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.
Privatisation is one mechanism for redistributing the wealth ofthe State, and the use of an
Employee Share Ownership Participation Scheme (E.S.O.P.S.) is a way in which the
wealth can be spread over a large proportion ofthe 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 grouped with
various holistic empowerment strategies. There are however two fundamental differences
from these two traditional plans:
1. It invests only in the equity ofthe employer
2. The E.S.O.P.S., provides the organisation 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 has made a study of the acceptance of E.S.O.P.S., schemes in the South
African Mining Industry and the impact of this concept on the workers through an
attitude survey. The author headed the Department of Mining Engineering in the new
University of Johannesburg, Faculty of Engineering and the Built Environment. He
lectures the subjects Mineral Engineering Management, Coal Mining and Coal Services
to candidates for the National Diploma (NO) and Bacculareus Technologae (B Tech) in
Mining Engineering.