Affirmative Action in South Africa and Mohamed Adan & Paul Mayanja
How Swedish Subsidiaries Cope With It.
Table of Contents
1. Introduction 3
1.1. Background 3
1.2. Reason For Our Thesis 3
1.3. Purpose 4
1.4. Definitions 4
1.5. Delimitations 4
1.6. Methodology 5
1.6.1. Chosen Paradigm 6
1.6.2. Research Classification 7
1.6.3. Research Strategy 7
1.6.4. Method 8
1.6.5. Evaluation Criteria 11
1.7. Theoretical Frame 12
1.7.1. Model 12
1.8. Outline of the Study 13
2. What is Affirmative Action? 13
2.1. Definition of Affirmative Action 13
3. An Example of Affirmative Action-- Malaysia 14
3.1. New Economic Policy 14
3.2. National Development Policy 14
3.2.1. Success of Policy 15
4. Historic Reasons for Black Managerial Exclusion in South Africa 15
4.1. The Labor Market: A White Institution of Exclusion 16
4.1.1. Segmented Labor Markets 16
4.1.2. Internal Labor Market 16
4.1.3. Resistance to Black Advancement 17
4.2. Results of Labor Market Exclusion 18
5. Attitudes Towards Affirmative Action in South Africa 18
5.1. Arguments Against Affirmative Action 19
5.1.1. Reverse Discrimination 19
5.1.2. Client Base Reflection 19
5.1.3. Elimination of Apartheid Laws 19
5.1.4. Targets and Quotas 19
5.1.5. Merit and Lowering of Standards 19
5.2. Arguments For Affirmative Action 20
5.2.1. Client Base 20
5.2.2. Standards/Competence /Qualification 20
5.2.3. Targets/Goals 20
5.2.4. The Removal of Apartheid Laws 21
5.2.5. Reverse Discrimination 21
5.3. Summary of Attitudes 21
6. The Employment Equity Bill 21
6.1. Vision of The Employment Equity Bill 22
6.2. Eliminating Unfair Discrimination 22
6.3. Implementing Affirmative Action 22
6.3.1. Drawing Up an Employment Equity Plan 23
6.3.2. Government Relation 23
6.4. Concluding Remarks on The Employment Equity Bill 23
6.5. Political Perspectives on The Employment Equity Bill 23
6.5.1. South African Chamber of Business 24
6.5.2. Congress of South Africa Trade Union 24
6.5.3. Conclusions 24
7. Generating Hypotheses 24
7.1. The Model 25
7.2. Conclusions and Hypotheses 27
8. Discussion of Findings 28
8.1. Presentation 29
8.2. Summary 31
8.3. Weaknesses and Areas For Further Research 31
9. Reflections 32
9.1. Qualification and Competence 32
9.2. Management Diversity 33
9.2.1. Benefits of Management Diversity 33
9.2.2. Problems With Management Diversity 34
9.3. Conclusions 34
Sources: 35
Publications 35
Journals 37
Internet Sites and Home Pages 37
Draft 38
Interview 38
Appendices 39
1. Questionnaire To Subsidiaries 39
2. Effects of Black Exclusion 44
1. Introduction
1.1. Background
South Africa was first colonized by the Dutch in the 17th century and then by the British from 1806 onwards. During this period, unfair discriminatory measures were imposed which deprived the indigenous Black people of achieving equal opportunity to prosper and advance in their country. The past and present absence of Blacks in the mainstream economy partly results from legislative measures imposed by the Nationalist government when they came to power in 1948. However, the Nationalist merely adopted and built on a system that had already been installed by the colonialists, and all they did was implement it with a greater zeal (Qunta, 1995).
In 1911, the first major job reservation legislation (the Mines and Works Act) was passed, making hiring on race basis official. Thirty two job areas in the mining industry were set aside specifically for Whites, which consequently resulted in other ethnic groups being burred from these spheres. The 1922 Apprenticeship Act stipulated educational requirements necessary for job considerations and apprenticeship. However, due to separate syllabuses sustained by separate educational departments, it succeeded to keep education in predominantly Black schools inferior to White schools. Hence Black people were effectively excluded from the aforementioned sectors. The possibility for apprenticeship consideration was further hemmed by the 1952 Native Building Act, which excluded Blacks from the Apprenticeship Act and defined the areas they could work.
The need to rectify past injustices has been accepted by the majority of the Black population and some of the White as well. Yet the topic remains highly controversial ever since the South African government in November 1997 presented the Employment Equity Bill. Its provisions are not yet legislated, but its two primary objectives are to eliminate unfair discrimination and implement affirmative action measures in order to achieve employment equity in organizations.
All Swedish subsidiaries in South Africa with more than fifty employees (designated companies), are eligible to comply with the Employment Equity Bill. They will like all other designated corporations in the country, have to submit an employment equity plan, 18 months after the Employment Equity Bill’s presentation. This change in the host country’s legal labor environment implies that subsidiaries will have to make decisions on how to respond to their new business climate. Failure to adapt to prevailing conditions could result in measures that might harm their business in the country.
1.2. Reason For Our Thesis
Labor legislation in South Africa has led to occupational segregation between Blacks and Whites. The consequence of this labor market distortion is an under-representation of Blacks in many occupational categories. The reason for our thesis is our interest in how Swedish subsidiaries in South Africa are handling employment equity in their organizations. There has been no previous research conducted in this area and with our study, we would like to contribute by laying a foundation for future research.
1.3. Purpose
There is an under-representation of Black people in companies operating in South Africa, Swedish subsidiaries included. The government has proposed two prerequisites in its aim to achieve employment equity: The elimination on unfair discrimination and the implementation of affirmative action in organizations. The purpose of our thesis is to:
1. Identify historic reasons for the exclusion of Black people from managerial positions.
2. Use a model to generate hypotheses about affirmative action in Swedish subsidiaries.
- Investigate whether there are any patterns by Swedish subsidiaries in handling affirmative action.
1.4. Definitions
This study is about Swedish subsidiaries operating in South Africa (SA). A subsidiary is a business company that is controlled by another (Cowie, 1989). In our study, we will consider a subsidiary any company in South Africa that is controlled by a parent company registered or that has major shareholders and interest in Sweden. It should be understood that in those instances when we only state subsidiaries, we mean Swedish subsidiaries in South Africa.
Our research is to be considered a “minor” case study of the subsidiaries from which we received answers to our questionnaire. We adopt the term “minor” case study because of the constraints (time and access to subsidiary informants) upon us while conducting our research from Sweden. Time and access are otherwise crucial elements in traditional case studies research.
The Employment Equity Bill (the Bill) which recommends firms to implement affirmative action, has not yet been legislated. However, if its recommendations are not abided the government has vowed that legislative steps will be taken (Labournet, 1998). For this reason we find it appropriate to use the Bill to denote a law when generating our hypotheses in chapter 7.
The Bill defines Blacks as Coloreds, Asians and Africans. However, we will use Blacks to denote Blacks Africans, not including Asians and Coloreds. The reason for this is that most of the studies we have collected focus on Black Africans and exclude Coloreds and Asians.
1.5. Delimitations
We limit ourselves not to look at the entire Employment Equity Bill since it is vast and not the whole of it applies to our area of interest. Hence, we only extract and refer to the sections of it that are relevant to our thesis.
Our study is limited to the private sector since Swedish subsidiaries are not part of the South African public sector.
Additionally, our investigation is deliberately oriented to look at senior, middle and junior managerial positions in Swedish subsidiaries. This is based on evidence that Blacks are overwhelmingly under-represented at these organizational levels.
We have used a model to generate hypotheses about affirmative action (AA) in subsidiaries. The model should only be understood as an instrument for that purpose and issues relating to anything else about it will not be dealt with in our thesis.
Our intention is not to develop recommendations on how subsidiaries should tackle AA, rather we intend to look for patterns in subsidiaries handling of AA. We hope that those patterns identified might serve as a platform for future research.
A lot has been written about AA in the U.S.A. and its impact on organizations. However in the U.S.A. Blacks who were the intended beneficiaries of corrective measures were a minority, which is not the case in SA. Another fundamental difference is that the largest labor union in SA advocates AA, that was not the case in the U.S.A. (Adam, 1997). We therefore find it more appropriate in referring to Malaysia and give a general overview of AA where it was introduced in order to benefit the indigenous Malays who were the majority group in the country. However, no comparison between Malaysia and SA will be made.
1.6. Methodology
The approach used for the entire process of a research study is known as the methodology. “Progress of scientific practice based on people’s philosophies and assumptions about the world and the nature of knowledge; in this context, about how research should be conducted” is referred to as the research paradigm (Hussey and Hussey, 1997, p.16). The two main paradigms are the positivistic and the phenomenological. However, alternative terms for both paradigms are common and they are a result of researchers wishing to delineate differences in research approach. Examples of alternative terms for the positivistic paradigm are objective, scientific, experimentalist and quantitative, with the latter being the most extensively used. Alternative phenomenological terms include subjectivist, humanistic, interpretivist and the qualitative being most commonly cited. Below we give a brief description of the most commonly cited alternative terms and later choose a paradigm and present a case for our choice (section 1.4.1.).
If a researcher opts for a quantitative approach for his/her study, one could expect the investigation to be objective in nature, with distance from data and emphasis on testing and verification of data. The data gathered is converted into numbers and it is from the numbers that the researcher conducts statistical analysis in an effort to for instance test a hypothesis (Holme and Solvang, 1991). There is great focus on gaining facts and/or reasons for social events and the study is characterized by a logical, systematic and critical approach to the phenomenon being researched (Ghauri, Gronhaug and Kristianlund, 1995).
The qualitative approach emphasizes understanding a phenomenon from the respondents or informants point of view and advocates a interpretive approach with the intent of gaining a holistic perspective of the phenomenon being studied (Train, 1986). The research is subjective and it includes examining and reflecting on perceptions in order to gain full comprehension of social and human activities (Hussey and Hussey, 1997). Additionally, unlike the quantitative approach, qualitative research is process rather than result oriented and calls for the researcher to acquire insights into the interactions within the phenomenon’s setting. Below we choose a paradigm for our research, classify our study and then choose a strategy for our investigation.
1.6.1. Chosen Paradigm
The choice between the two main paradigms is partly reliant on the study’s purpose and how it is defined and it will ultimately have implications on how research is conducted. On this note, we would like to clarify the relation between the positivistic and phenomenological paradigm and their commonly cited alternative’s, quantitative and qualitative. We have found suggestions that hold it possible for the positivistic paradigm to produce qualitative data, just as it is for the phenomenological to produce quantitative data (Hussey and Hussey, 1997). This implies to us that if a researcher adopts a phenomenological paradigm, quantitative data could be used in a qualitative way, and vice versa if the researcher adopts the positivistic approach. However, at undergraduate level, students are not obliged to focus on nuances between phenomenological/qualitative and positivistic/quantitative implied by the paradigms (ibid.). Hence, we can interchangeably use the main paradigm we finally choose, with its commonly cited alternative. Below is a table with the main features of the two main paradigms.
Positivistic paradigm Phenomenological paradigm
Tends to produce quantitative data. Tends to produce qualitative data.
Uses large samples. Uses small samples.
Concerned with hypotheses testing. Concerned with generating theories.
Data is highly specific and precise. Data is rich and subjective.
The location is artificial. Location is natural.
Generalizes from sample to population Generalizes from one setting to another.
Table 1. Source: Hussey and Hussey, 1997 p. 54.
Keeping our research purpose in mind, which are to identify historic reasons for the exclusion of Black people from managerial positions. Use a model to generate hypotheses about affirmative action in Swedish subsidiaries. Then investigate whether there are any patterns in subsidiaries affirmative action handling, we consider it very import to gain a holistic perspective of our research phenomenon. AA is a complex subject and we have to attempt to fully understand it and its surrounding circumstances. We contend that only by using a phenomenological paradigm with its qualitative characteristics that advocates understanding, will it be possible for us to fulfill the purpose our thesis. Presently, there is no research about AA in Swedish subsidiaries and we will later in our paper generate hypotheses on this issue. Had we chosen to conduct our research according to the positivistic paradigm, our focus would be more directed on verification and testing of e.g. hypotheses. However, no hypotheses presently exist, hence the importance of our study.
Now that we have chosen a research paradigm, we can proceed to classify our study.
1.6.2. Research Classification
If a researcher is to classify a study according to its purpose, then four classifications are proposed (Marshall and Rossman, 1995). Below we briefly account for them and their aims.
To investigate a little understood phenomena.Exploratory / To identify and/or discover important variables.
To generate hypotheses for further research.
Explanatory / To explain the forces causing the phenomenon in question.
To identify plausible casual networks shaping the phenomenon.
Descriptive / To document the phenomenon of interest.
Predictive / To predict the outcomes of the phenomenon.
To forecast the events and behaviors resulting from the phenomenon.
Table 2. Source: Marshall and Rossman, 1995.