South Africa: opportunity and challenge

South Africa is becoming an attractive destination for multinationals as its economy is growing at a rate of 4% of GDP per year and it has a rising black middle-class known as Bappies (booming, aspirational, previously poor).

by World Business

But the country still suffers from a host of serious problems and multinationals need to consider how to shape their management and human resources policies to best fit the environment.

First, if current trends persist, some 20% of the working population will have died from Aids-related causes by 2020. Companies such as Unilever have shown the efficacy of establishing social health programmes for employees. Violent crime, including murder, rape and aggravated robbery, is among the highest in the world.

Companies should consider locating their offices or plants in low crime zones, and provide secure car parks, home security and armed guards to protect company premises. Multinationals should also consider training programmes to attract the large numbers of unskilled workers in the country.

Harnessing the South African growth engine
Vishal Dixit
Business Strategy Review, Autumn 2006

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