Barter trading: An empirical investigation of management practices

Abstract

Barter trade is on the increase worldwide in both developed and developing countries. This study is aimed at investigating the management practices used by firms involved in barter trading in order to ensure that they take optimal advantage of benefits of barter trade and minimise its potential problems. Data was collected from 61 barter trade practitioners from the South African media industry. The findings show that most of the firms realise the need to have dedicated personnel responsible for barter trade in their firms. Having dedicated personnel responsible for barter trade helps ensure accountability. The findings also show that most of the firms actively search for barter opportunities, have top management support in their barter trading activities, make use of in-house specialists to negotiate barter deals and have in place clearly defined policies on managing barter trade. Nearly all the policies prescribe products that can be bartered, maximum value of deals acceptable, evaluation criteria for barter deals, accounting and tax treatment of barter deals as well as barter trade authorisation procedures. The findings of the study have practical significance to firms considering using barter trade in their organisations. These have been highlighted in the paper.

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