D. (Denver) Berman-Jacob

Clothing and textile manufacturing has traditionally been seen as a key economic growth driver for

low-income countries. This is due to relatively low setup costs, the ability to employ large numbers of

people and as well as provide economic access through a sustainable income. Although the South

African clothing manufacturing industry is well established, the sector has been in a steady state of

decline since 1995. Incoherent government policies, cheap imports and high input costs has seen the

industry, which was once one of the largest employers within the manufacturing sector, struggle for

survival.

As opposed to its sustainability being in question, the South African industry should be a global

competitor, especially with preferential market access to both the USA and Europe (the two largest

clothing importers). This combined with mass unemployment, low skill level requirements, available

investment funding, developed infrastructure and a reliable logistical network, South Africa is primed to

be a global competitor. The question is why this is not the case.

The aim of this qualitative case study is to examine firm-level strategies employed by executives at

privately owned companies in the decline phase of the clothing manufacturing industry in South Africa.

Using institution-based view theory as the theoretical lens for the research, the objective of this

grounded theory quantitative case study is to advance the institution-based theory research agenda by

exploring the strategic decision-making process of executives at privately held, small-to-medium sized

firms, in emerging economies, where for contextual reasons their industries are in decline.

Through a qualitative case study, the research aims to assess firm behaviour by looking at 3 overriding

themes which has presented itself consistently in previous research on the South African clothing

production industry:

1. The decline of the South African clothing manufacturing industry

The purpose of the study is to examine the constraining or transformative effect of institutions on the

clothing and apparel industry in South Africa and to understand how firms respond strategically.

2. Policy endogeny

The purpose of the study is to examine firm-level behaviour in response to industrial policy in the South

African clothing sector since the dawn of democracy and the role firm play in the development and

setting of new policy.

3. Industry informalisation and the institutionalisation of the second economy

The purpose of the study is to examine strategic choices made by clothing production firms in response

to industry informalisation and the development of a second economy underpinned by a complex

labour market, where historical factors, wage imbalance, political influence and labour unions play an

industry transforming role.