PPM Papers Coming Soon
This section contains information about articles under review and waiting for publication in next issues of the journal.
Determining high quality SMEs that significantly contribute to SME growth: regional evidence from South Africa
Neneh Brownhilder Ngek, University of the Free State, South Africa
Abstract. It has been widely advocated that SMEs create most of the jobs in an economy. However, studiesfrom both the developed and developing worldhave shown that only a small amount of SMEs create most of the jobs in an economy. These set of SMEs have been termed high quality firms that grow and create the much needed jobs. While studies from the developed world have identified a number of factors that depict the quality of a firm, there is however, little empirical evidence from the developing world on firm quality. This study has as main objective to determine the factors of firm quality that can be used to define a high quality SME in South Africa that contributes significantly to SME growth. The results showed thathuman capital, growth ambition, innovativeness, motivation, and market orientation could be used to define a high quality SME in South Africa that contributes significantly to SME growth (employment growth, sales growth and asset growth).Furthermore, SME quality as defined in this study significantly affects the growth of an SME. These findings are timely, as the South African government currently has a keen interest on using the SME sector to address the high unemployment rate in the country. This study recommends that this can be achieved by developing policies that promote the creation of high quality start-ups and not simply increasing the number of start-ups as prior polices have done.
Employee participation and productivity in a South African university. Implications for human resource management
Emmanuel Tamen Tchapchet, Independent researcher and consultant in the areas of labor relations and data analysis, South Africa
Abstract. Employee participation refers to giving employees and their representatives opportunities to collaborate in matters that pertain to the management of the organization especially where employees are directly concerned. This research therefore examines employee participation within the context of a university of technology in South Africa. Universities of Technology are a new phenomenon in South Africa. As part of the public university system, they are faced with a different set of challenges from the more comprehensive and traditional universities. UoT's offer practice based learning in the areas of business, engineering and technology, thus suggesting that they have a role to play in closing the gap in skills in these areas. This study asked the question: to what extent are employees of the faculty in question integrated into matters that pertain to the management of the faculty? This main research question was designed to interact with the following sub-questions: do you think employee participation improves productivity? Are there platforms for employee participation? Do you think management reasonably considers your input in the faculty? These questions have relevance judging from vast research that indicates a significant reluctance by management to accept employee participation as a necessary practice in organizations. Data was collected using the qualitative approach. The interviews were tape-recorded, while in some cases, notes were taken. The population for this study comprised 12 of the 30 senior lecturers in a faculty at a University of Technology in South Africa. The findings suggest while there is a desire on the part of the academics to be incorporated into matters of concern to them and the faculty, there seemed to be an obvious neglect of the contributions that academic staff make in the faculty.
Improvement of financial tools for expansion of opportunities for innovative activity investment
Andrey Nechaev, Irkutsk State Technical University, Russia
Abstract. On the territory of Russia the securities market carries out a role of the economic regulator and promotes integration of the economy into the world economic system. The main goal of the article is the development of the complex innovative financial tools of the derivatives use for the development of the venture business by means of the participation of the Russian venture funds.
Service branding: the role of innovative brand leadership
Hugo Skaalsvik, Harstad University College, Norway
Abstract. This paper suggests and discusses a set of components which, we argue, will impact innovative brand leadership performance at the level of an individual service enterprise. The research design represents a holistic and systemic perspective to service branding and the methodology employed is conceptual desk research. A systemic model is suggested which depicts five influential components of innovative brand leadership performance. The components are termed as ‘a service centric view', ‘a customer centric view', ‘a service employee centric view', ‘an organizing centric view' and ‘a knowledge centric view'. The paper contributes to existing knowledge of services branding by showing how innovative brand leadership may be obtained at the level of an individual service enterprise.
Industry-wide managerial discretion and executive compensation
Ji-Young Ahn, Ewha Womans University, Korea
Abstract. This study examines executive compensation in light of traditional agency theoretic assumptions, but also integrates institutional and environmental arguments in an attempt to understand why CEO compensation varies across industries. We find that the effect a CEO has on organizational outcomes varies considerably across industries. We also find that some industries have considerable within-industry differences in CEO discretion on organizational outcomes, such as ROA, annual stock returns, and Tobin's Q. In industries where there is a large variance in CEO impact, total CEO compensation tends to be significantly higher. However, we do not find that industry-wide CEO discretion affects contingent pay.
Modeling and measuring milestones in business process optimization
Mantepu T. MaseTshaba, University of Limpopo Medunsa Campus, South Africa
Abstract. The article develops a method to model and also measure the level in which a business has progressed towards business process optimization (BPO). In cases where tougher competition in business leads to opportunity losses, top managements in organizations tend to blame the operations managers for failure to optimize their processes. The extent to which progress towards ideal optimization has been attained is not noted, which is failure to acknowledge the efforts made or even the milestones already reached towards optimal level. In making it easy to measure the extent to ideal state of optimization, BPO is unpacked into its basic units. Then linear programming and probability measures are applied to enable measuring the level at which efforts already completed are away from the ideal state of BPO. The basic units enable a way to identify stages already completed and those that still remain to reach the BPO. This helps to explain to management that while ideal BPO has not been reached, some successes towards BPO have been attained. Such successes are identified by the completed stages, the level of success is also given as a measure, and incomplete parts are also identifiable.
The effects of culture as a start-up factor on business performance
Simon Radipere, University of South Africa, South Africa
Abstract. The study examined relationship between culture and business performance using 500 SMMEs in Gauteng province, South Africa. South Africa's low ranking in terms of global competitiveness is a source of national concern. This means that South Africa has the smallest proportion of entrepreneurs compared with other developing countries. This is a problem in a country where entrepreneurial ventures account for one-third of total employment. There is a need to find out to what extent the entrepreneurial start-up factor (culture) affects the performance of a business. Questionnaire was used to collect data from 500 SMMEs owners. Probability sampling was used to ensure that each member of the SMME population was given a known non-zero chance of selection. Simple random sampling was utilized to identify the respondents. The findings from the survey were modeled through a categorical regression model with business performance as dependent variable. The level of significance of the sixteen variables out of twenty five variables suggests that culture be classified as the strongest predictor of business performance. These findings, depicting the magnitude of the business environment in the study area, clearly confirm the positive impact of culture on business performance.
Establishment of the relationships of management culture and social responsibility: verification of the model
Jolita Vveinhardt, Ph.D., Chief Researcher, Associated Professor, Institute of Sport Science and Innovations, Lithuanian Sports University, Lithuania
Abstract. Work aims to identify the internal relationships of dimensions of management culture and corporate social responsibility. For organizations it is important to evaluate the factors that determine the success of implementation of the principles of corporate social responsibility. The paper aims to extend the sphere of management of implementation of corporate social responsibility, including the quantitative aspects of competencies of managerial staff and organization of the processes. Selected quantitative analysis method, using a questionnaire formulated by the authors of the study. The method of quantitative analysis by interviewing 1717 respondents was selected. The relationships of dimensions of management culture and corporate social responsibility are analyzed in the study, their strength is determined on the basis of evaluations provided by groups of ordinary employees, middle and top management staff. Results of the research show that with the strengthening of the management culture, the culture of social responsibility of the company is increasing. A statistically reliable relationship between all dimensions of management culture and social responsibility was established. The strongest relationships are recorded between the culture of managerial staff, management culture of working conditions, the culture of documentation system and categories of social behavior of the organization.
Salesforce incentive systems - an interdisciplinary review and research agenda
Michael Georgi, TU Dortmund University, Germany
Abstract. Company salesforce compensation plays an essential role in management control systems. Although salesforce incentive systems (SIS) have been discussed in the literature for decades, many unanswered questions remain. In particular, the interdisciplinary character of this topic exacerbates the integration of existing knowledge. To provide a comprehensive overview of the existing literature on SIS, this review considers research published in major journals in the fields of accounting, management, organizational science, marketing, human resources, and psychology. In developing a theoretical framework, we categorize existing knowledge into three main areas, i.e., the determinants, design, and behavioral effects of SIS. We identify environmental uncertainty and customer structure as the most influential company-external determinants, and information asymmetry and individual risk preferences as the most influential internal determinants of SIS. Many controversies remain regarding the design of SIS in terms of the applied performance measures, types of incentives, and the structure of compensation. Various negative behavioral effects aggregated from the literature, like free riding, collusion, and sabotage underline the high relevance of design choices for SIS in companies.
The role of age and business size on small business performance in the South African small enterprise sector
Simon Radipere, University of South Africa, South Africa
Abstract. This study examined the effect; age and business size have on business performance. A structured research instrument was used to collect data from 500 SMEs in retail industry through interviewer administrated and self-administrated survey and 93% of questionnaires were returned. The results show that there is no statistical significant difference between the means of business size and business performance. There is no significant difference between the age categories; under one year and 20 years and more and business performance. Age is no longer a significant factor in a company's performance after twenty years. Life cycle approach of the company or industry could be an appropriate basis for analysis.
The applicability of relationship marketing at non-profit organizations: a developing country perspective
Sameera B. Hussain, Durban University of Technology, South Africa
Abstract. Non-profit organizations are civil society organizations that range from faith and community based organizations, charity (welfare) or traditional organizations, such as social or sports clubs. The main aim of non-profit organizations is to pursue social public welfare activities. Global and regional development has led to an increase in the number of non-profit organizations. Non-profit organizations do not sell any products, but rather their mission, vision as well as programs and services. They ought to therefore ensure active promotion of their services to ensure financial support and to survive in a competitive environment. Promoting themselves effectively as well developing and maintaining relationships with key stakeholders is therefore of utmost importance. A key strategy that could be used to strengthen relationships with key stakeholders is relationship marketing. This study therefore sets out to evaluate the extent to which relationship marketing is practiced within non-profit organizations. This pilot research constitutes a quantitative descriptive study and is part of a broader doctoral study. The results of the study show that there are distinct benefits for non-profits in making use of relationship marketing. It is therefore concluded that non-profit organizations formally adopt relationship marketing as one of their key marketing strategies.
Re-establishing the psychological contract as a precursor to employee retention
Nelesh Dhanpat, University of Johannesburg, South Africa
Abstract. The violation and breach of a psychological contract and trust often results in a decline in employees' willingness to contribute and intentions to stay in an organization. Hence, this paper aims to understand the psychological contract and trust and their role in employee retention. It focuses on employee and organizational expectations and the importance employees attach to these and assesses issues of trust, job satisfaction and intentions to leave. Data was collected using an established questionnaire whose psychometric properties of validity and reliability were assessed using Factor Analysis and Cronbach's Coefficient Alpha respectively. Data was analyzed using descriptive and inferential statistics. The findings reflect that mutual trust and, meeting expectations and having their expectations met by the organization are important to employees. Based on the results on the issues of the psychological contract and trust, recommendations are tabulated, which when implemented, have the potential for enhancing employee retention and reducing intentions to leave the organization.
The impact of management concepts: A typology
Dag Øivind Madsen, Buskerud and Vestfold University College, Norway
Abstract. Over the course of the last decades we have seen the rise and fall of numerous management concepts. Research has shown that some management concepts are short-lived and have limited impact, while others spread widely and have an enduring and longer-lasting impact. What may explain these differences? This paper outlines a typology for assessing the impact of management concept in a given social context. It is argued that the impact of a management concept varies along two dimensions: the degree of institutionalization denotes the impact across time, while the degree of diffusion denotes impact across space.
Communicating the HIV/AIDS message: a rural perspective
Jeevarathnam P. Govender, Durban University of Technology, South Africa
Abstract. South Africa has one of the highest HIV/AIDS infection rates in the world with the majority of infections occurring in the age category 15 to 24. This trend can be reversed if young people are informed and empowered to change their sexual behavior. Furthermore, clear and ongoing communication is an essential tool in addressing this pandemic. This paper aims to assess communication tools used to educate high school learners about HIV/AIDS. The context of the study is the Mthatha district, situated in rural South Africa. The research constituted a quantitative, cross-sectional and descriptive study. The key variables were demographics (gender, age, grade and residence) and perceptions regarding HIV/AIDS communication tools. The research used judge mental sampling to select the high schools and convenience sampling to select individual respondents. The vast majority of learners are aware of HIV/AIDS education. It was found that entertainment-education plays a vital role in creating awareness about HIV/AIDS. The study also found peer education to be an effective communications tool with a view to combating the pandemic. It emerged that the school curriculum was an effective medium in communicating the HIV/AIDS message as the vast majority of learners were knowledgeable about how HIV/AIDS was transmitted. However, in addition to information about HIV/AIDS learners are requesting addition information relating to the developmental challenge of HIV/AIDS on the economy and to unemployment. It is therefore suggested that developmental challenges associated with HIV/AIDS is integrated into the school curriculum. Some policy recommendations are made.
Effect of organizational climate on marketing performance: an analysis of the perception of marketers in the banking sector of North Cyprus
Cemal Çalıcıoğlu, The American University, Cyprus
Abstract. This study sought to verify if the performance of marketers within the banking sector of partially recognized nations followed a similar pattern observable for marketers in banking sectors of widely recognized countries when subjected to certain organizational climatic conditions. A seven point Likert scale questionnaire was administered to a sample of marketers from the banking sector of Northern Cyprus and findings reveal that, while certain organizational climatic conditions triggered low performance levels in widely recognized nations, they had no effect on the performance levels of marketers in partially recognized nations due especially to the fact that such organizational climate is normal in such countries and thus has no power to influence a low performance outcome on the part of marketers.
The mediating effects of role stressors in supervisor-to-subordinate burnout
Cody Logan Chullen, East Carolina University, USA
Abstract. Several scholars have cited the importance of the role of the supervisor in providing employees with key resources enabling them to effectively cope with job demands, thereby reducing the risk of burnout. However, although literature continues to cite the importance of supervisory behavior as a factor contributing to subordinate burnout, a cogent model detailing the role of the supervisor in the subordinate burnout process has yet to be articulated. Understanding the role of the supervisor in the subordinate burnout process is critical because as it may help organizations develop leadership practices that reduce and eliminate burnout's prevalence in the workplace. This paper articulates and tests a model whereby subordinate role stressors mediate the supervisor to subordinate burnout relationship. Drawing from a sample of 164 dyads, results and implications are discussed.
Measuring customer service in a private hospital
Christo Bisschoff, Potchefstroom Business School, North-West University, South Africa
Abstract. This study measures service quality management in a private hospital in Gauteng, South Africa. This was done by determining the current standard of service quality management, identifying the gap between the value and the satisfaction of the service quality dimensions, as well as the influence of gender on the perception of service quality. Following a literature study the empirical research employed a tailor-made 38-item questionnaire to collected data across seven sections, namely: premises/employees, doctors' medical services, diagnostics, nursing medical services, admissions, meals and rooms. A satisfactory response rate of 71% was obtained. The analysis included the demographic profile, reliability of the data (Cronbach alpha coefficients), exploratory factor analysis and descriptive statistics. The existence of the difference between gender experiences was also determined. The results showed that although satisfactory levels of service exist (in excess of 60%), management needs to focus on the factors highlighted during the study, with proper maintenance and improvement of the appearance of the facility and providing training to personnel to promote patient relationships. Furthermore, the recommendations include inter alia that the model is useable in other health institutions to evaluate service quality levels and to highlight possible shortfalls. This would provide management with knowledge to address possible shortfalls and improve the level of service quality across the private health sector.
The role of dominant power in supply chains
Tamás Brányi, Széchenyi István University, Hungary
Abstract. Companies within the supply chain have to cope with power structures while cooperating with each other. They tend to look for solutions to ease dependency. According to the statistical tables the key company of a given supply chain has the goal to deepen cooperation between partner companies but in the same time keeps up its power position. The company with dominant power influences partner firms and encourages them to be competitive. The supply chain will only be then competitive, if mutual advantages arise for all parties. Partner companies must benefit as well. Companies' future goals are clear. They want to work towards an efficient supply chain. Results show that competitiveness is being moved up to supply chain level. Global supply chains compete with each other.
Perceived benefits of balanced scorecard implementation: some preliminary evidence
Dag Øivind Madsen, Buskerud and Vestfold University College, Norway
Abstract. Since its introduction more than 20 years ago the Balanced Scorecard (BSC) has garnered the interest of both academics and practitioners. In the ‘official' practitioner-oriented literature the BSC's main proponents Kaplan and Norton have touted the concept's potential performance enhancing effects. Academics have been more skeptical, and have not found a clear-cut relationship between the use of the BSC and organizational performance. It appears that some uses of the BSC may increase performance, while other types of BSC use might decrease it. Still, research has shown that the concept is widely used in practice, more than 20 years after its introduction. The longevity of the BSC indicates that organizations are satisfied with the concept and find at least aspects of it useful and beneficial. The extant literature, however, gives limited insight into the aspects of the BSC that managers appreciate. This leads to the following research question: What aspects of the BSC are perceived as beneficial by consultants and managers? Using data from qualitative interviews with BSC consultants and users, this paper explores the perceived benefits associated with the implementation of the BSC. The data show the perceived benefits are related to the concept's fit with the local institutional context in Scandinavia, e.g. in terms of balancing shareholder and stakeholder demands. In addition, consultants and managers highlight social and behavioral changes as a result of BSC implementation.
Testing hypotheses concerning correlations between mobbing as discrimination in employee relations and organizational climate
Jolita Vveinhardt, Vytautas Magnus University, Lithuania
Abstract. The primary purpose of this article is to test whether and how mobbing - a type of group-driven aggression in employee relations in organizations of all types - significantly correlates with organizational climate. Hypothesis-testing is conducted through corresponding forms of data analysis ranging from literature synthesis, case study, and survey questionnaire analysis to applications of descriptive and inferential statistics. Following a brief review of pertinent literature, statistical methods are applied to case survey data consistent with established theoretical propositions identified in the literature. These methods include secondary factorization, linear regression, correlation, t-tests, unifactor dispersion analysis, and one-way analysis of variance (ANOVA).
Service quality in a landlord - small business relationship in shopping centers
Cornelia Harmse, Tshwane University of Technology, South Africa
Abstract. The aim of the study reported on in this article was to measure the perceived service quality that small business tenants in shopping centers receive from landlords. There are numerous models available to measure service quality, but no studies have been done on the perceived service quality that small business tenants receive from landlords in shopping centers. A quantitative survey on a non-probability sample of 457 small business tenants in 27 different shopping centers in Pretoria, South Africa was conducted. It was found that the perceptions of quality of service experienced by small business tenants in shopping centers in this regard were not overwhelmingly positive. An important finding is the fact that only two distinct dimensions of perceived service quality were found to be pertinent in this relationship, namely intangible (softer issues), and marketing and tangibles. Landlords need to know whether small business tenants are satisfied with the service they provide. This will help them to improve on their service quality in order to retain their tenants and be competitive with other landlords of shopping centers. The findings add to the literature on perceived service quality, specifically in the landlord-small business tenant relationship in shopping centers. It provides valuable information to landlords on having an understanding of how small business tenants perceive the quality of service rendered to them by the landlords.
Comparative analysis of two conceptual frameworks to measure creativity at a university
Ziska Fields, University of KwaZulu-Natal, South Africa
Abstract. Creativity is often misunderstood due to inconsistencies concerning the definition of creativity, the methodologies used to explain creativity as a phenomenon and the various measurement instruments to determine creative ability. This articleaimed to compare two conceptual frameworks to identify the most reliable and valid conceptual framework to measure creativity at a university. The findings showed that both conceptual frameworks are different in their own right and both are valid and reliable. Only marginal differences could be observed from the statistical tests used in the comparative analysis. The uniqueness and value of the paper lies in the validation of these conceptual frameworks to measure creativity.
Assessing the compatibility of management behavior and entrepreneurial orientation
Robert Goedegebuure, Maastricht School of Management, Netherlands
Abstract. In this paper we use a data set on a Dutch company of which the partners - who act as managers and entrepreneurs - have assessed both themselves and their peers on dimensions of De Waal's High Performance Management framework. Two of these dimensions relate to Management Behavior (MB) and Entrepreneurial Orientation (EO). Our research addresses the question whether the theoretical differences between MB and EO (inward versus outward looking; short versus long term; directly or not directly affecting others; specific versus abstract) are reflected by differences in the predictive power of one's self-assessment on the assessment of one's peers. Our findings indicate that MB and EO assessments are uncorrelated; and related to self-assessments in different manners. MB follows the assessment patterns that can be expected among chess players where the skills of the evaluator predict how they evaluate their peers. EO in contrast follows the pattern that can be expected in the popular game of soccer where even unskilled spectators are able to assess the players. In MB, self-assessments by evaluees are poor predictors of how they are evaluated by their peers. In EO the reverse holds: self-assessments by evaluees predict their evaluations by peers (and therefore, these self-assessments are informative). We argue that the differences between MB and EO have organizational consequences. MB is subject to processes of learning and adaptation, and therefore any differences within management teams can be overcome. Since team members will not easily disagree on each other's EO related skills, weaknesses are taken for granted and may cause an entrepreneurial stalemate with no improvement.
Service innovation: suggesting a typology of service innovation
Hugo Skaalsvik, Harstad University College, Norway
Abstract. This paper outlines and discusses a typology of service innovation which encompasses four types of service innovation. The typology emerges from a combination of two service concepts, those of service orientation and competitive environments. The innovation types are conceptualized as neglected, imitative, defensive and offensive service innovations. The types are discussed, and the paper shows that the offensive service innovation type is required in order to be successful in the development of service innovation.
The Nexus model for local economic development
Shamim Bodhanya, Graduate School of Business and Leadership, University of KwaZulu-Natal, Durban, South Africa
Abstract. The theory and practice of local economic development has been increasing in significance in the last two decades. This paper offers a critique of the current discourse on local economic development (LED) drawing on the body of knowledge related to complex adaptive systems (CAS) and their properties. Furthermore, it develops on previous research on a proposed institutional framework for LED, resulting in a generalized model referred to as the Nexus Model, applicable to multi-stakeholder settings that span a variety of domains and geography for working with complexity at multiple scales and levels. The model is useful in the LED context for nurturing processes of social dialogue, and the creation of economic and social value. The application of the model is itself a demonstration of some of the principles of CAS including emergence, sensitive dependence on initial conditions and self-organization, albeit at a meta-level and in the realm of concepts. Within LED, the nexus model may now be applied not just at district and municipal level, but at all geographic, administrative, economic and sectoral levels and scales.
The influence of perceptions of organizational trust and fairness on employee citizenship
Michelle Mey, School of Industrial Psychology and Human Resource Management, Nelson Mandela Metropolitan University, South Africa
Abstract. This study highlights the influence of organisational trust and justice on employees' organisational citizenship behaviour (OCB). Research investigating the role and importance of trust and perceptions of fairness in citizenship is lacking (Guh, Lin, Fan and Yang, 2013). The primary objective of this study is twofold: firstly, to identify the potential influence of organisational trust and justice on employees' OCB, and secondly, to make practical recommendations on actions organisations can take to promoteOCB. The sample for this study was drawn from 278 professional and white-collar employees employed at various organisations in the Eastern Cape, South Africa. The data collected was subjected to various statistical analyses, including Pearson's correlations, Cronbach alpha coefficients and Chi-square tests. The findings, based on proven hypotheses, were summarised and depicted in a theoretical model. Inferential statistical analysis emphasised the importance of positive justice perceptions and organisational trust in predicting OCB. Furthermore, the results indicated that employees may have a higher level of trust in the organisation when they perceive their organisation as being fair and equitable.
Job satisfaction in the royal Swaziland police service. A case study of Manzini and Hhohho regions
Ndiphethe Olive Mabila, Durban University of Technology, South Africa
Abstract. There is no study that has examined factors associated with job satisfaction in the Royal Swaziland Police Service (RSPS). Concerns about poor working conditions, inadequate training opportunities, poor remuneration, poor standards of living, high workloads and lack of transparent promotion criteria form the crux of the problems faced by most police officers in the country. All the aforementioned factors have impacted on police performance as the crime level is still high, despite the recruitment and training of new police officers every year and the application of several crime prevention strategies. The study aimed to investigate job satisfaction in the RSPS. The research had the following objectives: to examine the factors that influence job satisfaction within the RSPS; to explore the impact of job satisfaction on performance; and to make recommendations to police management on how job satisfaction in the RSPS can be enhanced.
The impact of information and communication technology (ICT) on commercial bank performance: evidence from South Africa
Adekunle Oluwole Binuyo, University of South Africa, South Africa
Abstract. This paper contribute to the on - going debate regarding the contribution of Information and Communication Technology (ICT) to firms performance. Beyond the focus of most similar studies being ICT impact on bank performance, this study further investigate the impact of Information and Communication Technology Cost Efficiency (ICTCE) on the performance of banks as well. The study assessed the impact of ICT on the performance of South African banking industry using bank annual data over the period 1990 - 2012 published by Bankscope - World banking information source. Data analysis was carried out in a dynamic panel environment using the orthogonal transformation approach. The robustness of the results was affirmed by residual cointegration regression analysis using both Pedroni and Kao methods. The findings of the study indicated that the use of ICT increases return on capital employed as well as return on assets of the South African banking industry. The study discovers that more of the contribution to performance comes from information and communication technology cost efficiency compared to investment in information and communication technology. The study recommends that banks emphasize policies that will enhance proper utilization of ICT equipment rather than additional investments.