Divergence or Convergence? South Africa's post-apartheid foreign policy and corporate expansion in Africa : the cases of Shoprite Holdings Limited and Standard Bank of South Africa Limited

Abstract

The political significance of multinational corporations (MNCs) in Africa dates back to the colonial era, when they acted as agents of their home countries after colonial conquest. The attainment of independence and the demise of apartheid in the second half of the 20th century necessitates scholarly focus on the role of MNCs under the new political dispensation. South Africa is home to MNCs whose existence predates democracy (e.g., Standard Bank); but it is also home to MNCs whose multinational status is a result of post-apartheid liberalisation policies that have enabled investment elsewhere on the continent (Shoprite).

The implications of the expansion of South Africa’s MNCs on the country’s foreign policy towards the African continent has been a source of interest in policy debates and in academic literature. There have been claims that South Africa has played a sub-imperial role and has hegemonic power over the rest of the continent. However, unlike such generic theoretical assertions, this study makes a contribution to the evolving scholarship on the subject by inductively examining the expansion strategies of Standard Bank and Shoprite.

Their expansion strategies are juxtaposed with key foreign policy themes using the integrative and convergence theories. The integrative approach takes into account three levels of engagement: firm-firm relations, firm-state relations and state-state relations. This analysis establishes the points of convergence between South Africa’s foreign policy and the corporate expansion strategies using the convergence theory hitherto deployed in studies on similarities of policies of states.

The convergence points centre on aspects of foreign policy such as continental integration, the facilitation of trade and investment, and adopting cooperative methods of engagement on the continent. The divergence points are discernible in the invocation of corporate symbolism that harks back to the colonial era. Overall, the study reveals the theoretical and empirical possibilities of contrasting the strategies of MNCs and the foreign policies of their home country.