Learning Unit 4 Part 2The Macro Environment

Characteristics of SA Government

• Constitutional democracy – 3-tier system:– National– Provincial – Local

• 3-Tier system:– Executive authority for each– Defined in Constitution as “distinctive,

interdependent and interrelated• Advisory bodies from SA’s traditional leaders

Characteristics of SA Government

• Country run on co-operative governance• Parliament has legislative authority• President elected by National assembly– Executive Head of State– Leads the Cabinet– Not serve 2x 5 year terms in office

Structure of the SA Parliament

South African Parliament(Situated in Cpt)

National Assembly(350-400 members for 5

year term)

National Council of Provinces

(Achieve co-op governance and

democracy)

SA economic system

• Open economy:– What G&S to produce– What price to charge– How to use resources– Start business of own choice– Choose how to divide profits

SA economy

On par with developed countries

On par with basic

infrastructure

SA economy

• Transportation best in Africa.• Primary sector well developed.– Manufacturing– Services– Mining– Agriculture

• SA is productive and industrialised.– Labour divided into formal and informal sector– Uneven distribution of wealth and income

SA economy

• 3 Fundamental problems to solve:1. What should be produced in the economy?

Quantities to produce, spending on housing and HIV?

2. How should production be organised?Employment, location, buy or lease?

3. For whom should production take place?Equal distribution?

Doing business in SA

• Must comply to ‘rules of the game’.• Major rules:– Corporate Governance– Labour Laws– BBBEE– Basic tax

Corporate Governance

• Act as ‘responsible citizens’.• Corporate Governance = Good citizenship for

business organisations – Business integrity– Ethical values– Professionalism

7 Characteristics of Good Corporate Governance

Discipline

Transparency

Independence

Accountability

Responsibility

Fairness

Social Responsibility

Labour Law- Basic Conditions of Employment Act

• Regulate employment conditions:– Leave– Working hours– Contracts– Records– Deductions– Pay slips– Overtime– Termination

Labour Law- Compensation for Occupational Injuries and Diseases Act

• Information with regards to injury on duty.

Labour Law- Employment Equity Act

• Applies to employers and workers.• Protects workers and job seekers from unfair

discrimination.• Framework for implementing affirmative

action.

Labour Law- Unemployment Insurance Act

• UIF• Jobless or retrenchment• Temporary compensation

Labour Law- Labour Relations Act

• Support labour peace.• Support democracy.• Support worker decision-making in the

workplace.

Labour Law- Skills Development Act

• Develop the skills of SA.• Improve life-quality of workforce.• Improve prospects of work.• Improve productivity in workplace.• Improve competitiveness.• Improve self-employment.

Broad-based Black Economic Empowerment (BBBEE)

• Objectives:– Facilitate transformation: Enable meaningful

participation of black people.– Promotes fair percentage of racial ownership and

management for existing and new enterprises• Black people = Generic term for Africans, Coloureds

and Indians.• Also includes women, workers, youth, disabled

people and people in rural areas.

Broad-based Black Economic Empowerment (BBBEE)

• Strategies to ensure BBBEE:– Increase # of black people that manage, own and

control.– Equitable representation on all levels of the

workforce.– Preferential procurement.– Investment in organisation owned/managed by

black people.

SA Tax system

• Main income source of government.• Pays for services:– Education – Healthcare– Infrastructure– Research– Development

Business support in SA

• SMME’s play big role in SA economy and development.

• Gov target SMME’s for economic empowerment of previously disadvantaged.

• SMME’s receive investments and attention.– Through DTI

• National Small Business Act of 1996 = Establish supportive structures

Government initiatives to support SMME’s

• CSBP, Khula Enterprise Finance• Industrial Development Cooperation,

Women’s Entrepreneur network• NAMAC trust + Ntsika = SEDA = DTI agency• BRAIN: Online initiative with info and links