Examining The Business Sectors Of Projects Information Technology Essay

This project is done individually and it is a research project. In this project we will look at two different large organisations and compare them with each other. The two companies I have chosen are part of the SATRIX top 40 on the JSE list. I have chosen the two most popular Cell phone providers in whole South Africa, VODACOM and MTN. Over the past years, these two companies became very successful and they grow more and more everyday.

They both have been fighting against each other on who is the better and more successful provider in South Africa. I have researched a lot about the two companies and they both have a lot of differences. I made research on the shareholders of each business, the Corporate Social Responsibilities and Environmental Sustainability, the BBBEE Compliance and the Companies’ Performance of each business. This project will also show you which company complies more with the King 11 Report and Triple Bottom Line Reporting as well as the company which will be the best proposition for a prospective investor.

CSR related Issues in

South Africa

The needs of our society in South Africa are called the CSR (Corporate Social Responsibility). Social Responsibilities are not only important in South Africa but also in the rest of our world. Social Responsibility is a very important part in many spheres of any business; examples are poor working conditions, dumping of waste or abuse people’s savings to enrich them. CSR addresses the legal, ethical, commercial and other expectations society has for business. The CSR needs to deal with shareholders, customers, suppliers, employees and other communities.

Major issues are:

Human rights

Labour conditions

Environmental impacts

Operations

Products and services

In South Africa, growing demands are imposed on any type of society. Business needs to contribute to a huge extend to solve any problems which accrue in the business. In South Africa, CSR refers to operate and organize everything in a good manner. It can be measured be performance indicators, which include: less operating costs, advanced brand image, higher salary and employee retention.

Environmental Issues In

South Africa

Environmental issues in South Africa are mainly caused by us humans who don’t look after our environment and just do what they want to. People like that, don’t really care about our nature and they just don’t follow the rules which help our country to be cleaner and healthier. Most of those issues have a huge impact on us humans. Issues like that include; safer water supplies, population explosion and depletion. The problem with South Africa is that it is to over populate and the population needs to be cut down by quite a lot in order to have a better environment. There are many types of issues which we have in South Africa. Issues like climate change, land use, farming, nuclear issues and pollution are the most common issues in South Africa. But you get many other issues which affect our environment everyday.

Stakeholders

Stakeholders are the most important people in any business. Without them, it’s not possible to run any type of business. Every business has to have stakeholders. Stakeholders are the members of a business. You get 2 different types of Stakeholders, namely internal and external stakeholders.

Internal Stakeholders:

Employees

Manager

Owners

External Stakeholders:

Suppliers

Society

Government

Creditors

Shareholders

Customers

Social CSR Issues

Different forms of CSR have been found in South Africa over the couple of years. Apartheid played a huge role in it to shape these programmes and to run them successfully. After the 1990’s, South Africa ranked into the global economy and new dynamics and programmes have been added to the CSR. The CSR works its way though many policy debates and corporate agendas.

The CSR’s issues are very important to any type of business, because it helps you to be more successful and improve the working condition of each member.

Major issues are:

Human rights

Labour conditions

Environmental impacts

Operations

Products and services

Yes, there are many more issues but those are the most important ones I have found and chosen. These issues are very important for each business doesn’t matter what type of business it is. It helps to make your employees happier and make them feel comfortable at their working place.

Environmental CSR Issues

An environmental issue is the way how a human treats and looks after our environment. It’s the humans who don’t look after our environment and because of that; our environment is not in a great shape at the moment. Nature dies and animals are starting too die because us humans dirty the nature and environment.

Environmental issues in South Africa are mainly caused by us humans who don’t look after our environment and just do what they want to.

Issues like that include; safer water supplies, population explosion and depletion. The problem with South Africa is that it is to over populate and the population needs to be cut down by quite a lot in order to have a better environment.

More types of issues are;

Climate change

Dams

Energy

Land use

Farming

Nuclear issues

Pollution

If most of the people in South Africa would look after our environment a lot, we would have a great environment and the nature would be cleaner. But unfortunately, most of the population in South Africa don’t care about their environment. They destroy our environment more and more day after day.

BBBEE

BBBEE (Broad Based Black Economic Empowerment) is a form of empowerment created by the South African government in order to make it even for blacks and whites. As you know, in South Africa we have Whites, Blacks, Coloureds and Indians. Most of the people in South Africa think that the white people should be supported more in getting a job. They think whites are the highest race in South Africa; they are at the top and think they better than the blacks or Indians. But it’s so not true. Every human, doesn’t matter what colour their skin has every human should be treated the same in any way. That’s why the BBBEE plays a huge role in South Africa and it’s very often used by a lot of companies around South Africa. Every year, the country sets a vision statement by reaching some goals. Some of the goals include;

50% of management is black

40% of the total staff are woman

I think that the BBBEE plays a huge role in South African businesses and it helps the business to have an equal amount of employees. They should have different races and genders and I mean a business is only going to be successful when there are different types of people in it. More ideas will come and the business will be more successful.

Stakeholders

The companies I have chosen are very large and they have a lot of stakeholders which work for the company.

Vodacom

Stakeholders

Employees

Shareholders

Communities

Business partners

Regulators

Customers

Government

Shareholders analysis

Shareholder

No of shareholders

%

No of shares

1-100

65798

69.14

2334687

101-1000

26016

27.34

7631889

1001-10000

2553

2.68

7206854

10001-50000

409

0.43

9814621

50001-100000

148

0.16

10787017

100001-1000000

204

0.21

59739289

1000001 and over

35

0.04

1390439643

Totals

95163

100.00

1487954000

The price of a share changes a couple of times per day.

Share

Current price

% Change

Time

5465

1.20

4.March

The dividend a shareholder will receive is 36.00 cents per share.

MTN

Stakeholders

Employees

Regulators

Shareholders

Customers

Communities

Government

Business partners

Shares

Current price

% Change

Time

11510

-0.77

3.March

The dividend a shareholder will receive is 65.00 cents per share.

Comment:

I’ve researched the different stakeholders the 2 companies have and the shares they each charge. At the end, it was MTN who sells his shares for much more money. The dividend MTN shareholders will get is more than double the amount you get from Vodacom. So, it is better at the moment to buy shares from MTN rather then from Vodacom.

Responsibility towards Stakeholders

Vodacom:

Communities:

Vodacom plans to improve the engagement processes further this year.

Suppliers:

Vodacom improved its BBBEE score from 55.2% to 68.0%, according to DTI Codes.

Employees:

Vodacom invested over R70 Million on training employees only. Vodacom tries his best to make it the most comfortable for their employees by improving the working conditions. HIV tests are regularly done.

MTN:

Employees:

Created an awareness training 5 years ago, this improves year by year. Makes sure the employees are comfortable at their working place, so they will be able to work the best they can. HIV tests are made every month.

Government:

Government focuses on creating small groups to make it easier to work. Annual interviews conducted.

Communities:

Press conferences are held every week. Annual interviews conducted. Good education.

Most Credible Policy

Both companies, Vodacom and MTN, have very good policies which they follow all the time and try too improve them as much as they can. A big role in both companies is HIV/AIDS. They both test all their employees nearly every month and that’s good to hear. It gives other workers more confident to work now that they can’t get sick or infected by any viruses. But when I go more into detail, Vodacom has impressed me more. They’ve spent so much money on training employees and making their working place comfortable for them.

Policy

Projects of each Company

Vodacom:

Education project

Health project

Security project

Penryn Mobile Lab

Schola Amoris School

Committee for Crime prevention

Mahumani Empowerment centre

Reagona Disability Unit

SAICA

NMMU Scholarship

Cities of Africa

Wits centre of Excellence

Vodacom Education Project- the Company invests money to equip and educate young people with the skills they will need when they go out to the big world.

Vodacom Health Project- the company invests quality health initiatives to develop to their full potential. It focuses on surgery, HIV/AIDS and feeding schemes.

Vodacom Security Project- security is the secondary focus of the whole Vodacom foundation. Projects like Men against child abuse or committee for crime prevention were created.

MTN:

Y’ello Care

South African Red Cross

Fifa World Cup

Cancer Research Centre

Y’ello Care programme- a volunteer campaign that involves every employee in community building projects in addition to the MTN Foundation initiatives.

Fifa world cup- MTN supports the fifa world cup 2010. A lot of money will be donated to the cancer research centre. At the last year’s qualification, every goal a team made, R10000 were donated to the cancer centre.

Cancer Research Centre- MTN has made an agreement with United Nations Development programme to fight against cancer.

Most Sustainable projects:

Vodacom and MTN, both have a lot of projects created and most of them were really successful. But again, Vodacom has better projects and all of them were successful. Vodacom helped South Africa a lot more than MTN. Vodacom helped kids to have an education and get work. They also have created a health project which runs since 2008.

BBBEE Policies

Vodacom:

Equity ownership

Management control

Employment equity

Skills development

Enterprise development

Socioeconomic development

Preferential procurement

Management control- Black representation rose very high. More black people have joined the management team.

Employment equity- Vodacom are adding hundreds of employees to their team every month. Year after year, more black people come and work at vodacom with the right education.

Skills Development- over R90 million has vodacom spent on training employees only. R68 million were spent on Black Designated Groups.

MTN:

Increasing access to MTN procurement for blacks

Increasing human resource and skill development

Encouraging partnerships between Black enterprises

Promoting economic transformation

MTN has a license to promote Broad-based Black Economic Empowerment within South Africa through its procurement procedures.

Broad Based Black Economic Empowerment was integrated with the tender rules and policies to assist disadvantaged communities.

Companies’ Performance

Vodacom:

Group highlights:

16.5% growth in group customers to 39.6 million

10.5% growth in group EBITDA to R18.2 billion

28.8% growth in group data revenue to R6.4 billion

BBBEE transaction completed in South Africa in October 2008

Acquired Gateway on 30 December 2008

Listed on the JSE Limited on 18 May 2009

R500 million spend by Vodacom Foundation in its first ten years

Financial Information Summary of Vodacom

MTN:

Highlights:

90,7 million subscribers up 48% from December 2007

R102,5 billion up 40% from December 2007

R43,2 billion up 36% from December 2007

R904,4 cents up 33% from December 2007

Financial Information Summary of MTN

Vodacom:

Balance Sheet of Vodacom as at 31.March.2009

MTN:

Balanced Sheet of MTN as at 30.April.2009

Conclusion

The 2 companies I have chosen are South Africa’s biggest cell phone providers. I’ve done a lot of research and came to a final conclusion. Both, Vodacom and MTN have positives and negatives but for me Vodacom is a better provide between the 2. Vodacom is more reliable, I can trust it more, it has many more projects done than MTN and it’s more successful. For me, Vodacom is the best cell phone provider in whole South Africa.