South African Journal of Economic and Management Sciences, Vol 15, No 2 (2012)

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The strategic implications of black empowerment policy in South Africa: a case study of boundary choice and client preferences in a small services firm

Willem H Boshoff

Abstract


This paper studies the relationship between a firm’s boundary choices within its value chain and the BEE pressures it faces from its clients. The paper shows that BEE policy alters the value chain preferences of a firm’s clients. These changes in client preferences motivate the firm to altering its boundaries. More important, boundary changes due to BEE are implemented in a way that ensures that the firm retains crucial architectural knowledge, which preserves its competitive advantage. Firms therefore do not respond passively to BEE-induced changes in client preferences, but aim to meet BEE aims within their broader strategic environment.


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EISSN 2222-3436 (Online)