A PROPOSED SUSTAINABLE FUNDING FRAMEWORK FOR THE PUBLIC BROADCASTER IN SOUTH AFRICA BY Vuyo Nyembezi THESIS SUBMITTED IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY (BUSINESS MANAGEMENT) IN THE FACULTY OF BUSINESS AND ECONOMIC SCIENCES AT THE NELSON MANDELA UNIVERSITY 2018 PROMOTER: PROF M. TAIT CO-PROMOTER: PROF C. ROOTMAN DECLARATION NAME: Cydric Luvuyo Nyembezi STUDENT NUMBER: 20628071 QUALIFICATION: DOCTOR OF PHILOSOPHY (BUSINESS MANAGEMENT) TITLE OF PROJECT: A proposed sustainable funding framework for the public broadcaster in South Africa In accordance with Rule G5.6.3, I hereby declare that the above-mentioned thesis is my own work and that it has not previously been submitted for assessment to another University or for another qualification. ……………………………………….. SIGNATURE ……………………………………….. DATE i ACKNOWLEDGEMENTS I would like to express my appreciation to the following people and institutions for their contribution in making this study a success. My promoter, Professor Madéle Tait, for her knowledge, insight and continuous support. Without her patience and valuable guidance this study would not have been possible. My co-promoter, Professor Chantal Rootman, for her expertise, encouragement, comments and valuable guidance throughout the study. Dr Riyaadh Lillah, for his valued assistance with the statistical data analysis and guidance with the interpretation thereof. Mrs Redène Steenberg at ONE STOP SOLUTION for language-editing services for this thesis. All the South African Broadcasting Corporation (SABC) employees, who participated in this study as respondents, without whom this study would not have been possible. The SABC management for their support throughout the study. My colleagues and friends, in and outside the SABC, for their interest and support while completing the study. Professor Noxolo Mazibuko, for introducing me to the Faculty of Business and Economic Sciences, and encouraging my research. My family, for their support and encouragement, notably my partner, Yolande Funcuza, for her inspiration and believing in me. Above all, I would like to thank the Almighty God, with whom all things are possible, for giving me the wisdom and strength that ensured the successful completion of this study. ii EXECUTIVE SUMMARY Public service broadcasting in South Africa is the responsibility of the South African Broadcasting Corporation (SABC), which is the only national public service broadcaster mandated through the South African Broadcasting Act. Consequently, the SABC is meant to be a tool for information, entertainment and education that is accessible by all citizens, regardless of their social and economic status in the community. However, like all enterprises, the SABC requires a sustainable source of revenue to function effectively. It is of the utmost importance that the SABC has the necessary resources and stable source of revenue to fulfil its public service responsibilities, as a lack of proper resources and insufficient funds can hinder the provision of these services. The global economic crisis has put all public and private sector companies under financial pressure. The effect of this financial pressure was felt by the SABC and led to financial loss, subsequently posing a serious threat to the financial sustainability of the SABC. Given this situation, this study sought to develop a sustainable funding framework by identifying factors that influence the financial sustainability of the public broadcaster in South Africa and to provide alternative strategies for improving the financial sustainability of the public broadcaster in South Africa, which has thus far proved unsustainable and insecure. Past research has focused mainly on defining a public service broadcaster or a public mandate, or considered the future of public service broadcasters. In these past studies, researchers mostly debated the SABC funding challenges without attempting to develop a funding framework for the SABC. To achieve the objectives of this study a quantitative approach using a web-based distribution survey method was adopted to test the hypotheses. The participants were randomly selected in each provincial SABC office from the database of managers, unionised and non-unionised employees, as well as the database list of freelancers. A total of 432 participants, selected through a stratification sampling technique, were considered and 175 respondents completed the survey. However, after data clean-up only 168 respondents’ data was usable. Based on the analysis of various secondary sources, a theoretical framework regarding sustainable funding of the public broadcaster in South Africa was iii constructed. The proposed theoretical framework indicated that the intervening variable, which is sustainable funding, is possibly influenced by three independent variables namely, internal stakeholders, a competitive environment and the management of resources. The perceived outcomes (dependent variables) of a sustainably funded public broadcaster were identified as customer benefits and organisational performance. The computer programme STATISTICA was used for data analysis. Descriptive statistics was used to summarise the data of the respondents and allow easy interpretation by the researcher. Inferential statistical analysis was used to test for relationships between identified variables using a validity test, reliability test and correlation and regression analysis. The empirical results revealed that sustainable funding formed two separate intervening variables. These variables were renamed sustainable funding enabler and sustainable funding as part of management control. The dependent variable customer benefits and organisational performance also loaded onto a single factor and was renamed organisational outcomes. Given the results, it was determined that internal stakeholders, competitive environment and management of resources have a significant positive influence on the sustainable funding enabler for the public broadcaster. In turn, sustainable funding enabler had a significant positive influence on the organisational outcomes (customer benefits and performance). On the other hand, only the management of resources had a positive influence on sustainable funding as part of management control of the public broadcaster. Furthermore, sustainable funding as part of management control still had a significant positive influence on the organisational outcomes. The majority of the respondents agreed in their responses in relation to the variable items measuring sustainable funding as a part of management control and its influence to the organisational outcomes of the public broadcaster. In conclusion, sustainable funding of the public broadcaster is influenced by the identified variables, namely internal stakeholders, competitive environment and management of resources. In turn, sustainable funding has a positive influence on the organisational outcomes (customer benefits and performance). It is envisaged that the empirical evidence provided in this study will assist the SABC in understanding the factors influencing financial sustainability and thereby assist the iv organisation during strategy development and decision making. This study provides relevant and practical recommendations that will make the SABC financially sustainable. Finally, the objectives of this study were achieved and the research questions were answered. This study can also act as a foundation for other studies, thereby contributing to the body of knowledge. Keywords: public broadcaster, South African Broadcasting Corporation, SABC, South Africa, financial sustainability, sustainable funding v TABLE OF CONTENTS DECLARATION .......................................................................................................... i ACKNOWLEDGEMENTS .......................................................................................... ii EXECUTIVE SUMMARY .......................................................................................... iii LIST OF ANNEXURES ............................................................................................. xi LIST OF FIGURES................................................................................................... xii LIST OF TABLES ................................................................................................... xiv CHAPTER 1 INTRODUCTION AND SCOPE OF THE STUDY 1.1 INTRODUCTION AND BACKGROUND .......................................................... 1 1.2 PROBLEM STATEMENT ................................................................................ 6 1.3 RESEARCH OBJECTIVES ............................................................................. 9 1.4 RESEARCH HYPOTHESES ......................................................................... 10 1.4.1 Internal stakeholders ......................................................................... 12 1.4.2 Competitive environment .................................................................. 12 1.4.3 Management of resources ................................................................ 12 1.4.4 Customer benefits ............................................................................. 13 1.4.5 Organisational performance .............................................................. 13 1.5 RESEARCH DESIGN AND METHODOLOGY .............................................. 13 1.5.1 Research methodology ..................................................................... 14 1.5.2 Data collection