Original Research

Corporate political activity as part of enterprise strategy in South African agribusinesses

Liesel Botha, Susanna L. Middelberg
South African Journal of Economic and Management Sciences | Vol 23, No 1 | a3219 | DOI: https://doi.org/10.4102/sajems.v23i1.3219 | © 2020 Liesel Botha, Susanna L. Middelberg | This work is licensed under CC Attribution 4.0
Submitted: 05 June 2019 | Published: 28 May 2020

About the author(s)

Liesel Botha, School of Accounting Sciences, Faculty of Economics and Management Sciences, North-West University, Potchefstroom, South Africa
Susanna L. Middelberg, School of Accounting Sciences, Faculty of Economics and Management Sciences, North-West University, Potchefstroom, South Africa


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Abstract

Background: The South African agricultural sector is facing regulatory uncertainty relating to land reform and distribution, restrictive labour policies and minimum wages. Corporate agribusinesses play an important role in the agricultural industry. Increasing political influence on their activities manifested in the lack of government support, and the uncertainty surrounding public policy threatens investment and growth in the sector. This calls for an intelligent integrated enterprise strategy that includes corporate political activity (CPA).

Setting: Four South African agribusinesses and two agricultural associations.

Aim: The purpose is to explore the CPA adopted by corporate agribusinesses and agricultural associations in terms of enterprise strategy during times of regulatory uncertainty.

Method: Qualitative data were collected through semi-structured interviews. A questionnaire, consisting of sections focused on regulatory uncertainty, responses to regulatory uncertainty and strategy, was completed during the interviews.

Results: The participants experience significant regulatory uncertainty. There is a clear distinction between the strategic approach to CPA followed by corporate agribusinesses and agricultural associations. The parties surveyed pursue a combination of CPA strategies. A desire for greater cooperation and shared prosperity with government is evident, supported by a strong sense of conducting business ethically, traced across the results.

Conclusion: This article addresses the role that CPA plays in an integrated enterprise strategy – especially in times of regulatory uncertainty – such as the agricultural industry in South Africa is experiencing. It not only reports on the CPA approach of both corporate agribusiness and agricultural associations, but also describes the strategies agribusinesses follow during times of uncertainty.


Keywords

Corporate political activity; Enterprise strategy; Agribusiness; Agricultural associations; Policy uncertainty; South Africa

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