January - June 2019

Structural resilience: the future of organisational structure in South Africa, 2030 and beyond

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

Structural resilience: the future of organisational structure in South Africa, 2030 and beyond

By Deidre Samson

  • JUN 2019
  • Tags Reports, Management

18 minutes to read

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The future has arrived

Organisations all over the world are under increasing pressure to adapt to a rapidly changing environment – one in which technology is the new currency and innovation is a major driver of business success. Some would like to believe that the promised upheavals associated with massive technological change are still some way off. However, the future is already here. Encroaching automation, Artificial Intelligence (AI), the Internet of Things (IoT) and other innovations are changing the business landscape, both in South Africa and in the markets with which it does business. There is no time to wait to become technologically savvy, using innovation to craft new competitive advantages. Waiting will simply increase an organisation’s chances of becoming irrelevant in the foreseeable future.

In the face of changing market expectations and surging competition, many organisations are rethinking their fundamental purpose, strategic intent and operational design, since failing to do so will threaten their very viability. Too many organisations go through painful rounds of restructuring in response to external ‘shocks’, deeply impacting employee motivation and commitment.

‘There is no time to wait to become technologically savvy, using innovation to craft new competitive advantages. Waiting will simply increase an organisation’s chances of becoming irrelevant in the foreseeable future.’

Traditional business models with hierarchical structures are giving way to flatter, more organic working arrangements which rely less on authority figures allocating work to subordinates and more on collaborative networks, with team members sharing their varied expertise in the completion of the tasks at hand. More and more people are working remotely according to flexible schedules, connected via mobile platforms. All these things are challenging conventional management theory and practice. Even employment contracts are becoming more informal and more project-based (in line with the ‘gig’ economy). However, this changing dynamic should not be at the expense of productivity and the quality of outputs at the end of the day.

The changing business environment is not only the product of exogenous factors, such as shifting power relations in the world, a country’s economic ups and downs and political orientation, the technologies the country imports or is exposed to, the spread of the mobile culture, and so on. It is also the result of endogenous factors, including the demographics of the workforce and how workers relate to an organisation’s mission and goals, to the concepts of authority and responsibility, and to their peers. In today’s climate of free expression via social media and rising populism, people at all levels of society are finding their voice. But in an organisational context, these voices need to be effectively harnessed and channelled in ways that produce rich debate and bold solutions to problems and challenges, not dissent.

The primary purpose of this study was to determine what organisations could and should look like in South Africa by 2030. It also set out a thesis that structure should be pro-actively morphed over time with ongoing learning processes mitigating the new skills challenges faced by organisations. The study – which was qualitative in nature, with much gleaned from an extensive literature review – also explored the practical steps that organisations could take in making an effective transition into the future. The year 2030 is significant because it is the time horizon given in South Africa’s National Development Plan as well as the target date featuring in a number of economic blueprints produced by international bodies such as the World Economic Forum.

‘In today’s climate of free expression via social media and rising populism, people at all levels of society are finding their voice. But in an organisational context, these voices need to be effectively harnessed and channelled in ways that produce rich debate and bold solutions to problems and challenges, not dissent.’

Disruptive technologies driving change

Clearly, the future of work and the future of organisations are intertwined with the technological revolution that the world is caught up in. While the word ‘revolution’ has a dramatic ring to it, it can be argued that the speed with which technological changes are occurring is indeed dramatic – certainly when compared with the more measured, evolutionary changes that characterised the 20th century. Building on its predecessor, the Third Industrial Revolution (which saw the emergence of information technology and mass automation, and the rise of truly global companies), the Fourth Industrial Revolution is pushing the boundaries into exciting, but nevertheless daunting, new territory.

The Fourth Industrial Revolution can be described as a melting pot of technologies which are softening the contours of the physical, digital and biological worlds. Things are happening increasingly in a networked, rather than a linear, fashion, which helps to explain today’s global connectedness and the speed with which transactions and other forms of engagement are taking place.

Artificial Intelligence (AI), robotics and the Internet of Things (IoT) are three innovation fields associated with the Fourth Industrial Revolution that need to be on companies’ radar screens. Not only are they changing the competitive environment, including what consumers expect in the way of product and service offerings, but they are creating new job opportunities while eroding more traditional ones. The fact that tasks powered by AI, robotics and other advanced applications are often more efficient and cost-effective than those performed by humans is a key factor contributing to job displacement.

Whereas robots are typically seen as replacements for humans performing routine, repetitive work, they are now moving into more sophisticated job categories which require intelligent reasoning and discretionary decision-making.’

Artificial Intelligence (AI) has been defined as ‘the broad collection of technologies such as computer vision, language processing, robotics, robotic process automation and virtual agents that are able to mimic cognitive human functions’. Drones, autonomous vehicles, facial and voice recognition and virtual reality all depend on AI. AI has the ability to process and make sense of huge quantities of data in real time, which has enormous implications for the speed and quality of organisational decision-making. Equally intriguing is its capacity for self-learning.

Whereas robots are typically seen as replacements for humans performing routine, repetitive work, they are now moving into more sophisticated job categories which require intelligent reasoning and discretionary decision-making. Using Artificial Intelligence, robots are developing an increasing capacity for self-learning, which means that more job categories could be at risk than previously thought. Stories abound of machines teaching themselves (without human intervention) how to perform certain tasks after a short period of self-tuition. Robotic chess players, for example, have been known to beat their highly experienced human opponents after simply studying the rules of the game.

The Internet of Things (IoT) is another innovation which will play an increasingly valuable role in business, notably in the areas of production, supply chains and logistics. IoT works on the basis that general items (from clothing to pharmaceuticals to palletised cargo) have on-board sensors which allow them to be monitored in real time (stock levels, position in the logistics chain, etc.) with the help of high-speed broadband networks. Decision-making in the areas of production and logistics may also be automated through predictive analytics, which could enhance accuracy and free people up to focus on other priorities.

‘In a country like South Africa, which faces record-high unemployment figures and unacceptably high levels of inequality, some (particularly in government) view the disruptive forces of the Fourth Industrial Revolution as posing a threat to social stability as it will widen the digital divide.’

Clearly, the rules of the game are changing for producers, marketers and consumers. The thought that billions of people are connected via mobile devices and have practically limitless access to information sounds like a dream come true for many companies, particularly those with limited resources. Technology can streamline business operations by automating processes, while digitalisation can filter and lend order to large quantities of otherwise unmanageable data. But many potential obstacles stand in the way of companies’ technological goals – high levels of competition from more nimble players in the marketplace, financial constraints, a lack of suitable knowledge and skills, an inflexible business model which makes adaptation difficult and costly, a poor policy environment, and other factors. Even for strong proponents of a more technology-rich and digitalised world, the impact on jobs remains a concern. A key challenge is to build a culture of adaptation with employees pro-actively open to learning new skills required by the organisation, as an alternative to displacement and retrenchment.

In a country like South Africa, which faces record-high unemployment figures and unacceptably high levels of inequality, some (particularly in government) view the disruptive forces of the Fourth Industrial Revolution as posing a threat to social stability as it will widen the digital divide and drive a deeper wedge between the ‘haves’ and the ‘have-nots’. Many traditional job categories in the manufacturing and service sectors (from machine operators to call centre staff, and even those in the financial services and legal fields) will fall away in the face of rising automation. How governments use their policy space to encourage innovation and competitiveness without sacrificing too many jobs along the way, will be of critical importance in the years ahead. Similarly, the way in which companies adapt their business models and configure work streams to attract the best talent and be more technology savvy and market responsive, will determine whether they will be able to sustainably leverage the forces of swift and unpredictable change.

How advancing technologies are impacting jobs

As the Fourth Industrial Revolution gains momentum, company strategies will need to achieve the optimal balance between efficiency and innovation, on the one hand, and job retention and/or growth, on the other. The potential for automation is of particular concern to people today because it could result in job displacement. For example, the advent of the Uber app-driven service has displaced the service provided by many conventional taxi drivers whose value offering does not measure up. In time, Uber drivers themselves could face redundancy if driverless vehicles become mainstream. Interestingly, tradespeople like electricians and plumbers are likely to keep their jobs since they involve complex analysis and problem-solving. Trying to develop the technology to replicate the diagnostics that goes into an electrician’s or plumber’s work would be excessively expensive. Structural resilience – ‘the ability of an organisation to proactively anticipate and adapt to its environment, adopt new ways of working including structural forms that would enable it to accelerate and sustain strategic execution’ –  it is posited, is a crucial capability to be developed and implemented for future success. This capability will also require support divisions such as Human Resources to rethink their role as many of the people executing an organisation’s strategy will not be found on a traditional organisation chart but will be acting from positions as independent contractors, insourced service providers or ‘gig economy’ participants.

‘Tall hierarchies (and even physical premises in some cases) are yielding to more extended relationship-driven working environments, where the ability to cope with change as well as the adoption of innovative strategies in production, marketing and talent management are the keys to long-term success and sustainability. ’

Implications of a changing world for organisational structure

Some of the questions swirling around in strategic management circles today are: How do you harness the creative power of people freed (by machines) from the enslavement created by routine, repetitive, often manual work? How do you structure an enterprise to be agile, capable and innovative, responding presciently as the world changes around it? How do you maintain and sustain competitive advantage in a world of accelerated change?

Clearly, the notion of organisational structure has become enmeshed with organisational culture and the management of human capital. Tall hierarchies (and even physical premises in some cases) are yielding to more extended relationship-driven working environments, where the ability to cope with change as well as the adoption of innovative strategies in production, marketing and talent management are the keys to long-term success and sustainability.

The gig economy, though popular among growing bands of younger professionals and freelancers who are looking for flexibility and the opportunity to be part of creative teams, is creating challenges for organisations. It can be difficult to manage people at a distance, some of whom may reside in distant locations. Forging a common sense of purpose and work culture, especially when a project has a relatively short duration, can be difficult. Yet it is the way the business environment is going. Provided workers’ needs can be catered for, the gig economy can also deliver significant cost savings (e.g. in the form of overheads) to organisations and get the best out of talented, motivated people.

‘If carefully designed, jobs in today’s technology-driven climate could give workers the wings they need to fly. This is important as competitiveness today depends as much on organisations being innovative as being efficient.’

Project management skills are becoming an essential tool in a manager’s toolkit, as is the ability to nurture talent through continual learning opportunities and steady mentorship. If carefully designed, jobs in today’s technology-driven climate could give workers the wings they need to fly. This is important as competitiveness today depends as much on organisations being innovative as being efficient.

Ultimately, an organisation needs to be resilient but also have ‘structural integrity’ which, in simple terms, means that it must be ‘fit for purpose’. Technology can be an important foundation in this regard, but achieving such integrity – being able to pull all the pieces together and put them to work in the most efficient manner – is an art, which few machines will be able to replicate. Technology and Ways of Working should be integral parts of any model of organisation design, such as the Galbraith Star. New, innovative forms of structure should be considered to address some of the challenges experienced with traditional structures such as the matrix. The role of management also needs to undergo serious change in a world of digital connection which may expand spans of control and include linkages with people who cannot be managed in a traditional ‘command and control’ sense.

  • This article is based on the research assignment of Deidre Samson – an MPhil in Futures Studies graduate from the University of Stellenbosch Business School. She was the Top Achiever in her class in 2018. Her study leader was Prof André Roux, programme head of USB’s portfolio of Futures Studies programme. Prof Roux lectures in Management Economics and Africa Country Risk Analysis at USB.

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Brand engagement: What are your employees saying about your firm on social media?

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

Brand engagement: What are your employees saying about your firm on social media?

By Christine S. Pitt, Prof Elsamari Botha, João J. Ferreira and Jan Kietzmann

  • June 2019
  • Tags Strategic Management

16 minutes to read

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What can managers learn from their employees’ comments on social media?

Brands and people are regarded as highly valuable assets of a firm. That is why brand engagement – how stakeholder groups engage with a company brand – has received so much attention lately. But what about employees who are engaging with a firm’s brand on social media, especially in the business-to-business (B2B) context?

To gain a better understanding of employees’ engagement with their company brands, this study started off by looking at what these employees are saying on social media about the firms they work for in the B2B context.

Conversations about brands happen all the time, online and offline, without the explicit permission – or even awareness … For brand managers, this poses significant challenges.

It is believed that this insight can help human resource departments and managers to become better employers and to build better brands in the eyes of the employees. In addition, it will enable these firms to benefit from positive brand engagement while reducing potential risks and negative outcomes.

Why brand engagement is important

Brand engagement is an important concept in marketing as it is strongly connected to brand equity, also referred to as the value of a brand. Brand equity is often driven by a consumer’s association with a brand’s features and attributes, and ultimate engagement with the brand. Brand awareness is not the same as brand engagement. Engagement is emotional. Therefore, brand managers should focus on real brand engagement as this will influence their customers’ behaviour toward the firm, ultimately leading to sales and profitability.

Brand engagement has changed considerably with the advent of social media platforms like Facebook, Twitter and YouTube, specialised platforms like TripAdvisor and Instagram, platforms with a more professional slant like LinkedIn, and career-related sites such as Glassdoor. Users can interact with other users and engage with brands on these social media platforms.

Traditional brand management strategies focus solely on consumers, omitting important stakeholders like employees, whose voice is often seen as “more believable”. Evidence suggests that successful employee engagement strategies will strengthen firm performance. One study has shown that 84% of highly engaged employees believe they can positively affect the quality of their organisation’s offerings, as opposed to only 31% of disengaged employees who believe this.

Traditionally, employee comments on the firm was limited to face-to-face interactions. The advent of social media has changed stakeholder engagement with brands in many ways. Some of this has been intentional, driven by strategies aimed at forming online communities – such as fan pages on Facebook and YouTube channels. In other cases, these stakeholders, rather than firms, have driven much of the engagement with brands. This is evident in the plethora of consumer-generated content on social media. Consumers post videos, share content, and offer both positive and negative commentary on the brands they love or hate.

Conversations about brands happen all the time, online and offline, without the explicit permission – or even awareness … For brand managers, this poses significant challenges.

Conversations about brands happen all the time, online and offline, without the explicit permission – or even awareness – of those in charge of managing the brands. For brand managers, this poses significant challenges.

The reflexivity of brand and human capital

It has long been asserted in management literature that “brands and human capital constitute some of the firm’s most important assets”. Some researchers are now arguing that despite the focus on these two capitals as valuable assets in separate marketing and human resources management literature, their analytical separation impedes our understanding of how they can potentially interact. Hence, it is necessary to understand both assets – brand and human capital – jointly.

Figure 1 illustrates this relationship. Strong brands influence employees; this influence emanates from employees as they experience the brand. This engagement influences employee offerings and relationships with other stakeholders, the most important of which are customers but can also include prospective employees. Employee brand engagement directly influences the firm’s performance and ultimately affects the brand.

Figure 1: The cycle of employee brand engagement
Figure 1: The cycle of employee brand engagement

This cycle can be vicious or virtuous. In a virtuous cycle, a strong brand positively influences employees for which heightened brand engagement leads to increased firm performance through their involvement in improving the firm’s offerings or relationships with key stakeholders. The increased firm performance then further strengthens the brand, and so on.

Employee brand engagement directly influences the firm’s performance and ultimately affects the brand.

On the other hand, a vicious cycle describes how a brand in trouble could negatively impact employee brand engagement, which in turn could negatively affect the firm’s offerings and other stakeholder relationships. This would impact the firm performance and brand negatively. In order for organisations to compete successfully, customers as well as employees must be engaged.

At present, most of the research on brand engagement focuses on customers rather than other stakeholder groupings such as employees, suppliers and investors. This article, however, recognises the importance of employees as stakeholders who engage with their employer brands on social media.

How the study was conducted

To gain insight into the engagement between employees and the brands of the companies for which they work, the researchers turned to social media to collect employee-generated content regarding their employment at B2B brands.

The research team used Glassdoor as the source of data on employee brand engagement via social media. Glassdoor’s main purpose is to provide an online platform for employees to share information about jobs and employers in order to help others make career decisions. On this website, employees can rate a firm on a five-star scale (1 star = very low; 5 stars = very high).

Data was gathered from Glassdoor reviews in two ways. First, an independent ranking of the top B2B brands on social media by Brandwatch was used to identify the top 30 ranked B2B brands and the bottom 30 in terms of their use of social media. The reviews of the 30 top-ranked brands were split into two groups, those with five-star ratings and those with one-star ratings, and the same was done with the 30 bottom-ranked brands. This resulted in 2,315 five-star and 1,983 one-star reviews for the highest-ranked firms, and 1,013 five-star and 1,025 one-star reviews for the lowest-ranked firms.

Social media has become a major source of market intelligence for marketing practitioners as well as marketing scholars.

  • Each review was subjected to content analysis using the DICTION tool. DICTION determines to which extent the texts expressed the following:
    • Certainty (language and words that indicate resoluteness, inflexibility, completeness, and a tendency to speak with authority)
    • Optimism (language that endorses an individual, a group, a concept or an event)
    • Activity (language that is about movement, change, and the implementation of ideas and the avoidance of inertia)
    • Realism (language that describes tangible, immediate and recognisable issues)
    • Commonality (language that communicates communitarian concepts, and specifically highlights the agreed-upon values of a group of individuals, rejects language that is idiosyncratic in terms of engagement).

    Findings

    It was found that employees of higher-ranked and higher-rated brands were significantly more optimistic about their employing firms and also significantly more likely to express commonality – communitarian concepts and the agreed-upon values of a group.

Armed with powerful software to process this data, practitioners and scholars can shed new light on how stakeholders engage with brands.

The two dimensions on which higher-ranked and higher-rated brands scored significantly higher than their lower counterparts – namely optimism and commonality – were used to construct a simple but powerful matrix that provides potentially valuable managerial insights. The optimism-commonality matrix creates four different kinds of employee brand engagement situations, offering human resources and marketing managers different strategies in each case. This is illustrated in Figure 2 below.

Figure 2: Key drivers of employee brand engagement on social media
Figure 2: Key drivers of employee brand engagement on social media

The matrix argues that there are four kinds of employees who engage with their firms’ brands on social media: Engagers, Community seekers, Here for my friends and Apathetics:

  • Engagers: Firms ideally want employees who are engagers, typically found in both highly ranked and highly rated B2B firms. These employees are highly attached to their communities and optimistic about their firms. The manager’s task here is to uphold both the optimism and the commonality in order to maintain the highest levels of brand engagement.

This study found that employees in highly ranked and highly rated firms are more optimistic about their firms, the brands they engage with, and their future careers in these environments.

  • Community seekers: In the case, there is high optimism among employees about the firm and its brand but commonality is lacking. The manager’s task here is to focus on building a sense of community, or commonality, among employees. Social media can be a powerful way of doing this.
  • Here for my friends: In this quadrant, it is very possible that the engagement that employees have is not so much with the brand, but with each other. There is high commonality, but this might actually cause employees to coalesce in negative ways rather than in ways that are beneficial to the brand. Indeed, their negative feelings toward the firm might be their reason to band together, which could have deleterious consequences for the firm and its brand. The manager’s challenge here is to find ways to inject optimism into the situation and to use the commonality that exists to foster positive brand engagement.
  • Apathetics: Employees in this quadrant are low on both optimism and commonality. Employees who are pessimistic and find no community in their firms will leave, which is undesirable if they are good and competent. Or they will stay and continue to engage with
  • the brand in a negative way, which can have an adverse impact on other stakeholders. This reinforces the thinking discussed in the virtuous/vicious brand engagement cycle in Figure 1.

Employees’ opinions matter

This article looked at brand engagement from a generally overlooked perspective: that of employees as a stakeholder group. This is important because employee brand engagement impacts the engagement of stakeholders such as customers, suppliers and investors.

When employees are negatively engaged with their employer brands on social media, or when this engagement is poorly managed, the consequences can be severe …

Employees use social media to let others – including friends, family and current and potential employees – know how they feel about their places of work. This source can be “more believable” than company communication, which can be construed by customers as marketing rhetoric.

This study found that employees in highly ranked and highly rated firms are more optimistic about their firms, the brands they engage with, and their future careers in these environments. Similarly, they see themselves as part of a community or team, and these communities or teams are built around a brand as a common identifier. The benefits to the firm created by these phenomena are profound: The positive effects of these behaviours can help to increase revenue, lower costs, improve service and enhance customer satisfaction.

It was found that when employees are positively engaged with their employer brands on social media and this engagement is well managed, this holds various benefits for an organisation’s customers, its employees and the organisation itself. When employees are negatively engaged with their employer brands on social media, or when this engagement is poorly managed, the consequences can be severe for the organisation’s customers, employees and other stakeholders.

Making the analysis of employee brand engagement part of overall corporate marketing and HR strategy will allow managers to listen and react to their employees’ opinions, to become better employers, and to build better brands in the eyes of the employees. By paying attention to their own employee brand engagement over time, and by monitoring changes that can be gleaned about the brand engagement of their own employees and those of their competitors, firms can transform into desirable places to work and gain a competitive advantage over others.

Making the analysis of employee brand engagement part of overall corporate marketing and HR strategy will allow managers to listen and react to their employees’ opinions …

  • Find the original journal article here: Pitt, C.S., Botha, E., Ferreira, J.J. & Kietzmann, J. (2018). Employee brand engagement on social media: Managing optimism and commonality. Business Horizons, 61(4), 635-642.
  • Christine Pitt is from the Division of Industrial Marketing, Royal Institute of Technology (KTH), Stockholm, Sweden.
  • Prof Elsamari Botha lectures in Digital Enterprise Management and Digital Futures at the University of Stellenbosch Business School, Stellenbosch, South Africa.
  • João J. Ferreira is from the Research Unit in Business Sciences (NECE), University of Beira Interior, Covilhã, Portugal.
  • Jan Kietzmann is from Gustavson School of Business, University of Victoria, Victoria, Canada.

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Gender traits in relation to work versus career salience

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

Gender traits in relation to work versus career salience

By Prof Madelyn Geldenhuys, Prof Anita Bosch, Shuaib Jeewa and Ioulia Koutris

  • June 2019
  • Tags Insights, Leadership

17 minutes to read

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Understanding gender traits to make the workplace more meaningful

This study used gender traits – that is masculinity, femininity and psychological androgyny (gender-flexible behaviour) – to find greater nuances in the importance of work roles versus career roles to individuals (where work has a short-term focus and career a long-term focus). Generally, self-reported sex is used to determine differences in role salience between men and women, as opposed to considering the gender traits people display.

Making a distinction between work-role and career-role salience, and their relationship with gender traits, is useful when considering workplace mentorship and career guidance, because gender traits may dictate choice of occupation and career outcomes. Even though workplace outcomes are different for men and women, studies are indicating fewer differences in work-role salience when considering sex – man or woman – than previously noted.

This study used gender traits – that is masculinity, femininity and psychological androgyny – to find greater nuances in the importance of work roles versus career roles to individuals

Some researchers have reported career-role salience differences using gender-role orientation, in line with the argument that gender roles, although socially ascribed to the sexes, can be randomly assumed by human beings, irrespective of their biological sex.

To gain a better understanding of gender traits in the world of work, this study set out to:

  • Determine whether work-role salience and career-role salience are distinct constructs, as this will help to improve theorising on role salience in work and career settings
  • Determine whether gender traits (masculinity, femininity and psychological androgyny), as measured by the revised Bem Sex Role Inventory (BSRI), can predict work-role and career-role salience rather than the use of biological sex as a variable
  • Confirm the adapted factor structure of the revised BSRI, and whether sex differences (man vs. woman) existed between the variables.

The modern work landscape

Work is focused on earning material or other benefits valued by the person doing the work. Modern forms of work may include project work or part-time work, both requiring delivery of prescribed tasks that are current and temporal in nature, where alternative contractual arrangements may be made to an employment contract. In South Africa, women take up the greater share of part-time or non-permanent work in comparison to men, and reasons provided for this phenomenon often centre on essentialising women’s care obligations resulting in the need for such flexibility.

In contrast, careers have a long-term focus. Women’s careers may be directed by their perception of the socially correct choices, which are largely based on socially ascribed feminine gender roles linked to care obligations.

In South Africa, women take up the greater share of part-time or non-permanent work in comparison to men, and reasons provided for this phenomenon often centre on essentialising women’s care obligations

Distinguishing between career-role salience and work-role salience

In this study, role salience refers to the idea that not all life roles are equally important to an individual. A salient role in an individual’s life takes greater importance, and explains the standards and prominence that individuals assign to a specific role.

Work salience usually refers to the importance of working, which emphasises the short-term aspect of work, while career salience refers to the importance of a ‘pattern of employment’, which emphasises the long-term aspect of work.

Assessing work-role salience in developmental career counselling is important, because it supports how individuals make career decisions. For example, individuals experiencing low work-role salience may need to become more aware of the importance of their work before they make decisions regarding their career. In addition, they should explore how work fits into their life. Career-role salience refers to individuals’ planning, progress and overall decision-making regarding their career across their lifespan. However, the terms work and career are often used interchangeably, without much concern for the difference. Individuals who identify with their careers have a profound and personal investment in their work role and desire to advance within an organisation, with this advancement often entailing a higher social standing and more power. Career-role salience refers to the importance of a career role for an individual in relation to other life roles, such as those related to family. It is socially assumed, and therefore potentially endorsed during career counselling and guidance, that women may not place such importance on their work role and, by extension, their career role, instead placing greater emphasis on the family role.

Career-role salience refers to the importance of a career role for an individual in relation to other life roles, such as those related to family.

Gender identity and gender traits

Gender identity, as the ‘master identity’, is informed by an individual’s sense of self in relation to social queues about gender. Being born a boy or a girl, and therefore classifying yourself as male or female when research data is collected, no longer satisfies explanations of gender differences. Instead, gender traits – being masculine, feminine or psychologically androgynous – provide a nuanced understanding of work and career decisions and outcomes. Psychological androgyny is regarded as the ability of people to be high on both masculinity and femininity.

Women may be primed from a young age to display feminine gender traits such as being caring, affectionate and gentle, while men are encouraged to display masculine gender traits such as assertiveness and dominance. Displaying gender traits, that is, masculine and feminine, could lead to roles such as work and career being more or less salient in the lives of people, irrespective of whether they were born a man or a woman. The roles of work and career are therefore assumed and relinquished, based on how people interpret social pressure to conform to gender expectations.

Understanding masculine and feminine gender traits enables us to consider the benefits of being able to enact both, resulting in psychological androgyny, which includes behavioural flexibility and adaptable behaviour as dictated by the situation. While women have displayed more masculine traits, they have not become less feminine as a result. Changes in gender flexibility are more pronounced in women than in men.

Being born a boy or a girl … no longer satisfies explanations of gender differences. Instead, gender traits – being masculine, feminine or psychologically androgynous – provide a nuanced understanding of work and career decisions and outcomes.

While we acknowledge that gender is both ‘multifaceted’ and ‘multidimensional’, gender traits can be measured by using the adapted Bem Sex Role Inventory (BSRI). The BSRI measures masculinity, femininity and a calculation for psychological androgyny.

Work is largely masculinised or feminised and therefore predominantly taken up by either men or women. Women and men who identify with being feminine, for example, showing care, submissive behaviour and focusing on precision so as not to take risks, prefer feminised work and occupations, such as teaching, domestic work, nursing and administration. Masculinised work, which also holds higher social status, is associated with men and women who identify with being masculine and is characterised by leading, managing, calculating and taking risks. A career therefore manifests as a pattern of work in either a masculinised or feminised occupation.

 How was the research conducted?

The data was collected by distributing a survey to organisations in South Africa. In total, 395 completed questionnaires (79% response rate) were received from a targeted group of 500 employees. Three measurement instruments were used: the Work Salience Questionnaire of Allen and Ortlepp, the Career Salience Questionnaire of Allen and Ortlepp, and the adapted Bem Sex Role Inventory (BSRI) of Sandra Bem, adapted by Geldenhuys and Bosch.

Psychological androgyny is regarded as the ability of people to be high on both masculinity and femininity.

What did the study find?

Among others, the study found the following:

  • In the South African context, work-role salience and career-role salience measure different phenomena, confirming that these are two separate constructs, as postulated by Allen and Ortlepp.
  • We expected that men and women would attach different levels of importance to work roles and career roles, with men positively associated with masculinity, women positively associated with femininity, and women being more psychologically androgynous than men. The results indicated that women are more feminine than men, and that women are more psychologically androgynous than men. No statistically significant differences between men and women with respect to masculinity, work-role salience and career-role salience were found. Hence, there are no differences between men and women in terms of the importance they attach to work roles and career roles or how masculine they were.
  • The results show that masculinity increases career-role salience. Masculinity and psychological androgyny increase work-role salience, while femininity decreases work-role salience. Work-role salience predicts career-role salience. In addition, masculinity indirectly affects career-role salience with a partial mediation through work-role salience.
  • The factor structure of the adapted BSRI was confirmed.

Psychological androgyny is regarded as the ability of people to be high on both masculinity and femininity.

Discussion

The study empirically distinguished between work-role salience and career-role salience as separate constructs, while confirming the factor structure of the revised BSRI. Additionally, as work and careers are less influenced by sex (i.e. man or woman) in current times, but rather by gender traits, that is, masculinity and femininity, we have determined the effect of gender traits on work-role and career-role salience. We make another important contribution by determining that psychological androgyny, or gender-flexible behaviour, creates salience in a person’s work role. The study also supports the notion that women at work are more gender-adaptable than men. This has important implications for the career development of women specifically.

Sex differences in the experience of role salience

While we could not confirm that men are more masculine than women, the women in this study were significantly more feminine and more psychologically androgynous than the men. Because of societal and cultural expectations placed on men and women, women are displaying more feminine behaviours such as caring and being compassionate and understanding. Yet, the work environment is seeing a shift in women’s display of gender, where masculine traits are rewarded. Although women’s display of masculinity has increased, as confirmed by this study, we show that they have not rejected feminine traits and ‘have not discarded their womanhood’.

… gender roles, although socially ascribed to the sexes, can be randomly assumed by human beings, irrespective of their biological sex

Family responsibilities also play a role, as women are both working and taking care of their households, while men still focus mainly on their careers. These shifts for women have resulted in greater gender flexibility on the part of women. Our analysis of the traditional focus on differences between men and women shows that work-role and career-role salience are less affected by sex and that gender traits, as operationalised by the BSRI, provide greater nuance in the interpretation of the importance that people place on work and career roles. Men and women (sex) do not experience work-role and career-role salience differently.

Feminine versus masculine gender traits

Socially ascribed gender roles have become entrenched in how men and women function in society and at work. Women are often viewed as more feminine and often occupy competing roles outside of work. The results confirmed that work-role salience predicts career-role salience meaning that people who place importance on their work-role are likely to place importance on the career-role too. Masculinity increases career-role salience, while masculinity and psychological androgyny increase work-role salience. Femininity decreases work-role salience. Consistent with the literature, people displaying masculine gender traits attach importance to work or career roles, while people displaying feminine gender traits place work and career secondary to other roles. In this study, women typically demonstrated more adaptability or psychological androgyny than men. Women today portray more masculine traits, which supports the idea that psychological androgyny can counter the negative work salience effects of femininity and allow people to become less sex-typed at work. Increased psychological androgyny enables people to experience more salience in their work role.

In addition, some researchers believe that psychological androgyny may depend on a person’s situation. It is often the case that women compromise their careers in order to comply with societally imposed behavioural norms and may not want to threaten masculinity at work. Other researchers have indicated that, for women, ‘respectable femininity’ is encouraged to advance in their careers.

… women at work are more gender-adaptable than men.

In essence, this study showed that gender traits may be a better predictor of differences in the importance attached to work roles and career roles than biological sex.

  • Find the original journal article here: Geldenhuys, M., Bosch, A., Jeewa, S., & Koutris, I. (2019). Gender traits in relation to work versus career salience. SA Journal of Industrial Psychology, 45(0), a1588. https://doi.org/10.4102/ sajip.v45i0.1588
  • Prof Anita Bosch holds the USB Research Chair: Women at Work, and also lectures in Organisational Behaviour and Leadership at the University of Stellenbosch Business School.
  • Prof Madelyn Geldenhuys is from the Department of Industrial Psychology and People Management, College of Business and Economics, University of Johannesburg.
  • Shuaib Jeewa is from the Department of Industrial Psychology and People Management, College of Business and Economics, University of Johannesburg.
  • Ioulia Koutris is from the Department of Industrial Psychology and People Management, College of Business and Economics, University of Johannesburg.

Although women’s display of masculinity has increased, as confirmed by this study, we show that they have not rejected feminine traits and ‘have not discarded their womanhood’.

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Online security: Gaining insight into poor password practices among South Africans

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

Online security: Gaining insight into poor password practices among South Africans

By Rika Butler and Martin Butler

  • June 2019
  • Tags Strategic Management

18 minutes to read

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Are we making the best use of passwords to protect our online assets?

Online security is a growing concern as the use of computers and the internet are exposing computer users to an increased number of threats. Although the South African Cyber Security Policy Framework aims to foster a cyber-security culture, it does not provide for security education, training and awareness (SETA) – which are regarded as critical components of online security.

User authentication through passwords remains a key mechanism to protect online assets. Research has highlighted the need to address human behaviour in this regard, but without indicating what these SETA initiatives should focus on. Also, varying levels of digital literacy among computer users and different behaviour by users in the online environment make it difficult to apply a uniform set of interventions to improve security behaviour.

This study analysed the password behaviour of South African online consumers to (1) understand the prevalence of poor password practices among consumers overall and (2) to identify specific password deficiencies among different demographic groups in order to serve as focus areas for tailored intervention programmes.

Online security is a growing concern as the use of computers and the internet are exposing computer users to an increased number of threats.

Online security is a growing concern as the use of computers and the internet are exposing computer users to an increased number of threats.

While technology can provide a certain level of protection, human behaviour remains a potential weak link.

Studies have shown that specific training on password-related matters improved users’ password behaviour significantly.

… many computer users simply do not know how to select usable and secure passwords, or they are unaware of their vulnerability and the consequences associated with improper password use

Although many organisations show compliance in running security awareness programmes, this does not necessarily lead to behavioural change.

… to improve computer password security in this country, password SETA programmes should be based on individual needs and not merely on generic password practices for homogeneous groups.

While technology can provide a certain level of protection, human behaviour remains a potential weak link.

But first, what does the literature say about online security?

Password practices encompass the measures that computer users apply when they choose or create passwords (which involves aspects such as the origin of the password and the characters used in its composition), as well as manage these passwords (referring to the safekeeping of passwords).

An overview of the research on password practices shows the prevalence of both proper and improper password practices by users. While some computer users are proficient in their password practices, studies show that proper security measures and guidelines are often ‘unknown, neglected, or avoided’ by other computer users. As a result, many computer users simply do not know how to select usable and secure passwords, or they are unaware of their vulnerability and the possible consequences associated with improper password use and control.

In addition, human memory limitations place a strain on computer users’ memory and their ability to remember numerous passwords. Some researchers refer to this as ‘password overload’, which often results in weak password behaviour. This leads to a conflict between two opposing principles, convenience (memorability and usability) and security.

Some researchers propose interventions focused on the educational requirements of particular target audiences. However, they do not explain how to custom-design SETA interventions.

Studies have shown that specific training on password-related matters improved users’ password behaviour significantly.

Overview of current research on demographics and password practices

An extensive part of the research on online security is descriptive, philosophical or theoretical, lacking a structured use of empirical data which makes it quite immature.

Research on computer security often focuses on ‘particular user communities’ without necessarily reporting on the effects of demographics, despite the fact that basic demographic information is often obtained in these studies.

While some researchers noted small differences in individuals’ information security awareness and their age and gender, others found that gender has no significant influence on information security behaviour. However, they found that age seems to improve secure behaviour. Some researchers found female respondents to be more susceptible to, for example, phishing attacks. It was also found that age reduces the risk perception associated with a loss of data confidentiality and increases vulnerability to threats such as spyware. Also, males seem to have a tendency to engage in more risky online behaviour.

Some researchers established that users with higher education levels are significantly more likely to learn from negative experiences. These groups also have access to more credible sources of security-related information, potentially leading to more secure behaviour online.

… many computer users simply do not know how to select usable and secure passwords, or they are unaware of their vulnerability and the consequences associated with improper password use

The literature for demographics impacting passwords is scarce. Gender as a distinguishing factor did feature in some research, determining that females are more likely to use meaningful information in the composition of their passwords while males are more likely to use similar passwords for more than one purpose. A decrease in password sharing was noted as respondents grew older.

The need to change users’ behaviour in terms of passwords

The goal of security education, training and awareness (SETA) interventions is to change and improve user behaviour. Although many organisations show compliance in running security awareness programmes, this does not necessarily lead to behavioural change. Merely complying, and not dealing with the actual deficiencies, can result in people being more averse to change than before.

The primary objective of this study was to determine the SETA needs of individuals in South Africa by analysing the following:

  • The prevalence of poor password practices – to define common SETA focus areas
  • The variance between different demographic groups – to define focus areas for tailored SETA initiatives.

The study used a quantitative research approach. An online survey was used to gather demographic data, perceptions about online security and applied password practices. A sample of 737 valid responses was analysed. The steps in the research process were the following:

  • A literature study was performed to determine best practices for passwords and to compile a list of potential deficiencies.
  • A survey was designed and pilot tested to ensure accuracy and avoid forced answers from respondents.
  • The survey was distributed online using a commercial survey site.
  • The overall password performance was analysed to determine the incidence of improper practices among the entire data set.
  • Password behaviour displayed was analysed for different demographic groups.
  • The variation, for different demographics, was analysed to identify focus areas for tailored SETA programmes based on demographics.

Although many organisations show compliance in running security awareness programmes, this does not necessarily lead to behavioural change.

The intent of the research was not to use the results to design differentiated SETA programmes for generalised demographic groups, but rather to acknowledge the potential difference and to incorporate that into a learning process design.

What did the study find in terms of overall password behaviour?

An analysis of the data revealed that respondents vary significantly in their password practice proficiency levels. Importantly, there was a significant discrepancy between users’ perceptions of their password practices, and the real practices displayed. A total of 39 respondents (5.3%) perceived that they have absolute knowledge of proper password practices. However, only one respondent (0.1%) was able to demonstrate flawless ability to apply proper password practices, while only 21 respondents (2.8%) displayed a perfect ‘security first’ aptitude when selecting and managing passwords.

The most prevalent poor practices were the simultaneous use of the same passwords (90.1%) and password reuse (77.3%).This was not unexpected because previous studies have highlighted that users have fewer passwords than the number of websites they visit, indicating password reuse.

One study found that more than 80.0% of their respondents reused or slightly altered passwords for multiple purposes. The reuse and simultaneous use of passwords is thus a crucial focus area for SETA, especially where the same passwords are used to protect valuable assets (like online banking) as well as less valuable (and often less well-protected) internet sites of a general nature.

Analysis of weak password behaviour per demographic group

The analysis for the customisation of SETA programmes followed a dual approach. Firstly, it was determined which of the weak password practices were more prevalent across the entire population to ensure that these aspects were highlighted across the board for all demographics. Secondly, the prevalence of weak password behaviour within different demographic groups was analysed. This is a summary of the findings:

  • Age group: Weak behaviour decreased for the majority of practices as respondents grew older. A possible reason for this could be that older respondents do not visit as many password-protected internet sites as younger age groups, meaning that they do not have as many passwords to manage, resulting in less password reuse and simultaneous use. A decrease was noted in the extent of password sharing as respondents grew older. While the majority of poor practices decreased with respondents’ age, the practices of using personally meaningful words and numbers, not changing passwords regularly and using unsafe storing practices increased the older the respondents were. This could indicate that although they visit fewer password-protected sites, those older than 50 years are possibly unaware of the dangers associated with the use of personally meaningful information when creating passwords. This is supported by the increased lack of risk awareness as respondents grew older, which is not unexpected because older participants are not digital natives who have benefitted from a lifelong digital experience.
  • Gender: Although both genders displayed improper password practices, the areas of deficiency for male and female respondents differed. There was no notable difference in simultaneous use and unsafe storage practices across gender. A slight variance in the prevalence of improper practices of regarding ease more important than security when creating passwords, risk not regarded as an important consideration when creating passwords, not using a proper combination of characters to create passwords and password reuse were found. Although female respondents tended to reuse their passwords less than the male respondents, they were guiltier of using personally meaningful information, shared passwords more often and did not change their passwords as often as the male respondents. When analysing the number of sites visited requiring authentication, per gender, it was found that almost a similar percentage of each gender accessed 10 to 14 sites and 15 to 19 sites. However, significantly more male respondents accessed 20 or more sites – which could explain why the males tended to reuse their passwords more.
  • Number of internet sites accessed: This study showed that the more passwords users have, the more they tend to reuse and simultaneously use their passwords. This confirms observations from the literature about human memory limitations, resulting in users suffering from ‘password overload’ when they have more passwords to remember. The results of this South African study corresponds with international studies finding a correlation between the number of passwords that users have and password reuse – or the simultaneous use of a password for more than one purpose.
  • Education: While using meaningful words was found to be the highest for graduates, using meaningful numbers increased with levels of education. Although the weak practice of regarding convenience as more important than security increased with education, the lack of risk awareness (i.e. not considering the risk associated with a password’s use) when creating passwords seems to decrease as levels of education increase. Password sharing was the highest among respondents with no formal after-school qualifications. Interesting was the increase in unsafe storage practices with increased education levels.
  • Internet experience: Years of internet experience shows significant variance within the categories. Sharing of passwords, for example, peaks for the middle category (10 to 14 years of internet experience) and is significantly lower for both fewer and more years of internet experience. It is possible that this trend could again be related to an increase in the number of sites accessed. Related poor practices of non-complex composition and meaningful numbers decreased with experience. Surprisingly, both unsafe storage and simultaneous use increased with years of internet experience.

… to improve computer password security in this country, password SETA programmes should be based on individual needs and not merely on generic password practices for homogeneous groups.

Variations within different demographic groups

The variation within each demographic group was used to determine if a particular demographic group displayed a higher, or lower, prevalence for the particular measure. The results showed areas of higher and lower focus within all the demographic groups, meaning that all demographic groups are in need of SETA. Furthermore, it shows that the various demographic groups require tailored SETA programmes with different focus areas. These results confirm that a one-size-fits-all approach toward SETA programmes is not ideal, neither for specific demographic groups.

Although it could be argued that ‘covering all bases’ would be appropriate for all SETA interventions,, care should be taken not to hide the specific knowledge required by an individual user within a sea of non-relevant information. However, there is also opportunity within this variance: the construct of social influence is well appreciated in the behavioural change and technology literature. Therefore, allowing a natural transfer of good practices within diverse groups, although challenging, could have significant impact.

Designing different password programmes for different groups

This study showed that there is a substantial incidence of poor password practices among South African computer users. At the same time, research has shown that security-related information, guidance and feedback can positively influence secure behaviour. Appropriate interventions can therefore contribute to online security, even more so because these risks are changing all the time. The challenge, given different poor practices, is defining appropriate interventions.

It is essential that those users who need to hear the message should be ‘attracted’ to the education message. This can only be achieved by using the most appropriate method of communication, which could be tailored for those using a particular common undesirable practice. Although the design of the message falls outside the scope of this research, it is important that appropriate messages form part of SETA initiatives.

The study concluded that to improve computer password security in this country, password SETA programmes should be based on individual needs and not merely on certain generic password practices for homogeneous groups with similar behavioural challenges. These findings will allow for the design of targeted SETA initiatives to help create the security culture alluded to in the South African Cyber Security Policy Framework. Hence, these results should be useful to practitioners defining appropriate SETA programmes.

This research confirms that there are significant differences between the password practices for online users. Hence, a one-size-fits-all SETA initiative will not suffice. In essence, this research provides the set of practices that should be assessed to design individualised SETA for those individuals or, if required, groups who display a particular poor password behaviour.

  • Find the original journal article here: Butler, R. & Butler, M. (2018). Some password users are more equal than others: Towards customisation of online security initiatives. South African Journal of Information Management, 20(1), a920.

https://doi.org/10.4102/sajim.v20i1.920

  • Prof Rika Butler lectures at the School of Accountancy, Stellenbosch University.
  • Martin Butler is head of the MBA programme at the University of Stellenbosch Business School.

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Using drawings and stories to enable reflective learning

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

Using drawings and stories to enable reflective learning

By Jane Robertson, Dr Heidi le Sueur and Dr Nicky Terblanche

  • June 2019
  • Tags Coaching

12 minutes to read

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Business-driven action learning: turning theory into practice

With companies facing increasing competition and other challenges, the need for effective leadership, supported by well-informed and well-crafted strategies, has never been greater. In today’s highly charged business environment, more and more companies are recognising the value of business-driven action learning (BDAL), a dynamic process aimed at arriving at solutions to real-life problems through teamwork and honest enquiry and debate.

Assisted by a facilitator, the BDAL process brings together colleagues in an organisation to deliberate on challenges and opportunities, and collectively arrive at new and more effective ways of doing things. Yet the benefits of BDAL are perhaps even more profound at the individual level. BDAL gives people the intellectual tools and the emotional courage to assess their purpose, performance and (as yet untapped) potential.

‘More and more companies are recognising the value of business-driven action learning (BDAL), a dynamic process aimed at arriving at solutions to real-life problems through teamwork and honest enquiry and debate.’

The vital role of reflection in business-driven action learning

It is not surprising that a key element of business-driven action learning (BDAL) is reflection. It is through reflection that people are able to gain a deeper understanding of the issues and challenges facing their company and how, as individuals, they can become positive agents for change by tapping into their innate aspirations, values and strengths.

There is much scope for action learning practitioners to use reflective learning in management development programmes that embody BDAL principles. BDAL is experiential in nature which, when combined with systematic and candid reflection, can produce valuable insights into a company’s and employees’ strengths and shortcomings. In a corporate setting, the type of learning that reflection facilitates goes beyond technical systems and procedures. It also allows people to recognise and make sense of the economic, social and political dynamics that permeate a business operation. Despite the significance of reflection in action learning, little formal research has been conducted on how reflection is taught in higher education and skills development programmes.

‘Business-driven action learning gives people the intellectual tools and the emotional courage to assess their purpose, performance and (as yet untapped) potential.’

Background to the study

In this study, the power of reflection in business-driven action learning (BDAL) was put to the test in three management development programmes (MDPs) which formed the basis of this research. The programmes were organised at the request of sponsoring organisations in different industry sectors which had called for the MDPs to focus on enhancing leadership and management skills and to include BDAL. Each MDP was made up of three study schools in which five or six participants worked together in groups. Each group was given the same business challenge and had an external action learning facilitator or action learning coach. The action learning facilitator (who was also the lead researcher in the study) guided each group in practising reflection throughout the MDP. To this end the facilitator set out to foster strong teamwork built on trust, stimulate dialogue and debate, and create a supportive atmosphere that would be conducive to participants sharing ideas and opinions.

The participants, who were selected by the sponsoring organisations, were drawn from a number of African countries, including South Africa, Zimbabwe, Botswana, Namibia, Ghana, Nigeria, Kenya, Uganda and Senegal. All the participants had attended a previous MDP in 2016 (also based on BDAL principles), one year earlier than the study in question. This time gap was considered necessary as the participants would have had the chance to implement practically what they had learned in the previous MDP, both at work and in their personal lives, which they would then reflect on in the context of the research study.

‘It is through reflection that people are able to gain a deeper understanding of the issues and challenges facing their company and how they can become positive agents for change by tapping into their innate aspirations, values and strengths.’

While the participants had had the opportunity to apply reflective techniques during the previous MDP, three additional dimensions of reflection were introduced into the research study: first, participants were asked to hand-draw images of their BDAL experience; second, they had an in-depth interview with the action learning facilitator/lead researcher in the study; and third, they read aloud and commented on their personal experiences (including momentous ‘a-ha’ moments) in the form of an ‘interpretive story’ which flowed from their personal interview.

Using drawings and stories to stimulate reflective learning

The value of reflection was clearly demonstrated when participants were asked to hand-draw images of, and talk about, what they had learned since their exposure to the BDAL process in the previous MDP.

One of the participants, Sandy, had made great strides, as evidenced in her drawings and personal story. One of the things that used to hold Sandy back was the fact that she did not have a tertiary-level degree and she felt inadequate alongside more qualified colleagues and business associates. The BDAL approach followed in the MDP that she attended in 2016 helped her to shed her self-limiting beliefs, develop more confidence in her own capabilities, and engage more proactively with others. In the drawing exercise, Sandy first drew a pair of glasses symbolising her new-found ability to look at things from different perspectives and to accommodate other people’s points of view. She then drew a mirror as an acknowledgement of the importance of reflection in general as well as the need to look critically at and understand herself. Her final drawing was an open door which represented the whole new world that was opening up to her.

‘Drawings can be particularly powerful because they offer a snapshot of accumulated experiences and emotions. The story approach, in turn, serves a valuable purpose as it allows possibly jumbled, unarticulated thoughts to be verbalised in a coherent manner and shared with others.’

In her interview, Sandy explained that the BDAL process had been a turning point for her, from which she had not looked back. She said it had given her the confidence to change her behaviour and she was now on a carefully considered, personal growth path. Being able to explain her metamorphosis in images and words as part of the research study helped to crystallise and reinforce her earlier experiences.

Drawings can be particularly powerful because they offer a snapshot of accumulated experiences and emotions. The story approach, in turn, serves a valuable purpose as it allows possibly jumbled, unarticulated thoughts to be verbalised in a coherent manner and shared with others. Everyone likes stories, not only because they are interesting or entertaining, but because they often resonate with their audiences. It is not uncommon for people to learn more from personal accounts and stories than from theory because the former reflect things as they really are and not simply as they should be. Drawings and stories can also be shared repeatedly, thus constituting important learning material for other people embarking on a BDAL journey.

How easily can reflection be learned?

 Anyone can engage in reflection, but it is likely to be most effective when activated in a business-driven action learning environment under the guidance of a facilitator or coach. The study showed that when participants were coached in becoming mindful, in shutting out distractions and in focusing on the task or problem at hand, they were able to reflect deeply on important and/or pressing issues and contemplate possible solutions.

‘Reflection is difficult. It is not something that happens during idle moments; it is a skill that must be learned and periodically refreshed.’

For many people, reflection is difficult. It is not something that happens during idle moments; it is a skill that must be learned and periodically refreshed. Some of the participants in the study, for example, reported that devoting time to reflection seemed almost wasteful, considering how busy people are and how many priorities compete for their time and attention. However, others were of the opinion that reflection, far from being a waste of time, was an investment in time which would pay dividends down the line.

  • Find the original journal article here: Robertson, J., le Sueur, H., & Terblanche, N. (2019.) An account of practice: employing drawings and stories to enable reflective learning. Action Learning: Research and Practice, 16(1). https://www.tandfonline.com/doi/full/10.1080/14767333.2019.1562702
  • Jane Robertson is a director of Training Partners in Cape Town.
  • Dr Heidi le Sueur is a senior lecturer and head of Teaching and Learning at the University of Stellenbosch Business School.
  • Dr Nicky Terblanche is head of the University of Stellenbosch Business School’s MPhil in Management Coaching programme. He lectures in Management Coaching and Information Systems at USB.

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How coaching skills can help leaders to deliver on the SDGs

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

How coaching skills can help leaders to deliver on the SDGs

By Dr Dorrian Elizabeth Aiken and Dr Salomé Van Coller-Peter

  • June 2019
  • Tags Insights, Coaching

18 minutes to read

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The call for ethical leadership and sustainable corporations

In September 2015, the United Nations adopted an agenda that sets out a plan “to end extreme poverty, fight inequality and injustice, and protect our planet” (Principles for Responsible Management Education, 2016). The plan includes 17 Sustainable Development Goals (SDGs) aimed at addressing challenges such as poverty alleviation, management of resources, economic reform, environmental and ecological sustainability, and ethical leadership.

Responsible Management Education (RME) and the Sustainable Development Goals are clearly linked to the role that business schools can play in the development of potential leaders. Although there is a stronger focus on ethical leadership and sustainability in corporations, a recent McKinsey interview says that CEOs cannot deliver at the speed and scale required of them. Hence, this study focuses on the challenge for business schools to develop future leaders who have the ability to meet some of the SDG commitments.

Business schools are ideally placed to prepare future leaders. However … are business schools providing the leadership and management skills that translate into positive impact on employees? And can these leaders help to achieve the Sustainable Development Goals?

Various researchers have pointed out that to lead effectively in the 21st century, business leaders require technical excellence and experience, as well as the ability to understand and respond positively in terms of the complex range of human experience. They face a business world fast becoming unpredictable – often described as volatile, uncertain, complex and ambiguous. We argue that business schools can contribute to ethical, resilient leadership that can meet the Sustainable Development Goals when these schools equip potential leaders with coaching competencies.

Setting the leadership development context

A case study of an international retail organisation with an enviable reputation for quality and customer service illustrates our theme of developing relational leadership competencies to serve the Responsible Management Education agenda. In 2012, senior executives of this organisation became aware that the South African organisation struggled to retain staff and decided upon remedial action: leadership development workshops. Staff members were to give frank feedback to their leaders on their conduct annually. Each year since 2012, in spite of costly training, staff members’ opinions of leadership have become increasingly critical and distrustful, and the retention of good staff continues to be poor.

There is no doubt that the organisation’s investment in leadership training was well-intentioned. However, after the training, nothing changed. Leaders returned to their teams, under pressure to catch up after the off-site training, and their default management and leadership behaviours kicked in. And so the disillusionment, distrust and disengagement of team members increased until it reached a crisis point in 2016.

The reality is that this is happening to organisations all over the world.

… neuroscience has found that acquiring sustainable new behaviours … is primarily a limbic brain function. This requires learning stimulated by experiential insight into self and continuous practice.

What’s going on?

It seems, then, that leadership development workshops do not always succeed in changing behaviour.

Business schools are ideally placed to prepare future leaders. However, the following questions arise in the literature: Are business schools providing the leadership and management skills that translate into positive impact on employees? And can these leaders help to achieve the Sustainable Development Goals? Business schools have been criticised by some, especially since the 2008 financial crisis, for their dedication to business management theory where students are encouraged to adopt an attitude of self-interest and material enrichment. Some researchers have pointed out that business schools have lagged behind in introducing team-building and leadership skills into the curriculum.

Is it fair to say that business schools neglect the human element? We find this critique somewhat harsh and certainly not entirely true of the content we facilitate at our own business school. MBA students are increasingly incorporating leadership theory into their programmes. However, the problem word here is theory. Students gain insight into the importance of establishing positive relationships and ethical values-based interactions, and they incorporate this into their assignments. The issue is that the learning mostly remains fragmented and at a cognitive level.

Research on neuroscience has found that acquiring sustainable new behaviours, for example to support values-based innovative leadership, is primarily a limbic brain function. This requires learning stimulated by experiential insight into self and continuous practice with others.

… we argue that leadership is a basket of skills that would benefit from the inclusion of coaching competencies – a practice that should begin at business school.

The degree of experiential and self-reflective learning, and the regular practising that is required to master leadership behaviours, seems to be notably absent from mainstream MBA studies. The achievement of these leadership competencies depends on ongoing self-development – not likely the outcome of a short leadership course. Thus, we argue that leadership is a basket of skills that would benefit from the inclusion of coaching competencies – a practice that should (and in some places, already does) begin at business school.

To return to the above-mentioned case study, leaders in the troubled organisation cognitively understood the connection between the quality and consistency of positive engagement with their teams and their performance. However, the translation of this cognitive knowledge into daily practice of behaviours on the job with their teams has not yet become a non-negotiable requirement. Now, in support of the RME agenda, business schools have the opportunity to integrate coaching practices as a non-negotiable part of leadership behaviour along with technical business skills in order to meet volatile, unpredictable relationship challenges.

A coaching approach towards leadership development

On the University of Stellenbosch Business School’s MPhil in Management Coaching we aim to develop leaders and managers who are competent coaches. We believe that coaching skills help to grow more awareness of complexity and ambiguity, and consequently build more resilience in leaders. A core focus of the programme is how the students discover subjectivity, or the ways in which their views of reality have been constructed. Construct development theorists have provided frameworks that illustrate constructs at the different stages of adult development, from limited complexity and perspective-taking to multiple ways of seeing and engaging with the world.

Vertical growth refers to growing a person’s ability to think in increasingly complex ways, to be comfortable with multiple perspectives and to connect meaningfully across differences.

Vertical learning

We believe that business schools can create environments that are conducive for potential business leaders to grow awareness of more complexity and perspective-taking, particularly at an emotional and interpersonal level. Increased conscious awareness, which is the process of vertical learning, may enable leaders to inspire teams and find solutions to some of the world’s most pressing challenges, as set out in the Principles of Responsible Management Engagement.

Both horizontal (translational) learning and vertical (transformational) learning are important in leadership development. In this context, horizontal learning refers to the process of increasing knowledge and competencies – what leaders should know and do. It is primarily a function of cognitive (neocortical brain) intelligence. Vertical growth refers to growing a person’s ability to think in increasingly complex ways, to be comfortable with multiple perspectives and to connect meaningfully across differences.

It has been shown that when individuals are surrounded by colleagues who hold more complex views of the world, they feel safe enough to reflect on conflicting points of view.

Holding such complexity with ease is a function of emotional and interpersonal intelligence, which can be enhanced by coaching training. In a white paper entitled The Future of Leadership for Conscious Capitalism, Barrett Brown claims that vertical learning is a natural stage-development process that can be accelerated under the right conditions. He cites the Centre for Creative Leadership as naming vertical learning the number one future trend in leadership development.

It has been shown that when individuals are surrounded by colleagues who hold more complex views of the world, they feel safe enough to reflect on conflicting points of view. This means there is a strong likelihood of a shift to embrace multiple perspectives. These capabilities can indeed help to meet the challenges of the SDGs. Also, when employees are managed by leaders who engage with them in more complex ways, and whose behaviours are respectful and inclusive of all levels of staff, overall performance improves.

However, such leaders first need to know how to include and elevate others to the required level of thinking and operating. Indeed, the model or framework suggested for implementation of the SDGs emphasises, among others, top-down commitment from leadership and bottom-up commitment from faculty and staff. We believe that leaders with a skilful coaching style stand a greater chance of harnessing the positive commitment of employees because of the fundamental principles of coaching: listening attentively, building trust, encouraging potential, and ensuring accountability.

The process of developing leaders with a coaching style

Becoming a coach requires accepting who we are, what we think and how we behave. Undoubtedly, the skill that facilitates the most transformation during the process of becoming a coach is that of reflective practice. The MPhil in Management Coaching students’ reflective practices are built on various models. One such model asks these questions: What came up for you during a learning activity that caused an ‘aha’ moment? So what? How is it significant for you? What did it trigger within you that is worth exploring? The final batch of questions asks: Now what? How can you capitalise on the new insight to further your thinking and practice so as to enhance your competence in providing a richer coaching experience for both your client and yourself?

We believe that leaders with a skilful coaching style stand a greater chance of harnessing the commitment of employees because of the fundamental principles of coaching: listening attentively, building trust, encouraging potential, and ensuring accountability.

Thus, insight is deepened by developing awareness of our own processes of learning and thinking, as well as becoming intrigued by the sense-making of others. Becoming aware of constructs and meaning-making is significant for coach training if leaders are to help others recognise their own constructs as well as the possibility for multiple ways of making meaning.

Good coaching skills focus on how leaders consistently engage with stakeholders, colleagues and staff, along with the technical competencies of what they are expected to achieve. Good coach training translates leadership development theory into positive engagement. We have already described the practice of self-reflection. Neuroscience emphatically confirms that sustained behaviour change takes place only with iterations of practice, with practical experiences that challenge beliefs, values, emotions and habits. Reading a book is unlikely to bring about sustained behaviour change. The many leadership and self-help books that abound are testimony to the impotence of cognitive intelligence (a neocortical brain function) to influence emotional and interpersonal intelligence (a limbic brain function) in the absence of direct experience. Neuroplasticity, the ability for new neural pathways to develop in the brain in response to sustainable new learning, is possible for everyone – the caveat is that it requires practice.

Critical skills for ethical leaders with a coaching style

Leaders require particular skills to function optimally in a volatile, fast-changing world. Here we focus on the art of listening, building trust, and engaging the power of the limbic brain.

The art of listening: The practice of truly listening without allowing the intrusion of one’s own thoughts and without interruption or asking leading questions is a powerful discipline in developing vertical altitude. It requires more mature egos: such leaders are less prone to knee-jerk reactions or acting on split-second judgements, and more capable of impulse control. The benefits for the thinker are numerous: the positive impact of being heard, of having uninterrupted time to think and, as a consequence, feeling valued as an employee, team member or colleague. Our MPhil in Management Coaching students begin with three-minute practice sessions, in pairs, giving perfect attention to a fellow student. At first, this is difficult. With ongoing practice during the course of the year, the emotional and interpersonal maturity of the listeners increased significantly. This increased the quality of their attention to the thinker. It also increased their ability to hold silence and create the conditions to keep the thinker deeply engaged with the topic. The impact on the thinker is unfailing appreciation for the depth and richness of the experience.

  • Trust and the power of the limbic brain: In a 2016 global CEO survey, PwC reported that 55% of CEOs think that a lack of trust is a threat to their organisations’ growth. But most have done little to increase trust, mainly because they are not sure where to start. Our MPhil in Management Coaching students are introduced to David Rock’s SCARF, a model that describes five key triggers to the limbic brain. The students are able to engage emotionally with the positive and negative impact of these five triggers – status, certainty, autonomy, relatedness and fairness – drawing on their own experiences. Research shows that emotionally intelligent leaders build trust, engender loyalty, and enhance motivation when they consciously affirm status, give certainty and autonomy, and assure fairness. The ability to build positive relationships with SCARF in mind is an important component of learning to lead effectively by making use of coaching competencies.

Using coaching skills to create resilient business environments

This article focused on developing coaching skills that emphasise reflective awareness in potential leaders studying at business schools.

Our belief, based on our own experience at University of Stellenbosch Business School, is that business schools can play a powerful role in accelerating vertical learning by training potential business leaders to use coaching skills to create more resilient business environments.

We therefore draw the following conclusions about the mindsets that professional ethical leaders need, and the experiential practices that business schools need to instil in order to fulfil the RME agenda by 2030. In considering the theory and practices, and in particular the concept of vertical learning, we suggest that the leadership ability to implement the RME goals can be facilitated by including coaching skills at business schools to increase developmental consciousness and complexity through experiential learning. Such leaders will raise the standard of trustworthy, innovative and resilient leadership in the pursuit of achieving the Sustainable Development Goals, leading to the improved wellbeing of all.

  • Find the original journal article here: Aiken, D. E., & Van Coller-Peter, S. (2018). Developing leaders at business schools with coaching skills aligned with the goals of responsible management education. Philosophy of Coaching: An International Journal, 3(1), 38-50.

https://philosophyofcoaching.org/v3i1/00.pdf

  • Dr Dorrian Aiken is a lecturer on the University of Stellenbosch Business School’s MPhil in Management Coaching. She is also a highly regarded consultant, lecturer and leader in the field of coaching, organisational transformation and leadership development.
  • Dr Salomé Van Coller-Peter is a senior lecturer in Management Coaching at the University of Stellenbosch Business School.

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How do consumers choose the wines they buy?

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

How do consumers choose the wines they buy?

By Jeandri Robertson, Caitlin Ferreira and Prof Elsamari Botha

  • June 2019
  • Tags Insights, Coaching

15 minutes to read

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Decisions, decisions: the importance of product knowledge in the evaluation and choice of wine

Recent years have seen a dramatic increase in wine consumption in many parts of the world, and this trend is likely to continue. Today consumers are faced with a bewildering selection of wines, all boasting attributes designed to catch their attention and encourage them to come back for more ‒ from an impressive quality rating and well-known brand name, to attractive labelling.

Not surprisingly, choosing a wine is becoming an increasingly daunting task for many consumers. Yet wine purchases are rarely made on a whim. Consumers assess wines on the basis of several obvious and less obvious attributes, with their choices heavily influenced by whether they are wine aficionados, complete novices or somewhere in between. Understanding what consumers look for in a wine and where a particular product is perceived to be on the value-price fulcrum lies at the heart of an effective wine marketing strategy.

Today consumers are faced with a bewildering selection of wines, all boasting attributes designed to catch their attention, stir their interest and encourage them to come back for more.’

Product knowledge is a very important, but often overlooked, factor in the evaluation of different types of wine. Such knowledge may be subjective or objective. Subjective knowledge refers to what individuals think or believe they know about a particular topic, while objective knowledge refers to what people actually know about a topic in a practical sense, which can be verified or demonstrated to be correct. One could say that subjective knowledge is imagined while objective knowledge is real. Objective knowledge is typically associated with experience and expertise, and is therefore considered more reliable than subjective knowledge which could be the result of hearsay, preconceived ideas or bias. Yet, subjective knowledge is increasingly found to influence consumer behaviour.

Both subjective knowledge and objective knowledge are equally important to wine marketers because what consumers think they know and what they actually know about wine will influence the marketing strategy. This is because the presence of perceived and actual product knowledge gives rise to different market segments whose predilection for certain wine characteristics (and the relative strength of their perceived knowledge versus actual knowledge) needs to be investigated. Often wineries target wine experts differently to the average consumer, and this study investigates whether that should in fact be the case.

The ‘intrinsic’ attributes of wine include colour and taste. The ‘extrinsic’ attributes of wine include price, age (or vintage), brand and region of origin. Extrinsic attributes appeal to consumers’ senses in more complex ways than intrinsic attributes, often making the marketing of the former more challenging. However, a wine’s extrinsic attributes cannot be divorced from its intrinsic attributes. Thus, wine production and marketing are inextricably linked.

‘Consumers assess wines on the basis of several obvious and less obvious attributes, with their choices heavily influenced by whether they are wine aficionados, complete novices or somewhere in between.’

Extrinsic attributes have been defined as those that ‘are known or can be known to the consumer before buying the bottle of wine and are separated from the actual characteristics of the wine’. The contemporary literature on wine marketing is focusing increasingly on the ‘extrinsic’ attributes of wine, but what has not been researched is how product knowledge – both subjective and objective – influences the importance that consumers attach to extrinsic attributes.

This paper examines the influence of subjective and objective product knowledge on the relative importance of four extrinsic attributes of wine ‒ price, age, brand and region of origin ‒ in the evaluation and purchase of wine by consumers. The paper first presents the findings from a literature review and then discusses the results of an online survey that the authors conducted among a sample of experienced and less experienced wine drinkers.

‘Both subject knowledge and objective knowledge are equally important to wine marketers because what a consumer thinks they know and what they actually know about wine will influence the marketing strategy.’

A typology of wine knowledge

A ‘wine knowledge typology’ was developed by Vigar-Ellis, Pitt and Caruana in 2015 to provide a useful guide to the different degrees of, and variations in, wine knowledge among consumers. The typology identifies four main categories of wine consumer:

  1. Neophyte (low objective knowledge + low subjective knowledge): A consumer who knows and also thinks they know very little about wine. A dictionary definition of a neophyte is someone who has just started learning or doing something.
  2. Snob (low objective knowledge + high subjective knowledge): A consumer who believes they know more about wine than they actually do.
  3. Modest (high objective knowledge + low subjective knowledge): A consumer who actually knows more about wine than they think they do.
  4. Expert (high objective knowledge + high subjective knowledge): A consumer who thinks they know a lot about wine, and in fact do.

While it can be dangerous to generalise, some broad characteristics have emerged from the literature on the different types of wine consumer. For example, people’s relative wine knowledge has a significant bearing on the extent to which they are motivated to look for information about a particular wine. Also, most consumers tend to be overly confident about and overestimate their wine knowledge. Furthermore, expert consumers have been found to attach more value to the origin of wine, its official ranking and château name, while novices generally base their wine choices on price, age and bottle design.

‘To a consumer, the price of a bottle of wine is not only about its affordability; it is also an important part of the wine’s perceived brand value and can add to (or detract from) its desirability.’

What the literature says: The influence of price, vintage, region and brand on wine purchases

The interaction between price and quality is a key area of interest in the economics field and has been extensively researched. In the context of wine purchasing behaviour, the general consensus is that price and perceived quality are strongly interrelated. People’s views about price can be influenced by both subjective and objective knowledge. To a consumer, the price of a bottle of wine is not only about its affordability; it is also an important part of the wine’s perceived brand value and can add to (or detract from) its desirability. Although consumers typically weigh up several attributes when selecting wine, those with less brand knowledge are inclined to attach relatively more importance to price as a quality indicator.

Although some authors see the age or vintage of a wine as an intrinsic attribute, others argue that age should be treated as an extrinsic attribute because it can be evaluated without the wine being consumed. A number of authors have discerned a strong relationship between a wine’s age and its price, saying that as a wine matures over time its price tends to increase. A wine’s age can therefore also be seen as a mark of quality. Though often price-sensitive, novice consumers may be prepared to pay premium prices for older wine if its quality can be verified through a visible quality symbol or a persuasive argument provided by a specialist wine store.

‘A wine’s brand is a powerful marketing tool because it evokes different feelings and emotions in people, which can be tapped through the interplay of words and images, and an interesting story line. ’

A wine’s brand is a powerful marketing tool because it evokes different feelings and emotions in people, which can be tapped through the interplay of words and images, and an interesting story line. Part of the story line is the region of origin, an attribute that can make a brand particularly distinctive. A wine’s brand (and where the wine was produced) tends to make a stronger impression on more knowledgeable consumers. However, having said that, wine connoisseurs do not necessarily see the brand as being a consistent mark of quality; they will also consider other attributes before arriving at a final choice. Novices, in contrast, rely more on first impressions and are generally more swayed by a country or region of origin than the actual brand name and what it stands for.

The influence of region of origin on wine purchases has been one of the most heavily researched topics in wine circles in recent years. Region of origin indicates where a wine’s grapes are grown, where vinification takes place, how the wine is classified and also sometimes where it is bottled. Like a brand name, the region of origin can trigger perceptions about a wine’s quality and character on the basis of its geographical or cultural identity. For example, ‘New World’ wine-producing countries like Australia, New Zealand and South Africa have differentiated themselves from more traditional, ‘Old World’ wine-producing countries like France, Germany, Italy and Spain.

What the online survey revealed

Using a conjoint analysis (a statistical technique used to determine how people value particular attributes that make up a product), price emerged as the most important extrinsic attribute for wine purchases – irrespective of the level of product knowledge. Furthermore, most respondents, including those in the Expert category, indicated a preference for the mid-priced range of wine. Interestingly, those in the Snob category ranked expensive wine as their least preferred attribute. This suggests that consumers generally apply risk-reduction strategies when making wine purchases.

Region of origin emerged as the second most important attribute among respondents, with those in the Expert and Modest categories preferring this particular attribute over others. Those in the Neophyte, Modest and Expert categories viewed unknown region of origin (in other words, no information on the region was available) as their least preferred attribute. This highlights the importance of a wine having a clear regional identity. The Neophyte and Snob categories of consumer attached relatively high importance to a wine’s brand, with both indicating that their highest preference was for well-known brands. Clearly, brand differentiation is an important factor when marketing to all levels of consumer.

Age of wine was shown to be of lesser importance to respondents, with wines in the mid-range generally being the preferred attribute. This mirrors the preference for mid-priced wines and suggests a risk-mitigation approach.

‘Even novice consumers, with limited practical knowledge of wine, constitute a distinct market segment because they display common tendencies when evaluating and choosing wine, which marketers should creatively tap into. ’

Conclusion

With the global wine industry becoming increasingly congested and competitive, wine producers and marketers need to appeal to consumers in ever new and innovative ways. Understanding what motivates consumers to buy particular types of wine is a critical part of this process. While the literature is replete with studies on the extrinsic attributes of wine and how these drive wine sales, the particular contribution of this study is that it delves into a neglected area of research – that is, how consumers’ knowledge of wine influences their perceptions about the relative importance of price, age, brand and region of origin. What is interesting is that even novice consumers, with limited practical knowledge of wine, constitute a distinct market segment because they display common tendencies when evaluating and choosing wine, which marketers should creatively tap into.

This study lays an important foundation for more in-depth studies into the influence of product knowledge on wine purchasing behaviour, taking additional attributes into consideration. Wine labels and bottle characteristics, for example, could be included in the product attribute mix as visual cues can steer consumers in very clear directions. In line with the global focus on terroir in wine, region did in fact have the greatest influence on wine drinkers when considering both novices and experts.

  • Find the original journal article here: Robertson, J., Ferreira, C., & Botha, E. (2018). The influence of product knowledge on the relative importance of extrinsic product attributes of wine. Journal of Wine Research, 29(3), 159-176. DOI: https://www.tandfonline.com/doi/full/10.1080/09571264.2018.1505605.
  • Jeandri Robertson is from the Department of Business Administration, Technology and Social Sciences, Luleå University of Technology, Luleå, Sweden.
  • Caitlin Ferreira is from the Department of Business Administration, Technology and Social Sciences, Luleå University of Technology, Luleå, Sweden.
  • Prof Elsamari Botha lectures in Digital Enterprise Management and Digital Futures at the University of Stellenbosch Business School.

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South Africa and the UN Global Compact: Do our reports and progress match?

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

South Africa and the UN Global Compact: Do our reports and progress match?

By Prof Daniel Malan and Prof Marius Ungerer

  • June 2019
  • Tags Insights, Leadership

18 minutes to read

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Why this study was undertaken

To gain an understanding of the role of the United Nations (UN) Global Compact, and how the South African signatories to this initiative are performing, the authors of the journal article titled Communicating progress on meeting the United Nations Global Compact goals: An analysis of the South African experience started off by looking at the changing role of business in society. They also discussed concepts such as the purpose of business, Creating Shared Value (as a proposed way to reinvent capitalism) and Optimised Collective Value (as a proposed way to shift the emphasis away from narrow corporate self-interest).

Next, the authors scrutinised the South African companies’ annual progress reports to the Global Compact to determine how they are actually performing in terms of human rights, labour standards, environmental standards and anti-corruption measures. In essence, this is what they found:

About the UN’s Global Compact

In the year 2000, the United Nations launched its Global Compact initiative in New York to enhance cooperation between the business community and the UN, and to facilitate a communal understanding of the principles and values required to support human rights, labour standards and environmental standards. Later, anti-corruption measures were also added.

The establishment of the Global Compact speaks to the changing role of business in society.

The establishment of the Global Compact speaks to the changing role of business in society. First, there was philanthropy which evolved into traditional corporate social responsibility (CSR) and then into CSR based on enlightened self-interest or strategic corporate responsibility (CR).

The UN Global Compact is the world’s largest voluntary corporate citizenship initiative. At the time of writing, there were some 9 000 business and 3 000 non-business signatories. It serves as a forum where corporate citizenship can be investigated, as there is growing consensus that multinational corporations have a moral obligation as corporate citizens to do more than make a profit.

The work of the Global Compact is based on 10 principles derived from the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention against Corruption.

These principles are also aligned with the Sustainable Development Goals (SDGs), as expressed by the Global Compact: “We are a voluntary initiative based on CEO commitments to implement universal sustainability principles and to take steps to support UN goals.”

Once a year, signatories to the Global Compact have to submit a progress report. The Communication on Progress (COP) report is one of the most important tools for signatories to provide feedback on how they have supported the 10 principles. Although the COP system is there to provide some consistency and accountability, the UN Global Compact does not want to be viewed as a compliance-based initiative. Instead, it is about “learning, dialogue and partnerships” and also about collaboration, transparency and public accountability.

About the purpose of business

The founding of the Global Compact is an outcome of years of debates and studies about corporate responsibility and the purpose of business. In the full journal article, the authors describe how the role of corporates have changed over the years.

Those corporates who have adopted traditional CSR approaches usually prefer a percentage of profits to be spent on worthy causes, often to offset the way in which the profits were made. They sometimes cynically refer to this spending as guilt money. Those corporates who choose the enlightened self-interest approach take both risks and opportunities into account, and are therefore strongly focused on stakeholder engagement. However, the latter approach is mostly opportunistic, and, if the business case is not strong enough, corporations might quickly lose interest and step away from what could be regarded as values-driven behaviour.

First, there was philanthropy which evolved into traditional corporate social responsibility and then into CSR based on enlightened self-interest or strategic corporate responsibility.

Strategic CR is based on a deeper reflection on the purpose of business and the way in which corporations form an integral part of society. Driven by a clear understanding of the nature of the business, interventions are designed and contributions are made in such a way that the corporation uses its strengths to contribute to societal needs and thrive at the same time. Strategic CR (sometimes explained as a shift from focusing on how profits are spent to how profits are made) is based on the real capabilities and specific expertise of the corporation and can achieve integration on two fronts. Firstly, so-called CSR activities are no longer peripheral, but are integrated into the core activities of the corporation. Secondly, the business case and moral case are not presented as part of an either/or choice. Instead, there is a clear acknowledgement that core values are not negotiable. In other words, the moral case trumps the business case. This is also the preferred approach in this article.

One of the reasons for this shift in focus is that corporations are increasingly confronted with challenges once thought to belong in the domain of governments. Examples include climate change and increasing inequality between rich and poor, as well as political conflict and human rights abuses, especially in developing countries.

Corporations have to confront these challenges with commitment and innovation. If they can do so successfully, it will be in their own interest and also in the interest of the planet.

Hence, the focus of corporate responsibility (CR) shifted from an internal corporate perspective to a broader systemic perspective, reflecting the view that the responsibility of corporations cannot be addressed in isolation. In terms of purpose, Porter and Kramer (2011) presented their concept of Creating Shared Value (CSV) as a way to reinvent capitalism.

Donaldson and Walsh (2015), on the other hand, argued that what counts as value for a single firm is not the same as value for business in general, and proposed a world of Optimised Collective Value (OCV) – “a world where collective value is optimised, where the dignity of every business participant is recognized and honored”.

Strategic CR is based on a deeper reflection on the purpose of business and the way in which corporations form an integral part of society.

Taking a look at the South African signatories

At the time of writing, South Africa had 19 signatories to the UN Global Compact: Altron, AngloGold, Ashanti, Barloworld, Coca-Cola Sabco, Deloitte, Edcon, Eskom, Exxaro, FirstRand, Gold Fields, Impala Platinum, Mondi, Nedbank, Pick n Pay, Richards Bay Coal Terminal, Sanlam, Sappi, Sasol and Unilever.

The authors assessed their COP reports submitted to the UN Global Compact based on the following:

  • Did they emphasise the business case or the moral case for corporate responsibility?
  • Did they emphasise the global or the local context?
  • Did they emphasise the performance or conformance aspects of governance?
  • Did they treat their Communication on Progress reports as a public relations exercise or a compliance exercise?
  • Did they demonstrate a clear commitment to the principles of the UN Global Compact?

Narrative analysis was used to analyse both the CEO statements and COP reports. In all cases a four-point Likert scale was applied.

What did the study find?

As expected, it was difficult to measure the qualitative value of certain statements. Companies tend to use different strategies to address different areas. For environment, many companies had a business-centred strategy, given that improvements in energy efficiency have financial benefits. For human rights, such as the prohibition of child labour, it was more likely that companies would approach these issues from a moral perspective.

In general, corporations tended to focus on universal values and commitments with less emphasis on local flexibility. However, companies strongly emphasised compliance with local legislation. This was understandable in the South African context where there are specific commitments to labour laws and black economic empowerment obligations. South Africa has a historical legacy of poverty and inequality, distrust of corporations, and accusations of “green-washing”. This, combined with South African peculiarities and complexities, show how difficult it is for a global standard to add value at the local level.

Strategic CR – sometimes explained as a shift from focusing on how profits are spent to how profits are made – is based on the real capabilities of the corporation …

The UN Global Compact distinguishes between three different levels of signatories: learner, active and advanced. The differentiation programme is based on self-assessment in terms of the levels of disclosure as well as the implementation of the 10 principles. In total, 68% of the South African corporations indicated that they were at the active level. The active level is reserved for participants that fulfil all the minimum COP requirements, including addressing all four areas under investigation and communicating directly with stakeholders. In addition, 21% of the assessed corporations indicated that they were at the advanced level, which is reserved for the top-performing corporations.

These “advanced” corporations declared that they had adopted, and reported on, best practices in sustainability governance and management, with specific reference to some of the UN Global Compact initiatives. The corporations which indicated that they had reached this level were Unilever, Sasol, Mondi and Eskom. In terms of organisation type, publicly listed companies dominated the South African sample (63%), followed by private companies (26%), one subsidiary (Unilever) and one state-owned company (Eskom). Large corporations dominated the sample, with 74% having more than 10 000 employees, and 63% having had a turnover of more than $5 billion in the last financial year.

The vast majority of companies used the business case to motivate their support for corporate responsibility. The one exception to this was Exxaro, which strongly emphasised the moral case. Exxaro explained its support for the UN Global Compact as a “logical progression in our ongoing commitment to sustainability, given our shared goals and focus on universal values”.

The governance focus of the COPs was analysed to assess the relative importance attached to the two main components of governance as explained in the classical definition of governance: the system by which corporations are directed (performance) and controlled (conformance). Globally, there has been a shift from conformance to performance, with the United States still a notable exception owing to its strong culture of legal regulation.

It is significant to note the good performance of Eskom – one of South Africa’s most controversial corporations.

With the inclusive, stakeholder-based approach of the South African King Reports, which also emphasise a balanced approach to governance, it was expected that performance would be the main emphasis. Here, 21% of the companies focused exclusively on performance while 53% emphasised performance and 26% emphasised conformance.

The assessment also revealed that 21% of the companies treated the COP as mainly a public relations exercise while 74% saw it as mainly a UN Global Compact compliance exercise. Only 5% showed clear commitment to the UN Global Compact, serving as an example of best practice.

The Eskom case

It is significant to note the good performance of Eskom – one of South Africa’s most controversial corporations. As the national electricity utility, the corporation has been under scrutiny for underperformance over the past few years. The fact that Eskom’s electricity generation is still largely dependent on high-polluting coal power stations does not improve its image from an environmental perspective. The reason for Eskom’s good performance in this assessment can therefore be found either in the positive view that the corporation made honest disclosures and a sincere attempt to improve performance, or in the cynical view that the corporation may be guilty of blue-washing.

The critical question is: To what extent were the disclosures accurate and made in good faith? In his introduction to the COP, then CEO of Eskom Brian Dames stated: “We are confident that we are setting the utility up for success; that our organisation is becoming financially sustainable” (Eskom, 2012). In the same document, the chairman of Eskom, Zola Tsotsi, stated: “At a time when global economic uncertainty is forcing many companies to curtail operations and limit growth, Eskom is hard at work on one of the largest capital expansion programmes in South Africa’s history” (Eskom, 2012). Yet, barely a year later Eskom had to accept a R250 billion bailout package from the South African government, the CEO resigned (for “personal reasons”), the promised capital expansion was far behind schedule, and the pressure on the national electricity grid was such that frequent countrywide rolling blackouts were required. More recently, Eskom was implicated in a report on state capture issued by the South African Public Protector.

The COP … does provide useful insight into the activities of Global Compact signatories, and is probably the most important way in which external stakeholders can assess the performance of a participating corporation.

The purpose of the article was neither to provide a detailed case study of Eskom, nor to assess whether the corporation deserved its good performance in terms of the assessment or whether the advanced status according to the UN Global Compact differentiation programme is justified. However, it does underscore the fact that publicly available reports remain just that – publicly available reports. (Note by authors: Since the publication of the article it has become abundantly clear that the situation at Eskom was far worse at the time of writing, and therefore supports the position that a healthy dose of skepticism is not wasted when reading public reports.)

Closing remarks

The purpose of business is and will remain a matter of dispute. Debates will continue within both academic and practitioner environments, and in the long term will be influenced more by a systemic focus than an organisational behaviour focus.

The main empirical findings presented in this article are that almost all South African signatories to the United Nations Global Compact emphasised the business case in their Communication on Progress reports and that the majority of corporations also focused on the global picture rather than on local complexities. Although not part of the research performed here, it would be fair to state that it is very likely that the majority of these corporations (if not all of them) will be familiar with Creating Shared Value (CSV), but not with Optimised Collective Value (OCV), and – if given an immediate choice – would prefer the first to the second.

It is proposed that more corporate support for CR based on a normative foundation (prescribing what ought to be done) should be encouraged, and that the concept of Optimised Collective Value is an appropriate way to achieve this.

The COP remains a subjective account, even if verified externally. However, it does provide useful insight into the activities of Global Compact signatories, and is probably the most important way in which external stakeholders can assess the performance of a participating corporation. It also provides a glimpse into how corporates view corporate responsibility and the philosophies underpinning them.

  • Find the original journal article here: Malan, D., & Ungerer, M. (2018). Communicating progress on meeting the United Nations Global Compact goals: An analysis of the South African experience. African Journal of Business Ethics, 11(2), 1
  • Prof Daniel Malan teaches Business Ethics and Corporate Governance at the University of Stellenbosch Business School. He is the Director of USB’s Centre for Corporate Governance in Africa.
  • Prof Marius Ungerer lectures in Organisational Strategy, Leadership and Strategic Management at the University of Stellenbosch Business School.
  • Porter, M. & Kramer, M. (2011). Creating shared value. Harvard Business Review (HBR Reprint R1101C): 1‑
  • Donaldson, T. & Walsh, J. (2015). Toward a theory of business. Research in Organizational Behavior, 35, 181‑
  • (2012). Advanced Communication on Progress 2012. Eskom, Johannesburg.

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The ethic of care: An HR strategy to address obesity in the workplace

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

The ethic of care: An HR strategy to address obesity in the workplace

By Leon C. Prieto, Dr Babita Mathur-Helm and Kasey N. Dawson

  • OCT 2018
  • Tags Insights, Strategic Management

12 minutes to read

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Obesity in the workplace: counting the costs

Despite the importance attached to wellness and healthy eating in many countries, millions of people around the world are overweight, with obesity growing at an alarming rate. Someone is obese when their body mass index is greater than or equal to 30. According to the World Health Organization, of the 1.9 billion adults classified as overweight, 600 million (more than 30%) are obese. In the United States, one in four workers is obese, according to a Gallup study. The obesity phenomenon is not only an indictment of modern society; it is also proving to be very expensive for employers whose ability to compete in the market place is heavily dependent on a productive workforce and streamlined cost structures.

Obesity generally means a higher-than-normal rate of absenteeism, lower productivity and rising healthcare costs. A recent study put the cost of obesity among full-time employees at a staggering $73.1 billion. According to the US Center of Disease Control (CDC), the medical costs for obese individuals in 2008 were $1,429 higher than those for people of normal weight. Obese employees tend to be less productive than non-obese employees because they often perform their tasks less efficiently, require longer rest periods, are more susceptible to illness and are more likely to be injured on the job.

The obesity phenomenon is not only an indictment of modern society; it is also proving to be very expensive for employers whose ability to compete in the market place is heavily dependent on a productive workforce and streamlined cost structures.

Sectors most severely affected by obesity

In a recent study, the prevalence of obesity was found to be greatest among transportation workers. Most tasks performed in the transformation sector are sedentary and so workers are less likely to exercise during the day. Insufficient physical activity on transport routes, long hours, a lack of scheduled breaks or meals, and a paucity of healthy food options all contribute to significant weight gain. Studies have shown that bus drivers, for example, show consistently higher rates of obesity, absenteeism, morbidity and mortality than employees in other sectors.

Healthcare workers (particularly nurses) are also a high-risk group for obesity. In a study of 5000 registered nurses, 54% were found to be overweight or obese. Nurses cited insufficient physical activity, poor diet, sleep deprivation and high stress levels as contributing factors. To keep their energy levels up during lengthy shifts, nurses often consume more food, which leads to weight gain. Interestingly, the more well-paid health practitioners, such as doctors, are less likely to be obese because they can afford to eat more healthily and go to gym to stay in shape.

Worldwide discrimination against individuals with obesity

In the United States, obese people face a great deal of discrimination and prejudice because of their weight. One might ask whether the obese have any special rights that would deter such prejudice. In general, non-morbid obesity is not considered a disability under the Americans with Disabilities Act (ADA) because it is not seen to significantly limit people’s day-to-day activities. Although the Equal Employment Opportunity Commission views morbid obesity as protected under the ADA, which should theoretically shield people against discriminatory treatment, some courts have not concurred with this view when judging discrimination-related cases.

Obese employees tend to be less productive than non-obese employees because they often perform their tasks less efficiently, require longer rest periods, are more susceptible to illness and are more likely to be injured on the job.

South Africa has the dubious reputation of being among the three most overweight nations in the world. As many as 56% of women and 29% of men are overweight, while 27% of women and 10% of men are obese. This can have serious implications for people’s employment and advancement prospects. To discourage weight-based discrimination in various industries, South Africa has been adapting its labour legislation to more proactively and sensitively address the health and emotional issues that often go hand in hand with overweight and obesity. But it is early days still.

Weight-based discrimination in the workplace has been prevalent in Australia for many years. There is no national law that prohibits such discrimination. However, the state of Victoria prohibits overweight workers from being discriminated against (the only state to do so). Nearly 30% of the complaints lodged with the Victorian Equal Opportunity and Human Rights Commission pertaining to ‘physical features’ have been about weight-related discrimination.

South Africa has the dubious reputation of being among the three most overweight nations in the world.

In the UK, it is acknowledged that weight-based discrimination can be problematic in the working environment. However, the UK Equality Act does not recognise obesity as a disability requiring special consideration and/or treatment.

The ethic of care approach to tackling obesity in the workplace

What should companies be doing to tackle the obesity problem, both in the interests of their bottom line and society as a whole?

Given many countries’ policy and legislative shortcomings, it is incumbent upon the HR function in individual companies to introduce appropriate measures to mitigate the potentially adverse consequences of obesity among employees. One strategy that is gaining traction is the ‘ethic of care’ approach. In broad terms, it involves employers recognising employees’ needs and willingly shouldering the burden of meeting those needs.

The ethic of care approach is particularly appropriate when obesity poses a threat to efficiency as it emphasises the value that all employees bring to the company and encourages overweight and obese employees to make positive lifestyle changes.

The ethic of care approach is particularly appropriate when obesity poses a threat to efficiency, as it emphasises the value that all employees bring to the company and encourages overweight and obese employees to make positive lifestyle changes. Among the helpful measures that HR could take are: introducing a company policy that prohibits discrimination on the basis of weight; introducing wellness programmes for all employees, not just those who are overweight or obese; offering discounted gym memberships to employees; facilitating the formation of support groups in which employees facing similar weight-related challenges can interact and find the motivation to pursue a healthier lifestyle; and conducting a job analysis and redesign exercise to help reduce the incidence of obesity among employees.

Conclusion

Obesity and how to tackle it in an effective and sustainable manner are likely to preoccupy management teams well into the future. Although HR departments should not have to carry the responsibility for obesity management on their own, they are well-placed to conceptualise and drive initiatives that encourage unity, rather than division, among employees – regardless of their particular size or shape. This is the essence of the ethic of care approach, which involves creating a physical environment that is conducive to more healthy living while also offering support at a deeper, more emotional level. Too often, obese people find themselves isolated in a highly judgemental world. Tackling the obesity phenomenon more systematically and honestly will help to imbue companies with a healthier and more human-centred culture.

Although HR departments should not have to bear the responsibility of obesity management on their own, they are well-placed to conceptualise and drive initiatives that encourage unity, rather than division, among employees – regardless of their particular size or shape.

  • Find the original journal article here: Prieto, L. C., Mathur-Helm, B., & Dawson, K. N. (2018). The ethic of care: An HR strategy to address obesity in the workplace. Human Resource Management International Digest, 26(2), 12‒15. DOI: https://doi.org/10.1108/HRMID-07-2017-0131
  • Leon Prieto is Associate Professor of Management at the College of Business, Clayton State University, Morrow, Georgia, USA.
  • Dr Babita Mathur-Helm is Senior Lecturer at the University of Stellenbosch Business School, Bellville, Western Cape, South Africa.
  • Kasey N. Dawson is based at the Golden Key International Honour Society, Atlanta, Georgia, USA.

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Alternative fuel vehicles in South Africa: What drives green consumer behaviour?

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2019

Alternative fuel vehicles in South Africa: What drives green consumer behaviour?

By Brett Hamilton and Prof Marlize Terblanche-Smit

  • June 2019
  • Tags Strategic Management

16 minutes to read

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What drives green consumer behaviour?

While alternative fuel vehicles (AFVs) still account for a relatively small percentage of total vehicle sales, awareness of the impact of car usage on the environment is growing among consumers. Vehicle-emission controls are on the increase, and so too the number of AFVs available in the market.

With this increased awareness in mind, this study explored the underlying reasons that influence green consumer behaviour as this will allow retailers and marketers to develop more effective green marketing strategies.

The team explored the very factors that underlie consumer behaviour while considering the influence of attitude, subjective norm and perceived behavioural control on behavioural intention. They also looked at how a general positive attitude toward the environment results in a limited purchase of environmentally friendlier cars, often referred to as the attitude-action gap.

Concerns about pollution, limited fossil fuel reserves and climate change mean that consumers have become aware of the effect of their behaviour on the environment. This has given rise to ‘green consumerism’.

Growing environmental consciousness

Concerns about pollution, limited fossil fuel reserves and climate change mean that consumers have become aware of the effect of their behaviour on the environment. This has given rise to ‘green consumerism’. In addition, many companies are adopting green marketing strategies and environmental product attributes as a form of competitive advantage.

In the automotive industry, AFVs have been introduced as a green alternative that is less harmful to the environment. These vehicles use a conventional petroleum or diesel internal combustion engine in addition to at least one other type of propulsion system – such as an electric motor, bio-fuel, fuel-cells or compressed natural gas, or pure electric drive. The AFVs that were initially available in the South African market were hybrid electric-drive vehicles that use an internal combustion engine along with an electric motor. However, pure electric-drive vehicles have now also become available.

… many companies are adopting green marketing strategies and environmental product attributes as a form of competitive advantage

Offering green products that are less harmful for the environment, such as AFVs, holds many potential benefits as it meets the needs of environmentally concerned consumers while positively impacting on the brand image, reputation and financial performance of a company.

However, despite a significant rise in green awareness among consumers, merely offering green products does not guarantee long-term market success for companies as there remains a gap between positive attitudes and actual market data.

For example, in Belgium only 0.48% of new vehicles registered in 2013 were AFVs. In the UK, low-carbon cars (those emitting less than 100 g of CO2 per km) represented only 0.1% of car sales during 2013, while in South Africa, only 0.12% of new vehicles sold during 2013 were AFVs.

In many cases, these low figures are in spite of government incentives for the purchase or use of green vehicles, government disincentives for the use of conventional vehicles and the availability of numerous AFVs in the market.

… understanding green consumer behaviour is important as more alternative fuel vehicles become available and consumers have greater opportunities to express their environmental values and attitudes.

While technological factors (such as battery technology limitations and high costs) and situational factors (such as economic and regulatory factors) do curtail the adoption of AFVs, major barriers are found to wider adoption based on attitudinal factors. Consequently, understanding green consumer behaviour is important as more AFVs become available and consumers have greater opportunities to express their environmental values and attitudes. The development of marketing strategies for this growing demand relies greatly on understanding consumer behaviour and specifically on positive consumer attitudes as forerunners to purchase behaviour.

The theory of planned behaviour

To examine the purchase intention of South African consumers with regard to AFVs, the theory of planned behaviour (TPB) was used. Developed by Icek Ajzen in 1985, this framework can be used to define, predict and change consumer behaviour.  According to the TPB, actual behaviour is determined by the intention to perform behaviour (behavioural intention, BI), while this intention is jointly influenced by an individual’s attitude towards performing behaviour (A), perceived social influence of referent others (subjective norm, SN) and perceived behavioural control (PBC) over performing behaviour. These three determinants of intention, in turn, follow from an individual’s beliefs.

  • Attitude and behaviour: An attitude can be defined as an enduring favourable or unfavourable evaluation or feeling consumers have towards a product, behaviour, service, object or event. Individuals are more likely to perform specific behaviours if they have a positive attitude. Numerous studies support this positive relationship, including those related to purchasing environmentally responsible products or performing environmentally friendly behaviours.
  • Subjective norm and behaviour: Relating to the perceived social influence of others and the motivation to comply with the actual behaviour sought from referents, an individual may have more than one referent other, and it might also be a group known as a reference group.

The development of marketing strategies for this growing demand relies greatly on understanding consumer behaviour and specifically on positive consumer attitudes …

  • Perceived behavioural control and behaviour: It can be difficult for consumers to perform despite having a positive attitude and despite positive social pressure to perform certain behaviour. It is expected that the level of actual control that individuals have over behaviour will moderate their intention. For example, when individuals have an intention to perform behaviour and also have a high level of control over behaviour, it is likely that they will choose to perform that particular behaviour.
  • Perceived behavioural control as moderator: Research has found that despite consumers having a positive attitude towards behaviour, they may not develop an intention to perform behaviour when they perceive difficulties to do so. This might very well explain the so-called attitude-action gap.

How was the study conducted?

The data for this study was collected from a self-administered, internet-based survey of South African consumers who subscribe to the weekly CAR magazine web letter, the biggest selling automotive magazine in the country. Of the 201 responses, 196 were suitable for use in the study.

Given the demographic statistics of CAR magazine readers, and the 48.2% male population of the country, the 95.41% male and 4.59% female responses were expected. Most of the respondents (21.94%) were between 25 and 29 years, with 51.53% of them being younger than 35 years of age. The respondents were highly educated, with 82.14% having attained a qualification beyond matric or grade 12. Of the respondents, 61.73% indicated a monthly household income of more than R25 000. The group with the highest representation (20.41%) had a monthly household income of between R30 000 and R39 999. Half of the respondents indicated that their monthly household income was more than R30 000, indicating an affluent sample.

What did the study find?

The research found a significant positive relationship between attitude and behavioural intention, confirming that consumers with a more positive attitude towards AFVs will exhibit a greater intention to purchase.

In addition, the correlation between subjective norm and behavioural intention to purchase AFVs was confirmed, indicating that consumers who perceive greater social pressure will exhibit a greater intention to purchase. In general, respondents felt a positive social norm towards purchasing AFVs, and the significance is due to at least two factors: environmental behaviour and complying with social norms.

Environmental behaviour is often a new behaviour for consumers. This is certainly the case with AFVs and it often means that consumers lack the knowledge required to make an informed decision. They therefore rely on the support and guidance of friends, family or opinion leaders as well as the media to guide their behaviour. Since driving and owning a vehicle is a highly visible behaviour, the image associated with the behaviour is often also a significant determinant. This may influence the need of consumers to comply with social norms or to conduct what they perceive to be is the right behaviour.

The research found a significant positive relationship between perceived behavioural control as moderator and behavioural intention. In general, respondents feel control factors inhibit their ability to purchase an AFV. These control factors include purchase price, having access to charging facilities and the ease of using an AFV over a conventional vehicle.

Contrary to expectations, this study did not find that perceived behavioural control moderates the relationship between attitude and intention. It was expected for control factors, such as price, to impact the relationship between attitude and intention, and in some way, better explain the attitude-action gap caused by these factors, possibly preventing consumers from developing an attitude towards intention. So, while perceived behavioural control does impact the formation of the intention to purchase an AFV, it does not moderate the formation of attitude towards purchasing an AFV. This is possibly because the highly affluent sample did not consider a control factor such as price to impact their attitude towards purchasing an AFV because they can afford it, or the control factors are independent from attitude formation and the relationship between attitude and intention.

Since driving and owning a vehicle is a highly visible behaviour, the image associated with the behaviour is often also a significant determinant. This may influence the need of consumers to comply with social norms …

  1. How does this impact on green marketing strategies?
    1. Attitude was the most significant determinant of behaviour. As such, creating a positive attitude towards AFVs must be a significant consideration for developing an effective marketing strategy. Retailers and marketers should focus on direct channel factors and the fact that consumers often feel that AFVs are expensive. Marketing and advertising should focus on the benefits of AFVs, specifically on fuel cost savings and lower engine maintenance costs compared to conventional vehicles. They should therefore convince consumers that they will be able to afford AFVs.

     

    1. Since image plays an important role for purchasers of AFVs, retailers and marketers should focus on differentiating AFVs from conventional vehicles in terms of packaging – but not at the expense of price, functionality and practicality. Consumers will have a positive attitude towards AFVs if these products are perceived to offer equal or greater functionality and ease of use compared to conventional vehicles. Retailers and marketers should emphasise the recharging process, driving range, access to recharging stations, the operation of the vehicle (which is no different from the conventional) and the practicality of AFVs, with specific reference to its cabin space and luggage capacity.

     

    1. AFVs are often perceived to be more expensive to maintain and operate. Therefore, the following should be communicated: the cost benefit aspect of AFVs, its reliability, the availability of service centres, as well as a comparison between the lifetime costs of running an AFV against that of a conventional vehicle. Consumers will have a more positive attitude towards AFVs if they have the opportunity to trial a product, and therefore retailers and marketers should focus on providing test-drive opportunities to consumers. This will help consumers to draw informed conclusions about the practicality and functionality of AFVs.

     

    1. Marketers should focus on creating normative pressure and improving the knowledge of consumers regarding AFVs. To counter a possible lack of knowledge, retailers and marketers should focus on improving the channels through which consumers are informed about AFVs (thus offering multiple information search facilities). As a lack of knowledge means that consumers are influenced by their referent others, retailers and marketers should focus on developing knowledge-sharing platforms among consumers, which may also assist in delivering messages of price, image, functionality, practicality and (indirectly) trialability. This will strengthen word-of-mouth marketing. Knowledge-sharing platforms can include social media channels where consumers can share information with friends, family and colleagues.

     

    1. As consumers do rely on others to develop an intention to purchase an AFV and are influenced by them, it is important for effective marketing strategies to target end consumers as well as the reference groups of the end consumers. This can be done by considering referent others as part of the target group of the end consumers or as a separate target group.

     

    1. Consumers still believe that the ability to purchase an AFV – which is often a new behaviour for them – comes with obstacles. A positive attitude can therefore be fostered by focusing marketing efforts that provide information via advertising, test-drives, media coverage and in-store activities. Knowledge-sharing should remain a core focus of any marketing effort both by improving information search facilities and by creating social media platforms that will allow consumers to interact with referent others.

     

    • Find the original journal article here: Hamilton, B. & Terblanche-Smit, M. (2018). Consumer intention to purchase green vehicles in the South African market: A theory of planned behaviour perspective. South African Journal of Business Management, 49(1), a190.

    https://sajbm.org/index.php/sajbm/article/view/190/1128

    • Brett Hamilton is a former automotive media professional and holds extensive knowledge of the industry. He is currently a visiting lecturer in Corporate Finance at USB and is a director at First River Capital. He conducted the research via a database that he could access as a result of his contacts in the industry.
    • Prof Marlize Terblanche-Smit lectures in Strategic Marketing and Branding on the University of Stellenbosch Business School’s MBA programme. She also consults as a strategic marketing practitioner. Her consumer behaviour background guided this article from a consumer and academic perspective.
    • Reference: Ajzen, I. (1985). From intentions to actions: A theory of planned behaviour. In J. Kuhl & J. Beckmann (eds.), Action-control: From cognition to behavior, pp. 11-39, Springer, Heidelberg.

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