South African Business Structures

Until very recently 70% of the market capitalization of the Johannesburg Stock Market was in the hands of just four huge corporations and over 50% of the country’s fixed assets were in government hands.

This centralisation of power led to the creation of large, hierarchical and bureaucratic organisations where power was vested at the top.

The post-apartheid governments have sought to both reduce the influence of state holdings and to encourage the large, native South African conglomerates to sell off some of their business to local black consortiums. When these changes are coupled with the fact that a great many international operations (who avoided South Africa during the apartheid years) are now actively trading in the country, a much more diverse business landscape is developing.

These changes make it difficult to predict with any great certainty what type of structure your South African counterparts may have embraced. Research is necessary – but if in doubt it is probably still best to assume that hierarchy and bureaucracy will be evident.

One other issue worth mentioning at this point is the power and influence wielded by the Trade Union movement in South Africa. This power is a residual effect of the important role played by the Unions during the years of struggle against apartheid. It is hoped that, as the country develops, union militancy will decrease as the level of labour unrest is often quoted as a break to inward investment.

Author

This country-specific business culture profile was written by Keith Warburton who is the founder of the cultural awareness training consultancy Global Business Culture. 

Global Business culture is a leading training provider in the fields of cross-cultural communication and global virtual team working.  We provide training to global corporations in live classroom-based formats, through webinars and also through our cultural awareness digital learning hub, Global Business Compass.

This World Business Culture profile is designed as an introduction to business culture in South Africa only and a more detailed understanding needs a more in-depth exploration which we can provide through our training and consultancy services.