Impact of Eskom Leadership on South African Economy and Governance, Dissertation Example

Declaration

I hereby certify that this dissertation constitutes my own product, that where the language of others is set forth, quotation marks so indicate, and that appropriate credit is given where I have used the language, ideas, expressions or writings of another.

I declare that the dissertation describes original work that has not previously been presented for the award of any other degree of any institution.

Abstract

This study examines the main leadership traits in a government-owned energy company in South Africa: Eskom. Taking into consideration recent research studies related to leadership styles, traits, and management strategies, the author is attempting to measure the presence of transformational leadership within the organization. The author is attempting to apply western type leadership theories, such as transformational leadership in a South African context. The main assumption of the current research is whether or not this is possible at all, and if companies in South Africa could benefit from applying transformational leadership given that they operate in a globalised economy. It is presumed that culture, heritage, economic, and political environment, as well as ownership status are likely to affect the leadership style of the entire organization and individual business units. The author is attempting to reveal these correlations through a quantitative survey analysis. The views of Eskom employees about the leadership’s performance against the most common transformational leadership values are presented in the study.

The attitudes of the leadership, the characteristics of the organization, the industry and political environment are also examined when analysing the leadership traits of the company. The below research focuses on governance, management, human resources, and communication issues that are related to contemporary leadership theories created in the Western world. The main finding of the research is that Eskom acts as a vehicle of political, social, and economic change in South Africa, and its management focuses on aligning its internal policies with government priorities and initiatives, which, in turn, results in creating benefits for all stakeholders: employees, customers, and business partners alike.

The focus of this study is to identify whether Eskom, as a publicly owned company operating in the public sector has a significant influence on the well-being of customers, as well as the nation. By surveying current employees of the organization, the author is attempting to measure the overall performance of Eskom in delivering social change, social justice, and equality in South Africa, and employees’ perception of the company’s values. The survey results of the current study confirm that the values of the company related to social equality, economic development, and equal opportunities are clearly visible for employees, therefore, the vision of Eskom is effectively communicated.

The quantitative research is based on the results of a survey carried out among Eskom employees, with a sample size of 1000 with a response rate of 40 percent. The research question focused on the positive social impact of Eskom in South Africa. The main finding of the research study is that the majority of employees believe that transformational leadership is present within Eskom, and the company cares about the well-being of the society, as well as employees, by promoting equality and empowering individuals through training.

Chapter 1

Introduction

The extensive scholarly research on leadership since the middle of the 20^th century has revealed the importance of leadership and its influence on all areas of governance and ethics throughout organisations and beyond (Yukl, 2013). The most important characteristic of modern leadership approaches (transformational leadership) is the ability to share a vision, enable and inspire the followers, whether in a political, economic, social or technological setting (Bass, 1991). Personal characteristics of leaders and their actions contribute to the effectiveness of the individuals in a leading position, with credibility as the foundation of leadership (Kouzes & Posner, 2006). The relevance of leadership in business contexts relates to the competitiveness of an organisation, as an effective and ethical leadership team can significantly aid a company to obtain and maintain a competitive position in a business environment (Buchanan & Huczynski, 2013). However, for the purpose of this research, leadership will be considered from the point of view of a public company, namely Eskom and how the leadership practices within this company ultimately impacts on the economy and overall governance of South Africa.

It is generally believed by leadership researchers (Theimann et al., 2006) that ownership, industry, cultural environment, and social structure influence the organization’s behaviour and leadership approaches.  Theimann et al. (2006, p. 2) explains this influence using the convergence thesis, which assumes that there is a close correlation between cultural values and economic ideology. Further, Theimann (2006) explains the divergence perspective: culture influencing the society more than economic ideology. While several studies (for example,  Bolden, 2009: Podsakoff, 1996) have been carried out to measure the presence of transformational leadership within Western type or globalised international organizations, only a limited number of studies (Theimann et al. 2006: Kassier, 2012) are available focusing on large, publicly owned companies in the Sub-Saharan region.   While some authors (Malunga, 2007) claim that individualistic theories of the West  cannot be applied to Saudi Arabian companies, the below study will attempt to do just that, and reveal that management styles are affected by globalization, ownership, culture, individual traits, as well as market demands within Eskom. Given that Eskom is currently facing challenges related to effectiveness, service delivery, social impact, and business issues, it is likely that the management of the organization has problems to solve that are similar to those companies’ that operate in the developed world or on a global scale. The author of the current study believes that it is indeed possible to apply leadership criteria in a developing country for several diverse reasons. First of all, South African companies are ran by leaders who are likely to have received business education from Western universities, therefore, they would have an extensive knowledge about the theories and practice of improving practices, collaboration, and leading change. Secondly, – just like Western companies – Eskom faces several challenges that originate from the global market. This also indicates that the leadership theories are relevant to the company, even though it is owned by the government of South Africa.

Transformational leadership is sometimes referred to as charismatic or visionary leadership. It has been an important element in management research for a couple of decades (Bass, 1999). Scholars have uncovered a positive correlation between the influence of transformational leaders and the performance of teams and the overall organisation, therefore sustaining that this form of leadership is the most desirable for the purpose of increasing the profitability of businesses (Prati et al. 2003). Beyond the profit oriented targets of a company, visionary leadership can aid a company to overcome challenges through effective motivation of employees, whilst, at the same time, it can contribute to the building and maintaining the reputation of an organisation (Kotter, 1982)

In recent years, several authors (Erkutlu, 2008: GLOBE, 2014) have written about transformational leadership, as one of the most suitable for today’s organizations in the globalized world. According to the definition of Kark, Chen & Shamir (2003), this type of leadership is suitable for effectively communicating the vision, motivating people, and encouraging them to complete tasks that improve the organization’s performance. Therefore, this leadership trait will be in the focus of the current study.

The complexities of leaders’ duties increase in the context of large organisations, due to the fact that the stakeholders have distinct needs and expectations which have to be balanced out in any decision making instances by the senior management. Existing research outlines the leaders’ challenges of focusing on financial returns whilst motivating employees, particularly in situations when organisational restructuring, downsizing, mergers and takeovers take place (Robbins et al. 2013). The tasks of leaders are, therefore, often challenging and it is paramount that academic research contributes to the practice through relevant, timely and accurate theories. Whilst the current scholarly studies (Ghafoor et al,, 2011: Atmojo, 2012) focus on how leadership can impact on various aspects within a company, from a behavioural, financial and managerial viewpoint, one aspect seems to be slightly overlooked in the exiting literature: the impact of a company’s leadership on the society at large. Successful leadership is often used as a starting point for academics to correlate specific behavioural patterns with predicted success. However, this study attempts to uncover how the extent to which leadership succeeds within one company can be attributed to the successful economic and governmental situation of a region. In order to uncover the underlining intricacies of leadership within an organisation and the wider economic and social wellbeing of a region, this dissertation is using a large state-owned organisation, Eskom, as an example. Through the correlation of Eskom leadership and its influence on the economy of the state, this paper lays the ground for further studies aiming to outline the importance of transformational leadership beyond the performance of employees within a firm.

Beyond the case study used for this dissertation, the applicability of the results for the general academic literature (Bolden & Kirk, 2009; Denton & Vloeberghs, 2003) suggests that scholarly leadership research needs to focus on the relevance of transformational leadership to the wider economic sphere of a region. In other words, the scope of leadership theories needs to grow beyond the influence of a leader on the organisation, encompassing the influence on the overall governance of a region. The Eskom case study is a high impact study in terms of influencing the leadership discourse, as it helps analyse the impact of a state owned company on an entire nation, namely South Africa. Recommendations of this paper indicate how the dissertation opens up a path for leadership research in general.

Research Question

“What are the views of individuals within Eskom on the influence of the senior management team on the well-being of the South African nation and social justice?”

The above question is relevant to the company, economic, and social environment, and is focused around finding correlations between four different variables: culture, social order, national policies, and public sector administration.

Objectives of the Research

This dissertation aims to bridge the gap between the current scholarly literature regarding leadership with the realities of state owned companies in South Africa and their influence on the country’s economy.

The paper critically evaluates the existing leadership research in relation to the impact of companies’ policies on economic change policies in the country of South Africa have been created to increase participation of Blacks in management of public companies and the workforce, while empowering disadvantaged populations is another important policy that can be implemented in the mission and vision of Eskom.

Through the case study of Eskom, and its significant impact on the South African economy, this dissertation aims to provide the empirical evidence that leadership research should focus more on the influence of leadership in companies on the overall governance of a nation. The following research objectives cover the most important aspects of research, starting from the literature search focus to the primary research design and the overall purpose of the research:

• To explore the leadership traits present within the state-owned Eskom company,
• To evaluate how cultural environment and ownership affect the overall leadership’s effectiveness and style,
• How the company’s policies are aligned with the visions and missions set by the government.

In order to complete the above research, it is important to define the variables that impact leadership styles and traits within South Africa and the public sector. Therefore, it is crucial that the author examines not only the individual company’s procedures, governance policies, and management style, but also the economic environment, political factors, and stakeholder influence that impacts corporate behaviour.  Further, the perception of workers within Eskom are measured. This indicates that the research does not necessarily address the question: “how transformational the leadership’s approaches are”, but instead focuses on “how transformational the leadership of Eskom appears to be”. Likewise, the research below cannot provide answers to the question whether or not the company influences social justice, national policies, and development, but only research workers’ perception on the company’s influence on state affairs and social justice initiatives.

Thorough research is below undertaken in order to determine the following correlations that exist between different variables:

1. Corporate structure and social impact
2. Ownership status and alignment with national policies
3. State owned companies’ influence on national policies by reviewing the relevance of national initiatives to the corporate strategy of the company.

Research Focus

In order to determine an appropriate research design for the primary research undertaken in this dissertation, the critical literature review focused on uncovering the existing gap in the literature about leadership (Bero et al, 1998). The empirical research undertaken in the field of leadership has scarcely focused on the connection of a public organization’s leadership approach and social justice. As a result of this, academic research is not indicative of the practices required at the leadership level of organisations for the purpose of advancing the economic and general governance of a particular area. In response to this gap, the current study is using the example of Eskom, as the largest state-owned company in the energy field in South Africa, in order to present the empirical evidence outlining the need to bridge the gap between practice and academia regarding business leadership and the governance of a region.

The main characteristics of the company that make the research unique are as follows:

• State ownership

Ownership status is believed to have an influence on corporate decisions and strategies. The author believes that the fact that the company is owned by the government and operates within the public sector increases the influence of its strategy on the country’s economic and social well-being.

• Energy sector

The energy sector worldwide is highly regulated and faces several challenges. Government initiatives need to be supported by the company, as well as CO2 emission reduction projects on the international level. Therefore, the regulation status of the company is one of the main determinants of its policies and operating procedures.

• Large number of stakeholders

With millions of corporate, government, and domestic customers, operating in the energy sector, Eskom is believed to have a higher than average impact factor on the society of the country, due to the unique legislation procedures of public companies within South Africa.

All the above characteristics are examined in detail below, however, it is assumed that they increase the impact that the organization’s operation have on the population of the nation. According to Kassier (2012, p. 313) energy policies are in “connection with, for example, poverty alleviation, assuming that once a country undergoes economic transformation, all economically active citizens will benefit and contribute to development”.

State ownership indicates that the company closely follows the government’s initiatives and policies, and aligns its operations with the main goals of the government. As an example: when the government is looking to reduce regional inequalities within the country, it can create policies that would involve increased access to electricity. While a privately owned company would not necessarily consider the interest of the population as first priority, the public energy company needs to, as it is funded and ran by the state. It needs to align not only its operational practices to suit new government initiatives, but needs to work in collaboration with policy-makers, and officials in order to help the state achieve goals that are set on a national level. The close collaboration between the government and the publicly owned energy company indicates that the activities of Eskom have a great impact on people’s lives in the country, and shape the society, as well as the economic environment.

On the other hand, operating in the highly regulated (on national and international level) industry sector, Eskom needs to show an example for other publicly owned and private organizations, in order to influence compliance and adherence to rules.

According to the company-focused report of Greenpeace (2012), the main role of Eskom within South Africa goes further than supplying the domestic market with electricity. The report states that the company has been deeply involved in energy-related innovative and economic projects in the African region. However, on a domestic level, in 2011, the company was unable to meet its electrification target, and this means that the main focus of the company was not on empowering local communities and increasing the access to basic utilities nationwide, but the export of electricity, according to the assumptions of Greenpeace (2012). While the reasons behind not achieving the targets set by the management and government officials are not clearly identified by the Greenpeace report, it can be assumed that problems with management of the project, collaboration, project management have contributed towards the failure.

As Greenpeace (2012) concludes, the policies within Eskom have a great impact (questionably negative or positive) on social justice and equality. The report (Greenpeace, 2012:10) states that “Only 139 customers account for 34.9% of Eskom’s total revenues, however these customers generally pay less than half what the majority of customers pay. In 2011, mining and industry customers paid an average of 36.2c/KWh, while 4.5 million direct residential customers paid on average 66.4c/Kwh”. While providing concessionary rates for businesses is a common business practice in the energy sector, when the initiatives of the government focus on reducing the cost of basic services for the poor, this fact does not make Eskom appear to treat customers fairly.

The final reason why Eskom is believed to have a great impact on the economy of the nation is that it has one of the largest customer base, and a diverse pool of stakeholders. The main stakeholders of the company can be identified as workers, government officials, and customers. The operation of the company impacts every stakeholder, and vice versa. The expectations of the government, customers, and workers shape the internal policies of Eskom.

According to Haritha & Krishnan (2004), company structure does not have an influence on transformational leadership. The authors completed an extensive research based on an assumption that transformational leadership creates “a mutual relationship where both the leader and the follower are elevated from their present to a higher state of morality” (Haritha & Krishnan, 2004:16). While the authors did not cover ownership’s impact on the presence of transformational leadership, they reviewed the hierarchical structure’s impact on leadership approaches and collaboration methods. Maenetja (2009:86) states that the organizational structure of Eskom is centralized. Further, it is described as a paternal, authoritarian company. The researcher claims that the main priorities of the company’s management are:  grand mission, finance, and people (in the above order). The company is also described as hierarchical, as most decisions are made by the Head Office, located in Johannesburg. Still, recent changes in the structure, and the decentralization of the operation and decision-making – according to Maenetja (2009) had a positive impact on leadership development and communication.

Appendix B shows the company’s organizational structure, adopted from Maenetja’s (2009:87) study. While the hierarchical structure of the company would normally indicate that the presence of transformational leadership is limited, the same study (Maenetja, 2009:105) states that team leaders are “the main hubs of employee communication in any organisation”. This indicates that the flow of communication with regards to the company’s vision is effective, and middle-managers can act as a vehicle of communication the mission and vision with all workers.

The Role of Eskom According to the Management

According to the 2011 Fact Sheet (2011, p. 1), the company works towards one important role: “organising itself to deliver on its mandate for the decades ahead”. According to the document, Eskom’s role goes beyond creating and distributing power in South Africa. Some of the highlighted areas of impact described by the report are: contributing towards social investment programmes, creating jobs, maintaining and nurturing the company’s youth programme, supporting 5000 young people to find employment, and supporting 10.000 learners in gaining relevant knowledge. The company, on the other hand, also recognizes its responsibility to tackle environmental challenges (Eskom, 2011, p. 2).

Vision of Eskom and its Communication

Eskom leadership certainly has a vision for the future, and this indicates that the leadership style’s transformational aspects can be measured through a randomized survey of employees. While the survey design of the current study examines employees’ perceptions about the leadership, it is also important to note that it reflects some of the most important and most significant business practices that the leadership engages in. Determining the adequate representation of minorities within an organization is usually the responsibility of the company’s management. However, in the case of a government-owned organization, the influence of policies and social initiatives is much stronger than in the case of a privately owned company. Government initiatives can be enforced better within a public company, therefore, one of the most significant influences of the leadership within Eskom is believed to be the government.

Before analysing the impact of Eskom’s vision and mission on the governance of South Africa, it is important to clearly define the company’s aims, objectives, principles, and values. Reviewing the company’s corporate website (Eskom, n.d., web), it is clear that the management of the company has a great level of commitment to both the government programs and the society.

The mandate of the company, described by Eskom (n.d., web) is “to provide electricity in an efficient and sustainable manner, including the generation, transmission and distribution of electricity, the latter including wholesale and retail sales”.

The two most important words determining the mission of the company are: “efficient” and “sustainable”. These provide a clear focus for decision-makers within the organization to create policies and projects that make the operation of the company more effective and more sustainable. This mission would certainly create several common benefits: potentially lower prices for customers, higher rate of availability, due to more efficient distribution methods, and a better living environment for the future generations.

The above described benefits are further highlighted in Eskom’s purpose statement (Eskom, n.d.  web): “to provide sustainable electricity solutions to grow the economy and improve the quality of life of the people in South Africa and the region”.

The values of the company are also listed on the company’s website, as:

1. Zero harm
2. Integrity
3. Innovation
4. Sinobuntu (caring)
5. Customer satisfaction

Further, the core strategy of Eskom is described as shifting performance and growing sustainability. When reviewed in the light of national strategies aiming to improve the rate of public’s access to basic services, such as water, sanitation, waste management, and electricity, it is evident that the core strategy of the firm is in close alignment with national policies.

The pillars of the company’s strategic Pillars are found in Appendix A.

The proceeding Chapter 2, Literature Review looks at country-focused, and regional economic, social reports and analyses, while assessing the policy development and governance methods of Eskom. Further, the author makes an attempt to reveal the main factors that influence the company’s ability to impact social change and economic development in South Africa. Chapter 3   outlines the research, in relation with the hypotheses, testing methods, and survey design, as well as the expected results and data analysis. Chapter 4 focuses on analysing the findings of the research, while Chapter 5, the final part of the study determines the direction of future research that is related to the findings of the current paper, in order to create a framework for implementing transformational leadership methods in publicly owned companies in order to increase the overall effectiveness of the organization.

Chapter 2

Literature Review

The main assumption of the current research, namely that the leadership of a state-owned organisation can have a significant influence on the economy and governance of a region, will be examined in the light of related research and literature. The main research question will be examined through theories and studies completed within developing countries:

“What are the views of individuals within Eskom on the influence of the senior management team on the well-being of the South African nation and social justice?”

Eskom employs more than a hundred thousand people in South Africa (Eskom, 2011). As the below survey reveals the social, economic, and cultural characteristics of the country, future researchers will be able to apply the same approach when attempting to measure the presence of transformational leadership within other, similar companies. Therefore, the current research, focusing on employees’ perception about leadership effectiveness, relationship between government, and other stakeholders is likely to be suitable as a framework for further research studies.

Theories Related to Business Environment and Culture

Through a critical analysis of relevant theories and factual findings regarding the case study chosen, the literature review chapter confers an overview of the current situation in leadership studies and the influence of large state-owned companies on the economy of a region.

Theimann et al. (2006) states that the culture of the organization greatly influences the leadership of the firm, Indeed, the study of the authors about African companies has revealed that there is a tension between globalization and traditionalism in the business, world. The author of the current study assumes that ownership situation of the company would also influence the culture of the organization, which will, in turn, have an impact on the leadership approach of the entire firm, and individual business units. Theimann et al., (2006) also reveals one important problematic aspect of examining the leadership approaches of African companies, which should not be neglected. The study states that “Western theories that are continuously being used in organisations in Africa have not achieved their desired outcomes because many Africans find it difficult to relate to them” (Theimann et al., 2006:1). The above conclusion should be considered, and its validity needs to be cross-referenced with the current research findings,

The value systems of the African society, and even the government of South Africa seem to be different from Western cultures, therefore, it is important to examine in which way this cultural difference influences the leadership style of the organization in question: Eskom.

Theimann et al. (2006) also conclude that organizations’ culture in Africa is hybrid, taking roots from the West and from Africa as well. This statement also needs to be further examined and tested when creating the study.

In order to evaluate the presence of transformational leadership in the public sector of South Africa, it is important to clarify its definition.  Erkutlu (2008, p. 710) defines transformational leadership as an ability “to direct and inspire individual effort, transformational leaders try to transform (and motivate) their followers by raising their awareness of the importance of organizational values”.

Mthethwa (2012: 108) describes transformational leadership as one that is suitable for motivating workers. The author signifies that the main impacts of implementing this leadership approach are being able to articulate vision, providing a clear direction, expressing appreciation of staff, strengthening culture, and increasing commitment, consequently improving performance. As it has been highlighted before, the main challenges the public sector in South Africa face are related to collaboration and cultural integration. : Burns (1978: 37) defines transformational leadership from a different angle:. “a process that motivates followers by appealing higher ideals and moral values.

Based on the above examined theories and definitions, the author would like to define transformational leadership within the South African public sector segment as a “leadership trait that communicates vision, creates engagement, and promotes social change within, and outside of the company.

Next, it is important to review the main benefits of transformational leadership for the organization, and examine how applicable it is to the South African environment. The main dimensions where transformational leadership has an impact on the performance of the organization, according to Bass and Avolio (1994: 35) are: increased influence, inspirational motivation, intellectual stimulation, and individualized consideration.

According to Andersen et al. (2009) state that there are several benefits of implementing transformational leadership in private and public organization. One of the benefits mentioned by the authors is increased employee performance. While some authors claim that transformational leadership can only benefit private firms, Dumdum et al. (2002) research shows that “transformational leadership is at least as common and effective in public organizations as in private organizations” (Andersen et al., 2009, p. 6). Finally, applying transformational leadership in practice can help organizations clarify their goals (Andersen et al., 2009).

Hailey (2006:2) lists four different facets of leadership, which are relevant to the current research: leadership being a process, instead of a static approach, the role of influence, the group context of leadership, and the role of achieving goals. In relation with the above, it is evident that examining transformational leadership within an organization results in covering all the aspects. Transformational leadership is defined as a process, while it creates a vision that is communicated with a group, and the main goal is to make followers complete a certain sequence of action that is in line with the organization’s mission and vision.

The model defines different drivers, assumptions, and core values, which are represented by the relationship of the organization with its stakeholders. The framework of the model is represented in Appendix E. The main outcomes of social change leadership, presented in the framework are: changing structures, changing policies, and changing thinking. The framework talks about ongoing processes and approaches within the organization that lead to social change, such as collaboration, dialogue, culture, and identity. The framework is relevant to the current study, as it highlights the main leadership traits of companies that successfully contribute towards positive change.

The list of core values of social justice (Ospina & Foldy, 2005, pp. 22-24) are relevant to the current research, as they represent the values that are examined within the questionnaires, namely: inclusion, social solidarity, transparency and accountability, democracy, and equity. Social change policies aligned with company initiatives can create three different benefits for the society: changing policies, changing structure (systematic change), and changing thinking.

Specific Cultural and Political Traits of South Africa

According to Kuye (2012), in 2005, the African National Congress decided to create a development state in 2005. The main of the new initiative was to transform the economy of the country fundamentally, reduce the rate of unemployment, accelerate economic growth, and decrease inequalities. The main focus of the long-term government project is to invest into underdeveloped areas, improve infrastructure, and encourage private funding. However, the program is not limited to economic change: as the African National Congress’ report (2007) states: “Whilst acting effectively to promote growth, efficiency and productivity, it must be equally effective in addressing the social conditions of the masses of our people and realising economic progress for the poor”. The reforms, therefore, are not only economic, but also are meant to create social change in South Africa.

Further, the Public Finance Management Act (1997) brought forward management and financial reforms in publicly owned companies. The recent reforms have focused on transforming public companies into more effective, more responsible, and more transparent organizations. However, Kuye (2012:60) goes further than assigning public companies with the responsibility of social change, and states that “the governance context of a democratic developmental state calls for a different type of public leadership”.

The National Development Plan 2030 (2012), as the first long term plan targeting economic and social issues at the same time. It focuses on creating collaboration between the government and the management of public and private companies, while it calls for corporate citizenship initiatives.

Kuye (2012:61) confirms that public company leadership in South Africa still have a tendency to make decisions on a centralized basis. This trend is one of the main obstacles of participatory leadership approaches, and successfully communicating the vision with different stakeholders. Kuye, (2012:61) also defines South African leadership as being “neither collegiate nor collaborative”, even though transformational leadership would require the presence of both traits. While the above analysis is focusing on all publicly owned companies in the country, and does not name Eskom as a representative example, it is evident that – based on the political and social traditions of the country – the organization is likely to face the problem when attempting to make its leadership approach more transformational.

Analysing the main traits of distributed and shared leadership, Kuye (2012) finds that South Africa has a low rating for distributed leadership and shared leadership at the same time. This, translated to decision-making processes means that aims and objectives are determined on an individual level, teams have little or no authority, while individual trait approaches are the most prevalent. The above analysis somewhat contradicts the findings of research carried out previously regarding the culture of South Africa. Indeed, collaboration and community sense are in the focus of the Ubuntu philosophy.

The Institute of Business Ethics (Irwin, 2011) examines the ethical perspectives of doing business in Africa. While the study is limited to one area of leadership (ethics), it is important to review the findings of the author, as it is important to review the findings based on experience and surveys. The author (Irwin, 2011:7), the culture of South Africa is diverse. The population is divided to four larger ethnic groups: Black African (79 percent), White (9 percent), Coloured (9 percent), and Asian (3 percent). The culture of the different ethnic groups varies, and this means that the entire culture of the country is multi-faceted. The main philosophy that is embraced in the country, by the majority Black African population is called “Ubuntu”, which embraces collectivist values and ethics. Relationships within this belief and norm system are more important than individual achievements. Collective work, taking shared responsibility, support, and respect are the main qualities of Ubuntu. In order to better understand the leadership and management themes that are present in the country, and the government-owned company in question, it is important to consider the cultural characteristics of the business environment. While South Africa is found to be a collectivist country, with strong traditions, high economic inequalities and social issues related to race and class can make ethical policies problematic.

According to Khomba & Vermaak (2012), the culture of the country influences government-owned and private companies’ values, vision, and approaches.  The authors (Khomba & Vermaak, 2012, p. 3513) also summarize the business environment of Africa as follows: “corporate governance guidelines tend to take a stakeholder-centred approach to represent the African society”. However, it is important to review the main values and prequisites of the country’s culture, in order to determine their impact on public governance.  Malunga (2006) lists the main underlying principles of Ubuntu as:

1. Collective ownership and sharing responsibilities
2. The importance of relationships and people over material goods
3. Decision making based on collaboration
4. Patriotism
5. Reconciliation as the main conflict resolution approach.

Reviewing the above principles, it is evident that none of them prevent transformational leadership from developing in South Africa. Indeed, collaboration-based decision-making is listed as one of the strengths of the approach.

The political environment of the country is also unique, and this would certainly influence the results of the current leadership research. After being under British rule, South Africa gained its independence in 1961, becoming a self-governing republic (Irwin, 2011: 7). Initially, the minority White group ruled the government in the country, and the segregation of races, social classes was high. Being a young democracy, and only embracing free market values in the second half of the 20^th Century, the country is currently struggling to increase social cohesion (Irwin, 2011: 7).

Economic Development and Conditions of South Africa

The empowerment of Black Africans in the economy of the country only started recently. The government is currently promoting disadvantaged groups’ participation in economic activities and financial services. However, some claim that the promotion programs of the government were only limited to elite social classes. The government released a document titled “A Strategy for Broad-Based Black Economic Empowerment” in 2003 (Irwin, 2011: 8). The main development areas determined by the policy proposal are: increasing business ownership among Black Africans who have a low socio-economic status, providing equity in employment, and developing the skills of those who need it.

Irwin (2011:11) also states that in the sub-Saharan region South Africa is the 5^th least corrupt country[1]. The most corrupt institutions, based on a recent survey were found to be the police forces, while the least corrupt was believed to be the military. The author (Irwin, 2011:11) also mentions that the overall credibility of law enforcement officials in the country is low. This might have a consequence on the country’s business environment, as corruption can lead to unlawful prosecution and the spread of unethical economic practices. Public organizations, however, are believed to be more reliable than privately owned enterprises.

Mthethwa (2012) created a comprehensive review of the presence of transformational leadership within the public sector of South Africa. As the author (Mthetwa, 2012:108) concludes, “There is an urgent need for public sector transformation to deliver public goods meeting society’s expectations and spearhead the country”.  State ownership means that the company needs to align its strategy with government initiatives and projects.

The main issue within the labour market of South Africa, according to the report (JIPSA, 2010) is that there is low demand and high supply for unskilled workers, while there is a high demand and low supply for highly skilled professionals. Further, as highly skilled workers are in demand, and scarce, they are able to dictate wage trends. Companies that employ a large number of unskilled workers have a shared responsibility to provide development and empowerment programs for their employees. Companies that are owned by the government, just like Eskom could act as a vehicle for change, by empowering those who are willing to improve their skills and educate themselves.

When reviewing the role of Eskom in the economic development strategy of South Africa, it is important to highlight the fact that the JIPSA’s Joint Task team has several business leaders as members (JIPSA, 2010). The team consists of leaders of privately and publicly owned organizations, trade union members, and several companies made financial contribution to support the project development. In 2008, Mr Jacob Maroga, CEO of Eskom participated in the work of the task team, along with international companies’ leaders, such as Unilever.

Leadership and management in South Africa

Although the extensive and general applicability of paradigms and theories is a core focus of leadership theories, much of the current knowledge regarding management strategies is mainly relevant to the Western societies. This is caused by a bias in research due to a focus on empirical evidence from Western nations, which can be seen as a disadvantage in the context of studies focusing in non-Western countries. The accessibility to information in companies in Western nations is one of the reasons why most studies primarily use data from these nations. Due to the fact that most of the African nations, South Africa included, do not benefit from the longstanding history of ethical or transformational leadership and management in a business context, the applicability of general paradigms in these scholarly fields is generally low (Denton, 2003). In addition to this, it is paramount to take into account specific cultural aspects of South Africa, as an increased understanding of values and behaviours specific to the region can aid the advancement of the leadership discourse relevant to South Africa (Kuada, 2010).

Examining the existing literature regarding leadership and its impact on the performance of organisations, such as social change leadership (Ospina & Foldy, 2005) and transformational leadership (Andersen et al., 2009) within developing countries when attempting to apply them in the South African context is a good starting point for the research.  It helps understanding the current management approaches, trends, and cultural influences in a company like Eskom, and their ultimate impact on the South African economy.

Mhethwa (2012: 112) makes an interesting remark that indicates that in the transforming economic, political, and social environment of South Africa, there is a “need for leaders to become more transformational and less transactional if they were to remain effective.”  This also implies that organizations (in particular state-owned firms) need to change their leadership structure to become “flatter” and less hierarchical.

One of the main challenges identified by Irwin (2011) is addressing cultural and social diversity within organizations. As it has been mentioned above, South Africa is a relatively new democracy, and it does not have a tradition for anti-discrimination and equal opportunities policies, however, the government focuses on empowering disadvantaged groups in the society.

Bolden and Kirk (2009) examines how “African leadership” is different from western types of leadership. The authors find that relational leadership theories are the most suitable for analysing South African companies’ approaches, given the fact that the country has a collectivist culture. Collectivist cultures focus on collaboration and relationships. Hofstede’s theory of leadership (1985) states that collectivism is a social framework, in which relationships are tight, and individuals rely on each other. In contrast, in the Western culture, achievement on one’s own right is valued more than collaborative success. Reviewing the different analyses of Ubuntu, it is evident that the society of South Africa is collectivist, therefore, leadership styles that promote collaboration and shared responsibility/decision making are likely to be widely accepted.

The recent GLOBE (2014) study measuring the most desirable leadership traits and approaches worldwide has revealed how each country’s society perceives different leadership styles, based on culture, values, and traditions. There is one interesting aspect of the study, which is that it compares the “white” and “black” sample’s perception about the leadership approaches.

The six leadership styles covered in the study are: charismatic, team-oriented, self-protective, participative, humane-oriented, and autonomous. While the list of categories above does not include transformational leadership, it does cover some of its elements, therefore, it is relevant to the current research. The results show how effective and outstanding each leadership approach is perceived in each country. Charismatic leadership scored extremely high (5.99 out of 6) among white South Africans, while the same score for Blacks was 5.16. The second highest rated leadership style was team-oriented, (5.80 for Whites and 5.23 for Blacks). Given that the culture of South Africa is collectivist (Bolden & Kirk, (2009), it is not surprising that self-protective and autonomous leadership scored low (3.20 and 3.74 for Whites, and 3.63 and 3.94 for Blacks). Both participative and humane-oriented leadership scored relevantly high. As the foundation of the South African culture (Ubuntu) has been previously reviewed, and found to be based on relationships and collaboration, the above results are not surprising.

Kassier (2012: 311) mentions that the government-owned energy sector of South Africa currently faces several challenges. The increasing demand, limited supply, and rising distribution costs are among the main problems the industry faces. As the author (Kassier, 2012: 312) confirms: “Eskom faces stark criticism over its inability to service the country with consistent, reliable energy in addition to the crippling effects of power outages and load shedding aimed at reducing high consumption”. The company recently approached the World Bank to provide the company with a loan to improve its services, and expand its operation[2].

Leadership, Performance and the Society

The depth and breadth of the leadership research needs to be further expanded by exploring the interactions of leaders with the external environment of the business they are heading. Although correlations between leadership and performance of teams or the public image of a company have been explored so far, the core focus of leadership theories is still largely limited to how the actions of leaders influence their immediate subordinates or followers (Day & Lord, 1981). This dissertation aims to enlarge the view of the research through the empirical evidence that causality between leadership and the economy and governance of a region can be demonstrated. Changes in leadership are covered by the local or national media in the case of large corporations, which is an argument that this information is of public interest, impacting on individuals external to the organisation.

According to Mthethwa (2012: 108), “The public service is under considerable pressure to improve service delivery to meet this challenge and the ever increasing expectations of stakeholders and customers who are increasingly aware of new technological and government possibilities and practice”. Hence, the integration of transformational leadership in everyday practices of managing public firms is extremely important in order to remain competitive on a globalized marketplace.

Hailey (2006) reviewed the impact of leadership development on the performance of NGO organizations. While the current study focuses on a government-owned energy company, the findings of the author’s research are still relevant to the current research. Hailey (2006:29) states that leaders should respond to the changes within the society, and focus on traditional values and norms, as well as structures. The main conclusion of the author is that in the “changing environment leadership is viewed as the key organisational asset” (Hailey, 2006:29).

Malunga (2006) questions whether or not leadership theories from the West can be applied to examining African companies. The author goes further, stating that “African culture is at best ignored and at worst viewed simply as a negative obstacle to ‘good leadership’”. (Malunga, 2006:2). The author of the current study would like to argue with the above statement, on the basis that leadership theories and strategies can be adapted to any environment. Further, as transformational leadership builds upon collaboration, and the African is a collectivist culture, there is no reason why leadership development methods could not be applied to South Africa. The author (Malunga, 2006:9) also lists Ubuntu values that could be successfully applied within leadership development programs as follows: collective responsibility for the organization, importance of relationships, participatory leadership, patriotism, and reconciliation.

April and Peters (2010) describe the South African business environment as one that is “made up of a cross-section of industries represented by local, national and international companies”.  The role of a public company, however, is expected to be different than international firms’ and private organizations, or NGOs.

It is, however, important to examine the relationship between public companies with transformational leadership and its impact on different stakeholders, such as the public served, the government, and workers. Kark, Shamir & Chen (2003) state that transformational leadership has two faces: empowerment and dependency. While the authors apply the above impact categories to “followers”, such as employees of the organization, their theory can easily be used to describe the relationship between the leadership and other stakeholders. One of the hypotheses that the study (Kark, Shamir & Chen, 2003) examines is that transformational leadership does not only increase collective efficacy, but it also increases the level of dependence. While transformational leadership is believed to positively relate to collective efficacy.

The above review of theories related to the potential benefits of implementing transformational leadership in organizations increases the company’s abilities to respond to the challenges and demands of both internal and external business environments, and supports culture, as well as communities.

Chapter 3

Research Design and Methodology

Due to the nature of this research, it has been decided that a structured survey design research is necessary in order to gather the necessary primary data to be used as a basis for the analysis.  Through the use of pre-constructed questionnaires which were distributed to the target population of this study, the primary data aims to reflect the views of Eskom employees in regards to the leadership within the firm and also how this influences the society and national economy at large. However, comparing the answers and assumptions regarding diverse groups can be made. According to McEnery (2001: 76), the main purpose of quantitative research is to classify and count features, while constructing models of explaining statistical trends and phenomena. As the current research focuses on trends in employees’ perception on the leadership style and effectiveness of the company, using qualitative surveys to measure the level of agreement with pre-defined statements was found to be the most suitable research methodology. According to Rowley (2002:17), a survey design is suitable to answer the following questions: who, what, where, how many, how much. Therefore, the design was suitable for measuring workers’ perception of the management’s leadership approach. The main variables examined were: transparency, clear vision, motivation, strong culture, and collaborative approach.

For data analysis, questionnaire distribution is by far the most effective, fastest, and cheapest option. The selected method detailed below allows the author to measure nominal data, such as gender and race, therefore, the analysis is able to provide clear mean and average scores. The selected method also allows the author to determine variations between different demographic groups, based on nominal data recorded, and presented in Appendix F. Mathers, Fox, & Hunn (2009, p. 9) state that “can be cheaper than personal interviewing and quicker if the sample is large and widely dispersed”. Using pre-written questions with Likert scale design makes it faster for participants to complete the questionnaires, and allows stratified random sampling, as well as systematic and simple random sampling.

In the survey part of the current research, the author used a simple methodology that allows respondents to express whether or not they agree with the statement through expressing their opinion on a scale (Likert) of one to five, where one denotes the lowest level of agreement, and five denotes the highest. Further, comments and remarks of participants were recorded, in order to identify the most significant challenges the organization’s leadership faces.

Marshland et al. (2000) recommends using quantitative survey methods when opinions need to be quantified. In the current design, the answers were recorded and analysed based on the rating scale.  However, when designing the questions, it is also important to consider the main goals and objectives of the research, the constraints of the study, and the truth-worthiness of the information could be obtained.

The most effective and simplest way of analysing data and ensuring that maximum accuracy is obtained, while the numerical data can easily be analysed is using Likert scales. Bertram (2013:2) defines Likert scales as “A psychometric response scale primarily used in questionnaires to obtain participant’s preferences or degree of agreement with a statement or set of statements”. The design is extremely relevant to the current study, as it has been noted that it is impossible to measure performance on an objective basis, therefore, the main source of information about Eskom’s leadership was be the survey sample. The most commonly used 5-point Likert scale was be utilized by the survey design, with answers ranging from “Strongly Disagree” (1) to “Strongly Agree (5). The design allows the researcher to create a dataset that represents the sample’s perception and helps analysing the results. It also provides researchers with descriptive statistics, and it is cost-effective to analyse. The questionnaire design is found in Appendix C, combining the Likert scale approach with analysis methods.

According to Puth (1996), the main criteria for using samples in a survey in research studies is to ensure that it is representative of the entire population. Therefore, the researcher could ensure that the survey links would be distributed to a diverse group of employees working within Eskom, and the demographic characteristics could be taken into consideration when analysing the results (Onwuegbuzie & Leech, 2007). The current research focuses on a selected sample of the target population: Eskom employees with internet access. That stated, it is evident that the sample used is not random, as those with access to email and internet were able to participate, further, as the survey closed at 400 qualifying answers, the willingness and ability to participate determined the probability of taking part. While the company currently employs more than 100.000 workers, it needs to be noted that only about 30 percent of these employees have regular access to the internet, therefore, the target population is reduced by 70 percent to 30.000 employees. While the sample is not be representative to the entire workforce of Eskom, it provides enough conformation to determine trends and correlations.

The survey questions were distributed to 1000 employees, while the same survey included a section where free flow text answers were recorded: workers’ views on the most prominent development areas of Eskom’s leadership. Respondents were allowed to comment on the current issues within the company, the effectiveness of leadership, and their personal experience with management practices.

While job satisfaction surveys are widely utilized on a national level, measuring employees’ perception about the role of their employer in the society is an innovative approach. Instead of asking questions about internal human resources policies (which will also be covered), the author of the current study placed the emphasis on vision alignment. The main identifier of transformational leadership is to successfully communicate vision and engage employees to follow the guidelines that help the organization fulfil its mission.

In order to aid the process of primary data collection, a pilot questionnaire was be distributed to a small percentage of the targeted population (Eskom employees) in order to assess the length of times and difficulty level of the initial questionnaire. 1000 emails with links were sent out from an internal company email address. Once a participation rate of 400 was obtained (SurveyMonkey automatically validated questionnaires), the survey was closed, and no more answers were recorded. Therefore, the number of participants was capped at 400.

However, before designing the questionnaire and writing the survey, the author had to determine the focus of the research, namely: which government initiatives does Eskom as a public company support. While the current research focuses on the impact of the company’s activities in the country on the political, economic, and social environment, it is crucial to hereby re-visit the main priority areas of the national government.

The main initiatives of the government, and their presence in the strategy of Eskom are represented in the below table.

Source: Eskom Holdings SOC Limited. (2012) Integrated Report 2012.

The questions created for the purpose of the current research were based on the initiatives of the government that are also present in internal policies and missions of Eskom: These areas are: gender equality, equal opportunity, and making a social change through collaboration within the society,.

A survey was created, and anonymous answers were placed in the database in order to reveal the main trends in the views of employees.

The design of the survey is selected based on the time available for completion, as well as the cost associated with carrying out the research. As the author or the current study has used primary and secondary research of company policies and leadership theories in order to determine the research question and focus areas of the study, and has not received neither funding or compensation for carrying out the study, keeping the costs of creating the survey, collecting the answers, and analysing results. Given the fact that Eskom operates in different locations in South Africa, and there are eleven official languages in the country, the survey was distributed in several languages, with English being the first option.

Population and Sampling

This study uses the quota sampling technique within the selected relevant population group, namely Eskom employees. Employees working for the company in non-managerial position for more than 12 months were selected to complete the survey. In order to confer validity to the study, the survey was sent out to 1000 employees, aiming to obtain a participation volume of 400 employees, and no pre-selection criteria was set. However, once the response rate (400 valid responses) was obtained, the survey was closed. The author used a simple judgement quota sampling method.  Unlike random sampling, this method did not guarantee that each individual from the target group (non-managerial Eskom employees working for the company for at least 12 months) had the same chance of being selected (Barreiro & Albandoz, 2001), the quota size of 400 was believed to be representative to the entire population. Strata within the sample was then created based on the achieved participation rate of each demographic group (Kumar, 2014:207).

It is also important to note that unskilled workers who might not have access to internet, or have limited literacy skills could be under-represented in the current study, due to the dissemination approach employed. However, as it has been previously noted, distributing questionnaires or collecting answers in person would take a long time, and all the received questionnaires should have undergone manual validation.

The two main demographic characteristics of the respondents were recorded in the below table:

 The administration process of the surveys was based on a pre-agreed collaboration with the leadership of Eskom. Informed consent forms were created and placed within the email sent out by the company, and participants had to state their agreement with the terms of participation before beginning the survey.

Communication

The first step of the communication process is to gain authorization from the company’s management to carry out the survey, and negotiate the research questions, in order to gain commitment and build up an effective collaborative work relationship with the leadership (Atmojo, 2012). The author of the current study strongly believes that the company would benefit from reviewing the results, and they would help the leadership adjust their human resources, communication, and leadership approaches to improve the reputation of Eskom among its employees. At the same time, the review of related analyses of the company’s operation in South Africa would also provide information for the executive team of the company about how Eskom performs against its own, and the government’s targets, while they would get a clear picture of how the strategy of communication and service improvement is in line with the larger initiatives of South Africa as a nation. Therefore, building a collaboration with the management is essential.

A collaboration agreement would be drawn up between the researcher and the company’s representatives, covering areas of study, access of information, distribution of surveys, privacy, data sharing, and confidentiality. This would guarantee the integrity of research, and prevent further conflicts.

Upon agreeing to allow the researchers distributed survey questions to 1.000 employees, the company would create an internal plan for sending out the surveys through Intranet links, and complete a report on actions taken. This step of the communication and collaboration design was necessary for ensuring that the researcher was informed of all the completed steps, and could prepare, receive, and analyse data in a timely manner.

The participants were informed of the length of time necessary for participating in the study by the management. The management was provided with the outline of the research, as well as the purpose of collecting the information, attached in Appendix F. Once the management authorized the research, employees were sent a request through email, and prior approval of the management team was noted in the electronic communication. For safety and privacy reasons, the survey link was sent out from an internal company email address, and controlled by the management team collaborating with the researcher. This allowed the management team to review the survey questions, provide guidance on wording, language, and control the delivery of email. Further, sending the email from an Intranet site potentially increased response rates. It is, however, also important that the leadership of the company collaborating with the researchers committed to a non-selective distribution method. This means that – given the fact that the current study focuses on the larger population – all races, genders, and ages will be represented in the research, therefore, no exclusion criteria were created when selecting the participants.

SurveyMonkey’s service has been selected, as it provides a fast, reliable service worldwide, and it delivers real time statistics. It also allows the data to be exported into a spreadsheet table, which reduces the time spent on recording answers and validating information. Another reason why the service was chosen is that according to the website of the company designed for student researchers (SurveyMonkey, n.d.), survey links “Include a consent form on the first page of your survey”. It also allows respondents to leave some answers blank, and this is an important consideration given that some questions might be personal or not necessary for analysis.

As the target population of the study was over 100.000 employees. However, several adjustments needed to be considered when analysing the sample, regarding the demographics of the workforce, and the respondents.

Ethical Considerations

Participation in the study was entirely voluntary and no monetary or non-monetary gains resulted from participation. Participants could explore any additional information they required, as the distributed questionnaire featured the email address of the researcher for any additional information. Information sheets were also distributed to line managers, in several languages, so communication boundaries can be overcome.

Data collected was distributed to any third parties, and was only used for the purpose stated, and communicated to respondents prior to their agreement to participate in the study. In addition to this, surveyed individuals had the right to opt out of the study at any point if they desired to, and request their submissions to be removed from the research. One of the reasons why the Intranet survey design was selected is that it allows full anonymity within and outside of the company. This was important for many employees who might have been worried about the management monitoring their answers.

No personal details of the participants were shared with the management, and the collaboration with the executive team within Eskom was limited to providing the mean results of the research, and did not involve individual records. While data protection in South Africa is covered by the 2014 Protection of Personal Information Act, further guidelines were put in place to comply with ethical and privacy issues.

The main requirements of processing, set by the Act are: accountability, clear specification of the use of the data collected, limitations of processing and further processing, information quality, openness, safety, and data subject participation conditions. All the above guidelines were drafted and submitted for authorization, in order to ensure that the interest of the company and identity of participants were protected.

The survey was be distributed through an email link to a pre-written SurveyMonkey questionnaire. A limit was placed on the link, which automatically became invalid, providing those who click on it the response that “the survey is closed”, after enough valid answers were collected. IP addresses were not recorded in the database, and every person received an individual link, however, the link address was not recorded, either.

Due to the fact that the survey asked for opinions and ratings regarding the efficacy of leadership within the company where employees work, as well as their view in regards to improvements needed and overall image of company in the region, the issue of anonymity was paramount. As such, the survey was distributed and collected anonymously, allowing the respondents to protect their identity. The demographic information required, such as age group, gender and type of position within the firm (e.g.: middle management, senior management) did not compromise the anonymity of respondents and only guided the data analysis in order to uncover discrepancies based on demographic elements.

Research Questions and Variables

Before designing the research questions, it was important to determine the variables that the authors are attempting to measure through the survey. Reflecting back on the Literature Review section of the current paper, there is a need for defining the main characteristics of transformational leadership, and its potential impact on the entire society.

Vision

How effectively can Eskom create and communicate a vision that leads to a high level of engagement among all stakeholders? 

This question with regards to the impact of Eskom on the governance, society, and economic development of the country is relevant, as it signifies the importance of collaboration and creating an understanding through a shared vision.

Innovation

Does Eskom use innovation and change effectively to tackle issues related to productivity, effectiveness, social equality, and sustainability?

Innovation is one of the main drivers for social change and greener technologies. Therefore, this issue is extremely relevant to the current topic of the study. Further, innovation is a main characteristic of transformational leadership, and it can be a vehicle for completing a shared mission. Shared mission in the case of Eskom could be (shared with the company management, organization, the government, and public) to effectively deliver electricity to all areas of South Africa, while ensuring that sustainability guidelines are met, and the negative impact of the company’s operation on the environment and society is reduced to the minimum.

Creating and Nurturing Communities

How effectively does Eskom help communities through corporate social responsibility programs?

In order to align corporate strategies with government initiatives, the company should focus on involving the public in projects that can empower communities. Community creation can be completed on two different levels: internally, within the company through employee assistance and projects, and externally, through social responsibility projects funded and supported by the company. It is important to note that nurturing and helping communities is not necessarily limited to financial contributions. Indeed, sharing knowledge and providing opportunities for individual and community-based development can be seen as an act of nurturing communities.

Gaining Commitment

How are the employees of Eskom engaged in delivering the mission of the company? Do employees and other stakeholders share the vision of the company? How important do stakeholder think it is for Eskom to deliver its mission, and what are employees willing to do to help the organization?

Gaining approval for a vision from the public and the government is only the first step towards successful project delivery. Several authors have already confirmed the importance of gaining commitment from stakeholders in transformational leadership, and the related theories have already been reviewed within the literature review section of the current study. A shared vision can help determining priorities, creating new projects and initiatives, and it can positively influence the outcome of change campaigns.

Developing Skills and Empowering People

How does Eskom help employees achieve their true potential through employee education programs?

While there are several initiatives and priority projects created within the company to help employees further develop their skills, such as the Eskom Learning Academy, it is still important to measure the perception of employees and the public related to the programs.

Data Analysis Techniques

After the desired number of respondents (400) was reached, the data collected was analysed using an Excel spreadsheet, using formulas to calculate mean scores for each survey question. Apart from the questions, the author collected the following demographic and employment information, detailed in Appendix F.

The defined demographic variables were collected first, to compare the scores of different groups.

Research Limitations

The empirical evidence for this research is specific to the case study employed and as such, the applicability of the research findings may be seen as a research limitation. However, the purpose of this paper is to widen the current perspective on the impact of leadership within a company and the general applicability of the findings specific to Eskom and South African economy or governance does not impact on the overall value and relevance of the research. In other words, the ability to use the primary data analysed as part of this paper in order to provide the necessary empirical evidence for the hypotheses to be tested confer validity to the overall research.

Another potential limitation of the study is the applicability of the findings to private companies, as the current study uses a state-owned company as a basis for evaluation of influence of leadership on the economy and governance of a region. The research design utilised in this dissertation reflects the time, resources and word count limits imposed by academic rigours adjacent to a dissertation. However, as part of the recommendations of this research, cross-comparisons of questionnaire results from distinct companies will be suggested as a more comprehensive research methodology that confers increased validity to empirical evidence.

The research was limited to personal perceptions of employees, and it is likely that the responses were influenced by individual preferences and experiences. However, given the large sample size, this impact was reduced to the minimum.

Another important limitation of the study is that only employees who have access to internet and company email were able to participate. While managers within the company were encouraged to allow workers to take time for completing the survey in the office, those who work in construction or at plants were less likely to participate in the research. For the sake of simplicity, the authors, therefore, decided with an online survey design, even though it reduces the size of the target sample. In the light of the above, it is now necessary to correct the description of the target population as follows:

“Eskom employees on any career level, who have access to Intranet and are computer literate enough to complete the Likert scale survey”.

Further limitations of the survey include language barriers, and limited literacy skills of some participants. While the researcher made several attempts to word the questions in a manner that they are clear, easy to understand, it is impossible to ensure that the different translations of the text will have the exact same meaning. However, translating the survey to different languages improved the quality of data collected, even if the cultural and linguistic diversity of the country would generally potentially reduce the accuracy of the results.

Further, it is also important to note that while full cooperation was sought from the company to achieve maximum accuracy and population participation, the researcher did not have control over monitoring the distribution of the survey, therefore, selective methods used by the company for different reasons could have unintentionally altered the results and created bias that cannot be identified by outsiders.

Response rate was not recorded, as once the number of valid responses were obtained, the study was closed.

Chapter 4

Survey Results

Analysing the results of the survey, and determining the mean scores for the entire survey population (400 employees), the below table clearly shows that employees’ trust in the company’s internal impact is higher than their trust in its ability to make an impact on the national level. However, there were some gender-based and racial group based deviations that will be revealed later in the study.  The findings are not confirming the social and economic impact of Eskom on a national level, however, the values of equality and the influence of government initiatives have been found present in the company’s strategy, based on employees’ perception.

Out of the 400 respondents, 25 percent were women, and 32 percent were Black. While other demographic data was collected, apart from gender and race, these were the most relevant to the focus of the study, therefore, they are included in the below table to highlight the differences of the company’s perception among different populations.

The average score of each question within populations was calculated based on the Likert survey results.

Based on the above table, the author also created a cluster diagram, in order to measure deviation of Likert scale ratings within the group, in order to determine whether or not a trend among employees can be identified.

It is also important to reveal the findings of the open-ended survey question answers, in order to reveal the main issues related to the company’s policies (internal and external). In order to effectively analyze the results of the descriptive answers, the authors created a keyword-based assessment that focuses on the issues brought up by employees.

The research survey has found that Eskom’s leadership focuses on responsibility and providing equal opportunities for employees. The questions designed to determine the presence of transformational leadership within the company, focusing on the company’s initiatives and strategies tackling social inequality and making lives of communities better have determined that transformational leadership is not strong in the company. As it has been determined within the literature review chapter, one of the main characteristics of organizations that have transformational leadership implemented is the clear communication of the vision and high level of employee commitment.

Company Related Research Findings

Eskom was found to have a leadership approach that contained some transformational elements, such as a strong vision and collaborative approach. It was also found that the company’s culture was influenced by the shared philosophy of Ubuntu, which promotes dependence, community spirit, achievement through collaboration, and social relations. This philosophy was found to be the main driver for implementing transformational leadership in public companies in South Africa. The main barrier for transformational leadership was found to be the hierarchical structure of the company, and the ineffective methods of communication. The main question focusing on vision, Question 3, however, showed only a low level of agreement across the participant population, suggesting that the leaders of the company are not able to clearly communicate and share the vision of the organization for social change. While the above is one of the most important findings of the study, the rest of the questions will be analyzed in detail and in context in order to gain a better understanding of the survey results.

The below diagram was created to represent the trends within the entire survey population and to identify the numbers agreeing and disagreeing with the statements.

The above diagram of the questions and answers considering the entire sample population of 400 clearly shows that Question 4 was the one that employees most agreed on, and the majority of answers were on scale 3-5. The question asked whether or not respondents agreed with the below statement: “Eskom’s strategy is in line with government equality guidelines”. Question 3: “Eskom clearly communicates its visionary mission” had the most rating below 3, therefore, the results suggest that the company is not successful in communicating its vision. Question 6: “Eskom empowers people by providing training and development programs” was rated the highest, with the lowest percentile of answers below 3. Agreement among employees on the positive impact of empowerment and leadership development programs should be noted.

The above table also suggests that there is a difference between the perception of Blacks and Whites, as well as Women and Men regarding the transformational leadership approaches of the company related to gender, race equality, equal opportunities, empowering individuals, and social justice. Generally, males’ likert scores to most questions related to equality and equal opportunities were higher, while interestingly Blacks believed in the positive social impact of the company than Whites. There are several potential explanations that can be used for this trend. First, it is possible that the social impact of the company’s activities is greater among the Black population than the Whites. Blacks’ poverty level, as the literature review section of the study revealed is higher, therefore, it is possible that this is manifested in the results. The mean score for question one, for example was 3.8 among Blacks, and 3.4 among Whites. This shows that Blacks are more likely to associate the name and leadership of Eskom with positive social change.

Some contradicting results, however, need to be mentioned related to the difference between Blacks’ and Whites’ mean scores. While Blacks were more likely to agree that Eskom’s external policies benefit the larger society, their answers to question 2 indicate that their level of trust in the internal policies of the company is lower. The mean score to the question “Eskom cares about people, not only profits” among Blacks was 3, compared with 3.4 among Whites.

The analysis involved using a sample t-test in order to analyse the variance of the participants’ responses, as well as uncover the statistical significance of responses. T-tests are used to provide researchers with significance testing resources, determining whether or not there are deviations between various groups, if trend can be identified, and whether or not the mean scores of the sample are representative to the entire population surveyed.

The t scores obtained were used as a basis for the discussion section of this paper, in order to uncover the validity of the hypotheses developed as a result of the critical review of literature and the resulting research gap.  T-test is used to provide indication of the different perception of the company’s social impact in various demographic groups, based on sex and race (male, female, and Black or White). Considering that the company has several equality promotion programs implemented, it is important to measure the difference in employee attitudes based on which group they belong to.  A T-test is used to compare the average scores of different groups, detailed below.

Black and White Respondents paired t-test

The two-tailed P value for all questions was measured at 0.7078. The above difference is considered to be not statistically significant.  The mean of Blacks minus Whites equalled -0.067. 95% confidence interval of this difference: From -0.462 to 0.329.  The above statistical values were used in the calculation:

Group              Blacks      Whites

The difference on the mean scores were low, and the deviation within the groups was also similar. The perception of the leadership’s initiatives and approaches was somewhat dependent on race, however, considering the size of the sample, clear conclusions cannot be drawn.

Males and Females Respondents paired t-test

The two-tailed P value was measured as 0.0673. By conventional criteria, this difference is considered to be not quite statistically significant.   The mean of Males minus Females equals 0.313.   95% confidence interval of this difference: From -0.029 to 0.654.

The intermediate values used in the calculations were as follows:

In the above table, it is evident that while the standard deviation scores of males and females were similar, the difference was more significant. The mean scores difference, however, is more prevalent, suggesting that the perception of Eskom’s leadership is highly influenced by gender.

The above t-tests show that there is a difference between the mean scores of men and women, as well as males and females. As all questions were using the same method to measure the agreement of respondents with the statements on a Likert scale, with one meaning the lowest level of agreement and five meaning complete agreement with the statement, and the wording of the questions was designed to successfully measure the perception of different leadership impacts, the results are relevant to the current research.

The mean score of Black employees was somewhat lower, indicating that their perception of the leadership’s positive social impact and equality promotion initiatives was less positive than Whites. At the same time, female respondents’ mean score was 3.787, compared with 4.044 for males, and this means that male employees perceive the policies of Eskom more positively than females. This indicates that the impact of leadership for positive change within Eskom is not balanced across diverse groups, as the below detailed analysis of answers will show.

A separate paired t-test was carried out for two demographic variables, in order to highlight the differences. The data analysis is presented below.

Gender Comparison T-Test

The greatest variation between males’ and females’ answers was visible in Question One. The rating of women of Eskom as a trust-worthy company was well below males’. At the same time, genders’ perception of government equality guidelines implementation within the company was the same for all genders and races. Fewer females believed that Eskom cared about people, not only profits than men, and men were also more likely to believe that the company worked on making people’s lives better. Generally, as the t-test table shows, males were the most likely to believe in the positive impact of Eskom’s leadership. Males’ mean score for the question ”Eskom cares about people, not only profits”  was 3.6, compared with 2.9 among women. The mean difference in the case of this question is 0.7 points out of 5, therefore, it is significant. However, it is also important to note  that females’s score for the question related to equal opportunities within the company had a lower mean score of 3.9, compared with 4.7 among men. The difference in mean scores measured here was significant, again, 0.8 points. The trend identified is that men feel like they are treated fairly in the company more than women, therefore, it is possible that women feel less able to compete for positions and trainng, therefore, they might feel that there is a glass ceiling and gender gap within the company, even though social justice and equality is promoted by the company’s external policies.

Race Comparison T-Test

Whites were more likely to believe in the positive social impact of Eskom than Blacks. The greatest difference between Likert scores among individual questions was found to be related to the company’s visionary mission, in which White people were more likely to believe in and connect with. Meanwhile, more Blacks than Whites believed that Eskom is a truth-worthy company, (3.4 and 2.9 consequently) and the perception of the company’s equal opportunities policies was more positive among  Blacks than Whites. For the question “Eskom provides equal opportunities for workers of all race and sex”, the mean score among Blacks was 4.8, compared with 4.1 among Whites. The difference in mean scores is 0.7, a significant deviance from the overall population’s mean score of 4.4.

Further, apart from the structured survey presented to the participants, the author also utilized open ended unstructured questions in order to assess the opinion of employees on how well Eskom is doing regarding the implementation of transformational leadership and communicating company visions and values across the organization. Two questions were used focusing on the impact of Eskom’s leadership on the organization and communities. The selection of the questions was based on the assumption that one of the main indicators of the presence of transformational leadership is sharing responsibilities and vision with different stakeholders (Ospina & Foldy, 2005). The two questions asked in the end of the Likert scale survey were: “Recommendations for Eskom for involving employees more in projects” and  “Recommendations for Eskom for involving communities in projects”. The word “involving” was used, as the Ubuntu is a collective culture, as it has been established, and the wording was designed to be culturally relevant to respondents. Some important, significant trends were identified based on the 400 answers received. The gender and race of the respondents was not taken into consideration when analysing the answers. The most common keywords  that appeared in the answers based on the careful analysis of the survey are represented in the below table.

Based on the frequency of the phrases related to involving stakeholders (employees and communities) in decisions, it is clear that the democratic movements of South Africa have impacted the views of employees, and shared decision is preferred instead of an autocratic leadership style. However, it is also clear that – as for both questions the respondents highlighted this method to improve the level of involvement in the society and life of the company, shared decision-making might be one of the development areas of Eskom that it needs to work on.

Based on the above finding of both open-ended and Likert scale-based research questions, it is important to review the results in order to identify trends. The most important finding of the questions analysed above are that the main development areas of the company are: shared decision-making and communicating vision with stakeholders. Reviewing the mean scores to the questions related to social impact, for example: “Eskom makes people’s lives better” and “Eskom cares about people, not only profits”, the mean scores for the entire survey population seem to be low: 3.2 and 3.5 consequenty.  This, put in the context of the frequency of phrases used in the answers to the open-ended questions (going out there and shared decision being among the top 5 mentioned issues), it is evident that the collaboration of the company with stakeholders needs developing. Similarly, focusing on communicating a clear vision with employees and the public, a trend can be identified. 192 respondents mentioned communication as one of the development areas of Eskom that prevents effective involvement of stakeholders in decision-making and strategies. Reviewing the Likert score of the survey question: “Eskom clearly communicates its visionary mission”, the mean score was 2.8. This indicates that in order to improve the effectiveness of leadership within the company, and utilize transformational leadership within the company, Eskom needs to focus on two main areas: communication and sharing vision and decision-making. While training was found to be effective within the company to empower individuals (mean Likert score of 4.6), the main question remains how the company is able to make use of the created asset of organizational knowledge and turn it into a long lasting shared asset that would make the social and strategic initiatives of Eskom more effective. The following discussion chapter will focus on the above question in the light of the literature review, survey results, and trends identified during the current research.

Chapter 5

Discussion

The above review of literature, statistics, research, and company documentation has clearly identified some of the main areas where Eskom could impact the society and economy of South Africa. Further, the authors have compared the main missions and development projects created by the government and reviewed how Eskom’s strategy is aligned with those initiatives. The main areas of impact identified based on a thorough country, culture, theory, industry, and company analysis are: social justice and equality, equal opportunities, skills development, and reducing poverty. While the company was found to have a corporate strategy that is aligned with the government’s initiatives, it did not seem to be successful in communicating its vision and mission with employees.

One of the main traits of transformational leadership was found to be the ability to gain commitment from followers, as well as other stakeholders. Therefore, the research questions and survey were designed in order to reveal whether or not the company is able to gain commitment and share its vision with followers, while participating in collaborative leadership practices. Further, the alignment of the company’s vision with its results was examined, and its relevance to the government’s long term policies and programs focusing on creating a fairer and more equal society. One of the main obstacles regarding the leadership development of Eskom the author found was the centralized management system, and the hierarchical structure.

The research also focused on confirming the relationship between ownership status, industry, and number of customers on the company’s impact level on the economic and social movements in the country. All the above three were found to be increasing the impact of the company’s activities on citizens’ lives. As access to electricity was identified as a basic human and dignity right, service delivery had an immediate impact on communities.

The main impact areas where Eskom influences the country’s economy and social structure that were aligned with national initiatives and goals were identified in a comparison table, and those rated 3 and above on a scale of 5 were chosen as the main focus areas of research.

Recommendations

Based on the findings of the research above, it is important that Eskom will keep on monitoring employee perception of the performance for the leadership, while making sure that training and empowerment programs are in place. Based on the difference in the views of Blacks and Whites, and males and females, it is also recommended that the company enhances its equality policy, and created task force teams that work with minority groups in order to better understand their culture, aspirations, motivations, and align them with the company’s culture and values.

Future Research

Future research could provide the company with even more insight with regards to its ability to deliver results that are related to national policies and reforms. It would also enable the company to further improve its communication approach, and increase the alignment of its internal policies with the mission of the company and the shared vision of the country. While the current research is limited to subjective ratings, it could be used by the executive team of Eskom to make adjustments to its targets and priority areas to meet the expectations of the public, government, and customers better.

Conclusions

Eskom is one of the most influential companies in South Africa, given its ownership status, large customer base, and industry placement. As a highly regulated industry, electricity generation and distribution itself can have an immediate impact on people’s lives. Eskom has been found as an effective vehicle for social and economic change, and it has been revealed that the strategy of the company is in close alignment with major government initiatives. Eskom’s strategy for empowering people, educating employees, increasing the diversity of workforce can have several positive impacts on the economic and democratic development of South Africa (Eskom, 2011). However, the above described impact through higher availability of basic services, fairness, and ethical selection, diversity promotion can be strengthened through effective corporate communication designed to deliver a shared vision to all stakeholders, gaining commitment, and engaging with communities, by further implementing transformational leadership within Eskom, and utilizing the approaches of social change leadership (Ospina & Foldy, 2005).

While the findings of the above research will be compared and contrasted with the results of the survey in order to compare the actual performance of Eskom with employees’ perception about the impact of the company’s activities on social and economic change in the country, it is important that a large scale survey is also undertaken at a later date that measures the efficiency rating of the company among all its stakeholders. The results of the employee survey could be compared with the answers collected from government agency officials and members of the public, currently customers of Eskom.

Short again – the balance of your dissertation is important – not all the marks are dependent on the literature review.  There is also a lack of a discussion bringing the key theory and data together to form a foundation for the conclusions and recommendations

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