Abstract:
Various surveys conclude that regulation stifles the growth of South African SMEs. It is not known how regulation impacts on public companies.The literature identified certain unintended consequences of regulation that result in companies’ growth being stifled. Elements of an ideal strategic response that would prevent regulation from stifling companies’ growth were also identified. The perceptions of fifteen compliance officers in public companies were tested as to whether there was evidence of firstly, the presence in public companies of the unintended consequences identified in the literature and secondly, elements of the ideal strategic response. The research process consisted of a gathering of data through face-to-face interviews and a questionnaire. Snowball sampling was used to select compliance officers in public companies for interviews. Data was analyzed through a combination of content and frequency distribution analysis. The study confirmed that regulation does stifle the growth of public companies, but for different reasons than reported in the literature. Whilst some elements of the ideal strategic response were identified, companies’ overall strategic response to the regulatory environment can be improved upon. The conclusion of the research is that companies can thrive in the regulatory environment if the ideal strategic response, which was developed through the study, is adopted. Lessons learned from the research are discussed and recommendations for companies and regulators are indicated.
