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Competition and the performance of strategic business units ‐ A study of the South African beverage industry

Competition and the performance of strategic business units ‐ A study of the South African... Historically, South Africa’s apartheid policies had a negative effect on the financial performance of the South African beverage industry. This effect was characterised by the non‐participation of South African companies in the global market and the presence of foreign enterprises in the domestic market. From 1994, South African industries have been increasingly exposed to new opportunities and forces. Globalisation, deregulation, changing manufacturing systems and the entry of foreign competitors in the 1990s exposed the local industry to competitive challenges in the domestic and the global market. This study examined the impact of changing levels of competition on the performance of strategic business units and the mediating role of management accounting in the South African beverage industry. The methodology employed to investigate this relationship comprised both a survey and a case study. The results indicate a positive correlation between the level of competition and the performance of business units. The results furthermore indicate that enterprises can utilise a management accounting system (MAS) as a strategic response to competition. The increased use of MAS will, in turn, improve the performance of an enterprise. Enterprises that do not respond positively to competition will not survive. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Meditari Accountancy Research Emerald Publishing

Competition and the performance of strategic business units ‐ A study of the South African beverage industry

Meditari Accountancy Research , Volume 10 (1): 23 – Apr 1, 2002

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References (20)

Publisher
Emerald Publishing
Copyright
Copyright © 2002 MCB UP Ltd. All rights reserved.
ISSN
1022-2529
DOI
10.1108/10222529200200001
Publisher site
See Article on Publisher Site

Abstract

Historically, South Africa’s apartheid policies had a negative effect on the financial performance of the South African beverage industry. This effect was characterised by the non‐participation of South African companies in the global market and the presence of foreign enterprises in the domestic market. From 1994, South African industries have been increasingly exposed to new opportunities and forces. Globalisation, deregulation, changing manufacturing systems and the entry of foreign competitors in the 1990s exposed the local industry to competitive challenges in the domestic and the global market. This study examined the impact of changing levels of competition on the performance of strategic business units and the mediating role of management accounting in the South African beverage industry. The methodology employed to investigate this relationship comprised both a survey and a case study. The results indicate a positive correlation between the level of competition and the performance of business units. The results furthermore indicate that enterprises can utilise a management accounting system (MAS) as a strategic response to competition. The increased use of MAS will, in turn, improve the performance of an enterprise. Enterprises that do not respond positively to competition will not survive.

Journal

Meditari Accountancy ResearchEmerald Publishing

Published: Apr 1, 2002

Keywords: Management accounting systems; Business performance; Competition

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