State-corporate social development in South Africa : the role of the state in advancing corporate social engagement

• Main Author: Segel, Kim Rael
• Published: London School of Economics and Political Science (University of London) 2004
• Subjects: 658.4020968
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.415270

The contemporary South African state seeks to ensure economic growth and global competitiveness whilst simultaneously redressing apartheid legacies. These are its twin imperatives to effect social and economic transformation. This thesis advances the framework of State-Corporate Social Development (SCSD) to describe and explain policies developed by the post-apartheid government to regulate the social and economic practices of business, and policies adopted by businesses in response. The thesis explores state-market dynamics as these relate to policies promoting black economic empowerment (BEE) in South Africa. Against this broad policy rubric, the research explores, within a wider nexus of stakeholder relationships, the interactions between business and government with reference to two sectors: investment companies and tourism. Extensive legislative and institutional mechanisms have been established to ensure a business environment conducive to government's political agenda. A key driver is the imperative to accelerate the integration of black South Africans into the economic mainstream through BEE policies. The state uses multiple levers to offer incentive or apply sanction. It is shown that the state, as a major consumer of goods and services, is itself a primary agent in transforming socio-economic patterns along market principles. SCSD also includes the response of business to evolving policy and environmental conditions. These responses vary according to the business size, nature, sector and value placed on various stakeholding relationships. The thesis employs stakeholder and social contract theory, and qualitative methods, including 135 interviews, to develop and explain SCSD as it pertains to BEE. Using formal and informal social contracts, it is shown how BEE policy shifted from emphasising equity ownership to a broader-based strategy. The strategy relies on multi-stakeholder relationships and drivers offering economic market-based incentives. The thesis draws conclusions regarding the centrality of the state in providing incentives for corporate social development policy in South Africa. It also suggests broader policy lessons relevant to state-corporate relations and the viability of the SCSD approach.