Preserving State-owned Enterprises in South Africa: Views and Insights from Business Rescue Practitioners in the Commercial Field of Action

Abstract

The success rate of business rescue in South Africa is concerningly low as it currently ranges between 10% and 12%. This study intends to make a positive contribution towards addressing this problem by obtaining insight from professional business rescue practitioners regarding the feasibility of making use of the practice of business rescue to assist South African state-owned enterprises to avoid them going into insolvency and indefinitely stopping operations. This study, which is a generic qualitative study, will rely solely on the experience and insights of the business rescue practitioners in order to obtain a better understanding of the problem at hand. Nine participants were interviewed during September and October 2020. The study found that business rescue practitioners are confident that the business rescue proceedings are a solution to preserving state-owned enterprises. However, the level of political interference by the unions, government officials, and also the continued bailouts from the government to support these state-owned entities are some concerns raised by the participants as they hinder the effectiveness of the proceedings with regard to state-owned enterprises. Academically, the study expands to the literature on business rescue in the context of state-owned enterprises and what challenges are hindering the process. For managers, the study identifies the key constraints which are most likely to be encountered when conducting business rescue proceedings in a state-owned enterprise which, if not observed, will negatively impact the success rate.

Citation

Kesieman, B.S. and Thakhathi, A. (2022), "Preserving State-owned Enterprises in South Africa: Views and Insights from Business Rescue Practitioners in the Commercial Field of Action", Thakhathi, A. (Ed.) Transcendent Development: The Ethics of Universal Dignity (Research in Ethical Issues in Organizations, Vol. 25), Emerald Publishing Limited, Leeds, pp. 55-78. https://doi.org/10.1108/S1529-209620220000025006