Abstract
M.B.A.
The importance of a free market in a post apartheid South Africa has
been acknowledged. The benefits should be spread so that all
individuals may be able to share in the wealth generated by the people
within the country.
Privatization is one mechanism for redistributing the wealth of the
State, and the use of an Employee Share Ownership Participation
Scheme (E.S.O.P.S.) is away in which the wealth can be spread over
a large proportion of the population. This was a basic policy of
Thatcher's Government in the U.K. The same rationale is apt for the
South African situation.
An E.S.O.P.S. is similar to a profit sharing or a pension plan, and may
be group with various holistic empowerment strategies. There are
however two fundamental differences from these two traditional plans:
• It invests only in the equity of the employer
• The E.S.O.P.S. provides the organization with an increased finance
tool, through an increased ability to borrow.
One of the business trends, in the U.S.A. and the U.K. and more
recently in South Africa has been to extend the ownership of shares to
employees. This secures a stake in the company, an avenue for
retiring owners, and as protection against hostile takeover bids. Other
motives that have been used are, as an educational experience and
also as a part of participative management philosophy.
The author heads the Department of Mining Engineering in the new
University of Johannesburg, Faculty of Engineering and the Built...