FACTORS IN CHOOSING A BLACK ECONOMIC PARTNER

This report investigates the factors that are of importance in choosing a BlackEconomic Partner to maximise the vested interest of all stakeholders involvedin the joint venture.The research report is broad and lays the groundwork for further in-depthresearch. The research reported was exploratory and explanatory. Aquantitative research methodology was chosen, consequent to the limitednumber of possible respondents in a cross-section of companies in Gauteng.The Delphi technique was used as research method. Data were gatheredthrough documented questionnaires using open–ended questions in Round 1of the research, while documented questionnaires using scaling methodswere used in Round 2 of the research. In-depth interviews with experts in thefield of Black Economic Empowerment were used in the final round of theresearch.The factors involved in the choice of a Black Economic Partner include havinga clear documented reason for the joint venture and should not include “beingcompliant”. It was found that companies that choose a Black EconomicPartner just to be compliant run a bigger risk of choosing the wrong partner,resulting in the failure of the joint venture. For most companies it is abusiness imperative that they go into a Black Economic Empowerment jointventure. The most important factor when choosing a Black Economic Partneris that the partner should have financial risk in the joint venture. This financialrisk, though, must be carefully defined, as many Black Economic Partners donot have financial capital to invest in a joint venture, but instruments areavailable to assist. Another factor of importance is the Black EconomicPartner’s influence in the business world and ability of the partner to fit in withthe company’s culture and values. This research found that it is better tochoose a Black Economic Partner that does not have many investments overa wide spectrum of industries, as the partner must actively contribute to andfocus on one industry. This research also found that management generallyiiis committed to Black Economic Empowerment but that managers are notefficiently skilled to implement Black Economic Empowerment.This research should serve as a pilot study that aims to explore new territory.From this explorative research, more extensive research of the contributingfactors should be conducted in a cross-section more representative of theeconomy of South Africa and not only Gauteng.No research could be found that addresses the choice a company makes withregard to a Black Economic Partner in a joint venture. The researcher hopesthat this research will make companies more sensitive in considering thefactors involved when choosing a Black Economic Partner for a joint venture.