BUSINESS, SOCIETY AND COLLECTIVE ACTION

Business, Society and Collective Action
Name
Institutional Affiliation
Business, Society and Collective Action
Introduction
In this presentation, I reflect on the values and insights I gained by studying the Business, Society and Collective Action course. The course focused on four main topics namely: the structural, economic and political problems facing South Africa; collective action; ethical theories; corporate social responsibility and sustainable development. Despite South Africa being the largest and most developed economy in Africa, it ranks poorly regarding socio-economic development (Liebbrandt, Finn & Woolard, 2010). There is widespread poverty, joblessness, and inequality. Most sectors of the economy are dominated by the minority Whites at the expense of the Blacks. Resources are being depleted at a higher rate, and the environmental effects of the country’s industrialization program are quite challenging (Reddy, 2014). Due to increasing shortage of resources, South Africa has adopted the concept of sustainable development as the basis of its economic growth objectives.
Structural, Economic and Political Problems Facing South Africa
Studies have identified poverty, inequality, and unemployment to be the most significant structural, economic and political problems experienced by Africa’s largest economy. The three constitute the ‘Triple Challenge.’ In describing the critical development challenges facing South Africa, Liebbrandt, Finn and Woolard (2010) reckon that the country remains a strong economy but with wide inequality gaps.

Poverty is widely entrenched across the country, as is the widespread unemployment and economic exclusion. This description does not mirror the international image of South Africa as a high-income economy competing in the same rank as Russia, Brazil and India and China (the BRICS block). When the new government took power from the Apartheid regime, it had to deal with inequality and poverty (Reddy, 2014). The economic policies pursued by the Apartheid regime excluded the majority of South Africans from participating in the labor market effectively. The minority Whites controlled critical sectors of the economy, effectively subjugating the majority Blacks to the periphery of economic participation. The effects of this economic exclusion are still being faced in the country (Liebbrandt, Finn & Woolard, 2010).
Given the fact that racial segregation policies were deeply entrenched in the country’s economic, social and political spheres, attempts to reverse them have been painfully slow, and at best incomplete. Thus, while South Africa’s GDP has increased considerably since the end of the Apartheid in 1994, equality, employment and wealth income have not followed the same trajectory (Edwards, 2005). Regarding household incomes, more than 60% of SA’s income is attributed to less than 10% of households. These households are the richest and constitute a large share of the country’s economy. The poorest who account for 50% of the total population contribute less than 5% of total national income (Reddy, 2014). These disparities show how the ‘triple challenge’ has taken a heavy toll on South Africa’s economic development. Underlying the two issues is the perennial problem of joblessness, which cuts across generations.
When compared to its peers in the emerging markets category, the realities of South Africa’s ‘triple challenge’ are quite glaring. For example, if the country’s employment ratio falls short of BRICS average. In China, 72% of those under the working class population have jobs, 57% in Russia, about 67% in Brazil and 55% in India. These numbers are in stark contrast to the 40% of South Africa (Liebbrandt, Finn & Woolard, 2010). Outside the BRICS block, the average ratio of employment across all emerging markets is 56%, which is still higher than South Africa’s (Reddy, 2014). These figures get worse when the youth segment (18-30 years) is honed in. The unemployment ratio for the young people in South Africa currently stands at 12.5%, meaning that 1 in 8 young people in the country is unemployed. The average for emerging markets is 1 in every 3. This rate is not surprising considering that majority of South African youth have never been engaged in any formal employment, and come from backgrounds of multi-generational unemployment. Since the 1980s, the correlation between economic growth and employment has weakened significantly for South Africa (Harcourt & Wood, 2003).
An important issue of concern for South Africa at the moment is that the ratio of young people (especially graduates) who lack jobs is growing faster than any other age group, thereby fueling the ‘triple challenge’ crises. The labor market has been subject to numerous technological and structural changes (Edwards, 2005). At the structural level, the market was transitioning from primary sector output to service sector output. Until the 1980s, primary sectors such as agriculture, craftsmanship, and mining accounted for a large share of the country’s gross domestic product. At the technological level, the labor market witnessed a movement away from the labor-intensive industries for capital-intensive industries (Liebbrandt, Finn & Woolard, 2010). In addition, the financial sector witnessed sustained growth becoming the largest and most diversified in the African continent. However, the financial sector was not able to absorb a significant number of employees to the extent of tipping the unemployment prospects in South Africa. The two changes have resulted in a strong demand for skilled workers besides sustained attrition at the non-skilled end of the labor market (Thandika, 2011).
Thus, employment and economic growth have shown a negative relationship in South Africa. The adverse relationship between GDP growth and unemployment is due to several factors. According to Buhlungu and Ellis (2012), the post-Apartheid period has witnessed increased emphasis on internationalization and financialization of the economy and at the same time lacks any major reinvestments in the declining economy. As a result, the gross domestic production of the country has fallen, and labor costs increased, which discourages foreign direct investments into South Africa. Other factors that have been touted as being responsible for the poor economic prospects include competition from cheap imports due to the post-apartheid economic liberalization. Also, regulatory pressures causing industries to prefer skilled over unskilled labor have led to high unemployment in South Africa (Edwards, 2005).
Alongside the perennial ‘triple challenge,’ a number of negative economic trends have been observed in South Africa. In recent years, the economy of South Africa has been facing major problems. It slowed between 2009 and 2015, and its recovery was slowed by the persistent drought. The country’s manufacturing activity has been constrained severely due to the drop in the global and domestic demand for products. The mining sector has been affected adversely due to falling commodity prices as well as the reduction in export demand. Households have been pressured due to poor growth in income levels, increasing cost of living, and high-interest rates. Faced with a weak domestic demand, the confidence of the business sector has declined significantly. All these trends show that South Africa’s economy is not doing well (Edwards, 2005).
Despite the scourging effects of the ‘triple challenge,’ the post-apartheid South Africa has made impressive gains in key economic, political and social fronts. One of these is in the growth of democracy. According to Thandika (2011), democracy has been consistent with economic growth in the country. Today, South Africa is one of the few African countries that can be considered to uphold the principles of liberal democracy. There are regular and free elections, a vibrant civil society and free press in South Africa. The three elements have helped in holding leaders accountable. South Africa has the most powerful and largest organization of trade unions (COSATU) in Africa. COSATU has been at the forefront in agitating for fair working conditions and better wages for workers (Buhlungu & Ellis, 2012). South Africa has also made huge gains in terms of protecting the dependence of the judiciary. South Africa’s judiciary is an important arm of the government. The judiciary works independently of interference from the government or any other quarter. Over the past twenty years, the judiciary has been an important partner in the growth of democracy in South Africa (Thandika, 2011).
Due to a large number of unemployed people in South Africa, it would be appropriate for the government to set a national minimum wage for workers. The wage should be tied to a relatively modest living level so as to protect the economic prospects of low paid workers especially those in the informal sector (Spicer, 2016). A national minimum wage will also aid in narrowing down the wage inequality, which has expanded exponentially in the post-Apartheid era. Currently, South Africa’s social welfare system focuses mainly on the elderly, children and the disabled (Buhlungu & Ellis, 2012). Evidently, the current level of poverty in South Africa would have been much worse if such a welfare program was not in place. Unfortunately, the program excludes the unemployed working age people, and hence the high rate of unemployment in the country.

Corporate Social Responsibility, Corporate Citizenship, Business Ethics and Sustainability
Corporate social responsibility (CSR) refers to voluntary initiatives undertaken by business to benefit the society. These initiatives include environmental conservation, provision of employment opportunities to local communities, sourcing of raw materials locally, and support for charities (Dočekalová & Kocmanová, 2016). CSR is related to the notion of corporate citizenship, which refers to the extent to which companies take steps to meet the ethical, economic and legal responsibilities associated with their operations. The concept of sustainability encompasses the coordination and management of social, financial and environmental demands. Sustainability enables businesses to achieve the triple bottom line – people, planet, and profits. The triple-bottom-line requires that businesses go beyond the traditional financial objectives to address their impacts on the society and the environment (Harcourt & Wood, 2003).
Clarkson developed a framework for corporate social responsiveness and citizenship. According to this framework, businesses have a responsibility to acknowledge, monitor and address the concerns of all stakeholders. Common stakeholders include customers, employees, suppliers, competitors, the society, shareholders, management and the government (Dočekalová & Kocmanová, 2016). Moreover, businesses should work collaboratively with stakeholders (especially the community) to ensure that their operations promote sustainable benefits. Although the concepts of CSR and corporate citizenship are not new in South Africa, they have received improved attention in recent years due to increasing concerns about negative impacts of businesses in the society. For example, some SA companies in the mining sector have been accused of paying their employees low wages and not providing them with suitable working conditions (Harcourt & Wood, 2003). Other business enterprises have been blamed for polluting the environment. In some cases, employees have lost their lives due to the failure of employers to address their concerns early enough. All these indicate that CSR is an important initiative in South Africa.
Theories of Collective Action as a Response to Wicked Problems Facing South Africa
Collective action refers to any form of organized political or social activity that is carried out by a group of people to address particular needs. Generally, collective actions are aimed at addressing inequality in the society (Brayden, 2008). Examples of these inequalities include racial discrimination, denial of rights and struggle for gay’s rights. A good example of collective action in South Africa was the struggle against the Apartheid policies which discriminated against the Blacks. Different theories have been developed to explain the phenomena of collective action. According to the social movement theory, collective actions entail behaviors that are organized, purposeful and institutionalized with the objective of promoting or resisting change in society. A closely related theory is the convergence theory which states that collective action happens when people with similar objectives and intentions assemble at the same place to advance their common objectives (Brayden, 2008).
A slightly different theory is the stakeholder theory which states that collective actions happen when those in authority fail to address the concerns of their subjects (the stakeholders). All these theories can explain the various collection actions that have taken place in South Africa (Brayden, 2008). For example, during the apartheid regime, Blacks stages massive protests to force the government to recognize their rights. In recent years, millions of South Africans have gone to the streets to protest against the lack of employment and to demand accountability from the government. All these actions are consistent with the various theories of collective actions (Brayden, 2008). These theories provide guidelines for solving wicked problems. This kind of problems is difficult to solve due to various factors such as incomplete knowledge, large economic impact, interrelationships with other problems or a large number of people involved. Environmental degradation is a leading wicked problem in South Africa, whose impacts can be addressed through collective actions (Buhlungu & Ellis, 201).
Conclusion
This paper has identified poverty, inequality, and unemployment as the greatest developmental challenges facing South Africa. Unemployment has been singled out as the biggest crisis facing Africa’s largest economy despite more than two decades of a democratic government. Although both the public and private segments have expanded significantly since the end of apartheid, the notion of joblessness still reigns supreme as the labor market is not able to absorb the millions of unemployed people. It is apparent that if South Africa can solve the unemployment crisis, it will have found a solution to the other two challenges of inequality and poverty. In addition to the ‘triple challenge,’ South Africa is also confronted by a host of other issues such as environmental degradation. The nation’s natural resources are being depleted at a higher rate, raising concerns about the issue of sustainability. To address this issue, corporate organizations, and the government should foster efforts to embrace corporate social responsibility.

References
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Buhlungu, S. & Ellis, S. (2012). The Trade Union Movement and the Tripartite Alliance. In InBuhlungu, S. and M. Tshoaedi (eds.). COSATU’s Contested Legacy. HSRC Press, Cape Town: 259-282.
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