In Chapter two the opening case is on the subject "managing risks in New South Africa." The new democratically elected ANC government had adopted a Black Economic Empowerment, better known as BEE policy, aiming to increase Black's share in the economy. When you hear of BEE you would think it is a great way to get African Americans involved in the economy, however there are strings attached. Unfortunately, BEE sets quotas and timetables for affirmative action and achieving Black ownership, executive position, and employment. In addition foreign firms are required to invest and achieving Black ownership,executive position, and employment. In addition foreign firms are required to invest at least thirty percent of sales in local, black-owned firms. In my opinion, this is a turn-off. Bee is trying to promote something positive, but if I were a part of a foreign firm I rather work somewhere else that have to invest such a big number of sales.
Some of these requirements are asking too much and may eventually backfire which would greater hurt South Africa's economy. For example, big firms such as SASOL complain BEE policy scares away investment and "deters" foreign firms. As stated towards the end of the article I feel as though BEE may be doing more harm than good. It is a great rough sketch but needs to be tweaked in the penalty areas. The penalties of not meeting goals are major turn offs. I think rewards for meeting goals are more effective then getting penalized for them. When companies such as South Africa's Pricewaterhouse Copper's and MSGM Masuku Jeena mered it opened more doors for lucrative policy. BEE policy has great intentions but discouraging rules and regulations.
