The impact of B-BBEE on small and medium-sized enterprises in the Civil Engineering sector: Mangaung region

Abstract

After winning the first democratic election in 1994, the African National Congress (ANC) declared their intention to transform the South African economy and uplift the previously disadvantaged population. In line with this goal, Black Economic Empowerment (BEE) policies were introduced to address historical imbalances and promote the participation of previously disadvantaged groups in achieving sustainable development and shared prosperity for all. These policies are designed to address the legacy of apartheid-era discrimination, which left many black South Africans economically disadvantaged. One of the most significant of these policies is the Broad-Based Black Economic Empowerment (B-BBEE) policy, which was introduced in 2003.

The Broad-Based Black Economic Empowerment (B-BBEE) strategy, which was introduced in South Africa, aims to redress the imbalances of the past by promoting the economic participation of black people in the country. One of the key objectives of the B-BBEE strategy is to increase the number of black people in executive and senior management positions within companies. This is seen as a way to address the historical lack of representation of black people in decision-making roles within businesses.

In addition to increasing black representation in leadership positions, the B-BBEE strategy also aims to ensure increased income levels of black individuals within qualifying B-BBEE companies. This is achieved through a variety of measures, such as skills development programs, preferential procurement policies, and the provision of financing and support to black-owned businesses. The purpose of this study is to examine the impact of compliance with the B-BBEE policy on the sustainability and continued existence of small and medium-sized enterprises operating in the civil engineering industry. This study has the primary objective of analysing the B-BBEE impact on small and medium-sized enterprises in the civil engineering sector within the Mangaung region and making recommendations to the small and medium enterprises in terms of how to manage Black Economic Empowerment in their businesses.

The research conducted in the study utilized both a literature review and empirical research approach. The literature review involved a comprehensive analysis of existing literature and research studies relevant to the topic of the study. The empirical research was carried out through the use of a structured questionnaire, which was distributed to 37 participants from two groups - consultants, and contractors. The research methodology used in the study was quantitative, employing a cross-sectional research design. The questionnaire was reviewed by the study supervisor and industry experts to ensure its validity. The combination of the literature review and empirical research allowed for a more comprehensive and in-depth analysis of the topic.

The study conducted a descriptive data analysis on the benefits of the B-BBEE policy for small to medium enterprises. The results demonstrated that the policy provides significant advantages to these enterprises. Additionally, the study utilized descriptive statistics, such as means and standard deviations, to support the underlying assumption about the impact of the B-BBEE policy on black-owned small to medium enterprises. The disadvantages variables showed a negative response to the negatives of the B-BBEE policy to black-owned small to medium enterprises. The research found negative responses, suggesting that no significant disadvantages emanated from the policy.

The study also provided practical recommendations to assist and support Small- and Medium-Sized businesses within the Civil Engineering sector. These recommendations were aimed at providing guidance pertaining to- skills development should weigh more than management participation, effective government support, private-public sector cooperation, policy reconsiderations and practical implications of the research. By following these recommendations, small and medium enterprises will improve their chances of success and ensure the long-term viability of their enterprises.