Archives of Humanities & Social Sciences Research

Proactive Business Rescue Strategies for Leveraging the Contemporary State-Owned Enterprises Continuity and Sustainability

Abstract

Feresane Matthew Sibeko

In South Africa and across the world, state-owned enterprises play instrumental roles of creating and providing the required services in sectors like energy, air transport, rail, insurance, banking and water transport to the population. State-owned enterprises are also instrumental generators of government revenue. Unfortunately, despite the business and economic values of state-owned enterprises, proactive initiatives are often not adopted to improve the business sustainability of most state-owned enterprises. To respond to such a gap, this study uses integrative review to evaluate a combination of the proactive business rescue strategies that the state-owned enterprises can adopt going forward. Findings from integrative review indicated the most common forms of business rescue strategies used in South Africa and around the world to often entail the introduction of government’s financial bailout. Other rescue strategies have often prompted the use of outsourcing in situations where the government feels it is difficult to properly manage and run the struggling state-owned enterprise. If the government is not using such approach, findings indicated the introduction of public-private partnership. With the private sector engaged, the state-owned enterprises can be engaged in innovation that creates new values to re-vitalize their performance. Unfortunately, even as the government uses a combination of these business rescue strategies, chronic problems like politicization of board appointments, inefficient operational management and poor financial management are often not addressed with the hope that just financial bailout and business rescue will do the desired magic of turning around the performance of the struggling state-owned enterprises. Unfortunately, that is often not the case. Instead during the business rescue of most struggling stateowned enterprises, the success of such strategies has often still been saddled by a range of such problems. To proactively deal with the problems causing failure, it is suggested that the government must not wait for failure to arise. Instead they must take the initiative of proactively identifying and mitigating problems of politicization of board appointments, chronic inefficient operational management and poor financial management. Once these problems are ameliorated, it can become easier for the government to introduce more successful business rescue strategies.

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