Shared Flashcard Set

Details

broad black based economic empowerment
Part of legislation
14
Business
12th Grade
10/18/2021

Additional Business Flashcards

 


 

Cards

Term
Why was the BBBEE implemented
Definition
  • To reach a point where all South African companies are transformed to improving black people's access to the economy
Term
Purpose of the BBBEE
Definition
  • Promoting economic transformation
  • Decrease income inequalities
  • Uplift the standard of living of black people
  • Increase participation of black women
Term
Advantages of the BBBEE
Definition
  • Encourages businesses to address the demands for equity directly
  • A good BEE rating improves the image of the business
  • Compliance=government tenders
Term
Disadvantages of the BBBEE
Definition
  • Processes may lead to corruption or nepotism if not monitored properly
  • Provides for preferential procurement, certain businesses may be excluded from supplying goods/services
  • Businesses could experience large financial implications if they do not comply with BBBEE
Term
Penalties for non-compliance
Definition
  • Imprisonment
  • Fine (10% of company's annual turnover)
  • Licenses may not be renewed
Term
Compliance with the BBBEE
Definition
  • Appoint black people in managerial positions
  • Sell shares to black employees/people
  • Implement affirmative action when making appointments
  • Outsource their services to BEE compliant suppliers
Term
What is affirmative action
Definition
Preference to previously disadvantaged people - equal opportunities to all people
Term
What is BBBEE
Definition
Economic empowerment of black people. The participation of black people in the economy.
Term
What are the 5 BBBEE pillars?
Definition
  1. Management control
  2. Skills development
  3. Ownership
  4. Enterprise and supplier development
  5. Social responsibility/Socio-economic development
Term

Management control

(Pillar 1)

Definition
  • Apply: Appoint black people in senior executive positions
  • Advantage: Management must ensure black female representation in management
  • Disadvantage: Shortage of skilled black managers, find it difficult to make appointments
Term

Skills Development

(Pillar 2)

Definition
  • Apply: Engage black employees in skills development initiatives
  • Advantage: Provide learnerships and learning programmes to black employees
  • Disadvantage: Productivity is compromised
Term

Ownership

(Pillar 3)

Definition
  • Apply: Include black people in shareholding/partnerships
  • Advantages: More opportunities are created
  • Disadvantages: Many black people cannot afford shares
Term

Enterprise and supplier development

(Pillar 4)

Definition
  • Apply: Invest in small black owned businesses
  • Advantage: Support suppliers with diversity in their ownership
  • Disadvantage: Businesses become too reliant on support from other businesses
Term

Social responsibility/Socio-economic development

(Pillar 5)

Definition
  • ApplyFocus on critical ideas which can affect growth & development in SA
  • Advantage: Improves image
  • Disadvantage: Costly + Time consuming
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