Original Research

Institutional forces and divestment performance of South African conglomerates: Case study evidence

David King, David Coldwell, Tasneem Joosub, David McClelland
South African Journal of Economic and Management Sciences | Vol 18, No 3 | a1196 | DOI: https://doi.org/10.4102/sajems.v18i3.1196 | © 2015 David King, David Coldwell, Tasneem Joosub, David McClelland | This work is licensed under CC Attribution 4.0
Submitted: 19 August 2014 | Published: 25 August 2015

About the author(s)

David King, Iowa State University, United States
David Coldwell, University of the Witwatersrand, South Africa
Tasneem Joosub, University of the Witwatersrand, South Africa
David McClelland, University of the Witwatersrand, South Africa

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Abstract

 The history of South Africa serves as a natural experiment in how a changing institutional environment impacts corporate structure. Based on institutional theory, we anticipate higher performance through emulating successful strategies or through restructuring consistent with mimetic isomorphism. Conversely, coercive isomorphism results from restructuring driven by regulation, and we anticipate that they are associated with lower performance. To examine these relationships, we consider divestment by South African firms over two periods, using mixed methods. We find tentative support for our predictions, and we outline implications for policymakers, as well as for management research and practice.

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