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Literature on modes of entry has focussed on firm-level strategies. The predominant theories used are institutional theory and the resource-based view. Using an alternate approach – network theory – this paper aims to demonstrate an additional mode of entry: multiple firms entering together as an extension of an existing loose network, known as a bridging network. The extension of an external network across borders is an appropriate mode of entry in emerging markets, with no pre-existing networks or existing networks within a market that are weak, immature or missing.

A conceptual review, which develops four propositions, demonstrating that market entry with bridging networks may be the preferred mode of entry in the presence of institutional voids. Alternative modes may not be viable because of costs and risks associated with overcoming such voids.

Existing theory and case examples support the contention that market conditions facilitate firms to enter as networks rather than as singular entities. These conditions are found in markets with institutional voids and explain the dominant form of business groups in many countries and the operation of loose strategic alliances in emerging markets. Network entry facilitates market access speed may allow for local ties to remain undeveloped or be a first step in building in-country networks.

This paper heeds to the call for a network ecosystem approach to market entry, arguing that firms may enter as a collective in subsistence and emerging markets, which would explain the preponderance of business groups and loose alliances found.

Macro-Economics.

Undergraduate and MBA.

The COVID 19 pandemic-related restrictions devastated South Africa’s economy in 2020 and although the restrictions were generally less damaging than in 2020, the government had to budget for vaccinations and rebuild the economy. Public service unions had just announced that they were demanding an increase of 4% above inflation for their members and that they were preparing for a strike. They were bitter about the fact that the South African Government had withdrawn from the last year of a three-year wage agreement in February 2020 and their members had not received an increase for the two years. These demands and Finance Minister Mboweni’s response to them had to consider the structural and cyclical impact on the fiscus and economy.

The learning outcomes are as follows: understand the general objectives of fiscal policy and stakeholders’ interests; understand the tradeoffs in fiscal policy and the implications of taking a position; and make recommendations based on reasoned judgements about those recommendations.

Undergraduate and MBA level courses on Macro Economics.

Teaching notes are available for educators only.

CSS 10: Public Sector Management.

The case can be used in strategic management, international business or ethics courses. In strategic management courses, students will be able to identify political relationships as sources of a firm’s competitive advantage. Students will also understand the role of ethics in the firm’s competitive advantage. In international business courses, the students will be able to analyze the role that corruption and bribery play in the analysis of a country’s institutions. Students will also understand how corruption in a host country influences a firms’ decision to internationalize. Finally, students will understand the challenges that firms face when serving customers in other countries. In ethics courses, students will understand the nature of state/business corruption, i.e. the abuse of public office for private gain and the concept of state capture, i.e. managers controlling the political system for their advantage. Students will be able to analyze the decision of whether to collaborate with unethical partners or customers.

Bell Pottinger Private (BPP) was a British public relations (PR) firm with a successful but questionable reputation of helping famous critical figures and despots improve their public image. In 2016, Lord Tim Bell and the other leaders of BPP were asked to create a PR campaign for the Gupta family. The Guptas were a group of businessmen headed by three brothers who migrated from India to South Africa in the early 1990s. By the 2010s, they had built a business empire allegedly thanks to a corrupt relationship with the President of South Africa, Jacob Zuma and his family. The press and prosecutors were increasing their investigations on these relations. The case has two parts, which address two separate challenges and can be taught as standalone cases or in a sequence in two sessions.

MBA and Executive Education.

Teaching notes are available for educators only.

CSS 5: International business.

The discussion of competitive strategy in recent years has turned to exploring the differences between emerging market (EM) companies and traditional companies from the US, Europe and Japan. In particular the question has been: do we need a new theory of EM companies, or can existing theory be applied, perhaps with adaptations? The authors intent in this paper is to show what features enable EM firms to succeed in domestic competition, where institutional settings are different from those in Triad countries. The authors do not explore the issue of EM companies competing internationally.

The authors argue that competitive advantages (Porter) or resources (Barney; Wernerfelt) offer a solid base on which to build an understanding of successful domestic strategies of firms in EMs, also recognizing that the specific advantages differ somewhat in EMs, due to institutional differences (Peng). The authors explore characteristics of the 250 largest publicly-traded South African firms which enable them to compete successfully (incl: company size, brand value, company age, international sales and family ownership). The authors conclude that existing theories do indeed serve in this context, but that they need to be adjusted for the different institutional environments in EMs.

Factors that contribute to performance include: company size(+),brand value(+), company age (+), international sales(+) and family ownership(−). The literature that has developed on EM companies competing internationally fails to recognize that most of the features identified exist for all companies in a given country – so they do not explain domestic performance. Of course, even in the domestic context some companies will be better able to take advantage of institutional capabilities such as dealing with the government and with volatile economic conditions than other companies.

The study results come from only one EM, so there may be limits on generalizing to others. If China is excepted, the results here are broadly applicable to medium-sized and larger EMs today, with idiosyncrasies remaining for individual countries (such as natural resources, location, etc.)

EM companies to succeed in their domestic markets should look to build size/scale, to develop their brands and to expand internationally. They should also expand ownership to non-family investors. These factors were significantly correlated with superior performance of listed companies in South Africa and have been shown to apply elsewhere as well.

Also, most analyses of EM companies focus on their distinctive institutional capabilities for competing with firms from Triad countries. The study analysis focuses on domestic competition rather than on going abroad.

The South African government actively intervenes in the labor market in the pursuit of redress of social injustice. These interventions are complicated by economics and have a direct effect on intentions to turnover. In addition, South Africa has a dual labor market, with a high unemployment rate among lesser skilled workers, and a skills shortage at the top of the labor market.

There are four clear eras in the labor market of post-Apartheid South Africa. The first era was after democratic elections in 1994, when the government focused on nation-building with the introduction of indigenization programs. The second era was characterized by economic prosperity and an intensification of indigenization programs. The third era was characterized by rampant state corruption and increased regulatory uncertainty. During this period, the economy stagnated and unemployment increased. Firms restructured and lower-level workers were retrenched and higher-level skilled workers left the country. In 2018, a new president undertook to grow the South African economy and attract foreign direct investment. Despite these efforts, there was a spike in South Africans emigrating, increasing the turnover of highly skilled South Africans of all races.

Economics and politics create both push and pull factors and many unintended consequences, and the dual labor market reacts differently to labor markets than in developed economies. The lower-skilled employees lose their jobs as the economy contracts, while highly skilled jobs remain difficult to fill. However, skilled professionals nonetheless feel increasingly uncertain about their future employability.

This research stems from the need by organisations to retain their key talent in the context of the change in the psychological contract manifested from the emergence of boundaryless careers. Many organisations have segmented their workforce to develop talent pools of high potential employees to meet the organisation’s current and future critical skills needs. The purpose of this paper is to investigate the impact of inclusion or exclusion in the talent pool on the psychological contract.

The study presents findings from 195 employees from three different organisations, about 50 per cent of whom were in talent pools. Various instruments in the literature were used to measure the psychological contract and the other constructs of organisational citizenship behaviour, trust and turnover intention of employees in the talent pools in comparison to those not in talent pools.

The study shows that being part of the talent pool has a positive impact on the relational psychological contract and organisational commitment but does not necessarily translate into trust and the intention to stay with organisations.

The study was conducted in three large firms with well-developed and entrenched talent management strategies. The results may be different in firms with less formal talent management strategies or those firms that do not use talent pools. Despite these limitations, the study is valuable in showing the differences in relationships between employees recognised as more important and those not recognised in the same way.

Talent strategy should not ignore employees not in talent pools as they have shown that they display an aspiration to build long-term relationships with their employers and could represent a future source of potential. It is recommended that organisations should continue to segment their workforce to determine who should form part of the talent pool.

The results indicate the high complexity in understanding contemporary employment relationships and could be closely related to the previous findings on trust. Despite being identified as potential employees for development into linchpin and pivotal positions in their organisation, these employees were no different to employees not in talent pools when it came to trust and the intention to leave their organisation.

Employees in talent pools and those not in talent pools were similar in their intention to leave their organisations in circumstances where their expectations were not met. This finding is contrary to the expectation and indicates that relational psychological contracts do not have a moderating impact on the intention to leave where expectations are not met.