma programme (Antony & Banuelas 2002:21). The key elements below are identified from the existing literature as critical to Six Sigma implementation (Manville, GreatBanks, Krishnasamy and Parker 2012:13). Management involvement and commitment Henderson and Evans (2000:269) noted that those who implemented Six Sigma had agreed that top management involvement is the most critical factor for a Six Sigma programme. Kwak and Anbari (2006:712) propose that a Six Sigma implementation requires top management involvement, dedication, project selection and review, resource provision and training. Furthermore, the research of Pyzdek (2000) suggests that senior management should be taught the Six Sigma principles needed for the preparation of their organisation on the brink of adopting this concept. Moreover, Antony and Banuelas (2002:21) found that a lack of top management support and commitment toward the Six Sigma implementation would simply jeopardise the time, energy, resources and enthusiasm behind this concept. Culture change Conorado and Antony (2002:93) argue that as a breakthrough management strategy, Six Sigma involves changing an organisation’s traditional culture to enable its welcoming implementation. A successful introduction of Six Sigma implementation requires a total organisation culture shift where a transfer of the responsibility regarding product process quality is given to employees (Antony & Banuelas 2002:21). The research of Kwak and Anbari (2006:713) asserts that addressing factors such as the communication channel, overcoming resistance to change and the education of senior management, employees and customers on Six Sigma benefits are required to enable a cultural change of individuals who are reluctant to adopt the Six Sigma implementation programme. Communication Henderson and Evans (2000:277) propose that the cultural change that requires Six Sigma introduction and its implementation brings two fundamental fears: fear of change and fear of not keeping up with the new standard. A good communication plan addressing Six Sigma methodology, its benefits and how it is related to people’s work, is an important way to reduce or drive out reluctance to change (Conorado & Antony 2002:94). Organisational infrastructure On one hand, the main reason why only 10% of Total Quality Management (TQM) implementation succeeded was the lack of tangible infrastructure to support its introduction. On the other hand, Six Sigma provides an adequate organisational structure with a clear role and responsibility to ensure success when implementing this approach. Henderson and Evans (2000:270) point out that reaching the long term target of 3.4, DPMO requires a complete commitment of each component of the value chain and an active participation by everyone with specific roles and responsibilities within an organisation. The employees in an organisation practising Six Sigma are seen as catalysts who institutionalise change and are highly trained in statistics, problem solving and leading the group in selecting and completing Six Sigma projects (Antony & Banuelas 2002:22; Henderson & Evans 2000:270). According to Anbari and Kwak (2004:5) a Six Sigma project is selected, performed, accomplished and reviewed by individuals who are ranked according to a belt system in a powerful matrix organisational structure, as follows: • champion • master black belt • black belt • yellow belt • green belt (Assarlind, Backman, Gremyr 2013:398). Training Pyzdek (2000) proposes that basisc skills should be provided to all employees to ensure that relevant literacy and numeracy skills are processed by everyone. Literacy and numeracy skills will allow employees to grasp the fundamental principles behind the tools and techniques of Six Sigma during training sessions (Kwak & Anbari 2006:713). There is usually a hierarchy of experts denoted by the belt system (refer to ‘Organisational infrastructure’) who receive special training on Six Sigma principles. These experts then spread the training to the rest of the organisation to ensure that everyone speaks the same language during project selection, execution, completion and implementation (Antony & Banuelas 2002:22). Project management skills Owing to the fact that most of the Six Sigma projects failed as a result of poor project management knowledge and a lack of meeting roles and responsibilities, it would be wise for a project team to possess project management skills that will allow them to meet the milestones of different project phases (Antony & Banuelas 2002:22). Project prioritisation and selection, reviews and tracking The selection of the Six Sigma project has to be a well thought out process because a wrong selection approach will delay results and increase time, money and frustration (Antony 2006:243; Antony & Banuelas 2002:22). For an efficient completion of a Six Sigma project, champions, black belts, green belts and project managers have to look at some critical aspects of project management such as time, cost and quality. These aspects will help them to identify the project scope, objectives and resources needed to accomplish a project at a very competitive cost to meet the specific business objectives 38 Page 4 of 11 Original Research http://www.icbmd.org Open Access (Conorado & Antony 2002:98). A project review system is another means to assess the status of the Six Sigma project to ensure its completion and closure (Kwak & Anbari 2006:712). Moreover, a tracking mechanism of projects and documentation should be put in place to ensure that all completed, accepted and implemented projects can be tracked for further information regarding project constraints and best practices (Antony & Banuelas 2002:23; Kwak & Anbari 2006:712). Understanding the Six Sigma methodology, tools and techniques According to Antony and Banuelas (2002:23), most of the Six Sigma training involves the rationale behind the DMAIC methodology, the tools and techniques for process improvement. Dogu and Firuzan (2008:1102) state that process improvement methodology is a tactic used to identify process problems, measure, analyse, and find solutions in order to implement and sustain the most efficient way of operating that will lead to an enhancement of the organisation’s business practice. As a problemsolving methodology, Six Sigma makes use of a generally accepted and well-defined continuous improvement framework known as DMAIC (Antony 2006:239; Eckes 2003:29). The letter (D) represents the definition of the problem, (M) measures the problem, (A) analysis of data, (I) improvement of the process by removing root causes of defects and (C) controlling or monitoring process to prevent problems. Moreover, many authors argue that Six Sigma is an approach when used effectively; it minimises variability from any process or product by using the DMAIC methodology or a design and/or redesign for Six Sigma (DFSS). The DFSS is a methodology used when a process has to be designed or redesigned. The DFSS follow a sequence known as DMADV, which means Define, Measure, Analyse, Design and Verify. The frequently used tools and techniques for a Six Sigma project or process improvement are listed in Table 1. It is important to point out that these tools and techniques are not new but were brought together in a very disciplined and systematic manner to gain significant benefits when tackling process quality related problems (Antony 2006:241). Linking Six Sigma to business strategies The overall goal of every business organisation is to make profit and this can be achieved by substantial cost saving generated from the reduction of process variation, which implies 3.4 DPMO. This means fewer customer complaints, lower quality and production costs and, finally, higher income (Coronado & Antony 2002:95–96). This is what Six Sigma strives to achieve (Ingle & Roe 2001:274). Six Sigma cannot be treated as another isolated activity, therefore the link between Six Sigma project and business strategy has to be obvious so that the result illustrates a fully integrated philosophy into a business culture rather than just a limited usage of a few tools and techniques (Antony & Banuelas 2002:23). This has to be demonstrated in monetary terms and how it can be used to strengthen the business strategy (Coronado & Antony 2002:96). Linking Six Sigma to the customer Customer satisfaction is an ultimate goal for business survival, and Six Sigma revolves around the concept of critical to quality characteristics (most important attributes for the customer). Critical to Customer characteristics can be quantified by means of a tool called Quality Deployment Function (QDF), which translates the needs and customer requirements into engineering language that lead to customer satisfaction (Antony & Banuelas 2002:43). Therefore, all projects should begin with the determination of customer requirements that everyone in the value chain should strive to achieve. Linking Six Sigma to human resources A human resource based action is needed to be put in place to promote desired actions and results, ensuring the long term requirement of 3.4 DPMO of the Six Sigma goal (Henderson & Evens 2000:275). The study of Antony and Banuelas (2002:23) states that 61% of top Six Sigma companies have linked reward schemes to business strategy, TABLE 1: Frequently used tools and techniques. The seven basic quality control tools The seven management tools Other tools Techniques Cause and effect diagram Affinity diagram Brainstorming Benchmarking Check sheet Arrow diagram Control plan Design of experiments Control chart Matrix diagram Flow chart Failure mode and effects analysis (FMAEA) Graphs Matrix and data analysis method Force field analysis Fault tree analysis Histogram Process decision Hypothesis testing Process capability analysis Pareto diagram Programme chart Process mapping Poka joke Scatter diagram Relations diagram Questionnaire Problem solving methodology Systematic diagram Sampling Quality costing Gant chart Quality function deployment (QFD) SERVQUAL Quality improvement teams Regression and correlation analysis Statistical process control (SPC) SIPOC Project Team Charter Kano Model Source: Antony 2006:242 39 Page 5 of 11 Original Research http://www.icbmd.org Open Access whilst underperforming organisations do not emphasise this linkage. Henderson and Evans (2000) state the following: Any employee at GE Appliances who wants to be considered for promotion must be Six Sigma green belt-trained. This also includes senior executives. In fact, across all GE businesses, no one will be promoted without the full Six Sigma training and a completed project. This in itself is an impressive behaviour driver. (p. 276) Adding specific Six Sigma sections to the annual performance evaluation form and awarding executive compensation based on Six Sigma goals attainment are two other reasons for linking Six Sigma to human resources (Henderson & Evans 2002:276–277). Linking Six Sigma to suppliers Most business organisations using Six Sigma cannot operate without outsourcing some raw materials, and extending Six Sigma to suppliers becomes a necessity to ensure that variability will be reduced in order to fulfil the needs of customer requirements (Coronado & Antony 2002:97). To achieve this, Six Sigma companies must ensure the following: • Supplier must actively participate in the dynamic of culture change that arrives with Six Sigma by obtaining upfront support from their leadership (Antony & Banuelas 2002:23). • A criteria selection of suppliers based on an acceptable Six Sigma performance capability level will make certain that only those with a Six Sigma culture can be part of the value chain and, for that reason, deliver raw materials (Antony & Banuelas 2002:23; Coronado & Antony 2002:97). • Given the interdependence between an organisation and its suppliers, a solid, mutually beneficial relationship will enhance the ability of both to create value that will lead to a bottom line of customer satisfaction. Research methodology and data collection A survey was applied to collect quantitative data to achieve the research objectives and to address research questions. The quantitative data application requires a data collection instrument such as the questionnaire. This instrument was designed and administered using simple random sampling and snowballing (with known contact) methods. In simple random sampling, each member of the population has the same chance of being included in the sample, and each sample of a particular size has the same probability of being chosen (Welman, Kruger & Mitchell 2005:69). Snowballing sampling, however, starts with an initial network of known contacts to ensure that only respondent individuals having enough knowledge of the research problem are selected and interviewed. The sample selection method used to identify and select respondents was also applied to select participating organisations that are using Six Sigma in Cape Town. In total, 22 organisations in Cape Town participated in the study and 22 questionnaires out of 60 were returned. All the returned questionnaires were captured for data analysis. Analysis of results To ensure content reliability, the Cronbach Alpha test was performed on each of the questions and/or statements posed to respondents. Nunnally (1978:245) states that the Cronbach’s Alpha Coefficients for each item in the measuring instrument must be more than 0.70. For this questionnaire, the Cronbach’s Alpha Coefficients of each statement was more than 0.70 (acceptable level,) and thus these items (statements) in the questionnaire prove to be reliable and consistent. The descriptive statistics for all the categorical demographic variables as well as the frequencies in each category and the percentage out of the total number of questionnaires were calculated. Only the data from respondents who completed the entire questionnaire were used in the inferential statistics. The research results are illustrated below. Descriptive statistics for sample The results depicted in Figure 1 indicate that the main function of the organisations that took part in this survey, is mostly manufacturing (91%) whilst only 9% is services. From Figure 2, it can be inferred that just over 40% of the respondents pursued the Six Sigma philosophy for more than 10 years, whereas only 40% pursued the Six Sigma philosophy for 1–3 years. Nearly 10% pursued the Six Sigma philosophy for 4–5 years. Table 1 in Appendix A1 shows the reasons envisaged for implementing Six Sigma. The responses to this question, on the one hand, reveal that 45% of the respondents are convinced that their organisations implemented Six Sigma to reduce costs of operations and to improve product and/or Source: Nguenang 2010 FIGURE 1: Main function of organisation. 1 2 1. Manufacturing (90.9%) 2. Services (9.1%) The distribuon of main funcon of organisaon 40 Page 6 of 11 Original Research http://www.icbmd.org Open Access service quality. On the other hand, 41% of respondents strongly believe that they have implemented Six Sigma to improve customer satisfaction. In Table 1 in Appendix A2, between 32% and 41% of the respondents strongly agree with the question and/or statement of having key personnel driving Six Sigma in their organisation, with only 41% of respondents convinced that their organisations have involved process leaders and employees during the Six Sigma projects programme. Meanwhilst, 36% of the respondents were certain that their organisations each had a full-time black belt Six Sigma champion. This situation makes it possible for each to implement the Six Sigma quality management system without having key personnel driving Six Sigma in their organisation. The responses received from the questions in Table 2 in Appendix A2 indicate that between 32% and 36% of respondents strongly agree that their organisations use DMAIC and DFSS. With only 36% of respondents convinced that their organisations have deployed the DMAIC methodology during the process improvement project, this creates the possibility that organisations implementing the Six Sigma quality management system will experience problems such as lack of awareness and use of the DMAIC methodology during process improvement. Table 1 in Appendix A3 reveals that between 9% and 32% of respondents strongly agree there is not an effective mechanism in place to ensure success in most of the participating companies that have implemented Six Sigma. This means that, although the majority of companies implemented the Six Sigma philosophy, fewer than 32% of the companies are actually sure of having an effective mechanism in place to ensure success. Therefore, the 18% – 59% agreement observed in Table 5 is an indication of implementation challenges (such as poor training, reward scheme and communication) that may prevail in most of the companies, whilst other companies have failed to implement the Six Sigma programme to take advantage of the implementation benefits. These companies represent a response of only 4.6% – 22.7% who strongly disagree and 9% – 32% who disagree. With regard to the questions in Table 1 in Appendix A4, from 45%–64% and 5%–23% of respondents agree and strongly agree respectively, with only 5%–23% of respondents actually convinced that their organisations have used the Six Sigma tools and techniques for process improvement. This situation creates the possibility of an organisation implementing the Six Sigma quality management system without using the tools and techniques of Six Sigma for process improvement. The response received from the questions in Table 5 (in Appendix A5) reveal that between 4.6% and 18% and from 18% to 68% of respondents strongly agree and agree, respectively. This means that, although the majority of companies have implemented the Six Sigma, at most 18% of the companies are actually convinced that top management commitment is high in their organisations. A response of between 18% and 68% of respondents who agree is an indication of implementation challenges (such as lack of employee empowerment and encouragement for change) TABLE 2: Key ingredients for Six Sigma implementation in your organisation. Variable NMean Standard Deviation Median Range Understanding of Six Sigma methodology, tools and techniques 22 3.95 1.1329 4 3 Training 22 3.86 0.8335 4 2 Top management involvement and commitment 22 3.82 0.5011 4 2 Organisation infrastructure 22 3.64 1.2168 4 4 Communication 22 3.54 0.9625 4 3 Linking Six Sigma to customer 22 3.54 1.2239 4 4 Project selection and prioritisation, review and tracking 22 3.41 0.8541 3 3 Culture change 22 3.27 0.827 3 3 Linking Six Sigma to supplier 22 3.27 1.032 3 4 Linking Six Sigma to business strategy 20 3.15 1.0894 3 4 Project management skill 22 3.09 1.065 3 4 Linking Six Sigma to human resources 22 2.72 1.032 2 4 Source: Nguenang 2010 Source: Nguenang 2010 FIGURE 2: Number of years organisations pursue Six Sigma philosophy. Number of years organisaon pursue Six Sigma philosophy 1 2 2 4 5 1. < 1 year (4.5%) 2. 1–3 years (40.9%) 3. 4–5 years (9.1%) 4. > 10years (40.9%) 5. Unknown (4.5%) 41 Page 7 of 11 Original Research http://www.icbmd.org Open Access that may prevail in most of the companies. It is important to point out that management commitment is not visible at all when implementing Six Sigma in some companies. These companies represent only 4.6% – 27.3% who disagree and 9% who strongly disagree. Moreover, respondents were asked to show how the key elements of Six Sigma are prioritised in their organisations. The results in Table 2 show that understanding Six Sigma methodologies with a mean of 3.95 is the most important factor for Six Sigma implementation for organisations that participated in the survey. Other important ingredients to Six Sigma implementation for participating organisations are: training (3.86), top management commitment (3.82), organisation infrastructure (3.64), and communication and linking Six Sigma to the customer (3.54). Project selection, culture change, linking Six Sigma to suppliers, business strategy, project management skills and human resources were less important to respondents. Findings This research has led to some interesting and important findings. Firstly, the majority of participating organisations that implemented Six Sigma were from manufacturing who implemented the programme before or after the year 2000. Secondly, the main reasons for implementing Six Sigma were to improve product and/or service quality and to reduce costs. Thirdly, the key personnel driving Six Sigma did not involve process leaders and employees during Six Sigma projects. The participating organisations used the DFSS methodology when redesigning a process and the DMAIC methodology during process improvement, or both simultaneously. Furthermore, it was found that there were only a few organisations that did not use any of the two methodologies. The mechanisms in place to ensure Six Sigma success were not efficient because the individual involved in the Six Sigma project did not receive adequate training, and Six Sigma was not linked to all the stakeholders. Finally, it was found that the key ingredients for Six Sigma implementation for the respondents were: the understanding of Six Sigma methodology, tools and techniques; training; top management involvement and commitment; organisation infrastructure; and linking Six Sigma to customers and communication. Conclusion and recommendations Based on the findings, a framework for an alternative and effective implementation of Six Sigma in Cape Town organisations was developed by the researcher. As illustrated in Figure 3, the framework consists of some critical and soft elements which play a critical role in the successful implementation of Six Sigma. It shows two main sections: strategical and tactical. The strategical section relies on leadership who have the responsibility to fully understand STRATEGICAL DMAIC DFSS Organisaonal infrastructure Six Sigma tools and techniques Project priorisaon, review & tracking Project management skill TACTICAL Linking Six Sigma to human resource Linking Six Sigma to customer Linking Six Sigma to supplier Linking Six Sigma to business strategy Top Management Commitment Communicaon Channel Culture change Training Source: Adapted from a Six Sigma literature review contained within the ambit to the literature review FIGURE 3: Framework of Six Sigma implementation for Cape Town organisations. 42 Page 8 of 11 Original Research http://www.icbmd.org Open Access Six Sigma, show commitment to it and communicate its benefits to the entire organisation to ensure a smooth culture change to that of a Six Sigma entity. The top management also has the responsibility to establish an organisational infrastructure with adequate training that will effectively implement Six Sigma by linking it to: • business strategy • supplier • customers • human resources. The tactical section looks at the DMAIC methodology (the centre of Six Sigma implementation) which provides a five step continuous improvement approach and suggests the use of tools and techniques in a very specific and disciplined manner during a process improvement project. It is also important to mention that the Design For Six Sigma (DFSS) should be considered instead of the DMAIC when designing and/or redesigning a process. References Anbari, F.T. & Kwak, Y.H., 2004, ‘Success Factor in Managing Six Sigma Projects’, unpublished paper read at the Project Management Institute Research Conference, London, UK, July 2004. 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Nigerian consumers seem to value foreign brands and regard them as status symbols. However, consumers want the advantages of affluence and the latest services that technology and business can offer (Achumba 1998). If a brand is perceived as globally acceptable, consumers are likely to attribute a superior quality to it. It has also been reported that consumers buy foreign goods for prestige and nationalistic belief (Adina, Gabriela & Roxana-Denisa 2015; Zhon & Belk 2004). Therefore, it can be suggested that consumers in developing countries have conflicting reactions towards foreign brands. Nagyova and Cech (2004) suggests that, from a marketing perspective, the image of the country must be taken as an external factor which the marketer cannot influence on the one hand, whilst, on the other hand, the brand’s and/or product’s identity is fully in the marketer’s hands. The final purchase decision of the consumer is then based on both factors. Thus, the identity of the brand and/or product and the image of the country from which the product and/or brand originates influence the image of the brand. Most of the time, the attitudes and perceptions of consumers towards their choice of goods depend on product categories. For example, electronics from the United States or Spain may be regarded as low quality, whilst those from China or Japan are perceived as high or reputable quality. Previous studies (Achumba 1998; Aire 1973; Akomolede & Oladele 2008) confirm that the poor quality of locally produced goods is responsible for consumers’ preference for foreign products. COOs play a significant role in the industrial sector growth of a country. Unfortunately, COOs are faced with constraints that impede both their development and growth. These constraints include: infrastructural challenges, which may also contribute to poorly manufactured goods; negative perception that locally made goods are of low quality; status symbol is also a factor that discourages people from buying locally made goods. There is no doubt that of all these constraints, negative perception constitutes the greatest challenge to the promotion and growth of COOs in most developing countries like Nigeria. Hence, the objective of the study was to examine the impact the negative effect the country of origin has on customers’ perception of locally produced goods in Nigeria. The remainder of the article is divided into the literature review, design and methodology, discussions on the negative perceptions of locally manufactured goods as well as conclusions, recommendations and suggestions for further research. Literature review Factors affecting the country of origin Over the years, researchers have held perceptions of products that originate from countries of origin. According to them, consumers usually have several options in choosing products (Ahmed & d’Astous 2003). Research findings suggest, firstly, that better understanding of the country of origin is required in appreciating the perceptual decision of consumers. Secondly, the country of origin is used by consumers as a criterion to evaluate products and to make purchasing decisions (Hong & Wyer 1990; Parameswaran & Pisharodi 1994). More importantly, the country of origin may create a ‘halo effect’ which influences customers’ attention and evaluation of product features and dimensions (Erickson, Johansson & Chao 1984). Country stereotyping may also affect consumers’ attitudes towards the brand of a country, thus altering attitude rating (Wright 1975). The conclusions that emerged from country of origin research indicate that consumers use the country of origin as a criterion to evaluate products (Han 1989; Johansson 1989). For example, Johansson (1989) argues that consumers use information about the country of origin to evaluate product quality. Other authors suggest that the country of origin could be used as an attribute (Hong & Wyer 1989, 1990). Despite consumers’ frequent and numerous remarks that a product’s country of origin is not important (Hugstad & Durr 1986; Papadopoulos & Heslop 1993), they will readily use country of origin as an important factor in quality evaluation (Adina et al. 2015), and, in fact, consumers care about the origin of their products (Solca 2015). This is markedly so with products such as cars, household appliances, computer technology and apparel, amongst others. Therefore, it is not surprising that a number of studies undertaken in the past 30 years corroborate the hypothesis that country of origin image influences a purchase decision. Purchase decision is a concept which reflects and describes basic consumer perception of the quality of a product coming from a certain country, as well as of the people from that particular country (Vriontis & Thrassou 2007). The most frequently used definition of the country of origin image is that which defines it as ‘the picture, the reputation, and the stereotype that businessmen and consumers attach to products from a certain country’ (Johansson 2000). COO is a hint that consumers use to evaluate foreign products and brands. It has been defined in several ways: as the country of location of the corporate headquarters (Ozsomar & Caraggil 1991), country of manufacturing or assembly (Papadopolous & Heslop 1993) and the country of product design (Ahmed & d’Astous 1993). COO is also defined as any influence or bias that consumers may hold resulting from the COO of the associated products or services (Samiee 1994). The sources of the effect are varied: some are based on the experience of consumers with products from a country in question, whilst others are from personal experience, knowledge regarding the countries’ political beliefs, ethnocentric tendencies or fear of the unknown (Samiee 1994). It has been empirically demonstrated that the COO effect has significant price-related consequences and brands with favourable COO associations are able to charge price premiums over and above those attributed to observed product differentiation (Saridakis & Baltas 2016). Companies 50 Page 3 of 5 Original Research http://www.icbmd.org Open Access are seeking to communicate the COO and to increase their customers’ COO awareness with a number of different strategies such as the use of the phrase ‘Made in …’, use of quality and origin labels, COO embedded in the company name, use of the COO language, use of famous or stereotypical people from the COO, use of COO flags and symbols, and or use of typical landscapes or famous buildings from the COO, amongst others (Aichner 2014). Perceptions about country of origin and evidence from Nigeria Verlegh and Steenkamp (1999) suggest that the country of origin effect has a significant effect on consumer evaluation of products and that consumers tend to use COO as an extrinsic cue to make judgement about the quality of products. This may result from personal experiences, through information acquired from other sources or because of stereotypical beliefs about countries. Consumers also tend to develop product-country images. These are images of quality of specific products marketed by firms associated with different countries (Papadopoulos & Heslop 1993). A few examples of product-country images are Columbian coffee, Swiss watches, US appliances, Japanese electronics and German automobiles because of the product-country images consumers hold, and their sensitivity to COO. COO is believed to be one way of enhancing brand equity (Keller 1993; Shocker, Srivastava & Ruekert 1994). The COO image is related to economic development, technology, world status of the country, as well as to the availability and familiarity of products and advertising. It was found in previous studies that consumers prefer products from advanced countries rather than those from less developed countries (Adina et al. 2015). In preferring these products, consumers may also be willing to pay a higher price compared to products from developing countries. Nigeria’s total foreign capital imports declined by as much as 54.34% to $710.97 million in the first quarter of 2016 compared to $1.55 billion in the last quarter of 2015 (National Bureau of Statistics [NBS] 2015). Year-on-year, capital importation also declined by 73.79%. Both the quarterly and year-on-year decline also represented the lowest records since the series began, the NBS stated. It added: ‘As a result of these changes, total capital importation has fallen by 89.13% since its peak level in the third quarter of 2014’. According to the summary of the Capital Importation Report for the first quarter of 2016, the magnitude of the decline in the first quarter attested to the challenging period which the Nigerian economy is currently undergoing following the fall in crude oil prices. Adding to that, a huge drop could also explain why the amount of capital imported into the country in recent years may have been higher than usual. One such theory was the inclusion of Nigeria in the JP Morgan Bond Index and globally low interest rates triggering a search for higher yields over this period (NBS 2015). The NBS further said: The fact that the amount of capital imported has dropped to a record low suggests that there are further reasons why Nigeria has attracted less foreign investment in recent quarters. ‘Investors may be concerned about whether or not they will be able to repatriate the earnings from their investments, given the current controls on the exchange rate’. In addition, as growth has slowed in recent quarters, there may be concerns about the profitability of such investments. (n.p.) In the period under review, portfolio investment was largest, accounting for $271.03 million, or 38.12% of all capital imported, with equity as the largest subcomponent which accounted for $201.69 million, representing 74.41% of portfolio investment and 28.37% of total capital imported. Equity has been the largest part of portfolio investment in every quarter since 2007. Although it remains the largest subcomponent, this is despite contributing the most to the decline in portfolio investment, equity recorded a quarterly decline of 74.54%, and a yearly decline of 82.30%, the NBS stated. It further stated: The second largest subcomponent of Portfolio Investment was Money Market Instruments, which accounted for $67.85 million, or 25.03 per cent of portfolio Investment, despite recording a quarterly decline of 57.62 per cent. In contrast to the same quarter of 2015, Bonds were relatively unimportant, accounting for only 0.55 per cent of portfolio investment. This followed a year on year decline of 99.79 per cent, from $705.12 million to $1.50 million in the first quarter of 2016 (NBS 2016). According to the statistical agency, the second largest component was ‘other investment’ which accounted for $265.48 million, or 37.34% of all capital imported. As in the final quarter of 2015, only two subcomponents recorded any investments: loans, which accounted for $241.81 million or 91.09% of other investments, and other claims, which accounted for $23.66 million or 8.91%. Each of these subcomponents had seen large quarterly declines of 42.54% and 60.86%, respectively. In contrast to other investment types, Foreign Direct Investment (FDI) recorded a quarterly increase in the first quarter of 2016, from $123.16 million to $174.46 million. The NBS (2016) added that: As a result its share of total capital importation increased from 7.91 per cent to 24.54 per cent, although it remained the smallest part of imported capital. FDI is dominated by equity, which accounted for $173.73 million in the first quarter, or 99.58 per cent of FDI. This share represents an increase relative to the previous quarter; as a result of equity increasing by 43.60 per cent relative to the previous quarter, and Other Capital declining by 66.60 per cent. Given the respective shares of Equity and Other Capital, movements in FDI largely reflect movements in Equity. (n.p.) Design and methodology This article is exploratory in nature through the use of a literature review to investigate and examine the impact negative country of origin effect has on customers’ perception of locally produced goods in Nigeria. Discussion Negative COOs have a significant effect on a country’s economic growth and development. It is vital for Nigeria to 51 Page 4 of 5 Original Research http://www.icbmd.org Open Access refocus and dedicate its efforts to ensure that good quality products are manufactured locally. This will persuade Nigerians to support locally manufactured products instead of imported commodities. Iloani (2016) avers that federal government has exerted effort in encouraging Nigerians to support locally manufactured products. However, this can only be achieved if the federal government financially supports Nigerian manufacturers, particularly small businesses, with skills development and proper infrastructure. Implementing these measures would reverse the situation back to the 1960s and 1980s when other countries imported goods from Nigeria and had confidence in the quality of goods Nigeria produced at the time (Nigerian Nation 2016). It is important to note that customers place prestige at the forefront when purchasing a product. It is paramount to emphasise superior quality at the product development stage with efforts to attract not only local but foreign markets. Zhon and Belk (2004) concur with this by affirming that consumers opt for foreign goods because of prestige and national belief. Other researchers have also confirmed that lack of good quality in locally manufactured commodities has led to consumer preference for foreign goods (Achumba 1998; Aire 1973; Akomelede & Oladele 2008). It is also important for the federal government to maximise efforts to stabilise the country’s economy, political climate and to ensure harmony between cultural and religious dynamics. This is imperative because researchers highlight that customers are likely to use the COO as a primary factor in product quality evaluation (Johansson 2000; Verlegh & Steenkamp 1999; Vriontis & Thrassou 2007). Consumers tend to have a positive bias towards products manufactured in developed countries and a negative bias towards those produced in underdeveloped countries. However, these perceptions may change over time because of technological advances, personal lifestyles or more sophisticated marketing techniques (Chuin & Mohamad 2012). Conclusions, recommendations and suggestions for further research This article has presented a theoretical review of negative country of origin opinion and its effect on customers’ perception of locally produced goods in Nigeria. Concluding remarks suggest that a country of origin effect plays an important role in consumer product evaluation for both weak and strong brands. Even for a product with a strong brand image, the negative consequences of COO stemming from consumers’ unfavourable attitudes (COO) may influence a marketer to avoid direct comparison between products made in favourable countries regardless of their brand strength. Recommendations • If Nigerians want local products to be sellable, the appropriate authority, which is the government, needs to set trade tariffs to force the prices of imported goods to increase so that buying locally made goods becomes attractive to people. The United States enacted something similar in the past when Japanese manufacturers were dominating the electrical appliances market in the United States. • Nigerians have negative attitudes towards local products; they should try to de-emphasise the country of origin labelled on the product and emphasise the country of brand. Developing trade alliances with their developed counterparts is a sure way for developing countries to ease the effects COO has on their economies. • The government needs to refocus the policy reforms towards small and medium size enterprises to ensure a certain percentage of goods can be exported, for example, 80% of locally made goods and 20% of foreign made products. • Government should try to limit the importation of goods that can be easily manufactured or produced in the country and inculcate patriotic consumerism, a practice the Japanese and the Americans have adopted. • Government should provide funding to emerging entrepreneurs, particularly manufacturing firms, to source sufficient supply of commodities to meet their needs in order to provide quality products appreciated by the consumers. • As Nigerians complain about the low quality of the finished goods, government should provide the necessary infrastructure to produce quality made goods. Infrastructure such as regular supply of electricity, good roads and potable water would enhance the provision of quality goods. • Today’s product market is highly globalised and interdependent. Nigeria could fare better if its government sensitises citizens to adopt some level of consumer ethnocentrism for nationalistic or patriotic reasons. Consumer ethnocentrism will combine with other sound marketing and advertising measures to strengthen competition and ensure the survival of firms in the country. Suggestion for further research This study focused on a theoretical review of COO. Empirical studies may be conducted in the future using a mixed methodology approach to understand why Nigerians would prefer imported products and what could be done to enhance patronage of locally manufactured goods for Nigeria’s economic growth. References Achumba, I., 1998, ‘The challenges of service marketing and human resources development’, Unilag Journal of Business 1(2), 1–7. 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Wright, P.L., 1975, ‘Consumer choice strategies: simplifying vs. optimising’, Journal of Marketing Research 12, 60–67. Zhon, X. & Belk, R.W., 2004, ‘Sinolisation: An international advertising strategy for China’, Journal of Asia Pacific Marketing 1(1), 3–18. 53 http://www.icbmd.org Open Access Page 1 of 8 Original Research Read online: Scan this QR code with your smart phone or mobile device to read online. Authors: Henry N. Ozuru1 Joy E. Akahome2 Affiliations: 1Department of Marketing, University of Port-Harcourt, Port-Harcourt 2Department of Marketing, Federal University Otuoke, Bayelsa State, Nigeria Correspondence to: Henry Ozuru, [email protected] How to cite this article: Ozuru, H.N & Akahome, J.E., 2016, ‘Societal marketing concept and energy poverty eradication: An evidence from Nigeria’, in M. Twum-Darko (ed.), Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, pp. 54–61, AOSIS, Cape Town. https://doi. org/10.4102/aosis.2016. icbmd10.07 Copyright: © 2016. The Authors. Licensee: AOSIS. This work is licensed under the Creative Commons Attribution License. Introduction Nigeria’s crude oil reserves are currently estimated at 35 billion barrels; its natural gas reserves an estimated 185 trillion cubic feet. However, export levels have since dropped dramatically and, in March 2007, the United States imported 41 767 barrels of Nigerian crude oil and petroleum products. According to the International Energy Agency (IEA 2012), over 1.6 billion people – almost one third of humanity – have no electricity, the majority of which are in Africa. This means they have no light in the evening, limited access to radio and modern communications, inadequate education and health facili ties and not enough power for their work, activities and businesses. Despite Nigeria’s rich oil reserves, 44% of Nigerian households have no access to electricity (Michaels 2015). Indeed, even in Nigerian homes with electricity the quality of service provided is often intermittent whilst growing increasingly unaffordable. In the New York Times of 08 August 2014, Adewale Maja-Pearce explained that in February 2014 his monthly bill jumped from $30 per month to nearly $185 per month, despite the fact that he was receiving roughly 33 hours per day of power. This price increase occurred at a time when 92.4% of Nigerians live on less than $2 per day, and 70.8% live on less than a dollar per day. The problem of energy poverty is not exclusive to Nigeria. According to the International Energy Agency (2015): over 1.3 billion people are without access to electricity and 2.6 billion are without clean cooking facilities. More than 95% of these people are in sub-Saharan Africa or developing Asia and 84% are in rural areas. Although the problem is not unique to Nigeria, it brings to light the global inequality behind the phenomenon of energy poverty despite Nigeria’s status as a major energy exporter. It is seemingly paradoxical for a nation which began exporting large amounts of liquid petroleum gas through Chevron in 1997 to have a per capita liquid petroleum gas usage rate of 0.4 kilograms per second, one of the lowest in the region. Michael (2015) avers that addressing energy poverty This article examines the societal marketing concept as a remedial measure for energy poverty in Nigeria. Energy poverty is a situation where individuals or households are not able to adequately heat or provide other energy services in their homes at affordable cost. Basic energy services are critical to ensure that communities do not suffer negative health impacts, do not become further entrenched in poverty and can maintain a good quality of life as well as ensuring financial outlay to assist households that require support. Whilst allowing for full competition in energy markets, government and regulators have a role to protect communities and prevent groups in the society from falling into energy poverty. Improving access to energy provides the holistic service to host communities for which governments are looking and supports broader economic and social development. This, in turn, secures the industry’s sustainable access to reserves and social license to operate, increasing revenue potential from existing and new revenue streams, facilitating risk management and supporting increased brand enhancement – increasing shareholder value in both the short and long terms. To effectively build on these leading examples and drive stepped change, a societal marketing approach championed by strong leadership is required. The societal marketing approach requires a mission to bring together leaders from government, business and civil society ‘to achieve a broad-based transformation of the world’s energy systems and build a more prosperous, healthier, cleaner and safer world for this and future generations’. The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. Societal marketing concept and energy poverty eradication: An evidence from Nigeria Read online: Scan this QR code with your smart phone or mobile device to read online. Note: This article was originally presented as a paper at the 2016 International Conference on Business and Management Dynamics (ICBMD). 54 Page 2 of 8 Original Research http://www.icbmd.org Open Access is a key point in the fight against global poverty. Greater access to alternative energy sources will reduce unnecessary deaths, such as the 95 300 Nigerian deaths which occur annually from smoke created by the use of solid biomass fuels. It will enhance the financial capabilities of those nations currently struggling to provide power to businesses. This, in turn, will expand the global community of consumers. According to World Data Bank statistics (2015), 62% of Nigerians live on less than $1.25 per day. Extreme poverty remains high in rural parts of Nigeria, where political instability, low access to education and inadequate healthcare have become contributing factors to the nation’s high rate of poverty. Poverty largely cohabits with energy poverty. Whilst there are several definitions for energy poverty, a pragmatic view is that energy poverty is the lack of access to modern energy services. Razdan (2015) states that poverty is not only reflected in the disposable income of a household but also in the level of energy available for a household to meet its need for cooking, lighting and gainful employment. There is an increasing recognition of the importance of access to clean and reliable energy for poverty alleviation. Whilst inadequate and unreliable power supply continues to negatively affect economic growth of Africa’s biggest economy, almost all businesses run diesel generators, which have high operating costs. In achieving the electricity generation target outlined in the draft national energy master plan, significant private sector investment is required (UNDP 2015). Availability of energy is a crucial element for socio-economic development to take place, but in Nigeria many households have limited access to energy which affects the education, health, manufacturing and production of goods and services and small scale businesses. Over 1.3 billion people around the planet who lack access to the grid are desperately poor because lack of electricity helps ensure that they stay that way (Walsh 2011). Energy services for meeting basic human needs, such as food and shelter, are at the heart of any strategy to eradicate poverty. It is evident that access to energy is a prerequisite for human development. It contributes to social development by improving health, education and economic development by enhancing the productivity of labour and capital. Like improved health, use of energy is both a contributor to and a consequence of higher income (Bloom & Canning 2000). The 48-inch diameter export line operated by shell, NNPC and other JV partners was vandalised in February 2016, crippling export of crude oil from the terminal. According to the NNPC (2016), Nigeria has lost over 1 500 megawatts of power supply as a result of the damage to the Forcados 48-inch diameter export pipeline, which is the country’s major artery that accounts for 40%−50% of gas production. Ofikhenua (2016) states that power supply to 11 electricity distribution companies (DisCos) on 29 July dropped to 2796 megawatts (Mw) because of the lack of gas supply to thermal power plants due to the vandalism of gas pipelines. Business owners find electricity connection and the quality of electricity supply as one of the main hindrances to their activities (Audinet and Rodriguez Pardina 2010). Studies have shown that poor electricity supply adversely affects the productivity of the firms and the investment they make in their productive capacity. In an effort to curtail these challenges, the federal government has placed additional emphasis on the National Electric Power Policy (2002) and the Electric Power Sector Reform (ESPR) Act of 2005. The reason for power reform is the irregular supply of electricity in Nigeria which has led to high revenue losses. Moreover, power sector reform is expected to lead to reduction in costs, including short-term power and operation costs through efficiency gains arising from economies of scale as large-scale plants are enabled by larger markets (Eberhard et al. 2008). This will lead to improved supply conditions, including better reliability and security of supply due to access to imports during emergency situations (Eberhard et al. 2008). According to Adoghe, Odigwe and Igbinovia (2009), the irregular power supply and other poor infrastructure has affected the growth of industries and individual development, and this has led to a perpetuating electric power scarcity. Despite the enormous finance government has committed to this sector and with continuous assuring of customers of better service through the rebranding policy targeted at the concerns, values, image and feelings of both the employees and customers, consumers are still not satisfied with the quality of service rendered by the sector. The power crisis has led many manufacturing industries to flee the country to places where they have to spend little or nothing on diesel engines; it is a major challenge to Nigeria’s industrialisation efforts. This is why it is important for Nigerians to seek a permanent solution to the issue of an unsatisfactory power supply to improve the well-being of people and grow the economy. Problem of the study The causes for the extreme electricity deficiency in Nigeria are related to financial, socio-political and structural issues. The Nigerian government has not been able to find permanent solutions that will resolve the problems. According to NNPC (2016), a recent upsurge in vandalism has not only negatively impacted oil production but reduced Nigeria’s domestic gas production by 50%, which in turn has constrained gas supply to power plants in the country. Power supply has consequently dropped since the third month of 2016, plunging lower in the fifth month of the same year. Consequently, Nigerians do not have much influence that will compel the government to formulate decisive policies and initiatives that will enhance and promote the application of a societal marketing concept as an eradicative measure against energy poverty. 55 Page 3 of 8 Original Research http://www.icbmd.org Open Access This is a challenging matter as the managers should balance and juggle the often competing interests of society and companies and go beyond corporate image to effectively sustain a clean and healthy solution. This article addresses these concerns, presenting the view of several authors and concepts to support them. Objectives of the study The energy sector is of strategic importance to the Nigerian economy and a major driver of growth and advancement. It also has a major role to play in reducing energy poverty, improving productivity and enhancing the quality of lives in Nigeria. Hence, the objective of the study is to promote an integrated approach of the marketing paradigm that can bring about solutions to energy poverty challenges. Literature review Theoretical foundations Social cognitive theory Social development is a lifelong process, and many theories have been proposed over the years to describe the developmental changes that people undergo, including the different conceptions of human nature they adopt and in what they regard to be the basic causes and mechanisms of human motivation and behaviour (Bandura 1989). In 1963, Bandura and Walters developed the concept of social learning and personality development, which widened the ideologies of social learning theory that viewed people as self-regulating, self-organising and proactive rather than reactive organisms shaped by environmental forces (Pajares 2002). From the social cognitive theory’s (SCT) perspective, human functioning is seen as the outcome of a dynamic interplay of personal, behavioural and environmental influences which form the foundation of Bandura’s conception of reciprocal determinism, that is, the view that (1) personal factors (i.e. cognition, affect, and biological events), (2) behaviour and (3) environmental influences create interactions that result in a triadic reciprocality. SCT is adopted in numerous fields of study including psychology, education and communication. The theory postulates that large parts of an individual’s knowledge is directly associated with observing other people via social interactions, experiences and the media (Bandra 2002). This implies that the survival of humans solely depends on imitation of the actions of others, that is, if a person is rewarded for an act others imitate it to be rewarded. They act differently, however, if the person’s action leads to punishment. Further, Pajares (2002) stated that the theory is rooted in a view of human agency which posits that individuals are agents proactively engaged in their own development and can make things happen by their actions. Moreover, the theory affirms that amongst the three major factors affecting societal growth, the environmental factors such as social amenities, educational structures, economic and political factors and others should also be taken into account even though they do not have direct influence on human behaviour; they still directly affect people’s aspirations, selfefficacy beliefs, personal standards, emotional states and other self-regulatory influences. This is depicted in Figure 1. Recent years have witnessed an enthusiastic debate about the role of business organisations within society. Academic scholars and practicing managers have questioned ‘whether the proper or legitimate role of a business organization is merely economic or also social’ (Lantos 2001). They have wondered what the corporate purpose should be and to what extent the company should be held responsible for social issues. This is not simply a speculative debate over how to accommodate different opinions, but a relevant discussion over how the business world actually works and how it could do better. The bridge between firms and society is created and maintained by marketing tasks involving the establishment of relationships through the exchanges of values. The concept of exchange is also present in the definition of ‘societal marketing’ – a term coined by Kotler (1972) in the early 1970s. The societal marketing approach considers not only the commercial exchanges carried out to satisfy the needs of customers, but also the effects on all members of the public involved in some way in these exchanges. The members of the public who are directly or indirectly involved in the organisational process are called stakeholders. Business’s major stakeholders include consumers, employees, owners, shareholders, suppliers, competitors, government, the community and the natural environment (Carroll 2004; Ferrel 2004; Henriques & Sadorsky 1999; Laszlo & Nash 2001). The notion of future is embedded in the societal marketing thought because the consequences of current decisions will be felt in the long-term. In the edition of their textbook, Kotler and Keller (2006) define societal marketing as follows: The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being. Source: Pajares 2002:1–2 FIGURE 1: The triadic reciprocality. Behaviour Personal factors (cognive, affecve and biological events) Environmental factors 56 Page 4 of 8 Original Research http://www.icbmd.org Open Access In the beginning of the 1970s, Bell and Emory (1971) had already suggested the ‘consumer comes first’ assumption as a more equitable basis for the buyer-seller relationship. The concept of energy and Nigerian society Energy is at the heart of most critical economic, environmental and developmental issues facing the world today. Clean, efficient, affordable and reliable energy services are indispensable for global prosperity. Current energy systems are inadequate to meet the needs of the world’s poor and are jeopardising the achievement of the Millennium Development Goals (MDGs). For instance, in the absence of reliable energy services, neither health clinics nor schools can function properly, access to clean water and sanitation is constrained without effective pumping capacity and food security in Nigeria is adversely affected, often with a devastating impact on vulnerable populations. Worldwide, approximately 3 billion people rely on traditional biomass for cooking and heating (UNDP & WHO 2009), and about 1.5 billion have no access to electricity. Up to a billion more people have only access to unreliable electricity networks. The ‘energy-poor’ suffer the health consequences of inefficient combustion of solid fuels in inadequately ventilated buildings as well as the economic consequences of insufficient power for productive income-generating activities and other basic services, such as health and education. In particular, women and girls in the developing world, especially in Nigeria, are disproportionately affected in this regard. A well-performing energy system that improves efficient access to modern forms of energy would strengthen the opportunities for the poorest few billion people on the planet to escape the worst impacts of poverty. Such a system is also essential for meeting wider development objectives. Economic growth goes hand in hand with increased access to modern energy services, especially in lowand middle-income countries transitioning through the phase of accelerated industrial development. A World Bank study (2009) indicates that countries with underperforming energy systems may lose up to 1%−2% of growth potential annually as a result of electric power outages, overinvestment in backup electricity generators, energy subsidies and losses and inefficient use of scarce energy resources. At the global level, the energy system– supply, transformation, delivery and use – is the dominant contributor to climate change, representing about 60% of total current greenhouse gas (GHG) emissions. Current patterns of energy production and consumption are unsustainable and threaten the environment on both local and global scales. Emissions from the combustion of fossil fuels are major contributors to the unpredictable effects of climate change, urban air pollution and the acidification of land and water. Reducing the carbon intensity of energy – that is, the amount of carbon (Heegte & Sonder 2007) emitted per unit of energy consumed – is a key objective in reaching long-term climate goals. As long as the primary energy mix is biased towards fossil fuels, this would be difficult to achieve with currently available fossil fuelbased energy technologies. Given that the world economy is expected to double in size over the next 20 years, the world’s consumption of energy will also increase significantly if energy supply, conversion and use continue to be inefficient. Energy system design, providing stronger incentives for reduced GHG emissions in supply and increased end-use efficiency will, therefore, be critical for reducing the risk of irreversible, catastrophic climate change. Energy Community (2015) avers that energy poverty most commonly refers to the situation where individuals are not able to adequately heat (or provide necessary energy services) in their homes at affordable cost. The issue is characterised by three key drivers in combination or isolation – low incomes, poor thermal efficiency of buildings and high energy costs. The risk to households of energy poverty will be a function of five factors (Preston et al. 2014): the rate of energy price rise versus income growth, access to cheaper energy prices, household energy needs, efficiency of energy case and policy interventions. Access to energy is a prerequisite of human development. Energy is needed for individual survival, it is important for the provision of social services such as education and health and a critical input into all economic sectors from household production or farming to industry. Fundamentally, Nigeria is blessed with alternative sources of energy that is sustainable in alleviating energy poverty but has completely failed her citizens in realising the potential of their endowed gift from nature. Energy poverty takes many forms and has a devastating effect on the poor, especially in Nigeria. For example, this article observed that children doing homework by the light of a smoky kerosene lamp and candlelight do as much damage to their lungs as a two-pack-a-day cigarette smoker (World Health Organisation, Lighting Africa Report). Household air pollution kills more than 4 million people every year and exposes millions to various forms of sicknesses. Energy poverty definitions took only the minimum energy quantity required into consideration when defining energy poverty, but a different school of thought is that not only energy quantity but the quality and cleanliness of the energy used should be taken into consideration when defining energy poverty (Kumar 2011). Such a definition could read: a person is in energy poverty if they do not have access to at least (Kumar 2011): 1. The equivalent of 35 kg liquefied petroleum gas (LPG) per capita per year from liquid and glass fuels or an improved supply of solid fuel sources and improved (efficient and clean) cooking stoves. 2. One hundred and twenty kWh electricity per capita per year for lighting and access to most basic services (drinking water, communication, improved health 57 Page 5 of 8 Original Research http://www.icbmd.org Open Access services, improved education services, etc.) as well as some added value to local production. In tackling or eradicating energy poverty, it would be wise to create the right environment for marketing through the exchange of ideas and practices. These have been key factors in inspiring citizens, igniting processes, generating new ideas and sealing up successful solutions. This article promotes the idea that marketing managers should accept the challenge of balancing the interests of society with those of organisations by trying to cultivate good relationships. It is worth noting that behind the impersonal walls of an organisation are people. A company is built by people for people. Employees, managers and directors of a specific company may play the role of consumers of another company, or feel collectively injured by an unethical decision of a particular organisation. In this sense, one receives back all that one gives to one’s society. Moreover, individuals do not develop in isolation. Their development occurs through relationships with others. In order to promote ethical behaviour in managers, a firm should nurture them in an ethical environment (Sargent 1999). Bearing in mind what is discussed in this article with regard to societal marketing and strategic marketing, the authors invite academic scholars, practicing managers and ordinary citizens to think seriously about what kind of world they are constructing and the consequences of their current actions for the future. Strategies of eradicating energy poverty in Nigeria The oil and gas industry has a long history of operating in sub-Saharan Africa and developing Asia where the energy access challenge is most pronounced. For example, international exploration and production activities have been ongoing in Nigeria since the 1930s (NNPC 2016). In order to secure licenses to operate in these regions, operations have been required to invest in local economies through both local content development and community investment programmes. An assessment of social spend alone revealed that, whilst the level of spend varies in line with the size of the company’s broader country investment, some companies reported investments as high as $500 million in 2012 alone (Accenture Analysis 2015). This activity and required investment is not likely to diminish anytime soon. The share of global oil and gas reserves held in sub-Saharan Africa alone increased by 33% between 2000 and 2012 (IES 2015). Added to this is an evolving operating landscape with the evolution of shale gas resulting in larger operational footprints. Within this new context, needs-based philanthropy to maintain the social license to operate is no longer sufficient and oil and gas companies will need to rethink their relationships with host communities. The energy poverty challenge provides the industry with the opportunity to do so. The industry’s interest in tackling energy poverty can be summarised in three key value drivers: revenue growth, risk management and brand enhancement (Accenture Analysis 2015). Risk management Tackling energy poverty can help to manage operational risk and create shareholder value in both the short and long terms. In the short term, an emphasis on tackling energy poverty will have a direct impact on the quality of life across communities, helping to minimise potential unrest. A reliable source of energy supply will also support business operations and improve conditions for company employees – particularly during the development stage of the value chain. Together, these impacts will support greater operational savings from both time and financial perspectives, helping to manage shareholder expectations quarter to quarter. In the long term, broader economic and social development will enable provision of services such as health and education, thereby reducing work stoppages through access to a stronger, more educated workforce and lowering procurement costs through the development of a more robust supply chain. In the context of increased cost pressures and ever more stringent local content sourcing requirements, this has become a business imperative, with a small upfront investment paying substantial dividends over the longer term. Brand enhancement A related value driver is the need to establish a strong brand in order to secure licenses and access to reserves in the short term. By committing to tackling the energy poverty challenge as an enabler to broader economic and social development, the industry has the opportunity to strengthen its current local content offerings, better positioning itself vis-à-vis local governments. In the long term, these efforts will further help companies protect their brands, which is instrumental to retaining their social licenses to operate. Revenue growth In the long term, local communities present new markets for oil and gas operators. By building new energy solutions and innovative business models, oil and gas companies can provide access to energy to the balance of payments (BoP) – those considered to be in the lowest income bracket, creating new revenue streams. The International Finance Corporation’s (IFCs) market size estimate of $37 billion tells a compelling story, with the potential for new markets in poorer communities growing over time as purchasing power increases. It enables consumers to ascend the ‘energy ladder’ and move away from dirtier energy sources such as biomass to cleaner, more efficient energy sources. The sale of products such as liquefied petroleum gas for use as household and transportation fuels provides particularly interesting opportunities for oil and gas companies. The Global Alliance for Clean Cookstoves (2015) has been instrumental in developing this opportunity, helping to establish LPG as a clean, efficient and safe cooking stove 58 Page 6 of 8 Original Research http://www.icbmd.org Open Access fuel, thereby creating a new market base for the oil and gas industry. The relative strength of each business driver will be highly context dependent. In many cases, the case for investment may prove more compelling for national oil companies (NOCs), as supporting broader economic development is at the heart of these organisations’ missions. Saudi Aramco’s ‘golden quadrant’ strategy is an example of this commitment to broader economic and societal development as the NOC assesses the value of projects based on the extent to which they meet three priority areas: responding to the global energy market, commerciality and national development. However, whilst national development interests are generally more aligned with the strategy of NOCs, investment in energy access can also provide greater competitive advantage for international oil companies (IOCs). Local approaches to energy poverty challenges At the local level, industries are meant to take a more proactive approach to addressing energy poverty. These are: • Strategically invest in an integrated manner Oil and gas investment in local economies is driven through multiple channels, namely, core operations, local content development and social community investment. Whilst investment can be extensive, it is often rolled out in a disorganised manner. More strategic alignment of these investments would generate greater impact for both the industry and the local communities. Development of more comprehensive country-facing strategies – defined as a portfolio of integrated country-facing initiatives which enable the company to achieve its objectives whilst creating value for the country – is one way in which companies can begin to align company objectives to the needs of the local community and the country’s broader economic development goals to maximise impact. • More systematically leverage capabilities to support access to energy Taking a more proactive role, the industry should consider broader application of its capabilities to support community needs, ranging from stakeholder management to technical and commercial expertise to access to capital. In so doing, it should align investment to core business operations and identify a clear exit strategy by ensuring solutions are underpinned by sustainable business models. Several companies, including Total and Eni, are emerging as industry leaders in leveraging core business capabilities to support access to energy. Total, for example, is currently leveraging its distribution infrastructure. Awango by Total was set up by the French IOC in collaboration with the German development agency Deutsche to deliver solar lighting and phone-charging solutions for the BoP by leveraging local financing and distribution networks. They also supplied training to ensure correct use and maintenance of the technology (Total 2012). • Establish and lead ecosystem development In order to really drive transformative change, the oil and gas industry is well positioned to establish and lead an integrated approach to tackling energy poverty. This includes leading development of innovative solutions and business models as well as playing a key role in catalysing action, convening key stakeholders and coordinating a more comprehensive solution driven by shared value and supported by shared investment. Solutions should be considered at both the broad industry and cross-industry levels. For example, oil and gas companies operating in the same market could coordinate community investments at the industry level to more cohesively and holistically tackle community needs – from access to power for the end user to powering health clinics and schools. Benefits of capturing the energy efficiency opportunity Much of the recent attention to energy efficiency has its origin in the need to reduce carbon emissions; energy efficiency opportunities make up about a third of the total low-cost opportunities to reduce GHG emissions globally (McKinsey & Company 2009). A large number of currently available energy efficiency opportunities are characterised as having ‘negative cost’: in other words, the savings from reduced energy consumption over the lifetime of the investment exceeds the initial cost. It is estimated that the total financial savings, or avoided energy cost, of this efficiency opportunity will be $250 − $325 billion a year in 2030 (McKinsey & Company 2009). Additional benefits include the environmental benefit – a reduction of 12% − 17% of total global GHG emissions in 2030 versus a baseline scenario, which is around a third of the low-cost GHG abatement opportunity (McKinsey & Company 2009), and the economic benefit of reducing the risk of price volatility as a result of demand outstripping supply. When coupled with other low-cost abatement actions such as renewable power and reduced deforestation, this path is compatible with a 450 ppm stabilisation scenario (IEA 2009). In addition to the benefits shared by the global community, countries that succeed in increasing energy efficiency can also reap a number of direct benefits at different levels: • Governments. Energy efficiency can ease infrastructure bottlenecks by avoiding or delaying capital-intensive investments in new power supply without affecting economic growth. This is especially important in developing countries where there are energy supply shortages and significant capital constraints. The IEA estimates savings of $1 trillion in avoided energy infrastructure investment to 2030 if the available energy efficiency potential is captured (IEA 2009). Reducing peak load through load management can reduce generation costs. Reducing overall generation through 59 Page 5 of 7 Original Research http://www.icbmd.org Open Access include leadership, problem solving, teamwork, negotiation, politics and other related skills which are also needed for successful implementation of PM tools and techniques (Kloppenborg 2012:5; Larson & Gray 2014:17). For the construction industry hard PM skills relate to the practical execution of projects (e.g. structural engineering skills, project design, interpretation of site maps and drawings, accurate measurement of materials and structures, forecasting of costs, costing of materials, scheduling of tasks), whilst soft PM skills denote ancillary skills relevant to the expediting of processes for project completion such as people coordination skills, interpersonal communication and leadership. Larson and Gray (2014:17) and Kloppenborg (2012:5) assert that for effective PM tools and technique implementation, these two sets of skills need to be acquired and used together. PM readiness of emerging construction firms CIDB suggests that most ECFs do not possess any PM techniques and tools in their project activities (CIDB Act 38 of 2000; CIDB 2011:7). This inadequacy has resulted in project cost overruns, project implementation delays and low quality of projects delivered by ECFs (Ncwadi & Dagalazan 2006:186; CIDB 2011:7). Based on these observations, it could be inferred that the paucity of PM tools and techniques amongst ECFs has compromised their ability to adopt PM for successful project execution. In view of the ad hoc adoption of PM tools and techniques by ECFs, including the above-mentioned public outcry on badly constructed buildings and structures, the consideration of formal PM approaches for ECFs cannot be overemphasised. Yet, the transition from ad hoc and uncoordinated project activities towards more coherent formal PM cannot be assumed to be automatic but rather necessitates the creation of a propitious work environment for its smooth implementation. The transition of ECFs to effective PM culture requires a conducive work environment comprising a supportive organisational structure, a hands-on or practical and results-oriented organisational culture and specialised PM skills necessary for successful project execution. The supportive organisational structure allows for the smooth assignment of work responsibilities and coordination of work tasks, appropriate, flexible delegation of authority for successful task assignments and/or execution and flow of work-based communication. The practical, taskoriented culture permits successful work completion through concentration on delivery of quality outcomes within budgetary limits and on time. Task orientation also allows tasks to be organised around the organisational strategy to improve work coordination, and where tasks deviate from strategy, corrective measures can then be instituted to ensure coherence or to explain deviations. Organisational skills are key to the success of PM implementation in the light of the skills gaps evident amongst ECFs owners bequeathed by the apartheid legacy. The skills deficiencies perpetuated by a legacy of sub-standard education, limited professional training and limited construction experience all crystallise into an amalgam that is inimical to successful project implementation. To this end, the combination of a supportive organisational structure task-oriented organisational culture and an assortment of organisation-wide PM skills will collectively trigger successful PM and project execution (see Figure 1). Proposed conceptual framework Understanding the formal PM adoption readiness of ECFs necessitates an appreciation of the constitutive components of the project implementation model to ensure the effective execution of PM techniques and tools in project activities of ECFs. The model suggests that formal PM implementation involves a complex change management process in which the PM-based organisation has an organisational structure, culture and PM skills base which are congruent with the organisation’s situated context and are moderated by organisational change readiness (OCR) (cf. Kloppenborg 2012; Pinto 2010). For ECFs, high levels of PM implementation depend on the conduciveness for change of organisational structure, culture and the PM skills base of ECFs (see Figure 1). This implies that readiness of organisational change is a crucial precondition for effective implementation and management of formal PM techniques and tools within organisations. The framework assumes that once a conducive organisational structure, organisational culture and PM skills are available and moderated by Organisational Change Source: Researchers’ own compilation 2014 FIGURE 1: Formal PM implementation model. Organisaonal structure Organisaonal readiness change Organisaonal culture Organisaonal skills Effecve project management implementaon Formal project management implementaon 66 Page 6 of 7 Original Research http://www.icbmd.org Open Access Readiness (OCR), there are high chances of effective implementation of projects. Since external variables such as the nature and size of the industry the ECF is in, the general performance of the economy, and competition from rivals are givens, they were considered as unsuitable for inclusion in the model. Therefore, we argue that although the external environment provides a facilitative environment for the articulation of organisational readiness, the actual success of formal project management and/or implementation rides on a conducive organisational structure, organisational culture and prevalence of PM skills within the ECFs (see Figure 1). Methodology It was earlier emphasised that literature review constitutes the methodological approach in this study. The study is therefore theoretical. According to George State University (2015), theoretical research is ‘ based on the observation of others’ and ‘runs no analytical procedures due to absence of empirical data’. The study employs concepts, constructs and relationships of variables drawn from literature to make logical inferences about the extent of formal project management adoption readiness of emerging contractor firms. The approach was, therefore, adopted because of lack of data on the project management adoption readiness of emerging construction firms in Mangaung Metropolitan Municipality. Observations and discussion This article has already alluded to the central place of the ECFs in the economic development agenda of South Africa, including the value of the construction industry in the redistribution of the economic wealth of the country. The challenge, however, is that the fulfilment of these mandates is neither automatic nor a simple enterprise given the highly complex nature of this industry, multiple legislation and multiple stakeholders deeply implicated in the reconstruction and development agenda of the nation. In South Africa, the complexity of construction projects arises from the multiple structural, contextual and professional complexities. The structural issues relate to the construction backlog amongst historically marginalised groups bequeathed by the discriminatory apartheid regime, the high demand for decent accommodation in the face of a rapidly expanding population and resource constraints that limit public provision of decent housing across various social groups. Contextual concerns undergird public pressure for decent accommodation that manifests in strikes and demonstrations for basic amenities, which have become a public spectacle across the breadth of the country. At the professional level there is the abundant evidence of project skills gaps amongst ECF owners, their low educational attainments that complicate effective project delivery and inadequate organisational structure for successful implementation of large infrastructural projects. Combining the above-mentioned constraints become a recipe for construction disaster given that construction projects have to be delivered on time, within recommended budgets and of the appropriate quality. Therefore, formal PM techniques could enhance project implementation success by increasing chances of delivering successful projects on time, appropriate cost and quality whilst also satisfying stakeholder needs. Project management success, therefore, demands PM readiness, itself a mediator of organisational structure, organisational culture, organisational strategy and PM skills. Significance of the contribution Given the study objectives of determining the formal PM adoption readiness of emerging contractors, the theoretical discussion of this research should render an informative heuristic to: 1. Enable ECFs to realise the importance of organisational change readiness including adoption and implementation of formal PM techniques in their project activities. 2. Empower ECFs to identify and develop appropriate business strategies consonant with the types and scale of projects they implement. 3. Attract sufficient local corporate investment in ECFs, including the development of durable collaborations with the corporate sector on large scale projects. 4. Enable government construction regulation agencies to develop and monitor the PM skills base of ECFs and advise them on the appropriate organisational structure for effective implementation of their projects. 5. Enable government agencies to adjust and adapt current contractor development programmes to suit the skills base and organisational structural realities and complexities of ECFs. Concluding remarks The article argued that although PM techniques and tools are considered critical to effective implementation of ECF projects, the adoption of such tools and techniques is never an automatic process or a simplistic venture as effective project management implementation demands sufficient organisational change readiness. Such readiness sets the socio-cultural context and appropriate professional tone for developing a supporting organisational structure, coherent, results-oriented organisational culture, corresponding business strategy and PM skills base congruent with successful project execution. To this end, effective project execution can be conceived to be a chain reaction process: one in which organisational change management presupposes organisational readiness, whilst organisational readiness cultivates the situated context and aura for a relevant organisational culture, structure, strategy and PM skills base that triggers effective project implementation. 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Authors: Henri-Vincent Ndjave-Ndjoy1 Michael Twum-Darko1 Lee-Anne Harker1 Affiliations: 1Faculty of Business and Management Science, Cape Peninsula University of Technology, South Africa Correspondence to: Henri-Vincent Ndajve-Ndjoy, h.[email protected] How to cite this article: Ndjave-Ndjoy, H-V., Twum-Darko, M. & Harker, L-A., 2016, ‘Institutionalising knowledge sharing in an organisation: A case of a selected organisation in the Western Cape, South Africa’, in M. Twum-Darko (ed.), Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, pp. 71–79, AOSIS, Cape Town. https://doi. org/10.4102/aosis.2016. icbmd10.09 Copyright: © 2016. The Authors. Licensee: AOSIS. This work is licensed under the Creative Commons Attribution License. Introduction The aim of this article is to explore the social determinants which will enable the institutionalisation of knowledge sharing within an organisation. After an in-depth review of current literature, it was discovered that the success of knowledge management within any organisation is contingent on knowledge sharing. It was also discovered that knowledge sharing is often seen as problematic because of a lack of guidelines on what to share and how to share it, as well as the willingness of people to share. These discoveries have been because of a lack of an organisational culture for sharing knowledge (Twum-Darko & Harker 2014). Continuous knowledge sharing, knowledge renewal and knowledge creation cannot occur efficiently and effectively without an established organisational culture, infrastructure and procedures and policies for knowledge sharing (AbdulJalal et al. 2013; Malhotra 2004; Marabelli & Newell 2012) that is institutionalising knowledge sharing. Institutionalisation plays an important role in enabling an organisational culture for sharing knowledge and providing a systematic approach to sharing knowledge (Orlikowski 2000), thereby enabling the effective and efficient sharing of knowledge (Twum-Darko & Harker 2014). Nielsen, Mathiassen and Newel (2014) define institutionalisation as: the recursive intertwining of practices that encourage the travel of ideas across a field and within individual organizations. Ideas are created, transformed and legitimized over time, and take on different linguistic and material forms across organizational settings. (n.p) Thus, in the context of this study, the entrenchment of knowledge means sharing practices. The challenge, then, is to explore the determinants for institutionalising knowledge sharing, using structuration theory. Given the importance of structure and a culture for knowledge sharing as well as the positive influence that institutionalisation can have on knowledge sharing, systematic sharing of knowledge cannot take place unless there are procedures, guidelines, policy and an organisational culture nurtured for knowledge sharing (McDermott & O’Dell 2001:76; Riege 2005; Ruppel & The aim of this article is to explore the social determinants for the institutionalisation of knowledge sharing within an organisation. The article uses the concept of duality of structure of Giddens’ Structuration Theory as a theoretical lens. The reason for the focus on institutionalisation is because of its stabilising benefits and contribution to nurturing a culture of knowledge sharing. Systematic sharing of knowledge cannot take place unless there are procedures, policies and guidelines for knowledge sharing. The research, engaging an interpretive case study, reported on the major findings from the qualitative study with manager, professional, technician and intern staff members working within the development information and geographic information system department of a selected municipality in the Western Cape, South Africa. The perception is that organisational structure, policies and processes, corporate governance as well as technology have been identified as major enablers for the institutionalisation of knowledge sharing in an organisation. Management support and organisational culture were also recognised as social factors for knowledge sharing institutionalisation. New strategies for reinforcing efforts to nurture and invigorate the institutionalisation of knowledge sharing within an organisation were generated and presented as a general framework. Institutionalising knowledge sharing in an organisation: A case of a selected organisation in the Western Cape, South Africa Read online: Scan this QR code with your smart phone or mobile device to read online. Note: This article was originally presented as a paper at the 2016 International Conference on Business and Management Dynamics (ICBMD). 71 Page 2 of 9 Original Research http://www.icbmd.org Open Access Harrington 2001). The importance of organisational culture lies in its ability to have a direct effect on employees’ knowledge sharing behaviour as well as an indirect effect through influencing managers’ attitudes towards knowledge sharing (Wang & Noe 2010). In addition, the lack of appropriate infrastructure supporting knowledge sharing and formal and informal spaces to share, impact the effective sharing of knowledge in an organisation (Riege 2005:25–26). Institutionalisation is important not with regard to systems and structure, but also culture and the influence of management. Therefore, the problem is one of knowledge sharing not being adequately institutionalised in many organisations. This was observed after realising the importance of structure and culture for knowledge sharing as well as the positive influence that institutionalisation can have on knowledge sharing. The challenge, then, is to explore the social determinants for the institutionalisation of knowledge sharing. Knowledge sharing cannot be efficient and/or effective unless it is institutionalised. Furthermore, institutionalisation should be considered from all perspectives to determine how knowledge sharing can be entrenched in an organisation. Duality of technology and enactment of knowledge sharing-in-practice Anthony Giddens (1986) describes the duality of structure as constituting two pillars of duality: the dimensions of structure and the processes of interactions. The duality of structure concept is depicted in Figure 1. The signification structure relates to organisational interaction using different kinds of interpretative schemes (Giddens 1986). Signification, therefore, can be used by agents for communicating, understanding and providing the meanings for different types of activities (Mauerer & Nissen 2014). The domination structure deals with various ways of exercising power over different types of resources (Mauerer & Nissen 2014). Domination involves controlling and using allocative and authoritative resources, along with power, over other people or resources (Giddens 1986). Also, the legitimation structure deals with the institutionalisation of norms, standards and values (MacKay & Tambeau 2013). Twum-Darko (2014) refers to it as moral code, leadership, understanding and endorsement for human interaction which ultimately produces legitimation. Drawing on the work of Giddens, Orlikowski (2000:407) used enactment of technology-in-practice (ETiP), which has been adapted in Figure 9 below for knowledge sharing to further elaborate on the two notions of emergent structures and enactment. Orlikowski asserts (op.cit.): structures are embodied in technologies to be appropriated by users and indeed differently over time and space to share knowledge. That is, rather than starting with the technology and examining how actors appropriate its embodied structures, this view starts with human action and examines how it enacts emergent structures through recurrent interaction with the technologies at hand. Therefore, Figure 2, which is based on Giddens’ duality of structure, represents Orlikowski’s argument of technology appropriation. Barley and Tolbert (1997) define institutionalisation as shared rules and typifications that identify categories of social actors and their appropriate activities or relationships. The process of institutionalisation includes the concept of ideals, discourses, techniques and controls. This implies basic ideas, ways of defining and acting upon reality, using elaborate systems of measurement and documentation for controlling action outcome (Dambrin, Lambert & Sponem 2007). The dynamics of institutionalisation are adequately addressed by Orlikowski’s enactment of technology-in-practice and have been used as a lens through which to conceptualise the problem. Given the underpinning theory to enact knowledge sharingin-practice, the research problem has been conceptualised and illustrated as in Figure 3 below to address knowledge sharing challenges in an organisation. Institutionalisation cannot take place unless there are knowledge sharing strategies that are driven from policies leading to guidelines to implement procedures (Twum-Darko & Harker 20144:290). The institutionalisation of knowledge sharing is driven by the implementation of knowledge management strategies. Source: Giddens (1986) FIGURE 1: Duality of structure. Significaon Structure Modality Interacon Dominaon Legimaon Facility Interpreve scheme Communicaon PowerSancon Agency Norm 72 Page 3 of 9 Original Research http://www.icbmd.org Open Access These strategies, informed by the determinants for the institutionalisation of knowledge sharing, determine the kind of corporate support that the organisation requires to drive knowledge sharing. The process of institutionalisation is achieved through the monitoring and evaluation of knowledge sharing, which serves to inform knowledge management strategies for improvement. Consequently, recommendations are made to management on how to improve the effectiveness of knowledge management strategies, which include the determinants important for the institutionalisation of knowledge sharing. Literature review Introduction Ruppel and Harrington (2001) argue that knowledge management has received significant focus in literature as a result of the numerous advantages that it can bring to an organisation. Knowledge management manages the activities of knowledge workers, which is achieved through facilitating, Source: Orlikowski 2000 FIGURE 2: Adaption of enactment of technology-in-practice. Enactment of knowledge sharing-in-pracce (Enforcement of appropriate technology and management) STRUCTURE Facilies (e.g., Hardware/Soware) Norms (e.g., Organisaonal policies) Interacons Re-enforcing technology structures and management (Connuous entrenchment of appropriate technology) Interpreve schemes (e.g., Inter-personal interface) A G E N C Y Source: Derived from literature reviewed FIGURE 3: Problem conceptualisation. Determinant for instuonalisaon Policies People Processes Culture Organisaonal structure Technology drives empowers impacts enable support enforce facilitate Standard operang procedures Knowledge Management Strategies determine improves Instuonalisaon monitors Corporate support evaluates enables Knowledge sharing 73 Page 4 of 9 Original Research http://www.icbmd.org Open Access motivating, leading and supporting knowledge workers by providing or nurturing a suitable working environment (Gao et al. 2008:12). Furthermore, Wiig (2004) indicates that knowledge management is a social communication process. Thus, he (Wigg 2004) argues that the communication process is enabled by collaboration and cooperation support tools. It is therefore agreeable that knowledge management could make organisations act intelligently to make them viable and succeed to realise the value they can derive from knowledge assets (Wiig 2004). Knowledge management in an organisation involves certain processes, which include the creation, transfer, storing and using of knowledge (Bhatt 2002). Similarly, Massingham (2014) declares that the: goal of knowledge management is to capture, store, maintain and deliver useful knowledge in a meaningful form to anyone who needs it in any place and at any time within an organisation. (p. 1077) Indeed, knowledge, as suggested in the literature, can be either tacit or explicit. Becerra et al. (2008) argue that tacit knowledge refers to the knowledge that we keep in our minds or our personal experience. However, Clarke and Rollo (2001) have suggested that explicit knowledge is knowledge existing in physical forms such as manuals and documents, or codified knowledge. Knowledge is derived from information. Information is data in context that can be used for decision-making (Clarke & Rollo 2001:207). Knowledge is information possessed in the mind of individuals (which may or may not be new, unique, useful or accurate) that is related to facts, procedures, concepts, interpretations, ideas, observations, and judgements (Alavi & Leidner 2011:109). Knowledge is therefore an organised combination of data, assimilated with a set of rules, procedures and operations learnt through experience and practice (Bhatt 2001:70). Knowledge management has become a key component of an organisation as it helps the organisation to improve performance and achieve a competitive advantage (Lindner & Wald 2011). Knowledge sharing Knowledge sharing is the cornerstone of a knowledge management strategy as better and purposeful sharing of useful knowledge translates into accelerated individual and organisational learning and innovation (Riege 2005). Knowledge sharing ensures that knowledge is distributed and made available to all employees across an organisation (Wang & Noe 2010). At the same time, knowledge management can only be sustained through continuous sharing of knowledge (Twum-Darko & Harker 2014:282). Knowledge sharing, however, has become a crucial area of concern (Ghobadi 2015). Concerns arise from the observations that knowledge sharing is not efficiently performed because of many factors. According to Riege (2005) and Carmeli et al. (2013), this could be attributable to a lack of leadership and managerial direction regarding clearly communicating the benefits and values of knowledge sharing practices. The lack of accessible knowledge, lack of effectiveness and efficiency of knowledge sharing processes, and a lack of social cohesion can also negatively impact knowledge sharing performance (Wickramasinghe & Widyaratne 2012). Alavi and Leidner (2001) assert that communication processes and information flows drive knowledge transfer in organisations. It is therefore important to address the issue of institutionalisation as an enabler for knowledge sharing, as the uptake of knowledge sharing to sustain knowledge management is crucial for organisations (Twum-Darko & Harker 2014:3). Knowledge sharing strategies Knowledge sharing plays an important role in implementing and executing knowledge management (Cao & Xiang 2012). The success of knowledge sharing is driven by its strategies and approaches. Enhancing trust, social cohesion and organisational culture can be useful for the effective transfer of knowledge. Riege (2005) states that motivation, encouragement and stimulation of individual employees to purposefully capture, disseminate, transfer and apply existing and newly generated useful knowledge is a way of reinforcing knowledge sharing in an organisation. Moreover, according to Chumg et al. (2015), it is important to develop a trust-based social network in the organisation as it will generate social cohesion. Trust can impact on the knowledge sharing processes as the more people trust each other, the more they are open to sharing and distributing their knowledge (Finn 2011). Riege (2005) emphasises this view by noting the importance of developing an organisational culture for knowledge sharing. This includes organisational structures that facilitate transparent knowledge flows, processes and resources that provide continuous learning, organisational culture and clear communication of the company’s goals. Clarke and Rollo (2001), Riege (2005) and Alavi and Leidner (2001) further note the use of technology as a strategic approach for knowledge sharing. In this context, implementing a knowledge management system would be useful for the organisation as knowledge can be shared more effectively (Alavi & Leidner 1999). Based on these observations, it can be concluded that knowledge sharing strategies and approaches may impact positively on knowledge management performance (Chumg 2015). Corporate support for knowledge sharing The literature on corporate support for knowledge sharing recommends many tools and techniques for supporting knowledge sharing within an organisation. One of these tools is technology. According to Jones and Karsten (2003), using software tools such as a knowledge management system can impact positively on knowledge sharing. This opinion is supported by Hendriks (1999) and Alavi and Leidner (2001) who assert that information and communication technology are crucial for knowledge sharing. This is because technology 74 Page 5 of 9 Original Research http://www.icbmd.org Open Access makes the exchange of knowledge easier and more frequent (Connelly & Kelloway 2003). Moreover, Wickramasinghe and Widyaratne (2012) added that interpersonal trust, openness from employees, team leader support, rewards or incentives and knowledge sharing mechanisms can have a positive impact on knowledge sharing. Sánchez et al. (2013) contend that motivation, commitment, rewards, identification of competencies which need to be changed or optimised at the individual, team and organisational level, are all techniques that can be used to share knowledge more effectively and efficiently. This entails the implementation of proper knowledge sharing governance mechanisms such as motivation, and the creation of knowledge sharing opportunities, reward systems, internal training, leisure activities, reinforcing social activities, organisational design and culture, intrinsic and extrinsic rewards – all of which are important for employees’ willingness to share knowledge with their co-workers, especially tacit knowledge (Huang et al. 2013). According to Twum-Darko and Harker (2014:289), organisational culture, management support and technology are reported to hold a significant influence on enabling and sustaining knowledge. In that context, it is implementing processes, incorporating a structured, systematic platform, and using technology to offer support and standardisation that will indeed ensure order and uniformity in the context of knowledge sharing (op. cit.). It is, therefore, important for an organisation to foster a relationship amongst employees and to cultivate mutual trust in the workplace. Having governance structures for knowledge transfer such as exchange, entitlement and leadership can create a knowledge sharing culture (Wanyama & Zheng 2010). This would create a connection between sharing knowledge and practical business goals. McDermott and O’Dell (2001) are of the opinion that knowledge sharing efficiency is linked to the core values of an organisation. This would facilitate the creation of a human network and solicit the support of people to share ideas and insights. In that respect, ensuring that positive social cohesion exists, along with technology and knowledge governance, can be enhanced. the performance of knowledge sharing within an organisation (Akhavan et al. 2013; Connelly et al. 2007; Dell et al. 2003; Dell et al. 2003). The consideration of corporate support in the uptake and sustaining of knowledge sharing is important. Management support is a very important factor, as leadership is seen to be important for the promotion of the value of knowledge management, identifying opportunities to share and developing metrics for assessing the impact of knowledge sharing (Twum-Darko & Harker 20144:289). Research approach Introduction Because of the sensitivity of this study, and the contribution made to depict matters of knowledge sharing and its institutionalisation, the choice of research approach is therefore fundamental. The ontological position of this research was a subjective one and, as a result, an interpretivist approach was adopted. The intention is to provide an in-depth and interpreted understanding of the social phenomenon by learning about experiences, perspectives and social and material circumstances (Ritchie & Lewis 2003:3) of knowledge sharing in an organisation. Data on perceptions and insights on knowledge sharing enablers, which are important for institutionalisation in an organisation, were collected through a face-to-face focus group discussion with seven staff members operating within the Development Information and Geographic Information System (DI and GIS) department of the selected organisation. Focus group discussion was found to be important in the identification of cultural norms and the understanding of the issues of concern within a group of the affected population (Acaps 2012:10). The focus group was useful to obtain certain types of information as it was difficult to collect the relevant data across diverse groupings and departments using other qualitative techniques (Grafton Lillis & Mahama 2011:10). In addition to the focus group discussion, semi-structured questions were used in a way that did not restrict the flow of information amongst group participants. Thus, according to Welman and Kruger (2002:161, 187), the use of semistructured questions for interviews as well as focus group discussion are useful when the topic is of a very sensitive nature and when the respondents come from divergent backgrounds, offering a versatile way of collecting data. Therefore, since this study entailed direct interaction with the units of analysis, being the Development Information and Geo-spatial Information Systems department of a public local government organisation in the Western Cape, South Africa (Pozzebon et al. 2005), the research was empirical in nature. Sampling and population Purposive sampling, which is a non-probability sampling method, was used to enable an enhanced understanding of an information-rich case (Sandelowski 2000:248). Thus, participants were selected with informative characteristics, useful insights and ideas which were relevant for the purpose of this study (Anderson 2010:4; Bricki & Green 2007:9). The study focused on one department, ‘DI & GIS’, because it is a highly intensive knowledge area and knowledge sharing is a major component of this department and, as such, cannot function without the knowledge sharing activity. A focus group comprising seven staff members (manager, professional, technician and interns) working in the DI and GIS department and operating across the six branches of this department was conducted to obtain insights and perceptions about the matter of the institutionalisation of knowledge sharing. The DI and GIS department comprises a total of 6060 staff members from which 7 employees representing the branches were selected for the focus group (qualitative study). This is depicted in 75 Page 3 of 7 Original Research http://www.icbmd.org Open Access when the nature of the data cannot fit into relational databases. Hadoop Hadoop is an open source software project that enables scalable distributed processing of large data sets across clusters of commodity servers (Borthakur 2007; McTaggart 2008). It has many similarities with distributed file systems such as Google File System (GFS) (Ghemawat, Gobioff & Leung 2003). The main components of the Hadoop ecosystem are: 1. Hadoop Distributed File System (HDFS) (McTaggart 2008). In HDFS, a single file is split into blocks which are distributed in the Hadoop cluster nodes. The input data in HDFS is treated in write-once fashion and processed by MapReduce, and the results are written back in the HDFS. The data in HDFS is protected by a replication mechanism amongst the nodes. This provides reliability and availability despite node failures. 2. MapReduce, a programming model and software framework first developed by Google (Dean & Ghemawat 2008). It facilitates and simplifies the processing of large data in parallel on clusters of commodity hardware in a reliable, fault-tolerant manner (McTaggart 2008). In MapReduce, a map function is specified that processes a key and/or value pair to generate a set of intermediate key and/or value pairs, and a reduce function that merges all intermediate values associated with the same intermediate key (Dean & Ghemawat 2008). 3. HBase. In Hadoop, data can be stored in HDFS as mentioned earlier or in HBase (Apache 2014), which is a NoSQL database configured on top of HDFS. HBase provides a wide range of benefits which include fault tolerant storage for large quantities of data, near real-time lookups, atomic and strongly consistent row-level operations and automatic sharding and load balancing of tables. Spark Spark is a cluster computing framework which supports applications with working sets whilst providing similar scalability and fault tolerance properties to MapReduce (Zaharia et al. 2010). Spark programs can be written using Scala, Python or Java language. Data analysed with Spark can be stored in HDFS, HBase, any relational database, Hive or in operating system files. Spark can analyse big data in stand-alone mode or with Hadoop cluster. BD evaluation frameworks Several technologies have been designed and developed to manage big data. Ghazal et al. (2013) and Dilpreet and Reddy (2014) also made this observation and further stated that there is a gap in existing literature on how these technologies can be compared and evaluated. It is important to note that the excitement and interest in big data is continuously driving the development of more and more open source and commercial big data technologies. This makes it difficult for organisations to identify and determine technologies that are appropriate for big data analytics requirements. Therefore, there is a need for guidelines, frameworks or end to end benchmarks which are easy to use to assist enterprises in evaluating and comparing these tools (Dilpreet & Reddy 2014). Although industry and academia have proposed a number of benchmarks (Bakshi 2012; Ghazal et al. 2013; Gualtieri 2013), as at the time of this study, no end to end standard benchmarks could be identified from literature used for big data technologies and those that are available are very difficult to use (Ghazal et al. 2013; Liu et al. 2013). What compounds this challenge is the shortage of big data technology expertise, especially in South Africa. At the time of this study, there is no university or college in South Africa offering a course on big data analytics. This article therefore seeks to propose evaluation criteria that inform and guide non-experts in determining appropriate technologies for big data analytics. Methodology To recapitulate, the aim of this article was to explore and propose evaluation criteria that can be used to compare and select technologies that are appropriate for big data analytics. To achieve this aim, an intepretivist stance was taken and a mixed methods research approach (Teddlie & Tashakkori 2009) was used to collect and analyse research data. This approach was found appropriate because big data is still a new phenomenon which needed research data to be collected using multiple methods from multiple sources (Creswell & Plano Clark 2011). The study began with a comprehensive literature analysis to understand the concept of big data analytics, technologies used and ways of determining appropriate technologies. This was followed by a qualitative interview of 10 BI experts with knowledge or experience of big data analytics in South Africa. The interviews were restricted to South Africa because it was easy to identify the participants and schedule the interview sessions. The purpose of the interview was to gain insight from the participants on the technologies their organisations are using for big data analytics and the important things they look at when they determine the technologies they are using for big data analytics. The researchers then used a computer laboratory comparative experiment to find out other criteria that can be useful when comparing and evaluating technologies appropriate for big data analytics. In the experiment, a Hadoop cluster (CDH) was set up to compare three tool sets: Hive, Spark and Impala. The experiment was driven by five variables: toolset, which was a categorical variable, data size in gigabytes, query execution time (s), memory consumption and disk I/O. The data size (independent variable) was manipulated into different sizes, 10G, 50G, 100G, 250G, 500G and 1TB, and stored into HDFS. The data size (independent variable) was manipulated into different sizes, 10G, 50G, 100G, 250G, 500G and 1TB, and stored into HDFS. Each tool was executed 10 times against each data set as the dependent variables were being recorded. The mean variable values per tool set and per 82 Page 4 of 7 Original Research http://www.icbmd.org Open Access data set were used to compare the tools. Prior to each execution, the cluster was restarted to ensure that each execution had almost the same amount of resources. Findings Interview results Narrative data collected from the interview participants were analysed and interpreted in relation to the research aim of exploring big data analytics technologies and proposing evaluation criteria for big data analytics tools. Based on the participants’ experience with big data analytics and their perceptions, the following findings were revealed. Characteristics of big data Organisations that are generating or receiving high volume, high velocity data from disparate sources are either using big data technologies or have started migrating data analytics to big data technologies such as Hadoop, Spark and NoSQL databases, or they are already planning to move out of traditional BI tools to big data analytics tools. This is being driven by the new characteristics of data that cannot be handled by traditional database and data warehouse technologies and the business user requirement of running arbitrary analytic and reporting functions against arbitrary data sets and, sometimes, in real time. User requirements According to the views of the participants, user functional requirements drive the selection of technologies that are appropriate for big data analytics. Although batch processing is still used by the majority of organisations interviewed, the requirement to run analytics against all available data sources, instead of a subset as is done with traditional data warehouses, is pushing organisations towards big data analytics technologies such as Hadoop, In-memory databases and NoSQL databases. Such requirements as fraud detection and on-line advertisement need data to be analysed in real time whilst at the same time looking at historical data to check patterns for fraudulent transactions. Big data benchmarks and evaluation frameworks The data collected revealed that none of the existing big data benchmarks was used by any of the participants to evaluate and compare technologies for data analytics. Some participants stated that they are not aware of the existence of any benchmark, whilst others stated that it is difficult to use the benchmarks. Organisations seem to rely on analysts’ reports such as the Gartner magic quadrant report, online reports on GitHub, product vendor reports and intuition from individual employees when determining technologies appropriate for big data analytics. Unstructured data From the data collected, it is clear that organisations are becoming more aware of the need to analyse unstructured data. It is especially in the physical environment such as closed circuit television (CCTV) and the social media arena (Facebook and Twitter) where there is a need for companies to analyse the massive amounts of data generated to gain valuable insights for competitive advantage. Structured data Although organisations are generating both structured and unstructured data, it is evident that majority of the organisations have a need for analysis of large volumes of structured data that often changes quickly in value and in structure. The structure of data in a big data environment changes quickly and, therefore, technologies used for analysing big data must be able to seamlessly adjust without impacting business processes. Costs When determining technologies for big data analytics, organisations look at total cost of ownership. Organisations look at how much it is going to cost for hardware, software, maintenance and training. All these things are considered and then a comparison of three or more different technologies is carried out. Licensing models The data collected showed that different technologies have different licensing models. Some products are licensed per user, some per CPU core, and some per data node whilst some are licensed on the amount of data stored. Experiment results The results from the interviews indicated that system performance and resource utilisations (memory, CPU and disk I/O) are the most important criteria when comparing and evaluating technologies appropriate for big data analytics. To test this finding, a comparative evaluation of Hive, Impala and Spark was conducted as described in the Methodology. The experiment was driven by the query in Figure 1 and data sets described in the Methodology. The experiment results indicate that the three tools are significantly different with regard to performance (latency), memory consumption, CPU utilisations and disk I/O as shown in Table 1 and Figure 2. As seen in Table 1 and Figure 2, all of the three tools had different query execution times, although both Impala and Spark had similar execution times for lower input data sizes. The results also show that Hive had very high latency as the FIGURE 1: The relational query used. SELECT dim.country, dim.publisher_name, SUM(fct.sale_amount) 'sale_amount FROM publiusher_dim dim, conversion_winner_fact fct WHERE winner_publisher_had_click IS NOT NULL and dim.publisher_id = fct.winner_publisher_dim_id GROUP BY dim.country, dim.publisher_name; 83 Page 5 of 7 Original Research http://www.icbmd.org Open Access volume of data increased whilst Impala aborted at 1TB of input data size with the error message ‘MEM LIMIT reached’. In addition to the time variable, differences in memory consumption, disk I/O and CPU utilisation per tool set were also evident as the size of input data increased. For all the input data sets, both Impala and Spark used more memory than Hive, but Impala crumbled at 1TB of data. The data also shows that Hive has higher disk I/O than Spark and Impala. In addition, although Spark and Impala have very little difference in their CPU utilisation, they both have higher CPU utilisation than Hive. Evaluation criteria for data analytics technologies In this study, 18 evaluation criteria are proposed as a guideline that can be used to compare and evaluate technologies appropriate for big data analytics. These are, namely, (1) performance (latency and throughput), (2) scalability, (3) ability to handle quick changing data, (4) ability to read both structured and unstructured data formats, (5) ability to read compressed file formats, (6) ability to seamlessly adapt to changes in data structure, (7) fault tolerance, (8) ease of use, (9) technical skills availability, (10) ability to integrate with existing technologies and data analytics platforms, (11) costs, (12) licensing models, (13) CPU utilisation, (14) memory consumption, (15) disk I/O, (16) scalability, (17) fault tolerance and (18) security. All participants in this study stated that system performance is the most important of all the above criteria because real time analytics are concerned with delivering fresh information quickly to decision-makers. Experiments were conducted to test if performance can actually be used to compare and evaluate technologies. The experiment results show that query execution time for Impala, Hive and Spark are statistically significantly different and therefore, the performance of technologies can be used to compare and evaluate big data analytics technologies. Discussion Traditional database and data warehouse technologies have been the main pillar of data analytics in organisations for many years. This is slowly changing as organisations are moving their analytics processes onto big data technologies such as Hadoop, NoSQL databases and In-memory databases. An open issue on these big data technologies is the lack of standard benchmarks and guidelines on what to look out for when comparing these technologies (Liu et al. 2013). In this study, 18 evaluation criteria are proposed as a guideline that can be used to compare and choose technologies appropriate for big data analytics. MapReduce based technologies were conceived to process large-scale data in batch jobs in a shared TABLE 1: Execution time for Impala, Spark and Hive in Cloudera Hadoop YARN Cluster mode. Tool Used Input time(s) 10G 50G 105G 250G 500G 1000G Impala 1.45 2.48 3.09 5.96 11.69 Hive 37.49 85.15 148.1 357.49 706.51 1346.3 Spark 0.58 1.5 1.91 2.67 5.33 20.43 FIGURE 2: Comparison between Spark and Hive and Impala in execution time. 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 Execuon me (s) Input data size (G) 10G lnput 250G lnput 500G lnput 1000G lnput 50G lnput 105G lnput Impala Hive Spark 84 Page 6 of 7 Original Research http://www.icbmd.org Open Access nothing cluster architecture (Liu et al. 2013). Scalability, efficiency, fault tolerance, costs and ability to read both structured and unstructured data types were the main drivers for MapReduce based technologies. Hive is a MapReduce based tool which is best suited for batch jobs (Thusoo et al. 2009). The business need for real-time access to data either at rest or in motion (Marz 2012) has seen the emergence of other technologies such as Spark, NoSQL databases, stream processing technologies and MPP databases. Real-time processing technologies rely on distributed computing for scalability and in-memory processing to minimise disk I/O, thereby giving high performance (low latency). Impala and Spark process data much faster than Hive because Hive performs a lot of disk reads whilst Spark and Impala process data in memory. Conclusion In this article, the researchers explored big data analytics, related technologies and proposed evaluation criteria that can be used to compare and choose appropriate technologies for big data analytics. The study began with a literature review to explore the concept of big data analytics, big data technologies and how these technologies are compared and evaluated. This was followed by interviewing BI experts who have knowledge of big data to find out the technologies the participants’ organisations actually use for big data analytics and how they selected these technologies. The last part of the investigation involved setting up a computer laboratory experiment to test system performance, memory utilisations and disk I/O for Hive, Spark and Impala when analysing data. This study revealed that the area of big data analytics is still in its infancy with very few companies actually running big data analytics systems. It was also discovered that there is a lack of guidelines or frameworks available for use in determining the architecture or technologies that are appropriate. At the time of this study, only a handful of micro benchmarks could be identified which are designed to compare specific products. This article therefore gave a starting point for organisations and managers who are embarking on big data projects. The evaluation criteria proposed here can be used to choose appropriate technologies for big data analytics. The limitations encountered during this study include lack of experts on big data. It was difficult to identify companies and individuals in South Africa with knowledge and experience of big data analytics. The other challenge faced was getting enough resources to carry out a comprehensive experimental evaluation of Spark, Hive and Impala, and, therefore, this study could not provide detailed explanations of the differences in performance and resource utilisation by the different tools. This study can be developed further by testing the evaluation criteria proposed in this article through a survey using a large sample of participants which is not restricted to organisations in South Africa. Another area that can potentially be looked at is carrying out a survey of the successes of real time decision support systems in a big data environment. 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Authors: Konosoang Mpiti1 André de la Harpe1 Affiliations: 1Graduate Centre for Business Management, Faculty of Business and Management Sciences, Cape Peninsula University of Technology, South Africa Correspondence to: Andre de la Harpe, [email protected] How to cite this article: Mpiti, K. & De la Harpe, A., 2016, ‘Factors affecting agritourism growth in rural communities of Lesotho’, in M. Twum-Darko (ed.), Proceedings of the International Conference on Business and Management Dynamics 2016: Sustainable economies in the information economy, pp. 87–94, AOSIS, Cape Town. https://doi. org/10.4102/aosis.2016. icbmd10.12 Copyright: © 2016. The Authors. Licensee: AOSIS. This work is licensed under the Creative Commons Attribution License. Introduction Agritourism is regarded as one of the fastest growing industries in ecotourism. Hegarty and Przezborska (2005) mention that rural tourism and agritourism are terms that are used interchangeably, as agritourism is seen as part of the overall concept of rural tourism. Porcaro (2009:2) defines agritourism as ‘… activities of hospitality performed by agricultural entrepreneurs and their family members that must remain connected and complementary to farm activities’. Havlicek, Lohr and Benda (2011) refer to agritourism: … as a specific form of local tourism that involves tourists staying on a farm and engaging in daily agricultural activities and learning of the traditional rural activities that take place on the farm which include: – horseback riding, winery tours, agricultural exhibits, farmers markets, fishing, garden tours and on-farm sales. (p. 45) Hatch (2006) mentions that agritourism dates back to the late 1800s when people left cities and went to farms to visit their relatives for a short period of time. It became easier for people to travel to rural areas after the invention of motor vehicles in the 1920s. Hatch (2006) further explains that the Great Depression and World War II also gave rise to the first significant interest in rural development in the 1960s. From the 1970s, horseback riding and farm petting zoos became popular. In the 1980s and 1990s, farm vacations, overnight stays at bed and breakfast facilities as well as commercial farm tours became popular. Today, the demand continues to grow for agritourism. Background Lesotho is a landlocked country completely surrounded by the Republic of South Africa. Tregurtha (2012) explains that the population of Lesotho is approximately 2 067 000, and 58% of the population live below the poverty line. Although the country is located in the centre of the largest and most sophisticated economy on the African continent, Tregurtha (2012) mentions that Lesotho has not yet fully escaped poverty. Instead, it serves as a labour reservoir for South African mines and industries. According to Anon (2012), Lesotho receives its foreign exchange earnings from South Africa through exportation of garments, diamonds, wool and mohair. The country is also Agritourism is an important part of the tourism strategy and can improve the livelihoods of farmers in the agricultural industry. Changes that have been brought about by technology have created a challenging environment for farmers who do not have access to and knowledge about technologies available for agritourism. The aim of the study was to explore some of the factors that affect the growth of agritourism as an industry in Lesotho. The study further aims to contribute towards agritourism development and related studies, and proposes guidelines to overcome the negative impacts of agritourism growth. Multiple-case studies were used as a research strategy. Six commercial farms were selected using non-probability sampling and judgemental techniques. The units of analysis were farms, officials from government and tourists as a group. The units of observation included the individual farmers, farm employees, officials from the Ministry of Tourism, Environment and Culture and individual tourists. Content analysis was used to analyse data collected from faceto-face interviews. The findings show that whilst technology is viewed as an important component for agritourism growth, issues such as the lack of infrastructure, costs, ICT literacy, awareness and education are some of the factors that hinder the growth of agritourism. The study concludes by recommending guidelines on how to overcome some of the factors affecting the growth of agritourism. Factors affecting agritourism growth in rural communities of Lesotho Read online: Scan this QR code with your smart phone or mobile device to read online. Note: This article was originally presented as a paper at the 2016 International Conference on Business and Management Dynamics (ICBMD). 87 [Document text truncated for crawler view.]