Black/white joint small business ventures in South Africa

Abstract

The political history of South Africa, especially that of the apartheid years, has affected the structuring and functioning of business in the country profoundly. In general, White business is highly developed and formal, with access to financial and infrastructural support. Black business is often subsistence-based, informal and struggles for access to support mechanisms. These structural inequities have had a depressing impact on the economy that will continue if they are not resolved. Following the 1994 elections, policies and legislation have been introduced aimed at redressing structural imbalances. There is thus both a political and an economic imperative to bridge the gaps that have arisen between Black and White business. The study proposes Black/White joint ventures as a mechanism to this end. The history of Black/White relationships means that these enterprises are likely to face many problems. A model has been developed through the study for the formulation, structuring and operation of Black/White joint ventures that takes into account the factors that are likely to impact on these ventures and affect their success potential. The process of applying the model in practice is directed towards results that are not prejudiced by the background of the parties to the venture. The study expands the concept of joint ventures within the South African context to incorporate initiatives along a continuum ranging from extensions to employment to full joint ventures. Depending on its nature and objectives, a venture may be placed and remain at any stage along the continuum, or may progress along it. Case studies of Black/White joint ventures were investigated in depth and analysed in terms of the application of the model, in order to determine the relevance of the model. In all cases, the success or failure of the venture under scrutiny could be ascribed to the way in which the presence of various elements identified as being components of the model had been accommodated in practice within the venture. The use of the model when applied to formulating, structuring and operating a Black/White joint venture can contribute to its success potential.