Loadshedding has been plaguing South Africa since 2008. It has progressively intensified and is affecting businesses as detailed in the article above. With reference to the article, discuss the relationship between strategic risk and organisational success. Small business may be the backbone of the South African economy, but it's bearing the brunt of the energy crisis. Payingfor generators, fuel, and inverters, employing extra staff to work in less time, and having to turn away work are some of thedifficult steps this sector has had to take to survive. "The situation has gone from bad to worse," says labour lawyer MichaelBagraim. "Normally at this time of year, my firm receives instructions to draft letters of appointment and contracts ofemployment. All we've been doing is retrenchments. Both in small and big business, retrenchment has been at an all-timehigh. This is purely because of load shedding. Retrenchment is now greater than it was at the height of the pandemic."Lessa Gordon Mauerberger's laundrette, Wash World, and Supa Clean, the factory she runs with her daughter-in-law,Lauren Gordon, would have thrived in the holiday season if she hadn't had to turn down customers due to load shedding.Located in the heart of Sea Point, the businesses service hotels, guest houses, day spas, airlines, and individualcustomers, including tourists. "It's been an absolute nightmare," she told the SA Jewish Report. "We have lost a fortune ofwork. We usually operate throughout the night, but power is often out for four hours every night. In addition, night staff getpaid extra, but they spend most of it waiting for power. All this has a huge knock-on effect." She says she cannot invest in agenerator, and a business like hers requires a huge amount of power."I've had to employ extra staff to do more work in less time. We've had a fantastic season, but have had to turn down somany customers, such as kids returning from camp."She says small business owners often bear the brunt of angry and impatient customers and asks people to beunderstanding and accommodating when it comes to load shedding, for example, by packing extra clothes for the holidays."You can either be bitter or get on with it. We've chosen to get on with it. We would be flying if we had the water and powerto do it." She notes that when Cape Town faced its infamous drought a few years ago, it also affected the business, yet shesurvived. "We lived through it all, and we're still standing."Her daughter-in-law had to join the business when her late husband, Ronen Gordon, passed away suddenly eight monthsago. She has had to steer the ship amid the energy crisis, all while grieving her loss and learning the ropes. "We deal on adaily basis with firms who have less than 50 employees," Bagraim says. "They can't afford alternative power sources andinvariably if they are involved in service or manufacturing, they cannot afford to keep open. It becomes too expensive to askstaff to come in for two or three hours a day, and it becomes impossible for staff to pay for transport to earn only for thosetwo or three hours a day. The only alternative has been to undergo retrenchments. Normally, we would advise to put peopleon layoff during load shedding like we did in the past but now, unfortunately, this is a daily occurrence and layoffs aren't anoption."A bakery owner, speaking on condition of anonymity, says, "Our big ovens take 1.5 hours to warm up, and then just as weput the cakes in, the electricity goes off. There's a huge waste of paid working time and ingredients. My cold rooms getwarm and iced cakes don't cool enough to travel. It would cost half a million rand for a generator to run our ovens, and itwould be so big, it would take up most of our parking area. That's before you buy the diesel, which would push the prices sohigh, no one would buy the cakes."Even with a generator, entrepreneurs are struggling. Shelene Shaer, the co-owner of Tanaz Hair, says "Our generator pulls ahuge amount of power because of the hairdryers. It's the cost of diesel that's prohibitive. Sometimes the diesel cost equalsour electricity bill. Our electronic equipment is affected because of power surges."Architect Michelle Maltz Shevelew from M2S Architects says, "I have had to purchase an inverter which is now struggling torecharge its batteries. The batteries don't last, and I will need to layout another few thousand rand to replace them withlithium batteries." Her large-format plans need to be printed at a copy shop. "They turn off their machines prior to load shedding, and they takea while to warm up afterwards. So, If I need prints done, I need to check the schedules and prepare accordingly. "For aproject on site, the contractor requires electricity for many operations. This causes delays which then have a potential costimplication for the client. If a generator is hired, it's a cost for the client. There's always an unknown factor and uncertainty."Lynn Rose creates private label cosmetic ranges from concept to formulation, including making products, sourcingpackaging, logos, and labels, and delivering product ready for the shelves. "My suppliers, who all manufacture, whetherpackaging or product, have had severe delays because of load shedding. At the capacity they produce and the amount ofheat they need to produce, it's not always conducive to use a generator, so they are inoperable during power cuts."I then can't deliver on time to my clients, which causes cash-flow problems, delays in re-ordering, and therefore a decreasein monthly sales. I worry about the damage to my reputation because of my inability to deliver on time. I'm still waiting forpackaging to be made that was supposed to go out as a complete order in November. I've always supported local suppliersand will continue to do so, but it's becoming more and more tempting to import supplies." Jewish entrepreneurs areincredibly resilient in the face of all this. ORT JET Johannesburg's Helene Silberman Itzkin, says that of the 152 businesseson its books, none have shut down because of load shedding. The organisation supports small businesses by offeringmentoring, training, and networking opportunities. "These small businesses often don't have the revenue to get off the grid,"she says. "And yet load shedding affects every aspect of their businesses. What we do is help them to retain a strongmindset and be strategic, for example, helping them decide if it's worth getting an inverter or solar panels or making use ofa shared office space with green energy."Lisa Sandler of ORT JET Cape Town says that providing space for entrepreneurs to share their experiences also helpsthem navigate challenges. "It's been one battle after the next for them, from the pandemic to load shedding," saysSilberman Itzkin. But entrepreneurs have grit and perseverance. We provide mentors and life coaches for them to talk to,and to help them not give up. Our aim is to give people the skills and tools so that they can support their families so thatwelfare is a last resort. Our work is critical to the continuation of the community."

South Africa's persistent energy crisis and frequent power outages are putting a strain on small…

Loadshedding has been plaguing South Africa since 2008. It has progressively intensified and is affecting businesses as detailed in the article above. With reference to the article, discuss the relationship between strategic risk and organisational success.

Loadshedding has been plaguing South Africa since 2008. It has progressively intensified and is affecting businesses as detailed in the article above. With reference to the article, discuss the relationship between strategic risk and organisational success.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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