Entrepreneurship’s contribution to the success of deregulated electricity utilities

Abstract

Against the background of the Report on the restructuring of the electricity distribution industry in South Africa, indicating that some of the, to be formed, Regional Electricity Distributors may find it difficult to be viable, it was suggested that the promotion of entrepreneurship within the distributors will enhance performance. Stemming from this general suggestion, the following questions for the purpose of this thesis evolved: --Can corporate electricity utilities be seen as “normal” corporate business or should it be seen as ‘monopolistic organizations’? --Will corporate entrepreneurs jeopardize or enhance the availability and affordability of the organizational products, in this instance electricity supply? --What will the implications be on the success of the utility/corporation? --How should management promote entrepreneurship? In the review of the related literature it was found that very little information is available on electricity utilities. However, the literature on corporate entrepreneurship was used to inform the study, as the electricity utility can be seen as one type of corporate enterprise. The literature converged on several constructs namely: --The organizational culture and strategy --Organizational structure --Organizational reward systems --Risk taking The literature is clear on the finding that when management promoted and supported corporate entrepreneurship in these constructs, the prospect of organizational success improved dramatically. A test instrument was designed and used to evaluate the present South African Electricity Distribution Industry, consisting of 283 Municipal Distributors and Eskom, the national distributor. From the results gained in this study it was found that the present industry differs widely in the following aspects namely: --Distributor Size --Performance both on service levels and finances --Entrepreneurial orientation --Growth --Management It became clear that the South African Electricity Utility environment could, in general, not be seen as being entrepreneurial in nature. This led to the conclusion that the South African Electricity utility should, in the light of international research findings on corporate entrepreneurship, develop an entrepreneurial culture as a major component of their development strategy.