the quality quest: in search of the best in the best
DESCRIPTION
This book attempts to contribute to the all pervasive quality revolutions that has taken the world by storm. At every turn, quality is intertwined into about every product on the shelf as well as building product loyaltyTRANSCRIPT
Managing Quality in Project and Human Resource
The Quality Quest
Managing Quality in project and Human Resource
Billy Chilongo Sichone
1 st edition
© March 2009
Billy C Sichone
1 Quality quest
Managing Quality in Project and Human Resource
©Billy C Sichone
In case you have any enquiries call: 260977429521, [email protected]
All rights reserved. No part of this work may be reproduced in any form, or by any means,
without permission in writing from the publisher.
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Table of ContentsPreface........................................................................................................................................................6
Acknowledgements.....................................................................................................................................7
Dedication...................................................................................................................................................8
Introduction/Module descriptor.................................................................................................................9
Over view and definition of Quality...........................................................................................................14
A brief history of the quality revolution and its development...................................................................38
W. Edwards Deming.................................................................................................................................39
Joseph M Juran..........................................................................................................................................44
Phil Crosby.................................................................................................................................................47
Kaoru Ishikawa..........................................................................................................................................50
Armand Feigenbaum.................................................................................................................................51
General Douglas McArthur........................................................................................................................51
Later Developments in quality circles........................................................................................................52
Quality Standards......................................................................................................................................52
Summary and conclusion of unit...............................................................................................................58
Quality, its essential nature and necessity................................................................................................78
Some TQM definitions...............................................................................................................................81
Quality, its necessity & benefits................................................................................................................86
Implications and importance of quality.....................................................................................................91
Quality as relates to project management..............................................................................................106
The Project cycle.....................................................................................................................................106
Qualities of a Project Manager................................................................................................................119
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Roles/Functions of the Project Manager.................................................................................................124
Over view of contemporary practice and recent changes in Human Resources Management...............158
Definition of contemporary HRM............................................................................................................161
Strategic place/importance of HRM in project management..................................................................163
International Human Resources management in perspective.................................................................169
Quality issues relating to HRM................................................................................................................186
Methods of enhancing Human resource quality performance................................................................187
Documenting the best staff practices......................................................................................................192
Importance of quality in HRM.................................................................................................................195
Reasons why employees leave................................................................................................................207
Integrated Program management...........................................................................................................215
Operations issues....................................................................................................................................217
Teams......................................................................................................................................................227
Some frequently encountered challenges in project and program management...................................240
Implications of delayed project or program implementation..................................................................253
Grant Management snap shot.................................................................................................................254
Identifying quality in practice..................................................................................................................268
Quality challenges and why it fails...........................................................................................................427
Quality now and in future.......................................................................................................................447
General Bibliography...............................................................................................................................465
Glossary...................................................................................................................................................469
Index........................................................................................................................................................473
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Notes
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Preface
In a rapidly globalised and globalising interconnected world, the need for high quality output is
increasingly non negotiable. Any entity ignores quality issues at its own peril. On an average
day, thousands, yea, myriads of projects progress at different phases and paces towards an
intended goal. The perceived and anticipated outcome often bugs both the implementers and
sponsors of the said undertaking, failure may have devastating consequences. And yet sadly,
most projects are rarely completed on time, let alone successfully reach their set outcomes. As
has rightly been observed by Oded Cohen from the Golddratt Institute, “The majority of projects
do not finish on time or to budget and they rarely deliver to all the original project specifications.
This is down to poor management”1, there is urgent need to address this serious malady to restore
confidence in projects and project management, lest it slides to the fad slimy pit. In a high profile
training on project management hosted by the renowned Marcus Evans (www.marcusevans.com)
in November 2002, trainer and practitioner, Johan Steyn (KPMG Consulting) rightly observed
that it is possible to make a difference, if only the right parameters and staff cadre are in place
prior to the commencement of the project or integrated program as the case might be.
Thus, in this short treatise and module, we consider quality issues as relates to project
management and Human resources. In coming up with this module, a lot of resources have been
consulted from all sorts of mediums including the internet, books (hard copy & soft e-books),
workshop hand outs and interviews with some project quality experts. To make the work more
helpful, a few case studies have been included as well as questions, assignments and possible
research areas.
At the end of this module, it is hoped that you will have mutated into a world class project
manager!
1 As quoted by Robert Buttrick in his book “Project work out”, on the back cover.
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Acknowledgements
In coming up with this module, many quality enhancing minds have perused through the work to
make it what it is. To accomplish such a mammoth task in such a short time frame amidst a back
wrecking work schedule, I relied heavily on significant authorities, colleagues and quality gurus
who have paved the way for us to tread their paths. It would be impossible to adequately thank
these people let alone thank everyone that supported me as I incubated and developed my
thoughts. None the less, I make an attempt to salute some of them at the risk of leaving out
critical contributors.
I would like to thank the management of World Vision International Zambia for having accorded
me the opportunity to refer to the various organisational policies, DME manuals and sites as well
as the valuable training that has shaped my thinking over the years. I should also like to thank the
Cavendish University Zambia staff team that granted me an opportunity to contribute to national
development through this module. It would be injustice to fail to acknowledge the Quality and
Human Resource gurus that I consulted while I wrote this work. Their labours really opened up
my mind not a little. Special mention goes to Messieurs Gilbert Kamanga (Australia), Isaiah
Nzima (Zambia) and Assan Golowa (South Africa). Last but not least, accolades go to my ever
supportive my wife Jane, our two lovely daughters and other colleagues across the world. They
consistently brighten my days.
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DedicationTo all the world class quality pundits that strive to make the world better than yesterday.
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Introduction/Module descriptorThis module is focused on examining some salient qualitative project management aspects which
touch on Human resource as well in the said undertaking. To effectively open up this subject
area of study, the module has been divided into various units, each focusing on a specific area of
a given larger theme. The first Unit gives a bird’s eye view on the all important subject in its
crystal form and then goes on further in the next unit to consider historical aspects of this
important matter. The module also traces the project management processes as well as success
factors that make any entity succeed.
A clear understanding of what quality (especially TQM) is as well as how it impacts on our daily
lives is very critical to achieving world class results in a given time frame at the most cost
effective rate. Having imbibed the TQM principles as propagated by quality gurus, past and
present, it is incumbent upon the student to endeavour to reduce to practice what they learn. It is
no good having non functional information overload that actually contributes to inefficiencies
because decision makers turn into ‘white elephant’ arm chair critics, seriously paralysed by
morbid analysis. The Japanese teach us a big lesson of how right application of information and
principles can result in amazing strides in the right direction. Once application is in motion, it is
critical to constantly monitor progress as well as evaluate periodically against set standards and
bench marks for that given procedure. Quality is all about procedures and standards. Depending
on the feedback, it may be necessary to transition or change strategy so that the goals are
effectively and efficiently reached. Strategies change over time while goals do not. The student
must come away with expertise in qualitative project management skills at the end of the course.
Thus, as the student ploughs through this module, let him or her approach it with an open mind
and a willingness to imbibe new concepts as well as add potent ideas in our collective quest for a
better world than we found it when we first got here.
How to effectively use this study guide
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This guide is designed to be used both as a basic information pack on quality issues as relates to
Project management as well as a resource to stimulate further research. Therefore, to get the best
out of it, it is recommended that the student deeply acquaints themselves with the information
contained in this module pack as well as read broadly consulting other authorities on Operations
management as well as quality such as Oakland J, Kotler P, Brown M, William V, Luchsinger V,
Hill C, Banks J, Bicheno J, Harrison A, Bellingham R, Tulgan B, Townshend P, Burnes B,
Schroeder G R, Bower et al and Langdon among others. These venerable authors have done
extensive work on management related areas. In addition, the student should acquaint themselves
with the relevant ISO standards as well as other important standards. Lastly, the student must be
an ardent cyber space traveller exploring different knowledge “colonies, archipelagos and
islands” located on different websites. The case studies embedded in this manual are but a tip in
the iceberg for there is a whole world out there with many real life cases that will add value to
their learning and practice. However, the cases engrafted in this book must be fully read,
dissected and digested as should the self assessment assignments in this text. The student must
make it a habit to document all the processes they encounter or go through in their quest to
acquire knowledge.
Suggested study tips
As the student undertakes any study, the following tips could be handy:
1. Come with an open positive mind to learn something new in each sitting.
2. Each study sitting is unique and treat it as such.
3. Take in only enough per study session. Do not over or under load your marvellous brain
each time.
4. Take down some notes or highlight some important points as you read. Be neat
nonetheless.
5. Apportion enough time for your studies in a preferred locality, space and specific time.
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6. If it works well with you, engage in a study group of about three or so people. If possible,
attend tutorials or discussion groups as often as possible.
7. Ensure you attend class regularly if you are in full time.
8. Never procrastinate!
9. Read widely. Have an enquiring mind quizzing everything with a view to genuinely
learn.
10. Conduct a self SWOT analysis and thus formulate your optimum study regime.
11. Finally, enjoy your studies! You are investing into your future!!!
Recommended books and documents
Banks J, The essence of Total Quality Management, Prentice Hall, 1997
Banks J, The principles of quality control, Wiley, 1989
Beckford J, Quality: A critical introduction, Routledge, 2002
Bicheno J, The quality 75: Towards six sigma Performance in service and manufacturing, Picsie
Press, 2002
Burnes B, Managing Change, Prentice Hall, 2004
Harrison A et al, Cases in Operations Management, 3rd Edition, FT Prentice Hall, 2002
Naylor J, Introduction to Operations Management, 2nd edition, FT Prentice Hall, 2002
Oakland J, TQM: text with cases, 3rd edition, Butterworth-Heinemann, 2003
Pike J and Barnes R, TQM in action, Kluwer Academic, 1995
Prince 2 and PMBOK, The British standards institution
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Slack N et al, Operations Management, FT Prentice Hall, 2003
Books worth referring to for further reading
Buttrick Robert, The interactive Project workout, 2nd edition, Pearson Education, 2000
Dessler Gary, Human Resources Management, Pearson Education, 10th edition, 2005
Drucker Peter, Managing, 1990
........., The World according to Peter Drucker,
Knaut, Krasman & Meyer, Profiles of Excellence: Achieving success in the non-profit sector,
1994
Maylor Harvey, Project Management, Pearson Education, 3rd edition, 2003
Miles Glenn & Wright Josephine-Joy (Editors), Celebrating Children, Paternoster (Thinking
faith), 2003
Peters J Thomas & Waterman R, In Search of Excellence, Warner books, 1984
Render Barry & Heizer Jay, Principles of Operations, Pearson/Prentice, 6th edition, 2006
Important websites
www.businesscases.org/newinterface business case studies
www.dti.gov.uk/mbp Department of trade and industry-Management best practice
www.efqm.org EFQM-helping European businesses
www.european-quality.co.uk European quality magazine
www.hbsworkingknowledge.hbs.edu Harvard Business School working knowledge
www.hse.gov.uk Health and Safety Executive
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www.hsl.gov.uk Health and Safety laboratory
www.transformational-development.org World Vision International DME site
http://corporate.ritzcarlton.com/en/about/gp;dstandard.htm, Carlton Hotel award winning case
http://www.quality.nist.gov Malcom Baldridge National Quality award (USA)
http://www.asq.org American Society for Quality, (ASQ)
Wikipedia internet site, the free Encyclopaedia
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Unit 1
Aim
The aim of this unit is to give a general introduction to TQM as relates to business management
in general.
Objectives
By the end of this module, students should have:
1. Acquired a bird’s eye view of quality and its relevance today.
2. Grasped a basic background of the quality evolution.
3. Had a basic understanding of what strategy is all about.
Over view and definition of Quality
When talking about potent strategy in modern business circles, the organisation and individual
seek to curve the most efficient and effective route that outwits all potential rivals. In one sense,
there is move towards an interdependent “win-win” scenario in the contemporary business
environment where the corporations agree to share the market or cooperate in benefiting from the
same market. In another sense, each company would like to weave an especially unique path that
cannot be easily imitated by competitors, since the competitively modern uncertain business
environment is all about survival of the smartest and fittest. One thread however, weaves through
all products and services for successful entities, no matter what their location might be on this
terrestrial ball. That thread is crystallized in two words TOTAL QUALITY. The word ‘Total
Quality’’ is now an established buzzword wherever one turns. When profit is the subject,
competitive advantage and zero defects comes up, the word Total Quality Management
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(TQM) or its implication linger somewhere in the background. The business world is hailing this
newly found panacea as the ultimate solution to all the profit nightmares that seem to haunt
businesses. Turn to every media of communication where business is discussed, TQM is
mentioned. The print press, the radio, the business journals, the magazines and indeed the
business textbooks, all are replete with this concept. In America, TQM is relatively a new
phenomena having been practiced slightly over a few decades. The same holds true for the other
parts of the World too. The Japanese however have been the masters having practiced this for
well over five decades. As earlier intimated most of the modern Management books do not fail to
include the issue of TQM because it lies at the very heart of business success of the 21 st Century.
TQM has sometimes been called “The silver bullet” as it is believed that if properly
implemented, the quality efforts guarantee phenomenal profits, market share expansion, timely
project execution and unprecedented exponential business growth. Naturally, everyone is looking
for success!
A plethora of TQM books sit on bookstore shelves across the world but few stand out. Many
authors deal with the pertinent issues that affect the modern business of the 21st century. All that
needs to be said about strategic quality management is successfully delivered and clearly spelt
out for any readers to understand. One does not need to be a high profile Manager to grasp most
of the relayed TQM concepts.
Most authors acknowledge that TQM is not a ‘by the way’ thing but that it lies at the heart of the
organisation. It is practically impossible to ignore TQM today, bearing in mind that the customer
is king and must be pleased at all times if to remain in business.
In the midst of unveiling TQM, strategy comes to the fore. Strategy is defined as ‘The pattern or
plan that integrates an organisation’s major goals, policies, action sequences into a cohesive
whole.’ This means the organisation must be consistently aware that it is not isolated but in a
constantly changing, uncertain, turbulent and volatile environment. If that be the case, the firm
must swiftly move with the times so that it fits well within a given setting. In keeping with the
Anonymous
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quest to remain relevant, buoyant and competitive, the modern manager must involve as many
people in the organisation as possible, because people feel left out when archaic, clandestine and
boxed planning methods are employed. But where key stakeholders are involved from the
planning stage, no matter how minimally, they voluntarily go all the way to ensure success, yea,
they run with the ball. In a nutshell then, Strategy seeks to achieve the following:
(i) A clear direction curving.
(ii) Introspection with respect to the outside competitors, hence knowing what to do and
when.
(iii) SWOT analysis, both internal and external.
(iv) Subsequently, the company zeros in on its core-competencies, which would easily
give a competitive advantage, and also to use the resources as best as possible.
(v) Identify the major factors at play in the environment that will affect the business.
Examples are the political, religious, social and legal environments. These must be
carefully monitored as the business outcomes largely hinge on these, one way or the
other.
(vi) Mark which actions from rivals need meticulous scrutiny. To survive, an
organisation must be scrupulously meticulous so that nothing catches it by surprise.
All the above issues are addressed by a good strategy. Although this may be true in a local
scenario, today’s organisation must contend with the fact that the world has become a ‘Global
Village’ because whatever happens at one point of the globe, affects the rest of the world. The
‘ripples reach every shore line’. It is an increasingly interconnected world as evidenced by the
recent global economic meltdown of 2008 & 2009. Deeply ingrained in this global village
scenario is the need to produce quality goods that satisfy the international consumer and
ultimately bring about product loyalty. Quality is then intertwined in all that is going to be
bought or sold. Strategic Management in an organisation operates in a particular framework. It
has been mentioned that global, quality and social issues bombard the organisation from outside
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but there is need to mention that the organisation has to function as an organism gathering
information and processing it to get a feedback. The Operations, Finance and Marketing
departments do this. The strategy crafting process among others, covers the environment
analysis, direction establishment and strategy formulation. The strategy implementation and
control are equally crucial. In an ideal situation, the organisation should function like the human
body, constantly agile and mutating.
To achieve the above mentioned posture, the average entity goes through various phases that
include:
1. Environment analysis (the context in which the organisation operates noting the changes,
happenings etc)
2. Establishing organisational direction (Visioning, dreaming, strategic thinking etc)
3. Strategy formulation/crafting, shape and structure etc.
4. Strategy implementation and monitoring
5. Strategic control, evaluation and redesign
6. Strategic international operations
7. Strategic Total quality Management
8. Strategic social and ethical dimensions
9. Strategic Operations Management
10. Strategic Financial Management
11. Strategic Marketing and control
It is a curious fact that Total quality is either mentioned or referred to indirectly in many
successful entities and projects within its fibre.
As one traverses any winning firm or project, quality pops up and glows brightly in the
background. The analysis is defined as the process where the organisation pauses and monitors
what is going on within and without the organisation. Among the many things considered,
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include the need to identify both the present and future strengths, weaknesses, opportunities and
threats that buffet the firm. As earlier alluded to, this is known as SWOT analysis. The acronym
SWOT stands for:
S: Strengths
W: Weaknesses
O: Opportunities
T: Threats
The Strengths and Weaknesses relate to the organisation itself as it carries out introspective and
retrospective scan. These are internal and controllable. The Opportunities and Threats are from
outside the organisation and beyond the control of the entity. In other words, the threats and
opportunities lie in the immediate environment in which the entity operates and beyond the
firms’ control, rather, it is the organization to adapt to the changing scenes. As the firm seeks to
excel having checked within, it looks out for openings to clinch the best deals around as well as
counter the competitor threats such as new market entrants, new cheap high quality products,
substitute products or even government policies which threaten the business. All these must be
identified and addressed accordingly. This analysis is addressed in three ways:
1. The internal environment- among many areas, this has to do with human resources and
marketing within the organisation. (Focuses on the internal organisational weaknesses and
strengths)
2. Operating Environment – This has to do with players in the same industry such as suppliers,
competitors and customers. This includes new and emerging industries and market entrants.
3. General Environment- Under this head, we encounter certain issues which affect the
organisation such as the Economic climate, Ethical and political issues. (# 2 & 3 focus on the
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external threats and opportunities which the entity has to either contend with or grab the
lingering opportunities)
In a nutshell then, when carrying out an environmental analysis, scanning as well as forecasting
are at play. Implementation, monitoring, evaluation and continuous improvement crown the
analysis process.
Other areas deal with establishing the organisational direction. After the environmental analysis
is completed, and the results determined, the logical thing is to commence paving the way for the
organisation, ‘Which way forward?’ is probably the question echoing on many a mind at that
stage. In setting direction, three ingredients are commonly used and these are obvious but for the
sake of having a common understanding, it is prudent to clear the path. The said attributes are:
1. Vision- this is a desired end in a more general sense. In other words, a vision states goals
and direction in broad terms. The question probably at hand is ‘What are we up to?’
‘What do we want to make?’
2. Mission-This is the purpose for which the organisation exists. Why is the organisation
here? What are the aims? These are but a few issues addressed in the mission. Every
company should have a statement, which summarises the existence in capsule form. The
mission addresses those core values of the organisation without which the company will
have no reason to exist. Usually, the quality issue is always slotted in the statement so
that it acts as a powerful marketing tool.
3. Objectives- this is the Vision in more specific terms. Here, the specific target group to
which the organisation directs its weight and efforts are clearly brought to the fore. As the
period unfolds, the organisation is constantly asking whether it is meeting its objectives
or not. This is a good checkpoint or benchmark.
The 3 points above are the very heart of establishing Direction. Notice that even here TQM finds
a special place. The delivery systems must be in tip top shape to sustain high quality
performance and exponential growth/expansion.
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Further still, the strategy formulation issues as well as implementation have to be considered.
The managers responsible must first understand what they are about and in that context, the plans
are implemented. The formulation process takes place in at least three levels namely, the
Business, the functional, the global and the corporate respectively. All these levels look at the
company with respect to the environment. For example, the advent of customer sovereignty is
encountered in the business level, the need to improve all the time and yet to maintain goal
congruence and innovation are met within the functional and corporate levels. When the
formulation has taken place successfully, implementation is evitable. The implementation
process is critical because that which has taken long to arrive at is now being put into motion.
Sadly, this stage is usually undervalued or even overlooked in many a process! We assert that
more care is equally needed here too. A number of stages are suggested to be taken into
consideration as implementation takes place:
1. We must determine how much change is needed to accept the new strategy. A big
company like General Motors Corporation (GMC, USA)has taken several years to steer
around and yet still in deep weeds. At implementation stage, magnitude of change must
be arrived at so that the right momentum is gathered. In other words, acknowledge the
problem and set standards to reach for effective progress.
2. We need to analyse and manage both the formulation and implementation meticulously.
It is one thing to formulate and quite another to implement correctly and in the right
doses.
3. There is need to decide which mode to be used in the implementation process because
there are different approaches. One option is to be autocratic and declare that the entire
organisation must tow the top management line. Another is to consult the middle
management on the modalities and let them implement as they see best. Still another
would be to consult the whole organisation and each person implements as seen
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convenient. Each of these approaches has problems that beset them. Sometimes quality is
compromised, especially if it is left free for all to implement as they see best.
When the formulation and implementation are well done, the next is to see that this plan is
working according to schedule and in line with the desires of the strategy architects. The process
at hand is dealt with under strategic control and is slightly different from the traditional control
we have in ancient management practice. This is basically the monitoring, evaluation and
improving of activities. Continuous improvements or KAIZEN is another buzzword in
management circles. (Kaizen is a Japanese word, which talks about continuous improvement of
products and services) When control is in place, it ensures that the organisation is kept on course
all the time and emergent strategies are imbibed at the right time and at the appropriate levels.
Control helps the strategic manager to achieve the organisational goals. As can be seen, quality
rears its head even here because continuous improvement is hewn from TQM!
At some point, Strategy takes us into the international environment where it must be applied. On
the international scene, many complexities with respect to strategy are encountered. Here, cross
border trade, different cultures, attitudes and tastes must be smartly and adequately addressed. It
is difficult to find one universal strategy because different cultures interpret things differently.
Their value systems are poles apart in some cases. As they say, “PLAN GLOBALLY BUT ACT
LOCALLY”, better still in strategic terms, “Think long term, act short term” This phrase
summarises the international strategy as brought out in international marketing. Among the
issues tackled on the international scene is the need to be customer oriented as far as possible,
respond promptly, churn out high quality goods and services. Strategic acting is critical. Trade
agreements such as the general agreement on trade tariff (now WTO) GATT are intercepted. The
tariff barriers and regional economic groupings cannot be ignored on world trade. More
significantly is the advent of the usually huge multinational organisations which have feet
littered across many borders and buttressed with a large work force, though there is now a trend
Billy Sichone
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towards smaller, lean and sometimes virtual agile and buoyant organisation in the rough and
turbulent economic tidal waves of the 21st century. That is how the Japanese have triumphed thus
far over the Americans and the rest of the World. Today, the Japanese are the foremost quality
car producers capturing over 20% of the world market, as the Toyota brand reigns supreme for
instance. They have carried the day both in terms of number of cars sold as well as superior
quality, thus curving a cost effective unique niche although the Americans seem to potentially
hitting back by using computer simulations and shorter new model roll outs. Never make a
mistake of exposing your technology to Japanese or an Indian as they will quickly copy and
improve on your product idea beyond your recognition and yet it was initially your idea! A story
is told in certain circles that some parts of Europe do not allow Indians or Japanese to go beyond
a certain check point. Other nationalities, especially Africans are freely allowed to tour. One
wonders why but upon scanning what is beyond that point, it becomes evident that a lot of the
state of the art cutting edge technology is hidden there and must be protected at all costs. The
African and others are no threat as they are often ‘real and genuine’ tourists in the truest sense of
the word who simply marvel and go away empty headed! Not so the Japanese or the Indians!
The fellows are far too smart armed with photographic memories and once they pass through,
they will have carried along all the technology with them! Could it be, as strongly believed in
some circles that these people have good mathematical heads while others do not? We have no
telling.
Another interesting story is told that the first world countries develop technology valleys such as
the Silicon valley where technological ideas are hatched, harnessed, nurtured and improved
upon. One country in Europe is said to hire the best brains in the world to their facility on short
term contracts which they eventually fizzle out after they have “sucked” all the cutting edge
technology out of an individual. They ensure a native national supervises or understudies the
hottest whiz kid on the block, learn the ropes and eventually discard the poor fellow! To keep
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someone on a high pay roll for two or so years is not easy but what they get in return is ten fold
what they “invested”. Let us discard the mere tourist mentality and get down to serious business.
As earlier alluded to, TQM radiates brightly in this module. It sparkles in almost every sentence.
The Total quality issue has been around for some time now. Although we shall undertake a
deeper historical analysis of TQM history in the subsequent units, it is fitting at this stage to give
a snapshot. TQM first had its proponents in the late 1940s and 50s, although some authorities
argue that it has its roots long before this period. Interestingly, they were all Americans! The
three Quality Gurus, as they are popularly known are E.W. Deming, J. Juran and P. Crosby. All
these propagated that quality was the master key to market expansion, and project success long
before the American Multinational giants realised. The first and foremost of these is Deming
who got his Bachelor’s degree from Wyoming University. He went further and got his Doctorate
from the Yale University. Thereafter, he used statistics in the US weapon industry. After the
Second World War, Deming went to Japan to help the Japanese rise from the ashes after the
Atomic bomb disaster. He began to legendary lectures leading to a successful quality
indoctrination of the natives. There has never been a turning back. The Japanese were initially
notoriously renowned for mediocre quality goods but after those power packed and inspiring
lectures, they began to improve quality. Deming went back to America but was later recalled.
This led the highest honour being bestowed upon him. All the while, the giant multinational
titanic corporations were not for a moment aware that the Japanese quality was making inroads
into the world market. Deming proposed 14 points which, according to him, were to guarantee
success. The quality we see today is but a fully-grown tree of some of the seeds sown by earlier
by Deming. Juran was more or less a contemporary of Deming except that he came slightly later.
He too taught quality in all aspects of the product. Like Deming, he was honoured as well with
the highest medal in Japan. Crosby is considered one of the gurus because of his outstanding
contributions to the Total Quality Movement. But what is Total quality? It can simply be
answered as ‘the move towards better all pervasive quality products and services at all levels’. In
the past, defects were reacted to and corrected after they passed through the production chain but
with TQM, the organisation is pro-active. The goal is to get a zero defect and also to
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continuously satisfy customers. There are certain characteristics, which are universal as listed
below:
i. Total quality is customer driven. In other words, what customer wants and desires is what
goes, the customer calls the shots, as it were.
ii. There is a strong quality bias in all that is done.
iv. There is never a time when quality is stagnant. The organisation is ever improving-Kaizen
v. There is more employee participation in the planning, implementation and monitoring of the
process. In the past, some areas were only for the top brass and certain special departments. The
organisation of the future has moved away from the old way of doing things.
Total quality affects all areas of life today. If the quality is poor, the company risks losing market
share and eventual death! Countless academics and authors have poured out huge TQM
avalanches over the years showing the importance in our days. Although many have heralded it
as the grand panacea, the TQM movement has not advanced unnoticed or unscathed. Some think
it is just a passing craze (or fad) like other programs. Others have talked a lot about it but have
not internalised it into the organisation system so that it virtually becomes invisible to the naked
eye, because it is so ingrained and embedded into the corporate work culture. By the same token,
myriads have attended workshops and courses but as soon as they got back to base, they closed
their files and continued as before. In many instances, the top leadership does not seem to
support TQM, while in other cases are too cost conscious, or demand instant results. What they
forget is that TQM takes time to cultivate and results long term. It is a process. Thus, the
Japanese are more proficient because they have been at it for over four decades and their cultural
values support teamwork which has to be learnt by the individualistic capitalists.
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With time, the proud and static Americans realised the quality importance and thus set up the
Malcolm Baldridge prize in 1987 in a quest to boost market dominance. It became law. Other
standards like the ISO 9000 are worth looking at. There are five standards in the ISO 9000 series
but the most frequently used are ISO 9001 to 9003. Many organisations demand ISO
certification if they are going to do business with any client. The ISO 9000 basically looks at the
process used to produce goods. However, the ISO 9 000, does not look at many other factors
such as interpersonal relationship, circumstances, attitudes and feelings. ISO focuses on
processes. The future organisation has no option but to revisit the quality standards and also to
apply for certification if they are to be key successful players on the international market.
Having traversed the exciting quality landscape, one feels as though they begin to descend from
the mountaintop. They are at a ‘quality anticlimax,’ as it were. The other equally important
strategic components include the social responsibility and ethical considerations. The corporate
social responsibility issues (i.e. paying back to community by sponsoring contest, rehabilitating
clinic etc) orbit around whether a company or project should or not do any social good, which is
not directly linked to its main objectives. By that token, there has been considerable debate over
this in recent years. Some think the benevolent acts belong the state while others view it is a
corporate obligation as well as a powerful marketing tool. That said, increasingly, more and
more companies have opted for the benevolent and marketing option. This double edged sword
cuts down on tax and builds corporate image
It is crucial to look at the supporting departments, which are crucial to smooth running of the
organisation and also for strategic purposes. The Marketing function for example, helps not only
to market the goods but also to carry out research, which is crucial to find out what the customers
tastes. The Finance helps the organisation to “count its men” and avoid all extremes such as
These standards have to do with product and process quality standards. Specifically, ISO 9001- 9004 relates to quality management as well as systems. Various other standards exist for different industries. For instance, the ISO 14000 series focuses on the environment. It is worth knowing your relevant standards before you embark on the certification process.
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under or over trading. The balance sheet must cease to be the centrepiece of organisational
operation and development, although equally crucial. In some organisations, the Human
Resources department ensures the right staff are recruited, hired and developed. All these must
be viewed as parts of one organism so as to maximise on efficiency and effectiveness. As the
perceived universal panacea, quality standards will remain the main thing for decades to come
but what is more important is to make TQM work for us and not remain merely an ideology.
======================================================
Case study 1
The race to Mongu bus route superiority
At one time a trip to Mongu was the most dreadful of journeys to undertake. Not only was the
journey long, strenuous and sweaty, but also it was one that a person had to physically,
psychologically and emotionally prepare for long before hand. The road was as bad as the
vehicles that would be used. A single one-way trip would take no less than three days! As though
that were not bad enough, the route was serviced by one fleet of state owned infamous United
Bus Company (UBZ) buses!
Today, the picture is completely different, as one can manage to travel to and from Mongu in a
single day! How so different a scenario! What has caused this and what has been the impact? As
you might be aware, the number of buses servicing this route on a daily basis has increased from
one to over four! When the UBZ folded in 1994, shortly after the liberalization of the economy,
other transporters sprouted and started to service the selfsame route though they were more
Jack Welch would rather focus on cash flow not balance sheet ‘The Jack Welch way’ by Stuart Crainer, Magna Publishing Company Ltd, 2003 The UBZ & Zambia Airways closed in 1994. See the Southern African Economist Magazine of Feb/Mar 1995 pp23.
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unreliable and unpredictable than the UBZ that to some extent had guaranteed departure and
arrival times. As these initial transporters took on the route, a bus popularly known as Time bus
or JR came on the scene. This proved to be more agile, comparatively customer friendly and had
more capacity. This move caused others to fizzle out, as they could not compete. But just when
JR was becoming the established route leader, the RPS made a sudden appearance on the
horizon, this time even more efficient than JR! There were reported fights and violent instances
between the rivals. In no time, RPS robbed the market though JR still remained a formidable
force, in the peripherals. RPS then became the upper class market bus while JR serviced the
poorer sort of travellers. As a result of the near monopoly on the route, RPS became too
comfortable, complacent, obstinate and less customer focused. There were instances when the
RPS crew would violently hound out or insult customers and still get away with it.
Alas, in 2000, CR smelt the profit on the golden Mongu route and was irresistibly drawn into the
race. As expected, CR arrived with a bang and momentarily shook the RPS not a little as the said
fleet had not expected any other competitor. CR came with robust modern marketing strategies
that completely out witted RPS. Some of the weapons exploited were introducing a customer
friendly service and at times even offer drinks or fruits free of charge! Another avenue was the
introduction of good quality, timely buses fitted with Video/TV. This was too good for an
average Mongu bound bus by then!! In addition, the service ensured all the buses were never
overloaded and initially begun with a lower price so as to capture the market. In no time,
customers shifted allegiance enmass. Soon, the anticipated funeral procession to the bus
graveyard for the once potent RPS and JR was imminent, though they lingered around a little
longer than expected.
As providence would have it, in 2001 after reigning unrivalled on the route for over a year, Euro
Africa heard about the fame and richness of the western province route and joined the race.
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Determined not to be out done, the Euro Africa employed similar strategies that CR had used
except that they emphasized on timeliness on all routes. This has worked well and potentially
dislodged the undisputed Mongu route heavy weight champion-CR. For a season, the incumbents
were paralysed because they were in the same market niche with Euro. JR still limped along but
better than the other two as it serviced the poorer sort who would be packed like sardines on the
buses, with luggage littered all over the place including the passage way.
Progressively, the battle raged hotter as the buses used all sorts of strategies that included
different departure times. For instance, some now start off as early as 04:00 in the morning and
arrive at their destinations at about 10hrs and then make a return trip at 14 hrs, all in a quest to
get that extra buck!
Thus, the battle for route superiority rages on as other bus services like Juldan, Shalom, Germins,
Zoom etc join the race, one wonders who will ultimately carry the day, let us keenly watch…
Case study questions
What is has made some bus services/fleet more successful than others on the Mongu route?
What one ingredient has been key to success?
What would you attribute this improved service in Zambia especially after 1992?
Do you think the upcoming bus services will sustain superior quality service? Substantiate your
answer giving reasons why you think/do not think so.
What are some of the pitfalls each emerging and incumbent bus company should watch out for to
succeed?
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Case study 2
The rise, progress and spread of the Zambian Post
newspaper 1990-2007
For nearly 27 years, the Times of Zambia and Zambia Daily mail (though both initially had other
names before), both State run papers, although nationalised some time after independence,
reigned supreme. They were by far the most potent government propaganda daily print media
mouth pieces and to the extent they reported, to that extent most Zambians were informed. Their
operations were extremely government regulated and dared never publish any iota of government
critical news item. The key strategic positions such as Editor and above were to a large extent,
political jobs. In terms of finances, the papers raked in millions although most of the times, the
papers were inefficiently produced, of poor quality, highly subsidised and distributed to mainly
government departments that probably never settled their accounts. As for competition, well,
your guess is as good as mine, they competed between themselves in a cosmetic fashion! I guess
they spent more time gossiping about pay rises and political promotions than strategising to
competitively outwit each other on the market. Very few foreign publications were allowed, and
if they did, one paid dearly to get a copy. The News week, Economist and Times magazines were
about the only potent foreign publications worth talking about at the time but even then, most of
the propagated ideas could not resonate with the average mind as the government controlled
command economic and political system impeded outside contact and exposure. In any case, if
anything was viewed as antagonistic to the State, heavy censoring ensued, if not the total
banning of that particular issue. That is how things stood as at 1990. By all standards, the Times
of Zambia and the Zambia Daily mail were national standard trend setters and appeared poised to
maintain the superior market share given their extensive and complex national network, perhaps
even beyond the borders of this country.
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But then something happened in 1991, from nowhere, a publication called the Weekly Post was
born whose editor was Mr Fred M’membe alongside some prolific, racy, penetrating and
piercing writers such as the late Jowie Mwiinga, atheistic Mercutio and the towering Bright
Mwape, a first or second year Evelyn Hone College Journalism student at the time. The powerful
Yuss dazzled the readers with his artistic caricature antics and later the quaint satire writer,
Clarke. Never before had the Zambians ever experienced such stinging daring reporting. At the
time, Dr Kaunda with his hench men were the prime target, and the major issue of the day,
reintroduction of the multiparty politics. At first, the long established papers (Times and Daily)
sneered at, mocked and ridiculed the puny back yard weekly publication that seemed to have
been formed by a consortium of perceived disgruntled fellows with a little support from
anywhere. What could they do? How could they dislodge such long standing and time tested
papers with a powerful international profile? How could the half baked journalists possibly ever
match up with the seasoned, experienced and ripe writers of the day? What about their
distribution, coverage and regularity? What would these frail and perhaps diseased guys do, why
waste their time and resources? So went the ridicule avalanche, similar to the taunting Nehemiah
and company faced (Nehemiah 2-8) when rebuilding the Jerusalem walls. The Post was indeed
bullet riddled and pelted from all angles at the time. The New paper idea appeared a sick joke
and near lunacy at the time. As expected, the young but living paper experienced some initial
operational setbacks but as the stinging and revealing investigative reports begun to pour out, the
world sat up straight, because a new force had hit the scene. Not a few eyebrows were raised as
the once fragile looking paper begun to dig deeper whilst others desperately attempted to bury
the trash. In no time, the titanic traditional and so-called “objective” papers begun to feel the heat
of the potent and fearless Post editorials. Before long, litigation battles ensued raised by mostly
high profile personalities in the country. It appears that they (people) were traditionally
accustomed to unquestioned filthy clandestine dealings and could not simply stomach criticism,
akin to one stealing relish from a pot. In no time, the paper garnered sufficient clout and
credibility among the national papers. The paper that dug deeper carried the spirit and aspirations
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of the general populace though it appeared rather too radical then, after nearly 27 years of State
controlled media. As a result, the Weekly Post was verbally outlawed in many circles and not
bought by the State. That did not cool the Post momentum. With time, The Weekly Post turned
into The Post and confidently took its place among the daily newspaper stands, clearly out
growing the rusty rest. Today, the paper is by far the foremost widely read Zambian paper both
at home and abroad. Its daily hard copy circulation coverage of nearly 15,000 reaches the whole
country, the Internet and gets to many outlets long before the Times or Daily Mail do. It has an
efficient and effective distribution channel with a reliable transport fleet. Besides, the newspaper
contents are worlds apart with the Post carrying burning and current relevant issues of the day.
The catchy headlines and punchy editorials make the paper stand apart from the rest. Further, the
paper has been moving with the times and seems to have a finger on what the real issues are and
what people want to and are itching to hear. The Post has a way of exhuming and exposing dark
corner secret bedroom meetings that countless times even catch the President by surprise. A few
of those startling revelations have sometimes sent the man hysterical! One can’t help but think of
what was said about the Prophet Elijah (2 Kings 6:12). Sometimes, the Post makes the alleged
corruption infested government appear like a seriously dysfunctional information leaking vessel.
Hence the endless skirmishes with the powers that be.
But the Post has other unique attributes as it is full of innovations that are absent in the
traditional papers. I suppose penetrating the “Kariba Dam wall” bureaucracy makes it a fruitless
task to attempt change the ancient lethargic state run papers, as one is better off looking for and
sipping away Zigolo all day. As an example of what I mean, the paper has continuously
introduced powerful sections such as the Business Post, the feature articles, the Sangwapo
(advertisements), the Saturday Educational Post, lifestyle, sports, Farmers’ Post and the weekly
personality profiles among many forward looking ideas. The paper consistently continues to
As quoted from a reliable veteran source. The estimated volume for the state run papers is 12,000 (Times of Zambia) and 7,000 (Daily mail) down from 45,000 in the 70s and 80s! Zigolo= A sugar saturated cold solution popular among boarding pupils and students.
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improve but never losing sight of the original resolutions of being objective, profitable and
candid. It is clear that the Post rakes in millions daily and is the trendsetter of the times on the
newspaper market. The traditional papers are still clutched in the bureaucratic mode and are no
match for the agile Post. The Daily Mail and Times are miles behind as though they never once
commanded nearly 100% of the Zambian newspaper landscape. For instance, one can still find
the Times and Mail on the streets as late as 15 hrs selling at ridiculously slashed prices. The Post
will have long run out, even in most of the smaller towns! Sometimes one wonders why waste
tax paper’s money on papers that won’t sell but merely used for political propaganda. Another
thing one notices when you encounter a Post and State Journalist is the difference in the attitude,
diligence and motivational levels. A Post journalist will compass land and sea to get accurate
fresh information. The others grumble all the way, are laissez faire and generally laid back unless
there is some “motivation”! Why be bothered when they know that whether they report or not,
whether the paper sells or not, the tax payer will still subsidize the company anyway! After all,
their pay cheques are guaranteed. The Times and Daily papers have not awakened to the needs of
the times. They need to review their strategy consistent with their fine and unequalled motos, if
they have a strategy at all apart from reporting on globetrotting President or busy defending
blatant clear irregularities! People will not always buy a paper like that! People are looking for
credible tangible news, both local and international. Apart from the job advertisements and a few
Internet downloaded news pieces, what do the papers have to offer? In fact, it is the
advertisements that cause most of readers to occasionally buy the said papers. Perhaps, they
should consider crafting a strategy that revolves around the advertisements, it could just be the
long sought after money spinner!
Having said the above, there is need to mention a few perceived weaknesses and strengths of all
the papers. In many senses, the Post leads in many areas of strength but sometimes is perceived
too strong for the 27 year suppressed Zambian minds. Besides, our cultural norms do not as yet
sufficiently appreciate some of the things promoted especially on the lifestyle section. Some of
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those reports are too extreme, nearly nude and offensive to a wider audience, though some
consciences are becoming seared by the day with the Satellite TV advent. That explains why
some political leaders bark out loud once hit under the belt. The Post should watch out what it
promotes in the name of “modernism” or “Post-modernism”. In terms of candidness, by and
large, it is doing a great job though this opinion is relative. Another caution though, watch out for
potential new market entrants. It is true that many have come and wound up in the intermittent
period but one may just manage to dislodge the paper that digs deeper in terms of sales, just like
it (The Weekly Post) did in the early nineties! Continuously improve and build a powerful niche.
Learn from the Zamtel that is being beaten by new comers like Celtel despite potentially having
the widest telecommunication infrastructure network in the country. Today, Cell Z is trailing far
behind Celtel, what more when mighty MTN settles? There will be entertaining drama! I
suppose that is what a market economy is all about but take heed lest the Post also joins the other
dead papers in the already crowded corporate bone yard.
As for the Times and Daily Mail newspapers, a lot of lethargy, scrap metal and boxed thinking
still needs to be hurled out. Sadly, these papers remain in the organisational coma surviving on
the taxpayers’ life support system. They are actually a drain on the meagre national resources
and not worth supporting unless privatised or let to run independently and professionally. If
possible, these should be commercialised or spun off from state control. Away with the mediocre
archaic politically infested management and puppet journalism! The times have changed
therefore, it is high time to awake. Largely, the invisible political hand messes up these potent
media entities. The same goes to the now frustrating ZNBC. The Daily Mail and Times should
urgently shrug off all impediments and give the Post newspaper a run. Perhaps one way to beat
the competition and silence the Post is to commercialise one of the state papers into an
independent tabloid or investigative paper akin to Uganda’s Monitor paper. It is a smash hit
worth spending your cash on. But knowing African politics and politicians, that is a farfetched
dream, perhaps unique to Museveni. That said, both papers need to improve on their reporting
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quality, especially their generally poorly researched and biased editorials. The language level is
good enough given the target readership but there is need to polish up even there too. One hardly
feels they are reading good standard English when their eyes are scanning these papers. The
language level is rather too low for developed, broad and exposed minds. If the lower brackets
(and they are in the majority, though most do not buy as they cannot afford!) of society are the
target group, then well and good!
The page size of the papers is needlessly too large, perhaps to accommodate more
advertisements. To their credit though (Times and Daily), their advertisements are good and this
is highly encouraged. There is variety and a good assortment. They get rid of the adverts at their
own peril, though the papers need to add more innovative contemporary issues that will motivate
almost every Zambian, old or young to walk across town to get a copy of the Times or Daily. I
often find it intriguing when kids troop to read the education Post, that is the way it should be!
Others want to read Kalaki, Pastor Cholwe Mweetwa, Dr Canicius Miles Banda, Ms Lucy
Muyoyeta, Dr Neo Simutanyi, Dr Simeo Siame, Dr Owen Sichone, Dr Judith Lungu, Mr Simon
Kabanda, prolific Mr Chibamba Kanyama, racy Professor Fackson Banda , Professor Clive
Chirwa and myriad other seasoned brain waves of our times. They do not only look for the
adverts but far much more. That gives value for money.
Well, as the dynamic newspaper landscape continues to mutate, let us sit back and meticulously
but keenly observe what comes our way next. Will a paper greater than the Post arise soon? It
presently seems not to the naked eye but let us not be too comfortable lest another dislodges all
the present three leading papers of the day much like what the Post did back in 1991.
Case study questions
What one distinctive competence does the Post News paper have over others?
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Given a choice, what would you change or do differently at the Post?
What areas need improvement in (a) state run print media and (b) the Post?
Do you think the post is a catalyst to development or a mere nuisance? Justify your answer.
How best do you think the State run and other Post competitors can improve (a) their
profitability/market share and (b) their operations?
Is there a likely hood that a new market entrant will dislodge the Post soon from market
leadership? Give reasons for your answer.
Revision exercise
Describe what you know about the evolution of quality perceptions.
Why is quality so important in today’s world?
Why do some perceive quality as a mere passing management fad?
What do you know about the ISO standards?
What do you know about the Malcom Baldridge National quality prize and its significance?
What do you understand by the statement “Quality must be embedded in the system”?
Mention something about the “big four” quality gurus.
What is unique about Japanese management? In your opinion, is it superior to the western mode?
In your own words, write brief notes about Kaizen, the ringi system and their importance.
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BibliographyBellingham Richard, Virtual Teams, Jaico Publishing House, 2003
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processes. Irwin McGraw-Hill, 8thedition, 1995
Burnes Bernard, Managing Change, 4th edition, FT Prentice Hall, 2004
Campbell J David, Organizations and the Business Environment, Butterworth Heinemann, 2002
Certo C Samuel & Peter J Paul, The Strategic Management Process. Chicago: Austen
Press/Irwin, 1995
Cole Robert & Mishler Lon, Credit Management, Irwin McGraw Hill, 1998
Crainer Stuart, The Jack Welch way, Magna Publishing Company, Ltd, 2003
Henderson Gordon, “Quality is Key”, Banking world, December 1992 pp 26
Higgins C Robert, Analysis for Financial Management, 5th edition, Irwin McGraw-Hill, 1998
Higgins C. Robert, Analysis for Financial Management, 5th edition, Irwin McGraw Hill, 1998
Kakabadse Andrew & Analoui Farhad, How to recognise & Manage Corporate Sabotage, Jaico
Publishing House, 2004
Krames Jeffrey A, The Welch Way: 24 lessons from the world’s greatest CEO, TATA McGraw-
Hill publishing company, 2002
Mc Carthy & Perreault, Basic Marketing. 11th Edition,
Oakland John S & Porter J. Leslie, Cases in Total quality management, Butterworth Heinmann,
1994
Oakland S. John, TQM: Text with cases, Butterworth Heinemann, 2003
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Patton Quinn Michael, Qualitative Research & evaluation methods, 3rd edition, Sage Publications
2002
Peters J Thomas & Waterman H Robert jr, In search of Excellence, Warner books, 1984
Plessis Du A P & Smit P J, Management principles work book, Juta & Co, ltd, 1994
Pugh G. David & Bacon R. Terry, POWERFUL PROPOSALS: How to give your business the
winning edge, Magna Publishing Co. Ltd, 2006
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edition, 2006
Robertson Ritchie D, “The customer-friendly way to deliver the services”, Banking World,
December 1989
Salton J Gary, Organizational Engineering, Jaico Publishing House, 2003
Sleight Steven, Moving to E-Business, Dorling Kindersley, 2001
Steger B Manfred, Globalization: A very short introduction, Oxford University Press, 2003
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1989
Tulgan Bruce & Martin A Carolyn, Managing the Generation Mix, Jaico Publishing House, 2003
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Unit 2
Aim
The aim of this unit is to ensure the student understands the genesis and exodus of the quality
revolution, giving an adequate background enabling the modern TQM student to confidently
contribute new and relevant fresh ideas. In addition, the unit has two other aims to:
a. Equip students with an appreciation of relevant quality and human resource standards
b. Give guidance on why ISO is critical.
Objectives
By the end of this unit, the student should:
a. Know & appreciate the early Quality gurus.
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b. How TQM revolution has impacted the world since inception (1940s and 50s).
c. Know relevant project management quality standards
d. Basically interpret some key standards
A brief history of the quality revolution and its development
Any revolution has its heroes. The heroes may be many or few but at the centre of it all, a small
pack of people are usually at the core of the movement. These people, male or female are often
filled with a growing passion to see drastic change take place whether in their life times or not.
What bothers them is that the problematic status quo is maintained without challenge. Hence,
they stand out from the crowd and in their unique way make known their throbbing heart desires.
What matters so much to them is not fame but contribution to a noble and worthwhile cause
whether they be isolated or lone voices in the wilderness. The Quality development story is such
a case in which distinguished men and women, some accomplished in their respective fields,
have selflessly and consistently sacrificed so much to achieve change. It is fitting therefore to
spend some time to give honour to such venerable folk that have been the frontrunners and foot
soldiers in this noble cause that has engulfed the quality world so much. This unit therefore is
devoted to their memory as well as giving an objective historical narrative of how things
unwound to reach where we are today in this never ending quality journey. To effectively do
this, we briefly give a history of each of the giants as well as what they contributed and then in
the last section consolidate and summarise everything before proceeding to the next unit.
Naturally, to kick start this process, we consider the legendary E W Deming who in many senses
is considered one of the fathers of the quality movement especially in Japan.
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W. Edwards Deming
W. Edwards Deming
William Edwards Deming was born on October 14, 1900 in Sioux City, Iowa, USA and for
some time lived on his grand fathers’ chicken farm in Polk City, Iowa before moving over to Powell, Wyoming state, where eventually, he enrolled as an electrical engineering undergraduate student, successfully completing his studies in 1921. He then enrolled for and completed his Masters (University of Colorado, 1925) and proceeded to pursue a PhD degree in mathematics and physics completing in 1928 at the Yale University, where he no doubt proved his mettle. The young graduate for some time worked in several places that included a brief stint at the Bell Laboratories (internship while PhD student) as well as the United States Department of Agriculture (USDA: 1927-39) and the United States Census Bureau (1939-1945). While at the Bell Telephone laboratories (1927), he came across Walter Shewhart’s works and was very intrigued, learning some of his earliest quality ideas in statistical control from him (Walter) which he would later develop on and apply to quality issues. Whilst working with the Bureau, a team of experts that included him were assigned to help out in the rebuilding of Japan as it was occupied by the allied forces at the time and desperately needed external help. That was about 1946/7 and Deming would later return in 1951 (under the United States Department of the Army) to assist with the census and eventually give a series of lectures on statistical control as relates to quality. But a year earlier, Deming gave many lectures that were highly appreciated by the Japanese Union of Scientists and Engineers (JUSE) due to his expertise in Statistical Process Control (SPC). He also taught some company executives that cared to hear him on quality improvement. He returned to the USA only to be re-invited and later honoured with the highest
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Japanese honour by the Prime Minister of Japan (1960), acting on behalf of the Emperor. Deming received Japan’s Order of the Sacred Treasure, second class. This was in an addition to the string of honours he had already received and was to. The earliest honour was the setting up of the Deming quality Prize way back in December 1950 for his selfless contribution to developing Japan from the atomic ashes as well as fostering the lifting Japan from its well established mediocre quality product reputation. All the while, Deming was ignored and little considered in his native America and nobody bothered about what he said because soon after the second world war, the American multinationals with their superior products were sought all over the world and it would appear they were too busy supplying the ferociously sought after American branded products to pay attention to the lone quality voices that were shouting the sustainable answer to market share expansion. Sadly, they were too faint to be heard in the hustle and bustle of international business. As time went on however, the Japanese adopted these teachings, many of them encapsulated in Deming’s 14 points and applied them with increasing success. By 1980, the Japanese could not be ignored as the quality products coming out of Japan were exceptionally good, reliable and conformed to international standards, in many instances outstripping as well as outperforming the established international brands. Further investigations revealed that the Japanese had adopted higher standards for their goods and services which inevitably were better than what they themselves were churning out. A story is told of Car models with transmission made in Japan and United States respectively. Both these engines had similar design specifications were sold to the public but customers quickly preferred the Japanese made transmission. This puzzled the American vehicle manufacturers. After much investigation, the American car manufacturers discovered the reason why customers preferred Japanese made cars despite a similar design and same specifications. The Japanese had used slightly higher standards and thus their engines, although of the same design as their American counterparts, were slightly higher in standard by very few measuring units. This explained why their engines were more reliable, efficient, lower defect rate, cost effective superior performance and thus preferable. But this was not the only area, they embedded quality in about everything which irresistibly captivated the customer. In the course of time, and after much investigation, they discovered that a set of Americans were in fact behind this success story although they had gone unnoticed or recognised in their native countries. Thus, a number of companies searched and found this guru (Deming) and contracted him prevailing upon him to write the book “Out of the Crisis” though originally called “Quality, Productivity and Competitive Position” in 1982 after his theories marvellously worked for the USA as well. Deming did various works and consultancies chief among them being his work at Ford Motor Company. They hired him to advise management on how to turn the ailing company into a profitable one which he readily agreed to do. Expecting him to started talking about quality issues and statistical control when he arrived at the firm, the man instead emphasised management action and commitment. According
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to Deming, about 85% of the problems in companies were caused by management action or decisions and thus he asserted that the Ford problem lay in management because if management was not committed or did not take responsibility, the quality programs would invariably fail. Ford tried these ideas and surprisingly turned out profitable that year and in subsequent years, to the extent of even beating its traditional arch rival and competitor, General Motors Corporation. Crysler and others were also beaten clean. Thus, he penned down the classic book, “Out of the crisis”. Deming continued to teach, lecture and hold workshops throughout the rest of his life being peacefully gathered to his fathers on December 20th, 1993 in Washington DC, USA.
But what were his interests as well as his profound contributions to the quality movement evolution? It would appear he led a very simple life and delighted to lead a low profile life. For one thing, he faithfully sung on a choir, played flute & drums, wrote some sacred choral compositions, composed music & loved music as well as wrote in his spare time. This great man was simply amazing! In his life time, Deming was an American Statistician, Professor (New York University-1946-1993 & Columbia University-1988-93), author (authored “Out of the Crisis-1982-86 & “The New economics for industry, government, education”-1993), lecturer and consultant, all in one mortal! As a result of his huge contributions, Deming received a string of honours from all over the world.
As to his profound contributions, Deming hugely contributed in various ways. For one thing, he emphasised quality control through statistical means and management responsibility for effective quality management. For another thing, he selflessly taught the Japanese Scientists, Engineers and corporate executives with little personal gain. His was a labour of love. He also wrote an influential book as well as bequeathed the world with the famous 14 quality improvement points. In addition, Deming helped the Japanese discard low quality output and helped them appreciate higher competitive standards. This led to their international success and unprecedented economic development. But lastly, he went to Japan more than once to teach quality matters sometimes at the risk of his life and reputation, especially after the Second World War. This was unprecedented commitment, even if there was little to gain. Even more interesting was the fact that he was not even recognised or given due attention at home until Japan took the world business centre stage by storm. As part of his contribution, we list the now famous Deming’s 14 points as quoted by the Wikipedia website:
“Deming offered fourteen key principles for management for transforming business
effectiveness. The points were first presented in his book Out of the Crisis (p. 23-24)
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1. Create constancy of purpose toward improvement of product and service, with the aim to
become competitive and stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must
awaken to the challenge, must learn their responsibilities, and take on leadership for
change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on
a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total
cost. Move towards a single supplier for any one item, on a long-term relationship of
loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality
and productivity, and thus constantly decrease cost.
6. Institute training on the job.
7. Institute leadership (see Point 12 and Ch. 8 of "Out of the Crisis"). The aim of
supervision should be to help people and machines and gadgets to do a better job.
Supervision of management is in need of overhaul, as well as supervision of production
workers.
8. Drive out fear, so that everyone may work effectively for the company. (See Ch. 3 of
"Out of the Crisis")
9. Break down barriers between departments. People in research, design, sales, and
production must work as a team, to foresee problems of production and in use that may
be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and
new levels of productivity. Such exhortations only create adversarial relationships, as the
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bulk of the causes of low quality and low productivity belong to the system and thus lie
beyond the power of the work force.
11. a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
b. Eliminate management by objective. Eliminate management by numbers, numerical
goals. Substitute workmanship.
12. a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The
responsibility of supervisors must be changed from sheer numbers to quality.
b. Remove barriers that rob people in management and in engineering of their right to
pride of workmanship. This means, inter alia, abolishment of the annual or merit rating
and of management by objective (See CH. 3 of "Out of the Crisis").
13. Institute a vigorous program of education and self-improvement.
14. Put everyone in the company to work to accomplish the transformation. The
transformation is everyone's work. "Massive training is required to instil the courage to
break with tradition. Every activity and every job is a part of the process." ”
Clearly, Deming has taught us lasting lessons from which we can pick some valuable lessons. One of them being to remain humble, focused and committed to what we do best. Posterity will judge or vindicate us.
But then, we need to hurry on to consider another quality guru, who we cannot ignore, Dr Juran.
Joseph M JuranWhile Deming is remembered as the foremost quality and to some extent management thinker of
the movement, Joseph Juran can rightly be called ‘the evangelist for quality and quality
management’. This is for the simple reason that he spent most of his life advocating and teaching
on quality both in the American domain as well as Japanese. He was in a sense a contemporary
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to EW Deming though he came later. Let us briefly trace him through life and his marvellous
contribution to the quality movement:
Joseph M Juran was born on Christmas eve of 1904 in Braila, Romania. He was of Jewish decent
and later immigrated to America with his family in 1912 (the year the Titanic sunk) making their
settlement in Minneapolis, Minnesota, USA. As a young lad, it appears that Juran was brilliant
and thus excelled in school especially in mathematics. His mathematics and chess genius helped
him win and dominate the chess championship at Western Electric and later he graduated from
the Minneapolis South high school in 1920 and entered University of Minnesota where he
graduated with a bachelor’s degree in electrical engineering in 1924. The young gentleman then
joined the Western Electric’s Hawthorne works where his first job involved troubleshooting in
the complaint department. About 1925, the Bell Laboratories trained Juran in the new sampling
and control chart techniques, which Deming and others had been exposed to at around the same
time. Juran thus joined the Inspections Statistical Department where he and other colleagues
explored, applied and disseminated Bell Lab’s statistical quality control ideas. This activity
evidently propelled Juran to the upper echelons of the organisation in record time. And for sure,
this became reality for in 1928 he was promoted to department chief only to end up as division
chief in 1929. In 1937, he moved to the Western Electric/AT &T’s headquarters in New York
City where the great depression effects were severely felt.
Long before he moved to the head quarters, the great depression of the 1930’s was around the
corner and in a bid to mitigate its impact, Juran studied law (1931-1935) though he never
practiced law. For some reason, Juran quit(resigned) from Western Electric as well as his
Government post (at Lend-Lease administration & Foreign Economic administration) with a
view to go into private consultancy but later joined the New York University as an adjunct
Professor in the Industrial Engineering department. He taught quality control as well as held
seminars for executives for his consultancy was alive as well.
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Juran did a number of things that made him live well as well as etch an image for himself until
he retired in the 1990’s only to die 18 years later, well aged and full of quality wisdom. He went
the way of the earth on February 28th, 2008, at ripe age of 103 years in Rye, New York.
But what were his major contributions to the quality movement and what lessons can we draw
from his illustrious career and life? Juran made many contributions both at home (USA) and
abroad (principally Japan). We briefly state some of them and then hurtle along to draw some
lasting lessons from his legacy.
For one thing, Juran improved on the Pareto principle, which states that 80% of the problems are
caused by 20% of causes. Having exhumed Vilfredo Pareto’s work, Juran expanded this
venerable gentleman’s thoughts to include his famous sayings on “the vital few and useful
many”. Juran believed that although the 80% problems could be sorted out by dealing with the
20%, he also asserted that the 80% could not and should not be ignored in quality techniques.
For another thing, Juran is widely credited for adding the human dimension to quality
management for he taught that everyone in the company had to be involved in the quality
innovations if they were to be sustainably successful. Recall that he was for some time associated
with the Hawthorne, where the famous Frederick W Taylor worked? The human relations
scientific management trials were done at Hawthorne and thus may have influenced Juran.
Juran can also be credited the “Juran’s trilogy” which was the basis for the development of the
cross functional management composed of three managerial processes namely, quality planning,
quality control and quality improvement.
We can safely say that Juran was a bridge that successfully transferred quality knowledge and
practices between two cultures, the East and the West. Juran visited Japan in 1966 and learned
about the Japanese concept of Quality Circles, developed by the venerable Professor Ishikawa
and enthusiastically disseminated back to the West at his return. In a sense, he acted as a ‘go
between’ or matchmaker so that both sides of the world (USA & Japan) appreciated their
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perceptions and approaches to control. Probably that is why he has been dubbed the “Quality
movement evangelist” for he appeared quite zealous for quality matters.
Lastly, in terms of contribution, Juran was a writer, having written a book called “Quality
control hand book” of 1951 which captured the Japanese Union of Scientists and Engineers
(JUSE) who subsequently invited him over to Japan in 1952, around the time Deming had been
there, though independent of each other. While Deming focused on statistical quality control,
Juran focused on managing for quality, which later sent the American companies into serious
competitive trouble in the 1980s.
In terms of lessons from his life, we learn several, some of them being:
1. That there is a human aspect and component to quality that must never be ignored. People
need to buy into the idea and run with the ball.
2. Writing is important. He wrote his book as far back as 1951 and got noticed in later years
ending up as a renowned author and quality expert. He wrote many books that include the
following: “Managerial Breakthrough” (1964), “Management of Quality Control” (1967),
“Quality Planning and Analysis” (1970), “Upper Management and Quality” (1980) and “Juran
on Planning for Quality” (1988) among other works.
3. For another thing, Juran teaches us, that ground breaking work is not easily nor immediately
recognised or even readily supported. It needs patience, focus, hard work, resilience, zeal and
determination. He was a very zealous quality advocate both at home and abroad.
4. Regardless of where we hail from on this terrestrial ball, we can influence and impact the
world leaving an indelible mark upon our generation and beyond. Juran was originally Romanian
but impacted America so much, perhaps more than many American natives. Never despise the
day of small things.
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5. Lastly, we learn that people approach and perceive things differently. While Deming focused
on statistical control to quality, he approached it from another perspective but both contributed
greatly to the movement.
We can thus wrap up the life of this great legend in only a few words, live the conviction that
you espouse and your works will follow you now or posthumously. We need more people of
such calibre.
But then, our work is scarcely done, we must hurry on and consider several more quality gurus.
We next consider Philip Bayard “Phil” Crosby.
Phil CrosbyOur next great contributor in our chronicle of quality gurus is Philip Crosby, popularly known as
“Phil” Crosby. Crosby came slightly later than both Deming and Juran as he was born on June
18th, 1926 and died on 18th August 2001 aged 75.
Not much is known about Crosby’s early life except that he was a business man and author of
one extremely famous quality book called “Quality is free” which was published in the nick of
time when many American companies were struggling and losing market share to the Japanese
who had come of age and were churning out superior quality products at a far cheaper price.
Crosby worked as Quality Control Manager at the Martin Company at the Orlando, Florida plant
where he initiated the ZERO Defects concepts which would eventually result in mass cost
savings (30% scrap cost reduction) and significant reduction in the overall rejection rate (25%)
during the Pershing Missile program. Crosby simply insisted in doing a good job the first time
and thus reduced return jobs thereby cutting costs. Instead of focusing on quality control, his eye
was fixed on defect prevention while doing a fantastic job the first time. Crosby had a stint at
ITT before retiring to management consulting in 1979.
It was in that year that he published his famous book earlier alluded to above in which he
advocated among many things, the need to prevent defect and install as perfect quality systems
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as possible. In other words, Crosby made much about the systems as much as the process. At a
time when the crisis was getting deeper, this voice came as a possible solution to market share
loss which had the potential of revolutionalizing entire industries. Thus Crosby offered a number
of important pregnant points which would prove very handy to the ailing companies in the states.
For instance, he offered four major principles in addition to his 14 step quality improvement
program. These are summarised in the statement “Doing It Right the First Time” or DRIFT for
short. Here are the principles as stated by the Wikipedia site:
1. The identification of quality is conformance to requirements
2. The system of quality is prevention
3. The Performance standard is zero defects and finally,
4. The measurement of quality is the price on non conformance.
These points are heavily pregnant as they bring out a lot of principles which if properly analysed
and applied led to phenomenal results. For instance, he taught that the price to be paid for no
conformance was high because repeat jobs, market loss and inefficiency would be the order of
the day. In as much as the initial costs for quality program initiation were high, it was ultimately
cheaper in the long run.
After a distinguished career of both business man and consultant, Crosby, like any other mortal
gave up the ghost on August 18th, 2001 a few weeks before the September 11 catastrophe.
But what were his major contributions to the quality movement and what lessons can we draw
from his life? These are soon told and then we wrap up transitioning to another quality
contributor.
Firstly, Crosby was a prolific writer who excelled in communicating his quality ideas both in the
print and audio/video media. His writings can be found on the internet, written articles and
books. For instance, he wrote a book called “The Art of getting your own sweet way” published
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by the McGraw Hill publishers in 1981, while another title, “Quality without fears” published by
the same publishers. You would do well to visit the following sites to see some of his works:
http://catnyp.nypl.org/record=b4578224 and http://worldcatlibraries.org/oclc/13761&tab=details
to sample some of the man’s might. The take home lesson is that we should take time to write for
posterity.
In the second place, Crosby was a well seasoned professional and business person who ventured
into consultancy after proving his mettle in the industry, thus he did not merely trumpet theories
he was not fully conversant with.
Thirdly, He was dead correct when he asserted in his book that quality is free as well as why he
preferred to prevent defects rather than react to them later.
Lastly, we learn that we should dare venture into consultancy when we have strength rather than
when our present employers vomit us. Crosby was a man of many parts and galvanised himself
to get the best out of his talent. Unfortunately, most of us try out something when we have no
option and our energy far spent elsewhere.
Collectively, these three are called the ‘Big Three’ who devoted themselves to ensure quality
becomes the main thing rather than a by the way. Interestingly, each of these operated
independently of each other but significantly contributed to the quality movement though each of
them emphasised a different aspect.
Other equally important quality gurus who contributed significantly to the
movement
But then, these gurus were not alone in their quest to achieve high quality output. There are a
number of lesser known quality gurus that the world has not paid much attention to. Different
authors mention different people having mentioned the ‘big three’. We briefly mention them
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below and then proceed to consider some significant quality standards before we wrap the unit
with some labour related standards.
Kaoru IshikawaThe first we mention on the lesser known gurus is Kaoru Ishikawa, a native Japanese national
who made huge contributions to lifting quality standards in Japan including the Quality Circles
that Crosby got excited about. As earlier mentioned Kaoru was born in Tokyo, Japan in 1915 and
eventually worked his way through the education structure (Engineering undergraduate degree,
1939) before joining the working world where he distinguished himself, ending up as a
University Professor as well as an influential quality management innovator best known for
having introduced the fishbone diagram. This is used in the analysis of all industrial processes as
to their usefulness and quality.
His major contributions
Ishikawa was an amazing man of many parts. He learnt Deming and Juran’s principles and
translated them into Japanese as well as integrating them into his work. He also expanded the
management principles of ‘his mentors’ achieving outstanding success at Nissan and other places
he worked.
For another thing, he introduced the concept of Quality circles in 1962 in conjunction with the
JUSE.
Thirdly, he introduced the fishbone cause and effect diagram, sometimes known as the Ishikawa
diagram.
In the fourth place, he put much emphasis on the ‘internal customer’ as well as a shared vision
for better company success and efficiency.
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Fifthly, he wrote a number of valuable books that include titles such as “QC circle Koryo”,
“How to operate QC circle activities” and “Introduction to Quality Control” (1990).
For you to see some of his works, visit the following site:
http://en.wikipedia.org/wiki/kaoru_ishikawa
Having laboured tirelessly in quality circles, Kaoru succumbed to the cold hand of death in 1989
having left an indelible mark on the Japanese quality landscape. Indeed, he can rightly be
numbered among the ‘big four’ because he was a giant in his own right.
Armand FeigenbaumThe next giant we mention is Armand Feigenbaum. Little is known about him except that he
worked hard in quality circles to the extent that he has been numbered among the “big four” by
some writers. Specifically, he is well known for pioneering work towards cross functional team
concept, wrote a book on “Total Quality Control”, 40 steps to quality improvement as well
among many others.
General Douglas McArthurThe last (though not necessarily in contribution significance) of the great quality gurus is the
venerable General Douglas McArthur though he was of a different sort. He is not known to have
written or taught quality issues in the sense we know of Deming and others but he lived out the
quality philosophy. About 1946, post the Second World War, the allied forces still occupied
Japan and McArthur was left to govern the country. During his tenure, the General emphasized
quality so much to the Japanese and would not settle for anything less than the best. This
emphasis helped shape some of the Japanese thinking and probably explains why he directly or
indirectly brought Deming, Juran and others to Japan so that they could buttress his quality
convictions and views. This American really worked hard before he left Japan much later.
As to his contributions we can say that his one major contribution was to emphasise quality
throughout Japan which paid dividends later on and was in keeping with what gurus like Deming
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taught-Management action impacts greatly on quality. One lesson we learn at least is that we
need pragmatic action oriented people that will run with the ball as well as champion any cause
they elect to pursue.
Later Developments in quality circlesFrom a small insignificant stream, the quality movement gained momentum as standards begun
to be set, as well as Associations concerned with quality. We briefly mention some of the
Association as well as standards.
As earlier alluded to, the Japanese introduced the Deming prize on quality improvement and
application in 1951. Others were to follow which included the Malcom Baldrige National award
(USA, 1987) and the European Excellence award among others.
As for associations, the JUSE was one of the earliest, then the ASQ and European among many.
All these emphasize quality in various shades and approaches and were born out of a growing
concern to set quality standards as well as to see a better world with higher quality output. Some
of these also directly propagate the classic teachings of theses venerable quality gurus we have
mentioned above though primarily their concerns are quality standard related.
Quality StandardsIn the quest to improve and standardise quality across the world, various standards have been set
and continue to from time to time. By that token, quality definitions vary from association to
association but most of these centre around conformance, fitness of use and reliability of the
product. In general, each standard sets a benchmark producers must consistently equal or scale if
they are to be considered of an acceptable standard. As such, most of these standards focus on
zero defect as well as good processes that guarantee a good product at the end of the production
line. Other standards focus on service delivery standards which ensure that the customer is well
treated as king and repeatedly satisfied. For our purposes, we shall pick out some standards set
by the International Standard Organisation (ISO) which are relevant and relate to project
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management. We make a brief comment and leave the rest of the discovery to the student to
explore and comment upon.
Some standards and best practices relating to project management
ISO 9000
This standard is one major standards used by companies today to ensure quality. First established
in 1987, the standard focuses on ensuring compliance to standards or conformance quality as it is
sometimes called. The ISO 9000 series has a number of standards under it prominent of which
are:
ISO 9001: Guidelines for companies engaging in design, development, production, installation
and servicing of services or products as the case may be.
ISO 9002: Akin to ISO 9001 but does not include companies engaged in design and
development.
ISO 9003: Includes companies engaged in final testing and inspection.
ISO 9004: Covers quality management systems application guidelines.
In the USA, some of the ISO 9000 series has been issued under another code called ANSI/ASQC
& Q 90 series although they are essentially the same in nature and application.2
Some of the areas ISO 9000 looks at includes:
Management responsibility
Documenting quality procedures through systems
Review customer contract ensuring they bring together product offered and required.
Design process through quality control systems
2 Refer to Stevenson’s book, Production/Operations management by IRWIN page109 for more details on this matter.
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Document control
Conformance to standard and specific requirements
Use of statistical techniques where necessary and ideal
There are many other aspects that lead to ISO 9000 certification. Collectively, all these
requirements seek to guarantee quality delivery to the customer at all times.
ISO 14000
ISO 14000 touches quality issues as well as focuses on Environmental matters of ever increasing
importance. The Environment is a big issue today and no entity worth its salt dares ignore this
standard. As the interview with Mr Peter Njobvu of BP Zambia will reveal, ISO 14000 is as key
to business survival as it is to sound project management and implementation. Today and
tomorrow, an Environmental Impact Assessment (EIA) will increasingly become compulsory as
people seek to mitigate anthropogenic environmental backlash as well as planetary degradation.
Therefore, any project about to commence must adhere to this standard that gives guidelines and
standards to be observed before, during and after the project phase out. ISO 14000 centres
around environmental audit systems and the following aspect constitute this standard:
Commitment
Environmental Policy
Environmental review
Organisation & people (staff)
Targets and objectives
Environmental management program
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Documentation and manual
System reviews
Environmental audits and finally,
Operations Control & records
PRINCE 23
This relates to the bureaucratic standards and controls towards quality control and the acronym
‘PRINCE’ stands for Projects IN Controlled Environments. Basically, it is a structured way of
planning and managing projects of whatever size with a view to derive the best project results
possible, lessons learnt and best practices for future application. It is a form of a ‘laboratory’ to
test projects in structured controlled environments as relates to the project cycle especially
applicable and recognisable in the UK. It focuses on the “product” although does not guarantee
success. PRINCE2 is a recognizable standard for process rather than outcome quality, assuming
the correct procedures lead to good anticipated results. It is worth mentioning that PRINCE2 has
eight key process areas as listed below:
Directing the project
Planning a project
Starting up a project
Initiating a project
Controlling a project
Managing product delivery
3 Refer to Harvey Maylor’s book, ‘Project Management’, pp 399
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Managing the stage boundaries and finally,
Closing a project or Phase out
As shall be evident later, some aspects of this standard project cycle are followed by many
successful projects around the world. Once the above are followed, this is dubbed “good Project
Management” because all the due processes will have been followed to reach the expected
outcomes. PRINCE2 has other equally important components worth exploring but we leave this
to the student to pursue. Different views and schools of thought abound over whether to
subscribe to PRINCE2 or not but this is beyond the scope of this module, suffice it to say that
this is an approach which gives some direction and shape to project management. For more detail
on PRINCE2 and other relevant issues, visit the following websites: www.prince2.com and
www.spoce.com
BS-ISO 10009 (1997)
This standard houses specifications & guidelines relating to quality plans of project management.
So much then for the ISO standards, we proceed to consider some aspects relating to human
resources.
In a sense, part of the ISO certification (especially ISO 9000) includes not only what quality
processes are in place guaranteeing good quality output but also indirectly or other touches on
how staff in the system are treated to get the best results. They are “within the process” as it were
and hence there is hardly any justification warranting a separate unit on labour standards as
relates to Human resource in a project. Viewed from another perspective however, it is prudent
to state some standards that need to be observed at every project stage to ensure smooth
implementation as well as avoid disruptions brought about by litigation and disputes, as the case
may be. Hence, our consideration is not in detail but will centre around some International
Labour Organisation (ILO) standards which apply to all entities regardless of their magnitude,
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form, shape or direction. To adequately deal with these standards, we simply list them and give a
brief description leaving the student to investigate further. It must be stated that any Project
Manager, let alone employer will do well to familiarise themselves with these and apply them as
they work. We must also state that we have made no attempt to trace the historical developments
of these standards but encourage students to search out these. We limit our investigation to the
contents of these standards. Here we go then:
1. Basic Human rights such as freedom of association, freedom from forced labour and freedom
from discrimination (e.g. with the advent of the HIV and AIDS pandemic)
2. Employment which includes matters pertaining to employment policy, employment service
and vocational training/guidance.
3. Conditions of work or service. This alludes to wages, job security, work hours, occupational
health and safety, social services, housing and leisure, social policy.
4. Social security. This has specific reference to the well being of employees and covers matters
relating to medical care, sickness benefits, maternity, invalidity, old age, survivor’s benefits and
compensation in the event of injury in the course of duty among many others. In the developed
world, this may include migrant workers as well.
5. Industrial relations. Every entity employing a sizeable number of people is expected to allow
the formation of a trade union, if they meet the minimum standard. Industrial relations aims to
bring about harmonisation and efficient work flow through collective bargaining and negotiation
between management and staff. The Project Manager of a small project may not worry much
about this one but must none the less observe the basic human rights as well as equitably reward
project workers.
6. Employment of women, children and young persons. These are different standards and tackled
separately in the law but are grouped here in the interest of covering as much ground. In the past,
and to some extent today, there is ongoing concern revolving around unfair treatment of these
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vulnerable groups, sometimes denying some of them work when they deserve it or forcing them
to work when they are clearly under age, amounting to abuse.
7. Labour administration: This focuses on the work and how it is administered. Specifically, it
includes labour inspection and statistics which inform and guide effective labour administration.
As has been demonstrated, there is much to be learnt and mastered by the Project Manager
ensuring that they excel and above board in their labour administration. These are ‘must know’
standards and are thus non-negotiable. As later hinted on, staff come to work with a specific aim
and motive each day and must thus be well managed lest they quit and pick up something they
consider more meaningful and rewarding.
Summary and conclusion of unitWe have thus seen the known pioneers of the quality revolution, who for a long time were lone
voices in the wilderness but their work has increasingly come to be appreciated today. Much has
been said about the American quality ‘prophets’ but the last, Ishikawa, is equally to be
numbered among the ‘Might four’. In their own way, each of them contributed hugely to the
quality flash flood we have today though they emphasised different aspects which when
consolidated as well as integrated bring about an unprecedented amount of synergy, far
outweighing their single separate contributions. Collectively, they have left an indelible mark
upon history. Theirs is a blazing trail worth pursuing. Entities are more successful and
competently compete on the global market partly because of the classic timeless all pervasive
higher quality product and service output. But there is still yet much to be learned because many
well meaning and sincerely TQM applying organisations still flounder on the business scene.
Well designed and implemented projects do not reach their goals or transition on time, why?
This and many other questions are yet to be sorted out by future generations, since the
foundation has solidly been laid. At that time, perhaps the picture will tilt from ‘one third TQM
applying entity success rate’ to two thirds and eventually 100 percent, though the latter may not
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easily be achievable because entities will each be consistently improving further, outdoing each
other and thus triumph over their rivals. Perhaps the project management and human resource
success rate will significantly improve though, all things being constant and equal.
Below is a summary of the Quality movement giants and their contributions.
Heizer &
Render
Wikipedia
web site
Name Contribution Year(s) Name Contribution Years(s)
W Edward
Deming
*Formulated 14
points for
management to
accept
responsibility.
*Advocated good
systems
*Emphasised on
written
specifications
1982-
1986
W Edward
Deming
*14 points for
management of
quality
*Wrote influential
book “Out of the
crisis”
*Introduced the
Plan-Do-Check-
Act concept
(PDCA).
1982
Joseph Juran *Taught on
“Quality Trilogy”
*Taught the
Japanese quality
*Insisted that top
management
commits itself to
1951- Joseph Juran *Championed
companywide
quality (CWQ)
*Quality fitness for
use
concept/definition.
*Dubbed the
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quality and own the
goal.
*Advocated for
teams and staff
involvement in
quality matters
(companywide
quality)
*Exhumed and
improved on the
Pareto principle
‘evangelist of the
quality movement’
due to his zeal.
*Wrote “Quality
Control hand
book”
1951
Armand
Feigenbaum
*Wrote influential
book, “Total
Quality Control”
*40 steps to quality
improvement
Quality all
pervasive
*Influenced the
development of
cross functional
team work concept
Kaorou
Ishikawa
*Introduced the
Quality Circles
concept.
*Introduced the
Fish bone or
Ishikawa diagram
for industrial
process analysis (to
determine root
causes).
*Wrote several
books in Japanese
e.g. “QC Circle
Koryo” & “How to
1960
1982
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operate QC Circle
activities”.
* Translated,
expanded &
integrated concepts
of Deming &
Juran.
Phil Crosby *Wrote influential
book “Quality is
free”
*Low quality is
more costly
*Zero defect
“There is
absolutely no
reason for having
errors or defects in
any product or
service” he often
asserted.
1979 Phil Crosby *Introduced the
‘Do It Right the
First Time’ concept
(DIRFT).
* Was prolific
writer and authored
many books
including the book
“Quality is free”
Burnes (Managing Change pp 121) has well researched on the Japanese quality revolution and
names a few critical actors who championed the quality crusade. We have summarised this in the
ensuing table below:
Name Major Contribution Year(s)
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General Douglass MacArthur *Ruled Japan for some time
after the atomic bomb of 1945
in the rebuilding phase. The
General insisted on improved
and improving quality output
in whatever was done and thus
significantly fostered the
quality quest (Allied forces
occupied Japan then).
1946-
EW Deming *Lectures on quality matters,
resulting in the famous 14
quality points for management
to consider. He helped Japan
recover from the atomic bomb
catastrophe by firmly
implanting statistical quality
improving ideas. Deming was
honoured with the highest
quality reward for his
distinguished service to the
Japanese and mankind in
general.
1950-
Joseph Juran *Also did a series of quality
improving lectures but
emphasised that quality had to
permeate everywhere
1951-
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(companywide) to the extent
that quality was embedded
within the system. He was
later honoured with the
highest quality reward in
Japan before returning home
to the USA. Juran died
Recently on February 28,
2008!
Clearly, we can see that the stream is now a wide river which consistently breaks its banks.
Quality is indeed the main and only thing that any entity needs to succeed. Projects, businesses,
schools, churches etc, rise or fall on this quality stone. It is now the cap stones of all success.
As we considered the labour standards, we have no doubt that they are international standards
that have been set which govern the way human resource are managed and harnessed. It was
abundantly clear that none of us can escape or evade their shadow as they are at the very core of
our existence and being. Breach them at your own peril and you shall soon land behind bars or
indeed adversely affect your project implementation. You may not be an expert in listing or
tabulating each of them in order of merit or importance but one thing is sure, you must have an
intelligent appreciation of them as well as apply them well. In fact, rules and laws exist to make
our work better, more efficient and enjoyable. If these regulations are observed and well
administered, we have no fear that the project or program is up to a good start and will definitely
focus on project implementation rather than wasting time needlessly jumping from one court
case to another.
Finally, we trust we have in a sense given a bird’s eye view on the quality landscape. We also
trust that this brief historical treatise has laid a foundation and good back ground upon which we
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build the subsequent superstructure. The ensuing unit will begin to open up ground directly
relating to project management. Having surveyed the short TQM rise and progress, we proceed
to consider quality in its essential nature as well as why it is of essence today and tomorrow, stay
with us!
Case study 1
The Mongu hospitality industry race
It came with a bang on the Mongu business scenario around 2002 quickly supplanting the
already existing established hospitality business houses. At first, everyone considered the Cross
Roads guest house as a mere joke by some dreamer that would soon fizzle out but they were
wrong. Starting out with a small out let at the cross junction as one enters Mongu town, it was
clearly an underdog from the start because the owners were viewed as amateurs with little known
clout and business eye for that line of business. What made it worse for the start up entity was
that it was not very well positioned because of its close proximity to a police compound, a noisy
& crowded bus stop, a community hall, a noisy bar and some crafts men nearby. The place had
very little parking space which effectively would discourage some traveller. Given these and
other disadvantages, it was evident that the Cross Roads was destined to die in a short space of
time, but again, critics were proved wrong for some of these perceived challenges turned out to
be positives rather than negatives.
The entrepreneurs behind this business worked away quietly behind the scenes building their
business, establishing linkages and aggressively marketing the entity in various ways that
included posters, door to door visits, brochures and offering facilities that other established
entities did not have. Most of all, the owners ensured that the lodge rooms and services were of
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world class quality. For instance, the rooms were spacious, airy, well furnished, clean fresh linen,
privacy guaranteed, security, self contained rooms and above all state of the art satellite TV
service in each room that was rare in those early days. Another aspect they invested in that made
them stand out was that of later establishing a powerful conference room which they had lacked
for a while. With those aspects in place, there was no looking back as people begun to trickle in
one after the other with increasing frequency and delight. For another thing, Mr & Mrs.
Kalonge4 were all the time on site and ensured that they treated their customers with utmost
timely courtesy. They also ensured that customers were given a good treat, well served and paid
cash rather than credit. An exceptionally disciplined staff team was engaged who devoted
themselves to the business though the staff turnover was rather high in the early lean years.
By 2005, the Cross Roads boasted of two other lodges that had been built up from scratch with
the same brand name, though now located in superior and Porsche places of Mongu befitting
people’s status. Cross Roads 1 was the start up giving birth to Cross Roads 2 &3 which
eventually gave birth to Cross Road 4, the best of them all, targeted only for the Top brass of
society and Chief Executives. It was the natural choice for the affluent as one needs ready cash in
their pockets to patronize that place. The interesting thing is that whilst other formerly well
established hotels and guest houses were struggling to offer even the basic necessities like
running tap water, warm bathing water or a decent meal, the Cross Roads grew from strength to
strength!
Having established the brand name strongly in Mongu, practically the corner of Zambia, it was
time to expand to the major cities of Zambia. That would be a hard shot and risked serious
failure and waste of resources but the Kalonge’s were determined to make their mark. In 2006,
they ventured into the heart of Lusaka, bought a plot in Olympia/Roma area, built from scratch
and personally supervised the work. Mr. Kalonge, being meticulous and particular about detail
literally camped on site and ensured things were on track while his wife managed their properties
in Mongu. She occasionally visited the project site to check on the progress and quickly headed
4 Not real name. Actual with held for security reasons.
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back. Thus went the progress such that by the end of 2006, the place was basically ready for
official opening to the public. This latter stately Cross Roads structure was even more
sophisticated, beautiful, spacious, high standard and about everything was exotic and imported
from the far flung places of the world. The atmosphere was homely, fresh, calming and very
inviting to any visitor. As is the practice of many organizations, they rushed to try out this new
“joint” by having endless workshops, lodging there as well as hanging out with colleagues. The
Cross Roads is now a house hold name in Lusaka, with its unique, high quality service offerings,
far outstripping the earlier rivals back in Mongu and Livingstone.
One would ask, what has made this once little known Cross Roads brand such a house hold name
in such a short time? A number of reasons can be summoned to attempt to explain this but the
following clearly radiate as one carries out an interview with the proprietor or tracks the business
development.
Firstly, Mr. & Mrs. Kalonge are serious entrepreneurs who know what they want in and out of
life, to make just ‘a bit more’ money! At every turn, they look for opportunities to make an extra
buck.
Secondly, the entrepreneurs are focused and serious with what they do. They are of one mind and
deal in cash only, no credit is allowed and ensure everyone pays up on time. Thus, their cash
flow is sound most of the time.
Thirdly, the Cross Roads are a high quality class chain of guest houses offering nearly everything
a traveller would look for, comfort, World class quality courtesy, space, good speedy service and
security. Others fall far short on that score.
Fourthly, the management are very innovative, reading the times and able to respond to the
times. Bureaucracy is yet to be its lot. Many old incumbents suffer from red tape, bureaucracy or
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rigidity. Other smaller entities suffer from the founders’ syndrome effects and cannot possibly
innovate unless the owner sanctions that move.
Fifthly, the Cross Roads chain has a clear strategy, goal and direction, to be the best of the best!
Others are buried in personal scuffles, in fighting or witch hunting merely reacting to what is
around the environment to the extent that they do not have the muscle to chart the course.
Sixthly, The Cross Roads have a class, standard and high quality services which others do not
have. The Cross Road owners will not settle for mediocre standards or anything less than the
best. Rising from obscurity around 2000, the Cross Roads brand competes favourably with any
international service provider currently in the country. Gone are the days when the best only
belonged to the multinationals!
Lastly, the Cross Roads has been consistent in its development, expansion and evolution. Its
networks are good and has high good will from the banks, customers and others who not only
offer it credit facilities but market it to the rest of the world.
Indeed, you get quality for money at any Cross Roads outlet. Where it goes from here is hard to
tell but one thing is sure, the sky is the limit!
© Billy C Sichone 2008
Case study questions
What has distinguished the Cross Roads chain rest houses from the rest?
What one thing has made the chain a resounding success?
Do you think the Cross Roads strategy is sustainable? Justify your answer.
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Why have other old incumbent business houses failed while the Cross Roads has succeeded?
Is being a novice or one not specialised in a line of business justification enough to stay away
from a competitive business.
What one quality do you admire about the Kalonges and why?
What do you learn from the Cross Roads case?
Suppose the Cross roads empire was making plans to enter the international Market, say
expanding to Namibia or Angola, what would you advise them to focus on in their entry strategy
abroad?
Case study 2
Interview with Mr Dabson Mwendafilumba, MA
This was carried out by Billy Sichone with Mr Dabson Mwendafilumba, CEO of the Hostels Board Zambia, a chain of lodges dotted around Zambia. The objective of the interview was to discover how and why the said lodges were doing well under the Leadership of Mr Mwendafilumba, given a very dark background when the lodges once were not as good as they have suddenly become in recent years. Thus, this interview centres on strategic thinking, management, planning as well as quality issues. Interview date: October 2001 & July 2004
Venue: Mongu Lodge & Nyati Close, Rhodes Park, Lusaka
1. What, in your own word, is management?
Ans: In my own words, I would define Management as the process of managing resources ensuring that there is no management crisis. In other words, I could say ensuring that all resources under your case are properly harnessed and used to their intended end. 2. What various styles of management do you know?
Ans: I know several but I will give some that immediately come to mind. I must state first of all that management styles depending on the context as well as the team/hierarchical structure is framed. Now as for the styles, I know the following:
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a) Coaching managementb) Autocratic managementc) Laissez faire and lastlyd) Team building management.
I must also state that in Africa, management is quite different from that which you find elsewhere. It is a power distant type of management so that there is fear instilled instead of friendship in relations between supervisors and subordinates. As I have mentioned, this differs from the Western world where people are addressed by their first names, showing that they are colleagues and comrades.
3. Which one do you espouse or prefer?
Ans: Management is based on team building these days and to succeed, we need to depend on each other. Therefore, I prefer and practice this type of management. 4. Does team work or spirit exist or work in Zambia?
Ans: It has worked in the lodges that I am Director of. All our managers meet quarterly to discuss and create friendship by working together. When we meet, we have fun together and ensure we create a conducive environment where we are all at liberty. Every meeting, we begin in prayer which has helped unite us. In order to spice or enrich our meetings, we visit tourist attractions, engage in recreational team building activities like swimming which in effect create dependability on one another. After refreshing, we meet once again to brain storm and focus on one thing, ensuring there is a shared vision in common as well as buy in. As the leader, I ensure they all see the ‘Star of Bethlehem’ akin to what the Magi of old did.
5. How is the management today different from that of long ago? (What are the trends in management circles you have observed?)
Ans: Traditional Management wasted time on fighting each other and standards as such would start to decline. This cannot be tolerated now due to increase in marketing and competition. Furthermore, in a traditional management setting, new ideas are not encouraged or let to blossom but in the current context, you must continuously be coming up with new ideas which will be generated by different people contributing from within the team.As for the trends, Management in Zambia is changing at a slow pace as top management still tend to hide information from subordinates that would enlighten and build them up. Information is still the private preserve of the few thus curtailing anyone one from effectively contributing. Furthermore, in Zambia, the power distance between supervisor and supervised is still large although some modifications exist in pockets here and there but by and large, things are still pretty much the same. In addition, management does not come with one mind but different individuals are busy pursuing their own things at the expense of organizational development
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indicating very little buy in and no shared vision. That’s the picture in Zambia as I see it. But the good news is that we are changing the picture in the Lodges and I am sure we are far ahead of the others although admittedly we have our own challenges along the way.
6. How has been the transition from Traditional to modern management?
Ans: It hasn’t been easy admittedly but there have been pockets of resistance here and there as people dread to leave the comfort zone. If we are to be successful, there must be willingness to change, though change is not an easy undertaking.
7. How long have you been in management?
Ans: Well! I have been around quite a bit!Specifically, I have been in management circles since 1989. I have risen through the ranks and was executive officer but I am now the Executive Secretary or Chief Executive Officer (CEO) of the Hostels Board in Zambia.
8. What about in the Hotel industry how long have you worked there?
Ans: Like I mentioned, I have been in the hotel industry as far back as 1989 where I have most of my professional life.
9. How do you manage as a professional running a Government owned (Quasi - Government) business? I am sure there is a lot of political interference. I would be interested to know how you play the balancing act.
Ans: It is a very delicate exercise I must admit because every move, decision or act that you do is meticulously watched but I am pleased to let you know that we do not run like bureaucratic Government. In as much as we have some bureaucracy but Government has graciously allowed the Lodges to somewhat operate independently by and large. This has enabled the lodges to make significant headway because this is viewed as a strategic institution to the Government as well. A balance must be struck in relying on the Government and at the same time implementing modern management principles.
As for the balancing act that you mention, so far we have no problem emanating from political interference, in fact, the Government has been very supportive, desiring that the lodges improve and become self sustaining.
We have challenges in running the lodges one of them being the delayed payments which makes it difficult for us to raise the lodge standards where they can effectively compete with others in the same industry. However we have put some strategies in place to ensure we get where we want to go.
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10. How much interference from Government is there and how do you handle it?
Ans: An amount of interference is there but not so much and can be handled with some tact and wisdom by all of us. It is all about knowing who is who and what is at stake as well as how to respond. Strategic thinking is key.
11. Talking about survival of Hotel industry, just how do you survive, being a parastatal?
Ans: We have taken a number of steps to ensure we remain competitive. Here are some of them.The first is that we have embarked on rehabilitating all our lodges around the country, I am sure you have seen the Belvedere and Long acres lodges, these are master pieces. For lack of resources, we are doing this piecemeal and in stages as we generate resources as well as funding from Government. Since we are 100% Government owned, originally all the money generated used to go into Government Treasury. This brought its own dimensions and challenges. However, now the lodges have their own account which they use for operations and reinvestment. This is a very positive step in the right direction.
The second is to plan at National level but ‘Think local’. We take all the variables into consideration such as place, target market and so on then set our pricing.Our aim is to improve our service quality to world standards, if possible.
Therefore, in response to the survive question in the hotel industry, we must note that few lodges in our chain actually make losses at the moment (2004).In the event of a loss, other profit making entities offset that loss. Further, because of the Team work culture we have cultivated, it is paying dividends for us. In fact, we are actually making profits. 12. Hmmmm… this sounds good I am tempted to ask what place marketing takes in your
organization since it is quasi Government.
Ans: Marketing is important in this economic set up we find ourselves in. We have been aggressive and use personalized marketing to satisfy our customers. For instance, we know our clients’ birthdays, send cards when it comes around periodically call them and keep the lines “warm”. In addition, our staff ensure they master people’s names that have lodged with us before and that has a bonding effect and fosters loyalty.
13. How much of the market have you captured?
Ans: We can safely say that many people prefer lodges to hotels because they are far more ‘homely’ and for the moment, the lodges in Zambia collectively place it at about 65-70% of the lodge market while others hold the rest. We are correctly positioned for the moment and one hopes we can improve on that record. To capture market, many use different strategies
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but we focus more on quality because it is the best competitive weapon rather than price. Treat customers well, provide for them and I am sure they will come round again!
14. I note you use the word “Strategy” quite often, what is strategy to you and what does it mean? Ans: Strategy is the means of achieving your goals and objectives.
15. How do you apply it in your management skills?
Ans: Strategy cannot be applied once and then you forget about it. You must keep in mind what the competitor’s strategy is. Know how and when they are to apply their strategy and ensure you craft a better strategy that will outwit them. In other words, strategy should be kept fresh and organic so that it can remain relevant and effective as we know that competition is constantly rising. One such strategy that we have utilised in quality ensuring that everything that we do is as perfect as possible to more than please the customer.
16. Before I ask about TQM let me ask how your organization has used this weapon to survive the tough economic times in competition to other new industry entrants and other industry incumbents.
Ans: We have used it very effectively especially that we are a government entity. Our strategy is that they give a lifespan of assets by having a plan as well as lobbying for items we require in advance. In that way, we have beaten the bureaucracy and emerged victors in a ferociously competitive industry.
TQM! That concept entails having high quality throughout the organisation and tends to have a lot of advantages for the organisation that practices that. In the hospitality industry, one cannot evade quality because we just have to be the best at all times. At our lodges, we emphasize that every employee must put quality first in whatever they do because if we serve our customers well, then our business improves too. They will go out there and tell many others to come and lodge with us. We may not be TQM certified but we strive to be the best of the best among the lodges.
17. What is your strategy for survival?
Ans: Our survival plan is to always read the times and proactively respond before others do.
18. How do you motivate your staff?
Ans: It has not been easy at the lodges because the personal incomes are low but then, monitory
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gain is not the only motivator. To beat this, we make sure we recognise staff that are outstanding in their work as well as ensure that all members feel part and parcel of the organisational success.
19. I note you read a lot and have a lot of management concepts up your sleeve, can you recommend just one book for one to read so that they become as astute as you are?
Ans: I would definitely give you many titles but I highly recommend one...have you heard of or read a book called “The Seven Habits of Highly effective people” by Stephen Covey? Oh it is a marvellous book and deals with about everything any manager would like to know. It has impacted and changed my life a lot.
20. Does that explain the secret of your success.....?
Ans: It certainly has contributed! Covey brings out very important concepts such as having the end in mind as well as being proactive which concepts I have sought to integrate in my management. Every day before I start work, I sit still in my office chair and just relax while I think through issues. When I arise, I will have sorted out a lot of things. So, for sure, Covey has been a mentor and coach to me. 21. Finally, what have you studied and where? And what is the way forward for the
lodges?
Ans: I have studied some hotel management at NIPA as well as other studies in house. Lord willing, I hope to pursue further studies in future in the same discipline. As for the way forward, we would like to be the best, far mush better than we were yesterday. People always want to see innovators and as such, innovation is very vital for success. Secondly, we want to embrace change and be never content for the dynamic times in which live will not permit us to sit still. We must constantly be improving. This is the silver bullet to success. Thirdly, we want to embrace technology as fighting competitors is more than just having cash but mental. We need to be thinking all the time as we exploit cutting edge technology in the industry. Lastly, we want our customers to be able to book without being physically present. In other words, technology will help us as we install online book services. In that way, we shall get ahead of the pack and be a resounding success.
Thank you so much Mr Mwendafilumba for according me this special interview realising that you are a very busy executive.
You are very welcome and I wish you well! Watch us in the press as we make inroads!!!
Case study questions
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What do you think about the Hostels Board strategy?
Comment on Mr Dabson Mwendafilumba’s leadership and business acumen.
“A strategy is organic and not static” Discuss.
What one trait distinguishes the lodge chain across the country?
Do you think top management attitude towards impacts on quality effectiveness?
If Mr Mwendafilumba left the lodges, would they continue to succeed and improve? Give
reasons for your answer referring to the case study.
Revision exercise
Give a brief history of TQM and its early pioneers.
Why is it called the “Quality revolution”?
List the “big four” quality forerunners and what contribution they added to quality discourses.
Write brief notes about each of them as well as their significant contribution.
Why is‘Quality’ often referred to as the “silver bullet” in business circles?
What are ISO standards and why are they significant?
Comment on ISO 9000 & 14000. What do they focus on and how do they impact on project
management?
Explain how the use of standards has helped you in improving quality at your organisation.
List at least two organisations in your country that use ISO standards (or are certified) and which
standard(s) they use.
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Visit this site: http://www.miliken.com and state what awards this corporation has won and why.
Undertake an interview at one of the quality practicing institutions in your locality or country.
What is PRINCE2 and what is its significance to project management? Is it relevant to your
country? Give reasons for your answer.
Find the latest winning case on the Malcom Baldridge National quality award site
(http://www.quality.nist.gov) and draft a short report. Explain what made them/it stand out.
BibliographyBamberger Michael & Valadez Joseph, Monitoring and evaluating social programs in developing
countries: A hand books for policymakers, managers, and researchers, World Bank Institute
1994
Banking World Magazine, December 1989 issue
Boydell H. T, The identification of training needs, British Association for Commercial and
Industrial education, 1971
Burnes Bernard, Managing Change, FT Prentice Hall, 4th edition, 2004
Buttrick Robert, The interactive Project Work out, 2nd edition, Pearson education, 2000
Certo C Samuel & Peter J Paul, The Strategic Management Process, Auste Press/IRWIN, 1995
Henderson Gordon, “Quality is Key”, Banking World, December 1992 issue pp 26
http://.www.asq.org
http://www.corporate.titzcarlton.com/en/about/goldstandards.htm
http://www.prince2.com
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http://www.quality.nist.gov
http://www.spoce.com
http://wwwisixsigma.com
Husband J I, Labour administration, International Labour Office, 1980
ILO, Collective Bargaining, International Labour Office, 1960
ILO, Grievance Arbitration, International Labour Office, 1977
ILO, International Labour standards, IL Office 1978
Kakabadse Andrew & Analoui Farhad, Corporate Sabotage, Jaico Publishing House, 2004
Maylor Harvey, Project Management, 3rd edition, Pearson Education, 2003
Oakland John S, Total Quality Management, 3rd edition, London: England
Patton Quinn Michael, Qualitative Research & Evaluation methods, 3rd edition, Sage
publications, 2002
Peters J Thomas & Waterman H Robert Jr, In Search of Excellence, Warner books, 1984
Schroeder G Roger, Operations Management: Contemporary concepts and cases, 4th edition,
2008
Stevenson J William, Production/Operations Management, IRWIN, 5th edition, 1996
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Unit 3
Aim
The aim of this Unit is to enlighten the student on the nature and importance of quality in general
with a particular bias towards project management.
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The unit also aims at stirring the student to embed quality in all their business processes
throughout life.
Objectives
By the end of this module, the student should:
a. Define Total Quality Management (TQM)
b. Explain why quality is important for success
c. How quality can help in effective & efficient project management.
d. Explain why quality is cheaper though perceived expensive.
Quality, its essential nature and necessity
The world has witnessed an unprecedented improvement in quality output in the past many
decades. At one time, what mattered was mass production, assuming the customer would like
and purchase the product at whatever price it was pegged at but with the advent of the market
economy, capitalism and international business, leading to globalisation, the ball game has
radically changed with the customer emerging as the determinant of what sells and to some
extent what is produced. Today’s customer demands high quality and value for their money or
else they boycott the goods. Similarly, those that would sponsor a project or some particular
undertaking make much of what and how their money is being spent. They are meticulous and
will not fund a coin unless they are certain that they will get what they desire. Similarly, in large
production corporations, much attention is given to what is churned out because they are aware
of the dire consequences of producing the correct or saleable product. Share holders and others
key stake holders will not countenance a perceived needless waste of their resources which
ultimately impacts on their dividends and income. Given the above scenario as well as the
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importance of this concept, it is only fair and wise to consider it in detail so that we define
matters as well as be on the same page.
Quality, what it isIn almost every Operations Management book on the shelf today, one scarcely can escape
stumbling across the acronym “TQM”. The obvious focus is on the middle letter “Q” for quality
because it is perceived as the long sought after panacea for corporate and project success. It is
heralded as the silver bullet to success by many entities for several decades now. But what
exactly is TQM? For now, we do focus on the “Q” which, in our view is the defining element in
our study. What then is quality?
Simply defined, quality has to do with standards of doing something or functional effectiveness
of a product (i.e. in relation to product conformance & performance; Conformance +
Performance = Quality). This quality could be measurable or not but is a bench mark against
which all other products or services in that range will have to be weighed or measured against. In
other words, quality is the intrinsic worth of something that has been produced in tangible or
intangible form. For instance, when a guest arrives at the hotel, within a few seconds of touching
the reception, s/he must instantly be courteously attended to by someone at the counter and
within three minutes, the customer should know whether they book in and be on the way to their
room or heading to another hotel if bed space is not available. That three minute “Machine
cycle,” to use computer language, or lead time is what an ideal hotel should adhere to or scale if
they are to be considered high quality, assuming that is the set standard. Thus, to reach that
efficient level, the hotel must heavily invest in repeatedly training staff to achieve the desired
goal. Once well treated, the customer will tell a thousand others who will probably flock to the
said hotel. Quality has a rippling effect leading to exponential stupendous growth of some
entities while others sink and fizzle out of the industrial competition. Similarly, in project and
human resource management, how and when a project is executed speaks volumes to key
stakeholders especially the sponsors. Since a project has a definite life span and targets set from
the outset, the people monitoring will be giving ticks whenever something is achieved within the
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agreed time frame and a crucifix whenever the correct thing is done at the wrong time or not
done at all. All these small, small things matter and speak of the quality of implementers a
project has. Depending on the donor, the project may or may not be cancelled if certain
conditions are not adhered to. If worsening bureaucracy and red tape grips an organisation, then
expect the high achieving professionals to book the first flight out to the competitor company.
Internal customers (employees) also have aspirations, goals and desires which need to be
fulfilled and if that seems a far-fetched dream in their present positioning, they will either look
for a better paying job elsewhere or manoeuvre their way to another post within the organisation
thus positioning themselves to achieve their goals. If the latter proposition is not attainable, then
they leave, resign or start their own firm where they become their own boss.
Thus we have seen that whereas in the past, quality talk was nearly unheard of or treated as a “by
the way”, the world today has changed. Everyone is demanding quality and value for their
money consistent with the benefits they will derive from the product or service. As globalisation
continuously takes its toll on the world with cultures, tastes and perceptions clashing on the
international scene, there is need to produce high quality goods that will satisfy almost anyone on
this terrestrial ball. Gone are the days when what was deemed “good enough” for Zambia was
automatically perceived good for everyone. Times and tastes have changed, thanks to the all
pervasive and forceful electronic media that is fast helping to bring about a homogeneity of taste
and perceptions. What is viewed acceptable for a Muslim today is most like going to be for the
Hindu or Christian, but not necessarily in the past perhaps. This is largely because of the
relentless work of the marketer who works on peoples’ perceptions, attitudes, views and desires
as more information about the salient features of products are made known to all. They literary
bombard the mind. For instance, if someone bought a black and white TV today, their neighbour
would be surprised because there is something better, the colour TV! In fact, today, people have
moved on to the type and size of screen you have because colour is now basic! A plasma screen
is the talk of the times now and tomorrow, it will be something else. Thus, if a person purchases
a genuine Phillips TV set, their basic assumption is that it is of high quality with practically no
defect lest they send it back on warranty! Before we proceed to consider some TQM definitions
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in the next section, we quote some worthy authorities that have endeavoured to define quality
without making any comments:
“The ability of a product or service to meet customer needs” Render Barry & Heizer Jay,
Principles of Operations Management, pp 194
“Quality is meeting the customer requirements, and this is not restricted to functional
characteristics of the product or service. Reliability is the ability of the product or service to
continue to meet the customers’ requirements over time” Oakland & Porter, Cases in TQM, pp ix
“The totality of features and characteristics of a product or service that bears on its ability to
satisfy stated or implied needs” American Society for Quality www.asq.org
“Quality has dimensions of the facilitating good, tangible (explicit) service, and psychological
(implicit) service” Schroeder R, Operations Management, PP 150
“Meeting or exceeding customer requirements now and in future” Schroeder R, Operations
management, PP 147
From the above quoted definitions, it is very clear that there is hardly one concise definition.
However, certain parameters are common such as customer satisfaction, functional use and
reliability. We can thus coin a simple quality definition derived from the definitions above as
follows: “Quality is the sum total of all desirable traits in a given product or service fit for use,
and according to customer taste as well as desires” (Billy Sichone, 2009).
For purposes of this discussion, we focus on TQM which we now turn to define.
Some TQM definitionsQuality, yea, Total Quality Management (TQM) is a rather difficult concept to define in capsule
form. It is easier to observe and describe the effects rather than explain it in words. None the
less, it is essential to define as closely as possible what we are dealing with or are up against.
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Many have endeavoured to define TQM but we break it down into its constituent elements
before we construct one comprehensive definition.
The three elements are:
a. Total: this refers to the quality being all pervasive, covering the entire entity, throughout
the system processes. It is total in the sense that no part of the entity is left unaffected or
touched by quality.
b. Quality: These are standards set to which all products and services must adhere. Quality
connotes fitness for use and customer satisfaction or efficient functioning according to
agreed design and specification. Anything less than those bench marks is considered
below standard and therefore discarded. Thus, it means that these are minimum standards
which winning organisations must scale to reach higher heights and be differentiated
from the rest. Three traits are considered to constitute quality namely, conformance,
performance and satisfaction to customers.
c. Management: This has an allusion to the aspects bordering on harnessing resources to
reach their intended end. In this context, we are talking about managing this all pervasive
quality in such a way that the entity maximises on reaping the best results. The
management may include setting standards, indicators, benchmarks and parameters that
will indicate whether the project is on course or not, as the case may be.
From the forgoing, we note that quality must be managed and be all pervasive in the institutional
processes if any tangible dividends are going to be reaped. In other words, we can define TQM
as “that holistic and all pervasive high standard output of any process that ensures that the best
results are achieved in the most cost effective and efficient manner at the right time.”(Billy
Sichone 2009). We can further add that TQM is an ongoing and improving process not an end in
itself. It is a means to an end not an end in itself. The moment TQM becomes an end in itself,
that moment the quality standards plummet because innovation dies as well as slothfulness
creeps in. It is on going in the sense that quality is defined by customers whose tastes mutate
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over time and hence the need to change with the times. William Stevenson has defined it as “A
Philosophy that involves everyone in an organisation in the quest for quality, with customer
satisfaction as the driving force”5. This definition brings about the company wide aspect to
quality as driven by customer needs. Others, Oakland & Porter has defined it as being
“concerned very much with moving the focus of control from outside individuals to that
everyone is accountable for their own performance”6. Kotler & Keller have defined TQM as “an
organisation wide approach to continuously improving the quality of all the organisation’s
processes, products and services”7. Still another has simply defined it as “Total dedication to the
customer”8.
But then, we have to consider another definition given by the Wikipedia website which states the
following: “TQM is a business management strategy aimed at embedding awareness of quality in
all organisational processes. TQM has been widely used in manufacturing, education, call
centres, government, and service industries, as well as NASA space and science programs”
Perhaps the last and probably most comprehensive definition comes from the International
Organisation for Standardization (ISO) # 8402:1994. It is quoted at length below:
“TQM is a management approach for an organisation, centred on quality, based on the
participation of all its members and aiming at long-term success through customer satisfaction,
and benefits to all members of the organisation and to society.”
Clearly from the definition above, many of facets have been touched upon or implied that are
quality related. In the quest to establish and maintain uniformity, the ISO drew up this near
universal definition from which all other definitions are derived. Let us observe a few points
from the definition above:
5 Stevenson J William, Production/Operations Management, IRWIN, 1996 pp1016 Porter L & Oakland J, Cases in TQM, PPx7 Kotler and Keller, marketing Management, Pearson, 2009 pp 7908 Certo & Peter, The Strategic Management Process, 3rd edition pp 197
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Firstly, TQM is a management approach or way of doing something towards an intended end. It
is not a passing fad, craze or rootless wild theory but a pragmatic and workable path towards a
desired haven. In other words, it is a deliberately chosen way of doing something.
Secondly, this approach is centred around quality. Said differently, the centre pivot of this
management approach is quality which is all pervasive in the entire process or entity.
Thirdly, this approach is participative, all inclusive and consultative ensuring that the best
practices are identified, tested and adopted to get to the next level. In other words, no individual
has the monopoly of knowledge, truth or best practice but various people pool their ideas and
collectively settle on the best practice which they all wholeheartedly embrace and run with the
ball. This builds continuity and owning of the process. Top management should show
commitment and run with the ball, thus generating enthusiasm and interest in the organisation.
Fourthly, TQM is not a “quick fix” solution but a process aiming at the long term good of the
entity. As the processes are vigorously and rightly pursued and applied, the system is refined
ending up in the unique best practices which in themselves enhance and foster competitiveness
and high quality output. The moment an entity relies on a static TQM program, that day they
book a place in the corporate bone yard. In a ferociously competitive and mutating world,
dynamism and an organic strategy is of essence. TQM is a process rather than an event and must
be treated as such if to succeed. Always remember that TQM is a management strategy and thus
an approach towards an end.
Fifthly, the approach is somewhat a silver bullet to success provided the customer wants and
tastes are at the centre of all that is done. Thus, it is critical not only to treat the customer with
due care and attention but to ensure that they are in the driving seat, defining and determining
what should be done, when and where. Even in project management for instance, the major
customer is the sponsor or donor that would like to see qualitative results consistent with what
they envisaged from the start. TQM ensures that the customer is repeatedly and consistently
satisfied so that they develop product loyalty as well as woe many other would be clients and
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customers. The mass production “one size fits all” era in a sense misled the world for a season
because it was based on the premise that the customer would want to buy what the manufacturer
produced in bulk regardless of the quality or price but today, we know better, the customer has
power and is steering the ship to where they want. Any entity ignores the customer at their own
peril. In a bid to involve the customer, companies and projects are integrating partners,
stakeholders and customers themselves right from the conception and design stages to the final
product. In this way, only what the customer dictates is produced and thus saving millions of
valuable dollars producing a non saleable product.
Sixth and last component builds on the fifth in that having satisfied one customer, a myriad
others are which ultimately satisfies the society and community at large. Thus, a good TQM
program will ensure that all stakeholder concerns, fears, desires and wants are more than
adequately addressed and met. In the case of an intended project, the target community is walked
through the intentions from the scratch so that they not only buy into but identify their needs and
wants which they want addressed by the project. The easier option for the sponsors is to observe
a need from their desk and quickly mobilise resources, do a fantastic intervention (sometimes
minus an Environmental Impact Assessment- EIA) and have a white elephant after the project
phases out. Then the puzzle takes its rounds through the corridors of power who eventually
blame the community of being backward, laissez faire, indifferent, unappreciative or careless
when the problem was actually during the start up phases when the actual and real partners
(community) were left out and thus became spectators to the very end. This explains why
vandalism easily creeps in and preventive maintenance is a night mare in such communities. But
where all partners and stakeholders are appraised before, during and after the project, with their
full participation, they will most likely own and run with the ball long after the project phase out,
thus guaranteeing project sustainability even after close out. The reason is because in the latter
case, everyone felt the project was of benefit to them.
Having brought all those points defining TQM, we now attempt constructing a definition and
could be something like this: “TQM is the sum total of all organisation wide integrated
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approaches towards ensuring that quality is embedded in all the systems, hierarchies and
functionaries in the institution thereby ensuring that the best output is achieved.”
Thus, we have briefly dissected the ISO definition which is relevant to all aspects of the post
modern world. Since we engage in different projects from time to time, this definition ought to
be a good guide to setting our goals and standards for world class results.
Bases on which quality definitions rest
Quality, as we have noted has various definitions and leanings depending on who is defining it or
what they are looking at. Generally, quality definitions are based on three areas namely:
User based
Manufacturing based and,
Product based
Thus, if the user or customer is defining quality, they will emphasise some aspects such as
satisfaction while the manufacturer will concentrate on specification, fitness of use and
conformance. The Product based quality definer will look at attributes such as design, usefulness
and functionality of the product. Each of these have their own valid definition and thus, when
defining quality, it is critical to bear those facts in mind, bearing our target group in focus as we
develop, produce and market the product.
Quality, its necessity & benefitsThe question that begs answering at this stage is why the fuss about TQM, I mean, why bother
about this quality craze? The answers to this question are soon found for they are all littered
every where for all to see and recognise. For the purposes of our structured study, we collate all
these disjoint elements together in point form so that we consolidate our dossier. Without doubt,
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TQM is here to stay and in a sense unavoidable for the simple reason that we live in an ever
improving world which makes much about product standard quality. Some countries that were
once notorious for mediocre quality products have drastically changed and are now fostering the
quality crusade. Even China, with its varied quality goods in the same range is fast making
adjustments towards eliminating the poor quality strata products upholding only the top class.
This is positive for good business image and goodwill. Others however, are resolute to stick to
the same old, tried and tested obsolete standards and ancient paths that will not take anyone
anywhere, anymore!
That said, it is critical to state that quality being relatively perceived is a dynamic concept that
needs constant incubating and refining. The idea “microwave” concept is good because the ideas
can easily be defrosted and altered to suit the times, being malleable in nature. In response to the
million dollar question as to whether quality is necessary, we give an affirmative and resounding
YES! Quality is definitely of essence because of the reasons we advance below:
a. Fine results: If the project has been struggling to achieve high class results in the past and
an appropriate quality system is integrated into the current processes, it soon begins to
deliver the required results. Over time, the entity’s image improves thus attracting more
donors, sponsors or would be partners. One project the writer worked on struggled to get
certain processes right and was almost giving up when a particular staff joined the team
armed with a different but more effective approach. The new technique was tried with
phenomenal success. In another case, the project was having serious funding hiccups but
once the system was improved and competent staff hired, the scenario changed
completely in record time. Quality did the trick.
b. Timely results: Have you ever seen a project or any entity for that matter that repeatedly
succeeds from strength to strength and height to height? Have you wondered why some
individuals seem to fly in their own orbit and complete assignments in record time while
others lamentably fail? The answer probably lies in proper quality systems adopted. Such
individuals and systems ensure something is done correctly the first time while
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continuously improving on the existing systems. This author has worked in both timely
delivering as well as malfunctioning teams. The difference between these two is the
quality of the systems in place. While in the one, the product churned out is near perfect
as it goes to the world, in the other, repeat jobs are the order of the day.
c. Repeatedly satisfying customers & stakeholders: One secret that any entity has to
embrace and adopt is to keep customers happy and satisfied all the time. If for some
reason, they are displeased or feel neglected, they react in various ways. One of the many
ways is to simply withdraw and “invest” elsewhere hoping to get a better return for their
money. High quality systems ensure that stakeholder needs are noted and prioritised so
that they in turn not only repeatedly offer more support but successfully market the entity
to the outside world.
d. Marketing and lobbying tool: For a long time, the marketing function has not been
appreciated but as the world increasingly globalises, there is a near universal realisation
that marketing plays a critical role in building business, yea, multiplying effect on the
organisation. One of the hallmarks of marketing is superior quality to would be customers
which quality is defined by the person desiring it. They demand value for money. Thus, if
the entity places a high premium on quality, the expected output will most likely be good
& pleasing to the customer. Once repeatedly satisfied with the product or service, they
voluntarily tell ten others who eventually subscribe. If the opposite is true, then expect a
back lash. One of the best marketing tools to exploit today is consistent high quality
coupled by fitness of use. This eventually cuts down on the overheads as quality creates
demand for a long time to come.
e. In keeping with the globalising world trends. As earlier intimated, the global trends are
consistently and rapidly mutating implying that if an entity is to remain buoyant, let alone
be noticed, there is need to rapidly “pull up the socks” to the extent of outdoing rivals.
For instance, donor funding is no longer as obvious as it once was, it has to be “fought
for”! In other words, it is highly competitive and only the best bidder will win the tender
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or impress a would-be donor. It is no longer good enough to have an elaborate structure
or good internal control system, there is need to demonstrate that your products or
services are superior to other competitors, and this is only possible with the right quality
systems in place. Once again we assert, ignore quality at your own peril.
f. Fosters product differentiation and niche etching: Product differentiation has to do with
fashioning your product, although similar to others competing brands, different in little,
little things and features. A Niche on the other hand is a special curved out position that
distinguishes your product from the rest, making it practically inimitable. In project
management, branding is important as well to distinguish the project from the rest. In
other words, the project administered by your company must have a unique tag upon
them so that any would be sponsor immediately gets interested. Quality is once again the
key in the quest to achieve this goal.
g. Gives value for money: Quality is what makes people pay a premium for what they
perceive a good product or service. They will never pay an extra Ngwee for anything they
consider mediocre or below the expected standard. But if the quality is consistently good
and pleasing equal to the price paid, expect them to go a mile further because they are
receiving what they perceive as something worth their money, even if it is slightly more
expensive than ordinary. In project execution and management as well, if they are
impressed or believe in the processes and outcomes, their will stake their monies towards
that cause. Quality is that key ingredient that turns the wheels towards satisfaction land.
h. Eliminates defects: Good quality systems embedded throughout the organisation rather
than individual star performance is what ultimately counts, as advocated by Deming,
Juran and others. Phil Crosby especially championed the elimination of defects from the
systems so that only the best and desirable products come out at the end of the production
chain. He taught and advocated that it was better to be proactive rather than reactive to
products churned out. We can apply this same principle to other areas of management in
general for products or services. Half the time however, many non TQM compliant
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systems and projects do not take this seriously and would rather work on a return job.
This is common place in many public projects in Zambia such as road
rehabilitations/construction, structure renovations, borehole drilling among many. In the
long run, these repeat jobs are terribly costly and have a telling effect on the country or
project efficiency. If a zero defect policy and system was adopted and actualised from the
start, there would be marked progress and improvement in the country. Once again, a
high quality culture and practice does the trick.
i. Enables continuous improvement through lean and agile systems: To achieve maximum
efficiency and effectiveness, entities have to repeatedly re-engineer themselves. This
process may include many things such as structure reorganisation, job evaluation,
downsizing among many. These changes are constant in the face of an ever and rapidly
mutating global context. To remain relevant and above board, quality has to constantly be
enhanced. The bar must get higher each succeeding year as it were. The quest for higher
quality entails constant and consistent re-auditing how the system can be made better so
that the project becomes, agile, fluid, responsive, lean and relevant to the time. If a higher
quality culture is lacking, then expect contentment and mediocre standards to set in.
j. Cuts costs: A cursory view of the initial high expenditure when the quality systems are
introduced may seem astronomical and warrantless tempting the critical decision makers
to either ‘hijack’ or waylay the process. In other instances, as Brown and others have
demonstrated, simply pay lip service because the quality process is not priority as it is
perceived needlessly too expensive. Still in other cases, there is outright opposition to this
system as the pay back, akin to the Marketing function, is not immediately tangibly
visible. But the truth of the matter, as Juran and others have demonstrated, is that cheap it
is expensive in the long run while initially expensive qualitative initiatives are cheaper as
well as profitable in the long whole. The rationale is simply that the dividends drawn
from the high quality output are greater than from cheaper but lower quality initiatives.
Further, the initial cost once apportioned/spread over the entire project life turns out
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cheaper because there will be no or fewer return jobs, good will heightened and more job
contracts easily won.
k. Fosters efficiency/effectiveness: If the processes are right and good systems are securely
in place, then, expect good products churned out at the right time thus enhancing
efficiency as well as effectiveness. A faulty system makes the entity to repeatedly redo
the same thing when it would have progressed to do other equally important activities and
thus covered more ground. In projects where splendid and world class results have been
recorded, chances are that quality is an integral part of the operations and everything is in
sync for superior quality results. For instance, at NASA where several projects run
concurrently, chances are that they have the best quality systems in place, the best teams
as well as continuous Just in Time (JIT) systems exploited. That is why the safety record
and efficiency are some of the highest in the world, although other competitors are
currently emerging. Be that as it may, the people at the NASA projects work tirelessly
like beavers to beat their dead lines, despite the hurdles and challenges they meet along
the way. Similarly, we can safely assert that embedded quality systems and procedures
contribute significantly if taken with the right view, approach and support.
l. Corporate growth, market expansion and advancement: An organisation that means
business will do any and everything to ensure it gets ahead of the pack. In a similar sense,
a project desiring a contract renewal, extension or further funding will ensure its
deliverables are produced on time and of the highest standards. In that way, customers,
donors as well as other interested parties will not only vouch for them but eagerly support
them. As a consequence, there is marked improvement, fewer cash flow hiccups, more
development pace and well as heightened good will and loyalty. These positive traits give
birth to other benefits in due course.
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Implications and importance of qualityWe briefly list some perceived implications of quality generally because the previous section
has in a sense dealt with and explained some aspects of the implications:
Company reputation improved and exalted.
Product reliability as well as minimises liability.
Global implications (such as International profitability & Competitiveness)
Cost cutting and efficiency
Product loyalty fostered
Now that we have defined quality as relates to TQM, it is high time we transitioned to the
next unit where we delve into project and program management. Adjust your gears as we
move to higher ground!
Case study 1
BP Zambia, 1999
INTERVIEW WITH MR. PETER NJOBVU OF BP ZAMBIA ON
TQM AND PEOPLE MANAGEMENT
29.01.99, NDOLA.
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Introduction
An interview was carried out with Mr Peter Njobvu of BP Zambia on the 29.01.99 with a view
to find out the Total Quality Management (TQM) & People Management practices at BP and to
what extent TQM has permeated through the entire BP network. At the interview time, Mr
Njobvu held both the Association of Certified Chartered Accountants (ACCA) & the Chartered
Institute of Management Accountants (CIMA) qualifications and was the senior Depot Manager
in the northern part of Zambia. He has since relocated to Cape Town, South Africa to take up a
more senior and challenging job. By that token, he travels extensively in the BP network. During
his student days he was several times elected the best overall student world over and at one time
was the best Management Accountant in BP in the Southern Hemisphere. Peter is indeed an
international quality leader.
QUESTIONS
B. What, in your own words, is Management in general.
P. From the textbook? Management is basically about coordinating, controlling and directing
resources to a predetermined goal. So, it is the Marshalling of these resources towards a specific
goal put down in the budget. Apart from Marshalling, there is a lot more and more emphasis on
people management in these days.
B. What are the current management trends today?
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P. In the US, where individual performance is valued, there is a shift to try and unlock the
potential in the individual. The belief is that if you take care of an individual, then you will have
taken care of the results. This will mean that the care is both at work and beyond, ensuring that
the home conditions are made as comfortable as possible so that the worker does not spend time
thinking of how to survive but rather concentrates on one thing. This trend is coming in Zambia
though at a slow pace. In BP, we realize this and are at the forefront implementing modern
management practices that will motivate and unleash the hidden potential within a person. This
can be done in various ways such as rewarding, complementing or continuous training of staff so
that they can meet the challenges that lie in the way. As such, this builds capacity and greatly
motivates people so that they do their best.
B. Why the emphasis on people management?
P. Like I said, people are viewed as the most important asset of any organization and if they are
satisfied, they will improve in their output. This means taking care of both their welfare and
environment in which they operate. People say that these days, the buzzword is 'Team Work',
and this has been a buzzword for sometime now in the management circles and for a good
reason. They are saying that the original hierarchical structure is in efficient and must be broken
down to give way to a learning approach.
B. Do you think that Team Work is the best approach to management and why?
P. For a long time to come, we are yet to find a mode of management that is better than
teamwork because in a team setting, all the people are qualified with one leader who is basically
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a boss but does not come out as such but rather is a team player as well. In the Accounting firms
for example, all the members are qualified professionals so that none is above the other but as
they share ideas, the output is by far more and richer than if one person were to work. Teamwork
emphasizes the fact that people should be allowed to express themselves, brainstorm and bring
up all sorts of ideas. There is a belief that 100 lousy ideas are better than none. If you get ideas
from all sorts of people, including those on the floor, you will get great ideas.
B. What is your current job?
P. I am a Senior Depot Manager - north managing the northern operations though I do not
manage a deport here in Ndola, as such, I supervise depots in Mansa, Kasama, Mpika and many
other areas in the north. I also handle the public relations aspect as well.
B. That sounds like a lot of work, how do you manage?
P. I have a team under me, with whom I seat, plan, brainstorm and work out all things. I have
Engineers, Accountants and all sorts of staff under me.
B. Has the teamwork culture permeated into BP? How successful and applicable has it
been, if at all? (To what extent)
P. Teamwork is applicable to every organization and BP as an organization emphasizes so much
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on teamwork that when they are employing new staff, there will be an assessment on their
teamwork abilities. Teamwork hasn't been in Zambia a long time but in European countries, it
has been practiced for quite a while. In Africa, we still have a long way to go, as we still have
problems with it probably due to culture and background. And for that reason, teamwork doesn't
seem to be working too well. We still have a group on top that can't be touched while the
operatives in the middle to fix below are forced to receive commands. As a result you have a
culture where people will not accept correction or advice but busy to please the boss. As BP, we
are trying to discourage it. Various efforts have been made such as shared ideas to get the
methods of best practice. I have attended some in the region and they continue to take place, they
come up with really good ideas.
B. How do they respond to the Team/ TQM approach?
P. Very well although I sometimes have problems due to the hangovers people have from the
past. They always want to revert back to the past practices because they felt they have always
done the job in a particular way. The new methods seem to interfere and seem a bit more
difficult. It is extremely difficult to change them over a short period of time, but what I have
done positively is to occasionally go down on the work floor and find people in there natural
habitat and where possible, suggest ways of executing a process better. I am careful not to seem
to impose things by asking them "Don't you think it could be done better this way?" In that way,
I deliberately breakaway from the traditional box mentality where you impose your own ideas on
staff who, in the final analysis don’t own the process as a result. I go almost one and a half hours
every day to the shop floor to interact with people and in that way foster teamwork.
B. That's very nice, would you call it.... management by walking around.....?. How often do
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you do this?
P. Yes, if you like, it is very effective and I make sure that I go out on the shop floor for one and
a half hour everyday just to familiarize and acquaint myself with people who may ordinarily feel
uncomfortable to visit me at the office. Then we are dealing with people on a personal basis
rather than giving instructions from the top. In the end, this opens them up and you get better
results.
B. Now, although we have already alluded to it, what, in your own words, is TQM?
P. What I think is that TQM is the process of management where you affirm that our processes
and procedures guarantee almost that at the end of the chain or production line we are going to
be churning out high quality products, increasing performance and defects reduced to zero. The
emphasis of TQM is really on procedure upon procedure not an individual person. In other
words, other than finding out who went wrong, TQM emphasizes that we find out whether the
processes are correct. The system must ensure that no defect is introduced or allowed to exist.
B. What is the importance of TQM?
P. It ensures that there is no defect or redoing of something and thus cheaper.
B. Is TQM practiced in BP Zambia? What about in South Africa and Europe?
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P. In Zambia, we haven't really applied TQM, I think, to that level where we can say that we
have done it, although at our plant in Kitwe, we are running a system which more or less on the
lines of TQM, an ISO based system - International Standard Organisation (ISO 9003). What ISO
9003 basically deals with is that whatever you are doing must be documented in such a way that
if someone comes with no previous connection, they will be able to follow through without a
problem just by observing what you are doing, you should look it up and ask whether it is ok.
These processes are designed in such a way that at the end of the day they eliminate chances of
defect, ensuring that whatever is being churned out is an assured perfect product, with very little
or normal conformance to standards.
B. To what extent is it practiced in BP?
P. We are still trying to cultivate it into our system.
B. How long do you envision it will take root in Zambia?
P. It will take sometime in Zambia for it to reach international levels but we are determined to
foster its development, if we are to remain competitive.
B. Now, we are running short of time, but could you briefly tell us some of the hurdles you
have encountered in Implementing TQM?
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P. The problems are always on the attitude of people who think the procedures are just too long
and are tempted to use short cuts to achieve the same goals. The problems are basically attitudes.
B. What are the goals of BP in the coming years?
P. The company's immediate vision is as follows:
Financially, we hope to double the 1997 profits by the year 2002. But then in terms of quality
health and safety issues, BP wants to be like they say, "Our policy is to be friendly, cheap, high
quality and do no harm to people, no damage to the environment". So in terms of what we want
to do in health, safety and environment, there is the environment audit standard that we are
following. We are also going for another environment standard that is to do with environment
management from ISO, and as BP we are saying, we have to produce petroleum products that are
clean to the environment. Our motto is "Energy and Sustainable increase.
B. Finally, on a personal note, you have done both the ACCA and CIMA, which one of the
two emphasizes TQM more?
P. Objectively, CIMA leans towards management than ACCA and therefore by the same token,
you have more of TQM coming in CIMA, although both of them refer to TQM.
B. Thank you Peter, for giving me this interview despite the early hour I came.
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P. The pleasure was mine.
Case study questions
What do you think about BP’s quality initiatives and approaches?
What does the moto “Energy & Sustainable increase” suggest to you?
What does TQM focus on?
How important are ISO standards to BP as well as the environmental concerns?
Do you think BP is a safe haven for quality procedures (i.e. TQM)?
Do you think BP really cares about quality and the environment? Document from the case study.
Mr Peter Njobvu alludes to ISO 9003, what does this standard concentrate on?
In your own words, why has people management suddenly taken a centre stage in the recent
past/decades?
What is a “Buzz word” and how different is it from a fad?
Why haven’t traditional approaches to Management worked well as compared to the modern
trends?
Comment on Mr Njobvu’s leadership and management style.
Case study 2
Asahi Breweries, Ltd
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In 1949 when Dai Nippon broke up, it signalled a new era for the brewery industry in Japan in
that the once dominating giant snapped into two regional companies, Asahi in the west and
Sapporo in the east. This breakage, seemingly insignificant at the time, was a land mark because
it was perfect fertile ground for the Kirin company, once an under dog, to flourish as it remained
the only national player worth its salt.
The ensuing months and years saw Kirin emerge from oblivion to become a major player. This
was because the dismantled Nippon became regional and thus the two companies had to start all
over again establishing them selves as separate entities. This is the most difficult part in brand
establishment. Further more, Kirin was strategic in its approach as “it read the times”, and
moved with the trends in terms of marketing and customer approach. For another reason, the
Kirin brand was better placed and tasted better given the contemporary scene. Kirin’s brand was
of superb quality, which quality propelled Kirin to the top of the market. Product loyalty
naturally followed. In the third place, the lean companies also contributed further to this battering
as they made certain serious blunders. For example, Asahi made two near fatal mistakes by
firstly, allowing its distributors be used by another company-Suntory. This led to a situation
where the Asahi brand being laid aside in favour of the other brand. The second mistake was
their continued focus on a stagnant market. Over the years the market tastes and preferences had
been changing while the company remained insensitive, neither customer focused nor strategic in
approach. Rivals went ahead and made strides towards meeting customer desires by changing
products, packaging, new aggressive marketing methods and market/product research. These
innovations were taking place on the same customers, though in a different generation. In short,
the market remained stagnant while the Asahi market share slipped from minor to insignificant.
As the years rolled on, it was a matter of time, Asahi was on the on the way to the company
abattoir.
This gloomy picture thus far painted persisted for a years, all the while loudly proclaiming the
imminent Asahi demise. But just at the brink of death that is when things turned right round.
Asahi, under new management, made radical decisions which begun to steer the old ship back to
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safety again. The process was initially slow but certain. Fatally wounded, the organisation
needed drastic surgery to put it back on the rails. The Higuchi led management embarked on a
number of modern “Life saving measures” as follows. Firstly, the company carried out a self-
audit to find out the root causes for the decline. It was discovered that the company did not have
a specific goal or corporate strategy. This goal needs to be an internalised passion in every
employee. Granted, a company can do all the frantic manoeuvres under the sun but without a
strategy, all these efforts are wasted, if in the wrong direction. In a nutshell, there was need to do
a corporate identity, to trace clearly where the company had been, where it was and where it was
going. In what industry was it and what were the competitors like? In addition to writing a
mission statement, these were some of the questions that Asahi tackled before it begun to shake
off the death shackles that had stuck to the company “good will” like algae. This pivotal self-
introspection and retrospection was crucial in the turn around. The findings were that there was a
lot of bureaucracy, inflexibility, low morale, distrust, evil suspicions and neither initiative nor
risk was allowed. The “naked King” syndrome rested securely on the company’s laps. Having
established the pit falls, the company then went on to check the attitude towards customers as
well as the corporate agility. It was noted that Asahi had stuck to the old traditional tastes, values
and attitudes that had become obsolete. The beer taste for example had changed and needed to be
revisited. Furthermore, the company had not moved with the times to ensure that it was a
learning organisation, forever sensing the rapid taste changes in the environment. Although the
traditional brand name and logo were important, it was time to change these to fit the
contemporary tastes. The company made frantic efforts to conduct frequent market research so
that the company remained “on line” with trends. Also, the packaging and top quality products
had to be changed. In the end, the customer was king who called the “shots”. Having
implemented all these strategies, the giant begun to show some signs of life again! Asahi begun
to flex its muscles once more and moved to reclaim some of the lost market. As such, the Asahi
market share grew from 10% to 29%! This, by all standards is a feat! It was wrought by a new
strategy establishing a niche, which even the rivals found difficult to copy. Thanks to the
corporate identity and Total quality control exercises!
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Now the above “success story” seems to suggest that Asahi has arrived forever, nothing could be
further from the truth! The fact that it has begun to expand sales means more work, watchfulness,
and always reading the times. Quality must continue to be at the heart of the products. The
customer must set the pace and innovative aggressive marketing should continue. In our view,
Higuchi must increase company capacity, while remaining contemporary to meet customer
demands. Further innovations and brands must be launched knowing that rivals are busy etching
inroads into the beer market through new products, still believing that the Asahi brand was a
mere improvement to Kirin brand. In addition, product differentiation is crucial now more than
ever before.
Although the future for Asahi seems threatened, we have reason to be confident that given the
new management style and the continued efforts to ensure a competitively strategic position, we
have no fear that Asahi will be numbered among great revived giants, if not the greatest!
Source
Bower, Bartlett, Uyterhoeven, and Walter, Business Policy: Managing Strategic Processes, 8th
Edition, Richard D. Irwin
Case study questions
What are your general comments on the Asahi Breweries in relation to competitiveness?
What one thing or attribute accounts for the Kirin breweries success?
How did the breakup of the Dai Nippon affect the brewery competition?
What is a niche and how cut it be achieved?
Comment on the relevance of a self audit and how it contributes to a corporate entity’s
competiveness.
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What is product differentiation as relates to Asahi & Kirin breweries?
Revision exercise
What is Quality?
Why is TQM very important today?
In your own words, define TQM.
Does your organisation practice any TQM processes? If so, explain.
Whose responsibility is it to manage quality in an organisation?
In your opinion, which is best, to have a specific Quality Ministry or not? Justify your answer.
BibliographyBaker Susan, Sustainable Development, Routledge, 2006
Burnes Bernard, Managing Change, FT Prentice Hall, 4th edition, 2004
Buttrick Robert, The Project workout, Pearson Education, 2002
Campbell J David, Organisations and the Business Environment, Butterworth Heinemann, 1997
Crainer Stuart, The jack Welch Way, Magna Publishing co. Ltd, 2003
Dalal-Clayton Barry & Bass Stephen (compilers), Earthscan, Sustainable Development
Strategies: A resource book, 2007
Dessler Gary, Human Resource Management, 10th edition, Pearson/Prentice hall, 2005
Dresler Simon, The Principles of Sustainability, Earthscan, 2007
Flower Alan, Striking a balance, Earthscan, 2000105 Quality quest
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Higgins C Robert, Analysis for Financial Management, 5th edition, Irwin McGraw-Hill, 1998
http://www.asq.org, proceed to the “learn about quality” section of this site.
Krames A Jeffrey, The Welch way: 24 lessons from the world’s greatest CEO, TATA McGraw-
Hill Publishing company, 2002
Krames A Jeffrey, The Welch Way: 24 lessons from the world’s greatest CEO, TAT McGraw-
Hill, 2002
Kubr M (editor), Management Consulting, International Labour office, 1980
Maylor Harvey, project Management, 3rd edition, Pearson Education, 2003
Njobvu Peter, TQM interview, tape, 1999, Billy Sichone
Oakland S John & Porter Leslie, Cases in Total Quality Management, Butterworth Heinemann,
1994
Owen A Lewis & Pickering T Kevin, An introduction to Global environmental issues,
Routledge, 1995
Peters J Thomas & Waterman H Robert, In search of Excellence, Warner books, 1984
Render Barry & Heizer Jay, Principles of operations Management, Pearson/Prentice Hall, 6th
edition, 2006
Schroeder G Roger, Operations Management: Contemporary concepts and cases, McGraw Hill,
International edition, 2008
Silbiger Steven, The 10-day MBA, Magna Publishing co. Ltd, 1999
Steger B Manfred, Globalisation: A very short introduction, Oxford University Press, 2003
Steyn Johan, Project management (workshop notes/hand out), Marcus Evans, 2002
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Unit 4
Aim
The aim of this unit is to introduce and explain the project cycle giving a clearer understanding
of the processes/stages of a project
Objectives
By the end of this unit the student should:
1. Have an intelligent grasp and appreciation of the logical framework as relates to the
project cycle.
2. Know about other project quality enhancing techniques.
3. Be able to explain the project cycle
4. Know the roles of various stakeholders and project staff.
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Quality as relates to project management
Projects and programs have been around for a long time now. A scan into their development
will reveal among many things that projects have been perceived as better placed to deliver the
desired results in a given time frame. This realistic time frame takes into account so many factors
so that the project, once operational will progress towards a desired end. As you have probably
correctly concluded, projects have certain traits that make them unique in the sense that they are
specific in answer to a specific problem or felt need. In commercial entities, projects are usually
set up to sort out a bugging problem, increase efficiency or develop new products or services.
These manoeuvres in the long run pay back dividends tenfold as time rolls on. In addition,
projects have specific plans and direction facilitated by a competent team that feverishly works
away like beavers to achieve the desired goal(s). In this unit, we focus on the project rather than
the program as this shall be dealt with in a later unit. For now, we consider the project cycle and
what is involved in running a project.
The Project cycleA project by definition is a specific undertaking that seeks to address a particular need or
problem in a given context, the context being a community, organisation or domestic setting.
William Stevenson defines a project as “unique, one-time operations designed to accomplish a
specific set of objectives in a limited time frame”9. Yet other authorities, have defined it as “any
non-repetitive activity, a low-volume, high variety activity, a temporary endeavour undertaken to
create a unique product or service (PMI 2000), any activity with a start and a finish, a unique set
of co-ordinated activities, with definite starting and finishing points, undertaken by any
individual or organisation to meet specific performance objectives within defined schedule, cost
and performance parameters (BS 6079:2000)”10 among many others on the project definition
market today. Perhaps an example will do. Suppose there is a nagging problem in Mpika which
is malnutrition standing at 66.5%. (2006), a specific project tailored to deal with this problem
could be set up for a period to handle this matter so that the malnutrition prevalence significantly 9 Stevenson William, Production/Operations Management, IRWIN, 1996 pp 75810 Maylor Harvey, Project Management, 3rd edition, Pearson education, pp4
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reduces from say 67 to 35% in a five year period. To achieve this, the project must have clear
goals from the beginning (Year A) to the end in year X when the project phases out. The second
thing that is clear about a project is that it has specific targets and goals that have to be met in an
agreed time frame. Part of these targets could include assessing the projects’ viability (feasibility
study) and necessity, stakeholder engagement, staff recruitment & hiring, office set up, asset
procurement, project design, implementation, monitoring, evaluation reflection and transition.
All these issues should be set in concrete from the start. The first phase in the project cycle
tackles the initial project steps such as undertaking an assessment, which may include an initial
idea or concept. Apart from the concept to or from a potential sponsor, at this stage, the project
undertakes several activities which are incognito as well as stakeholder engagement to establish
the actual problem and what the partner perceptions are over their perceived own problem/felt
need. This stage determines whether the project is relevant or not. The second stage is basically
about documentation and analysis of findings as well as disseminating the results to all stake
holders in order for project planning purposes. Having confirmed the necessity of the project, the
right staff cadre are hired chief of them being the Project Manager and Accountant, apart from
procuring the project inputs. The third stage means that the project is designed as well as planned
and activities carefully laid down in consultation with stakeholders according to their priotised
interventions. The next stage now involves the actual implementation stage that may run for
several years. During that period, monitoring goes on throughout ensuring that the project is on
target. Periodically, independent evaluations take place to determine the outcome of all the
activities. Towards the end of the project, with funding diminishing and projects closing, a
comprehensive end of project evaluation takes place to find out whether the goals have been
achieved or not. Depending on the project agreements at the time resulting from the evaluation
findings, the project may be extended, renewed (redesign) or closed. This is the transition stage
and in the event of closure may include final asset transfer to partners, account closures, staff
scale down and ultimately departure. To understand the processes above, we proceed to consider
each stage in detail. But before we proceed, it is worth mentioning that depending on the nature
of the organisation, established entities periodically have projects with a specific mandate and
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goal while the larger organisation relentlessly pursues the corporate goal & strategy. Projects
come and go. For now, we consider the project stages.
A) Assessment stage
When a sponsor elects to fund a project (concept) with a specific focus, they usually have an
agenda or want to respond to a perceived need. This perception, although in good faith, may not
actually represent the actual felt need or problem on the ground. To establish the real root cause
and properly define a development project, some form of assessment involving key stake holders
takes place. In the case of other projects such as a dam construction, a feasibility study takes
place prior to the project implementation commencement. This may include an Environmental
Impact Assessment (EIA), partner mobilisation and other critical processes. Depending on the
outcome of the preliminary feasibility studies, the project may or may not proceed. In the case of
development projects, this is the first and most critical stage because the sponsors and potential
implementers do not know whether the project is relevant and will yield the necessary results.
We give a stage by stage process in the subsequent paragraphs:
Before any survey is undertaken, a concept paper suggesting the need of a project is drafted by
either the potential sponsor or implementer. This concept paper is a form of proposal is a
summary which highlights a problem and suggestion solution. It has several sections that include
a narrative and financial section. The budget is minimal at this stage as it is supposed to be in
‘seed phase’. If the sponsors agree to go ahead with the concept or idea, then the real work
begins though in low key avoiding to curiosity or raise unwarranted expectations. Here is a brief
breakdown of the initial feasibility study session:
a. 3 ‘L’ survey. This is the first stage of the assessment apart from the initial contacts within
the organisation. The assessors first take an incognito tour of proposed potential project
are and undertake a quick scan observing distinct & important features such as the
topography, landmarks, key places (e.g. Post office, Municipal administrative offices,
Church etc), local customs, practices and languages. At this stage, no one in that
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particular locality is aware that some people are observing and taking note of what they
see and learn. As earlier intimated, the three things the assessors do is to LOOK around
and take note of significant features and land marks of that locality such as the Market
place, the Post office, the stadium or church as the case may be. They sketch maps of
what they see as well as the perceived socio-economic issues of that place. The second
thing that they do is to LISTEN to what people in that place are saying. This can be done
by visiting public places like markets, stadiums, church gatherings or any passers by
without stating their mission or raising curiosity. They also note dominant values,
customs and languages of that place that may impact on the project implementation. The
last thing they do before departure is to LEARN from the local scenario. They learn all
sorts of things from an obscure standpoint such as the local customs, value, language,
staple food among many things. Having completed this three to four day “study tour” the
assessors retire to their place of origin and write short reports of what their perceptions
were and what they thought might be the felt needs in that particular locality. This
consolidated report is presented to the sponsors who evaluate the findings and decide
whether to proceed or not.
b. The second stage in the assessment is to regroup and then formulate questionnaires
(information collection tools or approaches) for stakeholder engagement. This may take
many different methods but the bottom line is to touch base with key people to establish
rapport and get basic demographic data that would be handy to planning. Among those
engaged could be Members of Parliament (MP), Government heads and religious leaders
among many. The administered questionnaires or focus group discussions are designed to
capture key secondary data that gives some profile about the area. This is a critical stage
but still the assessors have not fully decided whether the project should proceed.
c. The third and final key stage in the assessment is to conduct an appraisal with the
targeted beneficiaries. If the project is in the rural area, the appraisal is called a
‘Participatory Rural Appraisal’ or “PRA” for short. In this session, a three or so days
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meeting is convened with all partners and stakeholders together to do various activities.
Part of those activities will be focus group discussions, problem identification as well as
prioritising the needs in order of preference and importance.
d. Having completed the PRA, a report is drafted and disseminated to interested parties.
This closes the assessment stage leading to the next.
B) Design stage
The design stage commences on the premise that the sponsors have approved the project and
ready to progress with the subsequent processes. This stage has at least two processes namely
1. The Transformational Development Indicator (TDI) stage. During this phase, the team
builds on the findings in the assessment phase because this is a more structured and
technical stage where various stakeholders are taken on board. Basically, the TDI aims at
collecting secondary and primary demographic data, analysing the data found and
drafting a report with suggested indicators as well as what project(s) to undertake to sort
out a problem. This analytical report has graphs, sketch maps, pictures, tables and any
relevant information related to the intended project.
2. Having done the TDI, it is now time to draft a Provisional Design Document (PDD). This
document is the summary of all the findings from the previous stages in a logical and
semi permanent fashion. To compile this document, a series of meetings are conducted
with partners and stake holders where a number of processes are done to confirm earlier
responses. For instance, the stakeholders are asked again to identify their felt needs and
prioritise them. They are also facilitated to identify the root causes as well as effects of
their problems. This is done using the problem and objective trees (although some
critique these as only problem rather than intervention or activity focused). In this way,
the problem root causes are identified and targeted for action in the implementation stage.
At times, “short cut” projects deal with the effects rather than the problem root causes
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leading to recurring problems. The project(s) is given some shape upon which later stages
will build. This PDD report is disseminated to interested parties who make their
comments for improvement and then wait for the next phase. At the TDI and PDD stage,
if the logical frame work approach is chosen, the logical frame work and Detailed
Implementation plans are introduced. We consider these in subsequent sections.
3. From the PDD, the project now enters the Baseline survey stage where all the basic
parameters are set in place. The usual path is to use appropriate sampling methods as well
as the questionnaire method targeted at different stakeholders and findings captures in a
soft ware package for analysis later. Packages such as SPSS or Epi Info come in handy
because they are used to capture and analyse a lot of information which is later
interpreted and a report churned out. This is a very laborious and involving stage
although very sensitively critical.
4. The final part of the design stage is now to properly design the project inputting all
relevant information such as indicators, assumptions, M & E plan, budget and project
goal. This then is the final document that defines the path to be taken and what project
structure will be used. The sponsors consider this document and if they approve, then the
project is ready to kick start.
In good programming, this whole process should take about a year and a half.
But before we proceed, let us digress a little to explain some important terms and processes
because they have a bearing on what quality the project will pursue in its implementation.
The logical frame work
For any project to effectively and progressively attain its goals in a smart way, one of the tools
used is the logic frame work or “logframe” or as popularly known in programming circles.
Basically, the logframe is an expression of the project intentions arranged in a logical fashion so
that any one either implementing or evaluating can easily catch the ropes and get to work.
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Different approaches to logframes has been used by different organisations but in this section,
we present a basic “4 X4” logframe which is in essence a “4 X 4” matrix in the sense that the
frame is composed of 4 columns flanked by 4 rows for each project. It is worth mentioning at
this stage that the Logframe is a summary of the project which one can determine whether the project
will succeed or not. It is the “core” or heart of the project. The table below illustrates what a logframe
looks like and follow it up with some notes to that effect.
Objectives Verifiable
indicator
Means of
verification
Assumptions/risks
Project
Goal/Purpose
Outcome
Output
Activity
As earlier intimated, the Log frame is a tool that logically presents project direction and how this
is to be achieved. To understand this frame work, a few preliminary statements would be handy
and shed light:
a. The rows are made up of the Project goal, outcome, output and activities. Some even add
a fifth row which takes into account the inputs. This is called the ‘hierarchy of objectives’
and different organisations use different logic frameworks.
b. The columns represent the objectives, objectively verifiable indicators (OVI), means of
verifications (or Source of Verification) and finally, the assumptions/risks that affect the
project.
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c. This box matrix entails that the rows and columns intersect to highlight some activity or
output. In other words, for the outcome to be seen (row), the right indicator (column)
must be in place. These must be in sync and make sense.
d. Outcomes and outputs have indicators while activities and Purposes do not, although
some argue to the contrary.
e. There should be horizontal and vertical logic (see fig below).
Goal
Outcome
Output
Vertical logic
Horizontal logic
f. The assumption holds should there be an “If...Then...” logic to the next level of the
hierarchy of objectives. For instance, “if 10 farmers are trained in organic farming
(output) assuming the inputs are available on time every year (assumption), then farmers
consistently stock ready seed for subsequent season readily accessible to other farmers
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(outcome). In this example, the assumption holds because it leads to the next hierarchy of
objectives.
Having made the statements, we proceed to consider each line in detail as given below:
Goal (or Purpose)
This is the desired haven or destiny of any project. In another sense, it can be said to be the
dream or ideal. In other words, the whole project is centred around this goal which is the
justification for its existence otherwise all is a waste of resources. A proper goal has certain
characteristics which make it SMART meaning the project goal or purpose as some prefer to call
it must be:
Specific: Must be directed at something and clear.
Measurable: Must be able to measure change.
Achievable/attainable: Must be feasible in the given time frame.
Realistic: Must make reasonable sense and down to earth.
Time bound: Must be accomplishable in the agreed time frame.
In other words, a goal must be good, target oriented and “completeable” within a given time
frame. A project goal would read something like this:
“To contribute to improved quality of life through reducing of the impact of HIV & AIDS in
Katamo district by the end of 2018”
From this goal, we note that the HIV & AIDS project is to contribute to what others (e.g.
Government, NGOs etc) already are doing in the improving the overall quality of life for people
in Katamo district. How is this to be achieved? By reducing or mitigating the pandemic impact
(via several cumulative and complementary interventions) in a given time frame (time
boundary). This goal phrasing could be improved upon (by for example stating the reduction rate
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of prevalence from X% to Y%)but suffice it to say that it has the realism, specificity (HIV &
AIDS), measurability, time frame and achievability assuming other actors faithfully do their part.
Outcome
An outcome is the lasting impact or result that eventually results as a consequence of a series of
planned cumulative activities. At this stage, the impact is evidently clear and we can begin to
determine whether the project has been successful or not. If a strategy has been good and
successful, then the outcome is sustained stupendous exponential organizational growth profit
wise. If the strategy has been faulty, then the outcome will be weak and not anything to write
home about. Stake holders, especially the sponsor require reports at this level especially at
project phase out stage. One of the indicators of an outcome in development project is the
observed permanent behaviour change as a result of a cumulative effect of activities in the
people the project has been working amongst. An outcome is usually evidenced by a behaviour
change or practice on the target group. Others call it a ‘lasting change’ the absence of which
indicates that the outcome has not been achieved.
Output
When an activity has been carried out, the immediate end result is known as an output, almost
synonymous to what you get at the end of a production process. The raw materials you put in at
the beginning of the production are called inputs which are processed to give a product at the end
of the chain called an output. That output in and of itself may not have value unless some value
is added to it or made manifest to would be interested parties who then create a demand. In
similar lines, once an activity has been undertaken, we get immediate results which often are in
statistical form e.g. “10 Teachers sensitized in Adventure unlimited” Many projects report at
output level but sponsors usually are interested reports at outcome level i.e. the impact recorded
as a result of the intervention.
Activities
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Activities are the actual individual line items and interventions that the project undertakes in
order to contribute to the ultimate goal. These activities are the lowest in the logframe matrix in
the sense that they are the first step in the implementation process. Throughout its lifespan, a
project will be engaged in calculated activity after activity until phase out when it is assumed that
the cumulative effect of these interventions will deliver the outcome. Said differently, activities
are the tangible steps taken during the implementation stages of the pre-planned interventions in
a logical fashion to achieve the target goals. The first activity builds in to the next which builds
into the next until the bigger picture shows impact. Note that an activity may be one or many all
targeted at reaching a goal. For instance, training 10 community members in Home Based Care
(HBC) is an activity which builds into the broader goal of a resilient HBC system in the district.
Other activities may include a youth sports tournament, Malaria committee set up and leadership
training workshop. The list is endless. We can safely say that an activity is an event that takes
place in the spur of the moment whose final impact may not be seen immediately apart from the
statistic that an activity has been done.
Inputs
These are simply all the parameters or resources that a project will need to successfully
implement a given project. Ideally, before the implementation of the project, or indeed an
activity, the inputs must be clearly known (i.e. identified), tabulated and sourced in advance so
that the undertaking commences without much ado. For instance, if the project area is in a far
flung area from the administrative office, it may be prudent to include a project vehicle as one of
the inputs, although it is in asset form. We can mildly classify it as “transport” if we cannot
afford a one off purchase of a project vehicle. As for an activity, a list of inputs such as markers,
flip chart, projector, computer, resource persons etc may be some of the inputs that are essential
to holding a successful workshop or training. Half the time, project facilitators are weak on this
area and only react when it is too late and thus achieve an average impact on their target group.
Resource mobilisation is a critical skill to effective and efficient mobilisation. That is why a
Detailed Implementation Plan (DIP) is superior to the Annual Operation Plan (AOP) because the
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DIP tabulates all the inputs from inception and only retrieved from “the archives” with minor
modifications. The author repeatedly appreciated this when he worked on a grant once.
Now that we have briefly considered the horizontal rows (dubbed the hierarchy of objective), to
complete the picture, we look at the column in a similar fashion:
Objectives
An objective alludes to the desired results of a program or project expressed in generic terms. In
other words, it is linked to the goal except that it breaks down these desired ends in palatable
statements that generally show what a project intends to achieve in a given time frame.
Objectives can be at different levels (i.e. at Outcome & output level, though some suggest at
project and program level as well) in the logical frame but suffice it to say that they state
generally the desired results. In a project for instance, an objective at outcome level can be stated
something like this: “Reduced HIV prevalence rates and related infections in Kawale and
Shantumbu area.”
Objectively Verifiable Indicator (OVI)
An indicator is a sign that shows whether something has or is happening. With respect to project
management, an indicator is a parameter used to tell whether some movement or progress is
being observed in a specific direction. Further, we can add that this indicator must be
“verifiable” in quantifiable terms as well as be as objective as possible. No outside influence or
force should blur the indicator. For instance, if you want to determine whether the number of
nurses has increased in the district in the past two years, you need to establish a baseline from
which you measure any changes. In other words, project indicators are statements that are used
to observe changes in a given context and time frame. Any example of an indicator would be
“Number (or %) of community members tested positive and cases of HIV
related infection”
Means of verification (or Source of verification)
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When a project is in motion, a lot of information and experiences are generated and need to be
documented so that anyone who has no previous connection to the said project can simply read
the available information and have an idea of what the project is about and what it has actually
done. We would further state that whatever processes that the project goes through must be
documented and available for verification by others. In part, TQM centres around documentation
of processes which are used either for instruction or derive best practices. In the log frame
context, the “means” are parameters that can be summoned to verify claims of project staff or
partners and these are several such as surveys, evaluations etc. Some however have disputed that
project reports cannot be used as ‘means of verification’, probably because they are considered
as sources rather than means. Examples of sources are evaluation reports and project reports. But
others argue to the contrary. Be that as it may, the means of verification must have integrity, be
reliable and objective.
Assumptions/risks
Assumptions are those parameters that are assumed to be in place if the project will be a success
and attain next level results. In other words, these are significant factors that influence the
outcome of the interventions and can hinder or foster project progress. An assumption becomes a
“killer” when there is a remote probability of it happening and were to happen would effectively
kill the project. Others sometimes call these as risks because they are somewhat beyond the
control of the project. Akin to threats in SWOT analysis, these risks have a potential of
impacting negatively on the project outcome, sometimes even killing the project altogether. The
said risks or assumptions must be real and make sense. A good example of an assumption would
be availability of all partners at all implementation stages. This may be an acceptable assumption
but subject to debate because one may dispute saying that partners should have committed
themselves to the project during the start up phase and thus the question of availability may not
arise but should they ‘boycott’, the project is likely to fail. A risk would be drought but an
assumption may be availability of normal rains to reap an intended bumper harvest. There are
many sides to this coin but ensure you formulate an appropriate and realistic assumption.
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But note that this whole phase is collectively placed under “planning stage” in the PRINCE2
arrangement.
So much then for the planning and design stage, we hurtle along to a consideration of the critical
implementation phase.
C) Implementation stage
Once the project document and proposal are approved, the next is to begin the project execution
once the funds become available. Implementation simply means putting into action or motion the
things that have been pre-planned. This implementation goes on throughout the remainder of the
project life and only grinds to a halt once the project is closed. During implementation stage, a
lot of activities will be carried out with a view to contribute towards the project goal. The first
steps in the implementation phase is to recruit and hire relevant staff, set up office, mobilise
resources, open bank accounts, install accounting systems for financial management among
many. The first to be hired will be the Project Manager and Accountant who spearhead the office
set up. This staff cadre’s mission and mandate is to ensure the project roll out is on course and
activity execution is dead on target as outlined in the Gantt chart or implementation schedule.
We zero in briefly on the Project Manager before we consider other key staff.
A Project Manager in the person that leads the project implementation who by and large charts
the course, having read, interpreted and internalised the project documents and determined which
direction to take. The Project Manager manages the processes in keeping with the set standards
and has the responsibility to ensure s/he facilitates the implementation process towards a
successful end. In other words, the buck stops with the manager who should have the necessary
skills and competencies to catalyse the project process towards a desired haven. Some of these
qualities are listed below against which every Project Manager aspirant should gauge
themselves.
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Qualities of a Project Managera. Multi tasking
The astute manager of the 21st century must be one of many parts, meaning they must be able to
competently handle different issues simultaneously. It is not enough to have the right credentials
but there must be much more, which results in high quality output at the correct time. One of gets
confused, disoriented or stuck at the slightest introduction of a thing in addition to what they
ordinarily do is not fit to be manager. Granted, we cannot know everything but have to learn the
ropes, the post modern manager has an inquisitive mind ready to learn or take on fresh
challenges. More than that, s/he is able to do several tasks without much ado. This trait is
especially handy in program management.
b. Logical and systems thinker
The ideal project manager is able to think through issues long before any action is taken as well
as understand how or why an adopted system functions as it does. In that way, s/he is
intelligently able to fashion the best avenues to achieve a targeted goal.
c. Implementation intelligence (II)
This calls for several traits by the manager to be successful. For fact that a project has correct
funding, a great team and is timely is no guarantee that all is well. The Team leaders needs an
extra sense to discern what is going on and what needs to be done at the right time. For instance,
the manager needs to know the implications of exchange rate fluctuations on the
d. Good financial management skills
The Project Manager is the chief implementer of all project activities and must thus be well
versed with all aspects relating to implementation. One critical function s/he must
competently handle is the issue of finance. Although they may not be experts in all financial
intricacies, there should be an intelligent appreciation of how finances are managed and
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accounted for. More than cash only, the manager must be able to understand financial
systems, internal controls, budgeting and control among many competencies. Thus, no
manager must plead ignorance or fail to interpret a financial report.
e. Exceptional people management and team playing prowess
As Managers interact with people of different complexes, there is need to have that HR and
leadership touch that enables the manager to relate well with, motivate, build and encourage
staff. In other words, s/he must be a team player, play maker and coach at the same time.
f. Knowledge of the local cues, norms, values & culture
Different contexts demand different calibre of staff. In one area, people may not mind from
where a manager hails while in another context, they may be very particular. In other cases, it
may not even be some one’s back ground but their functionality, willingness to learn local
customs as well as adapt. In that way, they can successfully and winsomely worm their way
through society and excel. It pays to know the local values and customs as this helps in
critical times.
g. Good operations and programming competencies
This is a non negotiable trait which every manager worth their salt must possess. The ability
to organise, mobilise and set things in motion is a skill and art that people perfect over time.
Best performing and effective managers know when to do what and how. This calls for more
than just academic qualification but skill and competence.
h. Objective and action oriented
One needs to keep their heads in all situations and make the best decisions which they would
never be ashamed about years later of having taken. Circumstantial pressures may force
wrong decisions which some live to regret later. Thus, the manager must be sufficiently level
headed, mature and focused.
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i. Task and goal oriented
One mark of a top scoring manager is their ability to relentlessly work hard until the work is
done. They will not leave any stone unturned nor leave anything to chance because they
would like to see results. Once they take on a task, they will not put their tool down for
anything until the goal is reached.
j. Playmaker and professional
As earlier alluded to, the manager is the central key figure in the project that determines the
pace, mood and direction. If they are egocentric, recluse, risk averse and “commando like”,
the project is sure to fail. The reason is that the team will be dysfunctional and remain a
group rather than a team in the truest sense of the word. Positively, the manager acts like a
midfielder, a distributor and catalyst to the team dynamics. Additionally, the manager is both
professional, objective and issue based rather than wasting time in endless personal
squabbles and tussles.
k. Great leadership skills
Closely connected to (j) above, the manager should have well developed or developing
leadership skills. Leadership is not formal position but influence and an ability to motivate,
infuse hope as well as bring about a “can do’ attitude in the team members.
l. Innovative and creative
At times, the project cycle may be disturbed by some unforeseen challenges such as budget
cuts, economic down turn, political interference, delayed funding and a whole host of
problems. The post modern manager will not sit still and complain all day but will quickly
engage their creative and innovative powers to achieve the same goal but with fewer means.
m. Broad, deep strategic thinker and planner
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The manager is the torch bearer and vision carrier of the project and must at all times engage
in long range thinking, proactively handling matters long before they become emergencies.
Half the time, many wait until they hit a snag along the way and begin reacting. Not so the
astute manager, s/he is far smarter and prepares for the rainy day ahead. Strategic thinking
includes being well informed, avid reading, application of knowledge as well as being able to
mobilise resources from different sources to forestall any future crunch. For instance, the
strategic eye foresaw the 2009 global economic meltdown as well as its implications on
project implementation.
n. Ever learning posture
Increasingly as the world gets global in outlook, there is need to acquire as much exposure as
possible. This means getting a fresh skill set ever so often so that you remain relevant and
competent. But then, the manager also needs hands on experience as well as an open mindset
that is willing to learn from anybody, whether superior or junior. The power distance
between supervisor and supervised kills many a manager. In the post modern era, there is
need to change approach lest you turn into a pillar of salt.
o. Attention to detail, meticulous and focused
Lawyers make much about detail and so do Accountants. But the manager must also mind
much about detail and give it its due. They must for instance be keen to read reports, analyse
before signing anything and acquire an eagle’s eye that is able not only to pick things from
afar but be able to read between the lines. Hurry and negligence have slain their thousands.
p. Emotionally stable and mature
The manager should be mature, level headed and emotionally stable, able to control their
emotions. This is important because half the time, people mistake intelligence and education
for maturity. Age sometimes passes for maturity but this is not necessary the case although
one would expect this to the norm. Furthermore, emotional stability is critical because some
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managers shout at their staff and demean them as though they were non entities without
brains. Other managers throw tantrums when provoked and will not respond to anyone until a
week later when they have sufficiently cooled down. This ought not to be.
q. Team building and management skills
The last trait has already been alluded to or dealt with in the earlier points so we simply say
that a manager replicates him or herself by building others who turn out to be a winning
team. Not only do managers motivate, they also have a very steady hand that ensures things
are going according to plan as per agreed tenets.
Having elucidated on the above traits, it makes perfect sense then to consider the Project
Manager’s role.
Roles/Functions of the Project Manager 11
The functions of any manager vary from project to project as well as sponsor to sponsor. Being
the central figure in a project, the manager must be magnanimous enough to competently handle
all matters relating to it because if the project fails or succeeds, the manger bears the
responsibility. Usually, the manager assumes the role or function of ensuring the project starts
well, is on course and is wrapped up as per expectation. Time management is of essence in the
project and as such, the astute manager of makes much of when or how a project is implemented.
In this section, we briefly highlight some pertinent points worth considering:
i. Overall management and leadership of project.
ii. Facilitate project process (i.e. the work flow, implementation, resource mobilisation,
time management etc)
11 William Stevenson has some useful things to say about the Project Manager on pp 759 of his book “Production/Operations Management”.
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iii. Strategic thinking and planning.
iv. Financial and operations management (i.e. budgeting, costing, estimating, cash flow,
learning curve, quality issues etc)
v. Internal control enforcement
vi. Team building
vii. Capacity building
viii. Public Relations
ix. Human Resource handling
x. Policy interpretation and enforcement
xi. Monitoring and evaluation
xii. Managing project information
xiii. Negotiation (with donors & other partners)
xiv. Resource mobilisation-human, financial & other assets.
xv. Networking & Collaboration
xvi. Periodic reporting to relevant authorities and donor.
The Project Manager and sponsor/donor relations
One of the roles of the Manager is to maintain official cordial rapport with key partners. This
includes sponsors or donors. The Manager must execute this function diligently and meticulously
ensuring that the donor is kept abreast with the recent or current developments as well as
repeatedly satisfied with the project progress. Being the chief custodian of project resources and
entrusted with so much, the Manager naturally develops a special relationship with the sponsor
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in that they become mutually accountable to each other. Each party must do their part to honour
their commitment to the project. In this regard, the Project Manager executes and gives period
feedback on the project while the sponsor mobilises resources and funds the project timely as per
agreement. Should something go amiss, the Project Manager is answerable to all stakeholders for
the buck stops here. Thus, we see that the Manager holds a delicate position and has no option
but to deliver timorously and to satisfactory quality standard. Project navigation is a skill and
only the seasoned mind is equal to the task. On the part of the sponsor, their role, as earlier
intimated, is not only to secure funds but also to periodically monitor the project to appraise
themselves on the progress and challenges faced by the project team. The sponsor identifies with
and builds close mutually trusting ties with the project management team and should be on hand
to honour their pledge. Thus, if the Project Manager was exceptional and acquitted themselves
well, in the event they left the project or was transferred, the relations are sometimes temporarily
disturbed and new ties built which may take time. In some extreme cases, sponsors even threaten
to pull out because the person they trusted has left! But this ought not to be because there is a
staff team as well as systems in place to guide the next team leader. All that the next person does
is read the design documents, project reports as well as any monitoring or evaluation reports.
Within a short time, they should be up and running.
Other team members
The manager, although fully responsible for the whole project does not work alone, lest they be
overwhelmed. S/he has all the authority and has delegated some duties to specialists who hold
specific technical positions. Professionals must be hired in the interest of objectivity,
transparency and “division of labour”. Thus, this builds in professionalism and objectivity as
well as strong internal controls. As auditors and would be donors examine the structure, it gives
them confidence and impetus to do even much more. We consider some, not all, key positions
commencing with the finance person.
Finance person
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The finance person holds the delegated though independent function of managing all the
financial resources of the project. S/he is the chief custodian of the financial resources although
accountable and reporting to the Project Manager, with a dotted reporting line to the Country
office finance director, if the organisation is a multinational or large. This ensures objectivity,
independence and reasonable security to the finance officer.
With respect to personal traits and professional competencies, the said person should be mature
and extremely stable on figures. The person should be well versed with relevant financial
systems and data capturing accounting software such as the Sun systems, AccPac, Pastel, Quick
books among many. Each project will be suited for a particular soft ware. The Sun Systems has
proved a versatile and reliable package. In short, the finance person must have the following
competencies:
a. Able to devise and enforce strong internal controls.
b. Set up accounting system.
c. Able to generate periodic, accurate & timely financial reports tracking expenditures as
well as give explanations for variances.
d. Perform monthly bank reconciliations for all the project accounts.
e. Maintain confidentiality
f. Where applicable (if some other department does not do it like HR), generate payroll
(usually computerized)
g. Build capacity in junior staff with a view that they take up the function in the event s/he
is away.
h. Advise management on financial management matters.
i. Maintain a daily cash flow.
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j. Ensure only right amount of cash is maintained at any one given point. This is called a
target low, especially at the end of a reporting period.
k. Securely maintain financial records for a specified period of time according to policy.
l. Generate an updated asset register reflecting assets the project has at any one given point.
There should also be an inventory list that keeps a record of all items not classified as
assets.
m. The Accountant must also keep a record of all debtors (advance holders) and ensure they
settle them in a specified time. An aging analysis is handy to keep a tag on this matter.
As we can see, the Finance Officers’ job is both essential and critical explaining why the first
and last two project staff to be employed or laid off includes an Accountant. Lets next consider
the DC and DF.
Development facilitators (DF) and Coordinators (DC)
These staff interface directly with the community or partners as the case might be. Their role is
to primarily ensure the work is done on a daily basis and are the first to note any changes in the
project or whether there is need to mutate. As the saying goes, these are the ones who are “where
the rubber meets the road”, as it were.
Some of their competencies apart from their academic credentials is the ability to:
1. Mobilise partners and stakeholders at every project stage towards an intended goal.
2. Capture data on a frequent basis for input into the Monitoring system and database.
3. Keep in touch with relevant key stake holders at the bottom of the pyramid in the project
area and ensure everything is moving as per plan.
4. Facilitate training of partners who have a serious stake in the project.
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5. Get the “buy in” of all before, during and after the project close out.
Monitoring and Evaluation officer
This officer’s role is to ensure the project is always on course and the things to be undertaken are
done on time and to the required standard. In other words, this is a support rather than a line
function in that the M & E officer is independent and does not have position power over line
staff who report to the manager. While the Manager leads the way in implementation with team
members reporting to him, the M & E officer goes around to check, document and report on
what is going on. In other words, the M& E officer is the information focal point person and
keeps the institutional memory of the project. Until recently, this was a rather neglected function
in many projects but is now critical for almost any project that comes around. We can summarise
the officer’s function as:
1. Keeping record of whatever pertains to the project cycle.
2. Set up and maintain a data base.
3. Formulate an M & E plan
4. Monitoring project implementation
5. Periodic evaluation of project impact.
6. Analyse data generated at different stages of the project cycle.
7. Advise and update Project manager on some observations and how best to improve.
8. Track DIP implementation & alert relevant staff, especially Project Manager.
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For a person to effectively function, they must have excellent mathematical and analytical skills.
Skills in software packages such as Access and Excel are non-negotiable. Competence in
analytical software like SPSS or Epi info is definitely an advantage.
The above mentioned positions are very key in any successful project but other auxiliary staff do
exist that support and ensure that the project is on course and running efficiently. This depends
on the project type and nature.
It is fitting to mention at this stage that from inception, the project quality is under serious
scrutiny ensuring only the best is churned out in the interest of delivering impact to stakeholders.
To achieve this, various forms of monitoring takes place by different parties. Monitoring is
basically checking on the project progress at every development stage on a daily basis. The
parties to monitor include the community/direct target beneficiaries (in development projects),
NGOs, Government, civil society, sponsors, project staff and other interested parties. On a daily
basis, the staff and direct target beneficiaries meticulously watch and control the project direction
ensuring everything is on course. Should there be a deviation, one of the parties blows the
whistle so that a correction is immediately effected. Monitoring is daily while evaluation is
periodic and aims at establishing the long lasting impact and whether the project is headed in the
right direction in achieving its objectives. An evaluation is best undertaken after a reasonably
long period of time because then, many activities will have been done contributing to the long
term goal. An ideal time would be about three to five years in lengthy projects while a few
months if the project is short term (say one or two years). The purpose of monitoring and
evaluation is to ensure direction, focus, efficient and effective use of resources. Projects that
relate to service delivery or product churning out have their respective standards which function
as a mirror if the project is on course or not. One of these could be increased customer
satisfaction and retention, if the repeatedly trained staff are doing a good job. If it is about
tangible products like phones, improved market share or slump indicates whether the quality
improvement project is on target. Remedial measures are then instituted as the case may be.
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To assist in proper project implementation, the project breaks down the activities derived from
the DIP into smaller manageable packets. These ‘packets’ are called Plans of Action (POA)
which basically means that in a given time frame, say a week, month, quarter or half a year, the
project is going to pursue a certain path. This plan of action of implementation schedule of sorts
tells the story of how and when the laid down activities are to be accomplished as well as by
whom. Over the years, these POAs prove handy, improve implementation quality, hold people
accountable and give a sense of direction to whoever has written it down. It is recommended
practice that every person has a plan of action of sorts.
As the project comes to a close, many things are done and we deal with them in point (D) below.
D) Reflection, redesign and transition stage
The last stage of the project cycle is reflection, redesign or transition. Depending on the project
exit strategy and how it has been previously faring, in the last stages (say one or two years before
final closure if it is a long range project), the project begins to review its performance so as to
ensure it “phases out with dignity and honour” as some development guru have coined it12. At
this stage, the project is focusing on the whole process from inception and what tangible impact
it has evoked on the target group or beneficiary. If it discovers that things are not on track, the
project has an opportunity to alter its course so that the critical factors are instantly dealt with.
The reflection stage ensures that corrections are made or strengths fostered so that the lasting
impact is far greater. Further, the project is concerned about sustainability and continuity of
things commenced in the earlier phases. In the case of projects other than development ones, this
stage entails reviewing systems, refining processes, taking corrective measures as well and
renegotiating with the sponsors at least three months before closure for either an extension
(which may be a cost or no cost extension). Usually, negotiations start way off (in USAID (USG)
funded projects, at least 90 days before close out) so that the project is either extended or simply
closes out at the intended time, having achieved most, if not all the objectives. This is rare
(timely project closure) though but achievable in well executed projects which stick to time and
12 Anonymous, perhaps Dr Paul Woods, Australia
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schedule. Various tools are used to determine whether the project should close or continue for at
least six months to one year after which very few sponsors would be willing to fund. However,
there are cases when the project fails to meet its intended impact and sponsors still have a keen
interest. In such instances, the project transitions (closes) or to another process called the
redesign phase which focuses on other priorities most likely building on earlier targets. The goal
of the redesign is to “re-aim” so that the project hits the desired goal which could have either
been missed or eluded during the project cycle. It is worth mentioning that in the redesign phase,
the goal remains the same as before but what changes are the strategies to hit the Bulls’ eye.
Such cases (redesign phase and therefore extension) are extremely rare, especially if projects are
privately funded.
Monitoring & Evaluation (M & E)
In building quality into a project or program, Design and Monitoring and Evaluation (DME)
practitioners ensure that they engraft parameters that will guarantee quality within the system. In
development projects quality is a matter of much concern because a lot of things are at stake
and as such, a number of antidotes are engrafted into the system so that quality is guaranteed as
well as fostering continuous improvement. The M & E function is viewed differently by different
people but some have this to say though basically, all these centre around quality: “
Monitoring is a warning system that ultimately feeds into evaluation.
Evaluate simply means to assess the value of something (Feuerstein, 1986, p.2). The
reasons for evaluating are many and varied, viz sharing experience, improving
effectiveness, allowing for better planning (Ibid, p.3)
PM & E is not a matter of using participatory techniques within a conventional
monitoring and evaluation setting but rather a radical rethinking about who initiates and
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undertakes the process, and who learns or benefits from the findings (IDS Policy Briefing
12 , Participatory Monitoring and Evaluation: Learning from Change, November 1998)”13
Thus we can see that M & E is a critical function to project quality management but the question
that begs answering at this stage is what is involved in project M & E and what are the methods
of performing it? A detailed treatment of this is beyond the scope of this module but we highlight
some aspects of this for our information. Generally, any good M & E system, as earlier alluded
to, aspires at ensuring the correct thing is consistently done at every turn thus building quality
into the system throughout. To achieve this goal, several elements combine to make up this
system as shall be demonstrated. The first aspect about a good M & E system is that it should be
a wide ranging data base that retains all project information from inception to close down. In
other words, all data is collected and stored in a data base for further review or retrieval at any
one given time by all relevant stakeholders and interested parties. Knowledge management is
critical. Thus, all relevant information is collected by implementing staff and partners, fed into
the system and retained for future use. The second aspect about a good M & E system is that it
must have a good M & E plan which clearly stipulates who should collect the information, when
as well as the frequency. In that way, the type of information as well as whose responsibility is
known from the start. The third component is that the said system should have an Indicator
Tracking Table (ITT) which ensures that every indicator is not only meticulously monitored but
progress achieved from inception is gauged against the ultimate project goal. In this way, the
project team can reasonably assess and tell whether they are on target. Still another component
about a good monitoring system is that the M & E officer must be & operate independent
alongside other partners or stakeholders who carry out their own monitoring as the project
progresses. All these parties document the happenings at the project and quickly query when
something goes amiss. As for the M & E officer, his or her primary function is not only to
monitor but to document whatever transpires in a retrievable data base. Another M & E approach
is to carefully set up budget expenditure ratios indicating whether a project is top heavy or
spending more on administration rather than the target beneficiaries. A certain prominent NGO
13 Quoted from Sikapale Chinzewe WVZ Operations review Power Point presentation, 2006
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has set the administration to beneficiary ratio at 20:80. Anything outside that sends a warning
signal of poor management. Yet another would be to have a project peer review among projects
of similar nature with the aim to compare notes as well as draw lessons of best practice. Finally,
it is good to standardize the reporting system and make the documents accessible to any
interested party. For instance, World Vision International has developed an information system
that is accessible by any world Vision international office globally. Only what is of the highest
quality is posted there. The Program Management Information System (PMIS) has reaped
incredible results for the said entity as well as significantly enhanced programming quality. In a
nutshell, all these lose ends tie in together so well to foster qualitative project implementation as
well as drawing lessons to inform future project set up. In well planned projects, the M & E
system greatly supports the embedded quality into the system thereby making it impossible for
the naked eye to see it. What is evident however, is high standard output. It must be stated here
that monitoring takes place at activity and output levels while evaluation (which takes place after
some considerable time of cumulative activity implementation) takes place at the outcome and
goal levels. Some hold that project staff are held accountable at output level while others
maintain that it is at outcome level as well because the used strategies should lead to the outcome
otherwise people will not plan meticulously from the start.
Like hinted earlier on, projects use different tools to ensure quality but a good portion of them
use the log frame approach.
Other organisations like World Vision International have and are developing an approach of their
own, of course building on what the past giants have already done. This approach is coined the
LEAP approach which acronym stands for:
Learning through
Evaluation,
Accountability and
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Planning.
This is an organic Design Monitoring and Evaluation (DME) approach which, unlike the other
models, ensures that designed projects are agile, learning, flexible, relevant and open to change
as the context mutates as well. This model, although resting on the log frame approach is
different because the projects have a design document crafted at the beginning of the project life
buttressed by a Detailed Implementation Plan (DIP) which in itself is a list of activities derived
from the log frame for the whole project life span (Say three or five years). This LEAP life cycle
assumes that if well planned and executed, the project should address all the issues raised during
the assessment & design stage as well as redesign so that another project may arise that deals
with another felt need or problem. Thus, LEAP is premised on the ground that the world in
which projects operate is not static hence the need to be relevant to the needs of the time. After
the design is complete and DIP drafted, the project goes into implementation and is meticulously
monitored to ensure it is on track. Should any deviation be noted along the way, this is
documented and correction made accordingly, of course following normal programmatic
procedures such as evaluations or redesign. As the project reaches the reflection and transition
stages, lessons learnt are engrafted in the redesign otherwise the project closes. The LEAP
approach appears better qualitatively because it ensures continuous learning, accountability and
planning as well as evaluation for better programming. All these elements somewhat foster
quality assurance as well as build confidence with the sponsors. Furthermore, LEAP recognises
other contributors in a given context as well as attribution to other players long before the project
came on the scene. By that token, LEAP prefers to call “stake holders” as “partners” because
they are more than just interested parties watching by the terraces while the development process
evolves. Rather, they are active in one way or the other. In addition, LEAP is strong on the ITT,
implementation schedule (or Gantt chart) as well as the connection to the DIP (plus budget).
World Vision international is still refining this tool and can be found on the following site:
www.transformational-development.org
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However, like all other spheres of life, there have been changes in M & E circles that centre
around better qualitative programming. Below are some of the recent changes and discussion
points:
As hinted at earlier on, there is more talk about attribution and contribution by other
players in the contexts where projects operate. Hitherto, projects have claimed all the
accolades when they strike success without acknowledging other direct or indirect
contributors to that success. Instead of networking or collaborating, projects have tended
to compete and protect their “turf” when others have either been there before or after.
There is attribution at activity and output stages while contribution is at outcome and goal
levels for projects only contribute to something even if they seem to be the main players
at a given period.
Most significant change from Impact stories. As part of recording impact, projects write
impact stories at outcome and goal level but more and more there is thinking around the
fact that sometimes a small contribution can significantly change the life of an individual
or community. For instance, if a school plans to build an extra class room but lacks
sufficient cement. If a wealthy business man buys and donates cement pockets enabling
the class room to be completed in good time, then that is a seemingly small contribution
but has greatly impacted the lives of the local community. Smaller projects and
organisations excel at documenting such significant changes compared to the mammoth
big projects.
Whereas in the past, people have concentrated on “Monitoring and Evaluation” Current
thinking is questioning the correctness of this coined phrase with respect to project
management, as relates to the implementation stage. The thinking is that you cannot
actually and truly evaluate a project in a month or two while you implement but you
could monitor as you implement. Thus they would rather use the words “Monitoring and
Implementation” (M & I) as opposed to “M & E”. The debate continues though.
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As hinted at earlier, the LEAP approach now emphasises partnership rather than
stakeholders for the simple reason that the said stake holders are not idle but doing
something to contribute. The “stakeholder” concept, while good, is not entirely accurate
or representative.
There is also considerable debate in quality circles as relates to how best to manage
project and organisational quality. Some hold strongly that a specific department or wing
to look at quality must be established whose task will be to assure or control quality.
Some companies thus have ‘Quality assurance/control’ units, sometimes with a
directorate! Others strongly disagree with that approach and insist that quality must be
embedded within the system so that something is done once that guarantees success. This
view propagates the view that defects must be prevented rather than reacted to. That said,
we can safely say that quality is a hot topic nowadays unlike in the past and will continue
to be for decades, yea, centuries to come.
To be a success, certain key information must be known at project level. The points below
summarise some key points which, though seemingly simple may define success or failure.
a. Know and understand the donor/sponsor fairly well.
b. Know the donor/sponsor requirements and expectation. (I.e. cooperative agreements,
regulations etc).
c. Pace your project realistically.
d. Keep in touch with donor regularly (mutual feedback).
e. Anticipation and know who is who.
f. Get inside information before it is made public and position yourself well.
g. Polish your profile regularly and ensure a high quality job is done every time.
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h. Meticulously manage your financial affairs well. Ensure strong internal controls to
inspire confidence.
i. Encourage periodic internal & external audits such as operations audits.
In summing up on the project life cycle14, we can say that an ideal project goes through the
following stages:
1. Concept
2. Feasibility analysis (assessment)
3. Planning (design)
4. Execution (Implementation & monitoring)
5. Termination (Phase out, transition, close down or end, at times redesign)
Some projects do not have a defined concept stage but whatever the case some form of idea
(proposal) is floated to or received from potential sponsors before the actual work begins.
Thus, we have surveyed the project cycle landscape and must now come to a close. We have
seen that a project goes through different phases and has a definite start as well as close out date.
In between are various stages that must be managed well if the results are to be qualitative and
tangible for all to see. In the next unit, we proceed to consider some other aspects which foster
qualitative project management.
Case study 1
Chikondi Phiri-An upcoming leader
14 Refer to Stevenson, Production/Operations Management, pp760 for more detail on this.
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The interview at hand was carried out by Billy Sichone on 21 st September 2001. At the time of
the interview, the respondent, Mr. Chikondi Phiri, was the Area Development Program (ADP)
Manager for the Namuso ADP located 618 kilometres west of Lusaka. The said officer has been
in the area for three and a half years and has been at the helm of one of the most spectacular
transformations that have taken place in World Vision circles. Prior to his arrival, the program
was riddled with multiple problems such as a demotivated staff, continuous running inter
personal squabbles with the community and among staff themselves. At the interview time, he
was about to launch out to another higher challenge having successfully turned around the
mammoth program back to sanity. Mr. Phiri holds an MSc in Water Engineering and is currently
pursing an MBA with the Redeemer College, Canada.
Questions
1. Mr. Phiri, I notice that you have been at the Namuso ADP for some time,
could you briefly tell us about yourself?
I first came to the Western Province in 1996 as a project coordinator but shortly
became a Program Assistant. With the encouragement of my wife, we left to
pursue higher studies at the Morogoro University, Tanzania. Upon our return in
1998, we were again sent back to Mongu where I took up Management up to date
when I leave for the Southern Province.
2. Is this your first Program to Manage?
Yes. As earlier intimated, I was a Program Assistant until I returned from studies.
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3. What, in your own definition is Management?
Management is the art of getting things done through other people. This involves
control, directing and coordinating the implementation of activities to their
appointed ends.
4. What are some of the challenges you have faced whilst at Namuso?
I have faced multiple challenges during my tenure in literary every area especially
so that it was my first time to Manage a project. I found a diverse work force with
different goals and attitudes to work and out look to life. I had to fit in and then
meticulously turn the tide to the correct direction, having been charged by my
former National Director, Mr. Bwalya Melu. There was a lot of disorder at the
time but through consistent hard work and clear thinking, we have managed to
undo the mess and put Namuso ADP on the map. It has been a team effort all the
way through.
5. What is the workforce like at Namuso (Number of and type)?
Presently we have a workforce of 7 members of staff at the ADP office plus 15
others located in the Program catchment area. In my estimation, they are all
unique but focused towards one common goal, to which end they exert
themselves.
6. How have you managed to lead such a diverse workforce seeing that you took
over whilst young?
That hasn’t been a problem at all because I knew the source of my authority and
carefully studied that people I was going to work with. I was open minded and
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ready for any challenges so as to handle them, which, in effect is what
Management is about.
7. What was the situation like at Namuso when you first took office?
I found an emotionally torn project as they had just lost a Manager. Due to some
prior problems, the office was disorganised and not systematic with staff highly
demotivated and somewhat disillusioned. There were just too many unsettled
issues at the time which needed to be carefully and diligently attended to. As
though that were not bad enough, the ADP was in bad books with the support
office. Thus, the first year was largely spent on clearing the past wreckage. For
example, the community had no kind words for World Vision as they felt cheated
at the sudden phase out of three previous Community Development Projects
(CDP). This was the dark scenario in 1998.
8. What is the situation you leave now?
You wouldn’t believe it, but the face of the ADP has changed drastically as
people have a different view of World Vision. Our image has risen in the
following areas:
Integrity
Financial Discipline
Christian Image
Performance / Out put.
Almost all our key staff are Christians of high standing and do their best all the
times. They work as unto the Lord. We still have hurdles though but we are
certainly far much than before.
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2. What is the secret of your success?
I wouldn’t say I have a secret per se but I think I attribute all this to the teamwork
culture we have imbibed here. This has to do largely with the open management
that we have had and also being open and truthful to the community as well.
Consistency is very important when working with community.
3. What do you view as your most valuable assert in your work (people,
machines, money)?
People! I value my staff so much as each of them is uniquely structured to contribute to the
welfare of the organisation. As such, I ensure that each of them is treated well and each of case
treated as it comes. With the right people at the right places, we can achieve phenomenal results.
Unlike in the past where people were treated as things, I think if they are treated with the dignity
that they deserve, they will sustainably go a long way in doing good far above what I ask or
imagine. Other things are but mere things to advance our cause.
4. Are there still some Managers who do not value people?
Oh yes of course but thankfully, the attitude has changed tremendously in World Vision as the
ADP Managers have been trained through the ADP 2000 leadership initiative as well as the 2003
programs in South Africa. We are moving on to higher ground!
5. Would you classify your self as a leader or manager?
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I would classify my self as both though I think I am more being moulded into a servant leader
who facilitates rather then bosses around, despite the constant temptation to.
6. What is the difference between a manager and a leader?
A Manager is one who merely controls, directs and implements the goals of a said entity while a
leader is one who inspires others by being visionary while helping others along to achieve a
given goal. In other words, the leader is a coach, mentor and facilitator while a manager controls
the implementation of plans. Now I use the word “control” guardedly because some people do
not like the term because the connotation of dictatorial tendencies.
14. What, in your own words, are the qualities of a good leader?
The qualities of a good leader are that s/he is visionary and has the prowess to affect others
towards a goal willingly. The said person has a clear mind, listens to others, empathises, and
cares for the welfare of those s/he leads. Being a coach, the leaders possesses noble consistent
characteristic upon his/her chest such as integrity, honesty, humility, open mindedness,
willingness to learn and change, time for people, patience and a personal mission statement.
15. Obviously, you must have faced some challenges as a manager in this part of the
country, just how did you get round that hurdle?
As I said in an earlier in answer to a question, I am a foreigner while my staff all largely natives.
Naturally, but especially in Western province, there has been a prejudice against outsiders. I
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faced all that but I approached it positively and determined to prove my self over time. I think I
have been vindicated by and large.
16. You have a family I suppose, how then do you manager to cope since you are very busy
and travel extensively?
I am married to a wonderful wife, Anne with whom we have two sons. From the beginning of
our marriage, I have made sure that I have involved her in my work such that she knows what
goes on in the office, what I do and I even consult her on a number of issues. When we went for
studies, she was there with me as though she too was actually doing the course! I remember the
times when I would come home exhausted, she would read to me and help me to prepare for
exams! This trend has continued though there are times when I have to do certain things alone
when pressed with time. But at an appropriate time, she gets an update and then we continue.
This is the only way to balance things unlike a case where the wife has absolutely no idea what
in the World the husband is up to!
17. You strike me as some one who is analytical and strategic as well, how did develop those
skills, has your previous professional background have a hand in this?
Naturally, I like being clear minded and inquisitive, but this has been enhanced through training
and being coached by some people.
18. Talking about strategy, what, in your own words is strategy and how does it help you in
planning?
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A strategy is simply a plan to achieve a goal. In other words, you come up with an ultimate goal
and then ask the question, “How shall we get there?” There after, you proceed to map out a plan
and steps to achieve the goal. The route taken is the strategy. It is worth mentioning here that
today, there is more and more on strategic thinking rather than planning, I hope you know the
difference…
19. Would you classify yourself as a perfectionist, as we note that things that come out of
your hand are of the highest quality?
I wouldn’t claim that I am a perfectionist in the strictest sense but I must say that I like doing a
perfect job all the time. When I first took office at Namuso, I must confess that I had more of
those perfectionist tendencies. Obviously over time, I have learnt that we are at different levels
necessitating the need to be patient while working to sharpen people to the required standards.
20. In your view do you think that World Vision in its implementation minds quality in out
put? If not, how do you perceive that it could be improved?
If you looked at our reporting and way of doing things just over five years ago, you would notice
what great strides World Vision has made in the direction of improving quality. This is further
seen in the way people relate and do things in a team work kind of fashion. At the National
office, we have what is known as the Program Development and quality assurance department
(PDQA) whose main objectives is to largely ensure that reports and delivery systems in World
Vision are of the highest levels. The other thing that PDQA does is to ensure that they refine
project proposals from the various ADPs or indeed originate some themselves to source funding
for World Vision Zambia projects. In terms of improving the status, I would just say the road to
quality improvement is a never ending one, I think World Vision could improve by being open
and ready to change in these turbulent times.
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21. How have you ensured that your staff is motivated, give us some insights in this.
I have tried my level best to motivate people in various ways such as complementing them when
they do a good job, being patient and ready to work with them, giving awards and in some cases,
advocating for some people’s pay rise although I think money should not be the sole motivating
factor. Other ways have been to encourage my staff to go for short refresher courses that will add
to their CVs and build capacity in them. At other times, I have taken an interest in people’s lives
and visited them at home when ill or just to say “hello!” Mastering peoples’ names has also
helped things.
22. How do you handle people who are:
a. Younger than you?
b. Older than You?
c. Less educated?
I treat them all as equals, each unique, with something to offer. I am always conscious that I
can learn something from each of them. In addition, when they are treated well, they feel
motivated and will willingly do more. At other times, I have advocated their pay rise for example
though not diligently. I believe that money should not be the single motivating factor to work but
could be one of them. I would rather provide the best working environment.
23. What is your view of about training for staff? How often should that be?
I believe that training should be continuous and available to all without exception. We live in a
dynamic world with new challenges every day.
24. Do you think the budget should be a limiting factor for training of staff?
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I don’t think finance should be a limiting factor at all as training is essentially for quality results,
which pays back many times over.
25. What is your view about the World vision staff training policy? Do you think every one
is adequately catered for?
Potentially, the World Vision Zambia training policy is excellent only needing more funds.
Before I left for Tanzania, for example, there were absolutely no training opportunities but now
they are available for many disciplines relevant to the organisation.
We may not cover every body presently but we are getting there having made a start.
26. What are some of the ways that you have managed to make people aware of the aims
and objectives of World Vision in the Mongu Area?
We have had brochures done, been on the national and local radio, the National press as well as
through our community leaders who have done a marvellous job explaining who we are.
27. I suppose that World Vision is now talking about sustainable development, how have
you as a team ensured that this ethos is fostered and up held?
We firstly have had the task to uproot the previous mentality of handouts that the CDPs had
employed and replaced them with new ADP approaches. Having “disinfected” their minds we
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have gone further to work along side the community, letting them identify their needs and learn
to manage their own development. This has meant get them contribute something or offering
them things on loan. In the way, they have cared for and owned things lastingly. In other words,
we have taught them “to fish” rather then giving them fish. This has proved more sustainable.
28. World Vision is in the business of satisfying customers as well, who exactly are your
customers? How do you ensure you satisfy them?
Our customers are the Donors whom we seek to continuously satisfy by providing timely and
appropriate information at all times. In a way, the children, whom World Vision assists are also
our customers. At all costs, the Donors must be satisfied or else World Vision risks losing
support.
29. In your own words, what is teamwork and what is the place of it in World Vision?
Teamwork is simply working together across functional barriers to achieve goals. This means
working as an organism where there is a free flow of ideas, information and methods of best
practice. Unlike in the past, where people restricted themselves to their department, the modern
office demands a matrix approach to issues so as to reap the maximum benefits from each
person. This approach, akin to a football team is very profitable.
30. What are the goals of teamwork?
In my view, teamwork ultimately seeks to improve the product quality in a conducive enabling
environment. In other words, team work improve and increases out put as people to achieve a
goal as opposed when they work as “Islands”
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31. Can you cite an example where teamwork has been practiced or attempted in the
World Vision partnership. What has been the result. Do you see this taking root in the
organisation?
In 1999/2000, World Vision adopted the teamwork approach having noticed its benefits. Thus,
the country was divided into regions with each region having a leader. These regions had a
rotational leadership as each region was composed of many projects. This went on for some time
but seems not to have worked much probably for a number of reasons. In my thinking, one of the
main reasons was that we were not ready for the change and needed to be oriented much more,
having all along been accustomed to an independent approach to work. There could be some
regions still working as a team but by and large, we have informal ties where we consult each
other freely as we meet in conferences or call each other on phone. It has helped tremendously.
Having said the above, I think teamwork is the right way to go and as more people see the
benefits, I have no doubt that we shall move forward.
32. At ADP level do you see any teamwork?
Oh yes! In fact that has been one of the greatest sources of my elation that I have witnessed
whilst I was at the Namuso ADP. As I leave, I just marvel how people love their jobs and would
willingly put in their best to achieve a goal. They work over and above to be reminded that they
must go home to rest otherwise they would go on and on! People are focused and freely
intermingle to share ideas and also to take over each others’ functions where need be. This
emanates from the fact that people now take interests in each others’ domains as opposed to the
past where they were content to remain within the confines of their departmental walls. For
example, almost all our staff are studying, are all computer literate from the office attendant
upwards and have all acted as Managers before, (with the exception of the office attendant) and
each of them, though initially surprised have all performed extremely well. This has booted out
put, innovation, creativity and motivation in staff. This is simply marvellous! With respect to
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other ADP s, I have no telling exactly where they are, but I have reason to believe that they too
are on the way to teamwork.
33. How has it been developed?
I think it is because of the approach that has been employed where as manager I have taken time
to study each member’s strengths, and ensured that I use them in the right places without the
team members themselves knowing it. I have looked at Namuso as a football team with different
players who can play certain numbers. In that way, as coach, I have strategically put each person
in the best place. This has meant that I have taken the back role as a teacher, facilitator and
coach, ready to give support when needed. In the past I had perfectionist tendencies and wanted
to be bossy but over time, I have seen that it is more profitable to be there to guide and empower
people to do the right thing sustainable. It has been so gratifying to see the team members
attempt new things, be creative and consult among themselves without my direct involvement.
Now at Namuso, I do not worry about reports for example, because each department will do its
job diligently and timorously.
34. What are some of the benefits you have observed during the build up of the same?
The benefits are many as can be seen from what I have mentioned in the last two questions. Just
to mention them again, there has been an improvement in the quality and timeliness of reports.
There has been a marked improvement in the trust for each other and an appreciation of each
other’s function. This has led to a situation where work will not be stalled or slowed down by the
absence of any team member because others will quickly take over and over lap to cover up. By
and large, we are achieving more result than at any time ever.
35. What are some of the challenges/hurdles you faced on your journey towards team build
up of the same?
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As in any process, I have faced many challenges. The first is the diagnosis of the problem as I
found a demotivated and disillusioned work force that specialised in finger pointing. This was
not only at the ADP office but from the community as well. The second was the process of
getting people focussed without any prejudice as well as getting the right resources to foster the
goals to team building. The third has been getting the cohesive and having people discard the
mistrust they had of management especially so that I was not a native of the place. The fourth
was to get people analytical and think systematically. Thankfully, the staff responded very well
and slowly begun to find their feet in this new setting. Culture change is hard and takes time. It
has taught me to be patient, humble and to lead from the back seat. We still encounter problems
but I am glad to say that we are above the fundamental problems at this stage.
36. How do you arrive at a decision, which ultimately affects every at the ADP?
I make the final decision ultimately in any case but I make sure I get as much input from staff on
many issues. In the past I would make the decisions and pass them down but now, I consult all
the time and get the mind of the staff. Some times, I do not have to make the decision because
the staff discuss it and come up with the answer! This has been amazingly true time and time
again. At the end of each decision, every body feels heard, valued and thus owns the goal.
37. Do you ever have brainstorming sessions? How helpful have they been?
Every morning, we hold an updating meeting after the morning devotions. This helps us to
keep focused. It is during those meetings (about 30 minutes each day) that issues are brought
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to the fore discussion and debate. At first, people were reluctant to air their views for fear of
being misunderstood or making a mistake but now there is liberty. We allow people to bring
in all their ideas, including the crazy ones and then we begin to analyse and discount them
one by one. In the end, we arrive at a decision that satisfies every one to the extent that no
one has the audacity to claim that they had no hand in the decision. In that way, people will
go full throttle to support the decision. To answer your question, we do have brainstorming
sessions depending on the situation.
38. I notice that you are quite apt to handle Information Technology (IT) problems and
that your staff are generally computer literate, how have you arrived at this stage
(your staff trained as well as yourself)
When I took office, I noticed that there was a high dependence on the Admin assistant for every
piece of typing. As such, there was always a queue of people waiting to be attended to leading to
great inefficiency. I noted that if all were trained and had access to computers, they could each
type their own work and thus increase productivity. Being a firm believer in IT knowledge, I
determined to get as many computers as possible for all to use. Besides, this is an information
age where one cannot afford to be computer sills deficient. Therefore, we have slowly passed on
information to each other over time. I was first exposed to the computer in 1994 and have made
every effort to learn and master the operations of a computer and thus pass on knowledge to
others.
39. What is the best way to train/coach some one?
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I think the best way, which I have found effective, is to first teach them the principles and
then let them attempt something. When they get stuck, you can then come in to help. You
must ensure that you are open, patient, approachable and reliable. You must be ready to help
at any time and not seen to despise your student. In that way, your friendship will grow and
go beyond that particular problem but to other lawful areas of the work life. People must look
up to you as a facilitator not as a “know it all” kind of person who bashes everyone else when
they make a mistake.
40. You seem to be widely exposed, could briefly tell us about your travels abroad?
What have you learnt?
I have not travelled much per se but I see myself to be on the road more often hereafter. So
far, I have been to Tanzania, Zimbabwe, South Africa (Several times) and Canada. I have
learnt just how different people look at the same thing in different ways. In some cases I have
been stunned but have adapted. This has been a major paradigm shift for me and has thus
helped me to fit in appropriately in different circumstances while managing a culturally
diverse workforce. The other thing that has helped me is reading widely all the time. I am the
curious sort.
41. In your quest for excellence, who do you perceive as your mentor (s) and why?
I have mentors quite alright but the greatest motivator in my life is my dear wife Anne. She
has always given me unwavering support and valuable advice that has proved accurate. There
are many times I have felt frustrated but in her own unique soft way prodded me on to greater
heights of excellence. As such, I would say that she has been by far the greatest motivator. In
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terms of work performance, two men stand out as having left an indelible mark on my life.
The first is Mr. Stephen Tembo who exposed me to the computer and consistently lived the
Christian life while I lodged with him for two years. The other is Mr. Mapanza Nwilimba
from the World Vision National Office. He has always inspired me as a good, patient and
consistent teacher. Despite being very strict, he is unmatched as a coach. Both these men are
leaders par excellence in that they are resilient, patient, consistent, objective and focused in
life.
42. Kindly give us some titles that you recommend and why?
I have many titles to hand but I respect Green’s Servant leadership, Covey’s 7 habits as well
as principle centred leadership. I also enjoy reading periodicals such as Executive Excellence
that has fine articles that are pragmatically down to earth.
43. As we draw to a close, what are your future goals and what is your advice to those
that are aspiring to be motivational leaders in coming days?
My chief goal is to go as high as possible in my work to do as much as I can while I have
breathe. In doing this, I will be serving my Master, the Lord Jesus Christ who has safely led
me hitherto! As for those aspiring for higher challenges, I would advise them to work hard,
especially on their studies. I would urge them to study, study, study and get that paper!
Thank you for the interview Mr. Phiri and I wish you well in days that lie yet future.
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You are welcome.
End
Case study questions
What has distinguished Chikondi Phiri in his career?
What is the secret of his success in management?
Do you think Chikondi is a leader? Substantiate your answer.
What is the place of quality in World Vision Zambia?
Are mentors relevant today? Explain your answer giving one mentor you have, if any. What
inspires you about them?
What place does your spouse occupy in your busy schedules?
Explain the role of team work as relates to project quality and efficiency.
How relevant is IT to project quality?
Case study 2
Go to the following site and read the case and then answer the case study questions:
http://www.cnn.com/2009/US/03/27/no.freedom.tower/index.html
Case study questions
What are your general observations about this case?
Is this a project? If so explain why.
How sensitive is this project? Give sensitive points that you sense.
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Find a similar contemporary case study that has similar challenges.
Do you think this project is achievable in the given time frame? What are some of the inputs you
would expect?
How does the change of name to the building affect business? Explain why.
Revision exercise
Describe and explain the project life cycle
What is the log frame approach and a log frame?
Why is the log frame very important to project management?
What are internal controls and mention one such internal control?
What is cash flow management and how relevant is it in project management?
When is an evaluation meaningful in the project cycle?
What is DME?
What is the importance of Monitoring?
Explain three things that a log frame achieves and its merit?
Give any alternatives to the log frame approach.
Give the hierarchy of objectives in a 4X4 matrix (logframe)
What is an assumption? What about a “Killer assumption”? Why is it thus coined (“Killer”)?
Give some qualities of a competent Project Manager.
What is the role of the sponsor in project management?
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List some of the challenges faced by projects and how they can be overcome.
Distinguish between Source of verification and means of verification.
Who supervises the M & E officer and why? What is the role of the M & E officer?
How different is the M & E officer from an internal auditor?
What are the merits of an operations audit over a financial audit?
Why don’t monthly management reports qualify to be a source of verification?
What is meant by the statement “A goal must be SMART”?
What is a data base?
What is the role of an M & E plan as well as an ITT?
Bibliography.............................The Leadership Deception................................
Baker Larry & Douglass Merril, Time Mastery Profile: How to manage your time more
effectively, carslson Learning Comapny, 1992
Blanchard Ken & Muchnick Marc, The Leadership Pill: The missing ingredient in motivating
people today, Free Press, 2003
Brake Terence, Managing Globally, Dorling Kindersley, 2002
Burnes Bernard, Managing for Change, FT Prentice Hall, 4th edition, FT Prentice Hall, 2004
Buttrick Robert, The interactive Project workout, 2nd edition, Pearson Education, Pearson
Education, 2000
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Covey R Stephen, Principle Centred Leadership, Simon & Schuster, 1991
Covey Stephen, The Seven Habits Of Highly Effective People, Simon & Schuster
CSO, Zambia in figure 2003/2004, GRZ (www.zamstats.gov.zm)
Davies Anthony, Managing for Change, ITDG publishing, 1997
Heller Robert, Effective Leadership, Dorling Kindersley, 1999
Heller Robert, Managing Teams, Dorling Kindersley, 1998
Kinicki & Kreitner, Organisational Behaviour, 4th edition, IRWIN/McGraw-Hill, 1998
Kotler Philip & keller Kevin Lane, Marketing Management, 13th edition, Pearson/Prentice hall,
2009
Kouzes James & Posner Barry, The Leadership Challenge..................
Maylor Harvey, Project Management, 3rd edition, Pearson education, 2003
Patton Quinn Michael, Qualitative Research & Evaluation Methods, 3rd edition, Sage
Publications, 2002
Poltorzycki Stephen, Creating Environmental Business Value: Achieving two shades of green,
Financial World, 2001
Schroeder G Roger, Operations management: Contemporary concepts and cases, 4th edition,
McGraw Hill, 2008
Stevenson J William, Production/operations Management, IRWIN, 5th edition, 1996
Zikmund G William, Exploring Marketing Research, Thomson South Western, 2003
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Unit 5
Aim
The aim of this unit is to appraise students with Human Resource Management (HRM) as well as
help them differentiate HRM from Personnel Management (PM) in recent trends.
Objectives
By the end of this Unit, the student should:
a. Define Human Resources management
b. Understand what HRM is at project level
c. Understand why a motivated staff cadre is key to project success
Over view of contemporary practice and recent changes in Human Resources Management
“People are the most important resource in all business and government endeavours” Yoder &
Staudohar15
Project management goes through many cycles and seasons and thus needs to have the right
structure and resources. Behind every successful entity is a diligent staff cadre that usually
devote themselves to achieving their objectives in a given time frame as well as indirectly lobby
15 Yoder Dale & Staudohar D Paul, Personnel Management & Industrial relations, 7th edition, Prentice Hall of India, 1986 pp5
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further support from would be sponsors. A high profile successful project leads to greater
opportunities and responsibilities. As such, evaluators are curious to find out about the success
factors and ingredients that contributed to scoring. One area that will never miss out in that
analysis is the issue of what type of staff were on the winning team. The question asked is:
“What made them tick where myriad others failed”? What was their secret? In this unit and the
next, we explore this critical function of Human Resource management as a component
contributing to a quality project and in some cases, programs.
Without doubt, the quality of staff the project employs will definitely have a bearing on the
outputs and ultimately outcomes of the project although some argue that outcome is beyond
control. Once the project has the right blend of star team playing performers, the project is nearly
guaranteed to succeed though sadly this rarely happens. The question that perhaps begs
answering is why? Why should one project succeed while the other in the neighbourhood
lamentably fails? These and many questions will be touched on in the present unit. We
commence an examination of this unit by giving some preliminary statements and then later
delve into some definitions and explanations.
Preliminary statements
1. Projects succeed or fail depending on the quality of staff on the project team
2. The human resource component should be treated with meticulous due care throughout the
project life.
3. Continuous staff motivation is key for staff retention
4. Continuous training enabling staff acquire fresh skills set is critical at all times.
5. Investing in staff development is not a waste of resources.
6. Inept staff should be laid off but keep work as professional and objective as possible.
7. Staff performance must be documented and referred to during appraisal time.
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8. A High staff turnover signifies a problem somewhere.
9. Focus on the process and systems rather than on individuals.
10. A team work culture is the best and enables everyone to achieve more. Synergy usually
results.
11. There is diversity in the team and not all staff members are the same or perceive things the
same way.
Having made the preliminary statements, we now progress to consider the definitions so that we
are on the same page before we delve into other equally critical matters related to qualitative
human resources management.
DefinitionsIn this discourse, various words are used some times interchangeably but for the sake of clarity
in this unit, we shall confine ourselves to the correct usage of terms. For instance, the term
‘Human Resource’ is used synonymously with ‘Personnel Management’ or ‘People
Management’. We have avoided this mix up by defining each of them as well as to some extent
differentiating them.
To kick start our definition, we define Human Resource Management (HRM) itself and then later
look at the other two.
Various authors have defined HRM variously while others have not given a definition at all but
simply described it as distinguished from other terms. For instance, the Wikipedia website has
defined it as “Human Resource Management (HRM) is the strategic and coherent approach to
the management of an organisation's most valued assets- the people working there who
individually and collectively contribute to the achievement of the objectives of the business.”
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Another authority (Cherrington), has not really defined it but has described it. The writer has this
to say: “Human Resource Management is responsible for how people are treated in
organizations. It is responsible for bringing people into the organization, helping them perform
their work, compensating them for their labours, and solving problems that arise"
As earlier intimated, HRM is defined variously by different authors and practitioners. Many use
the words “Personnel Management” and “Human Resources Management” interchangeably but
strictly speaking, these are different as we shall see later. For now, we focus on HRM
definitions:
Definition of contemporary HRMAs earlier intimated, many have undertaken to define HRM but below is one contemporary
definitions:
“HRM is that function of general Management that ensures the recruitment, retention, motivation
and empowering of the right people in the organisation enabling the entity achieve its goals in
the most cost effective and efficient manner” (Billy Sichone 2009)
From this definition, several points are highlighted that constitute this lay definition. We isolate
the following:
a. Recruiting: Recruiting carries the connotation of attracting people or getting their
interest and attention to something you are doing or offering. In this case, the entity
advertises to the whole world seeking interested individuals express interest and
subsequently to apply so that they can be considered for the offer. The recruitment
process itself is not the hiring but the first stage to that which is followed by a short
listing/selection for interview, the interview itself and picking the best candidate
according to laid down standards and then offering them the job. Should they consent,
then a contract is signed by both parties and the person comes on board. Therefore, it
is the duty of the HR department to analyse the staff needs and look out for the best
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talent possible on the market. The project manager must be aware of the needs at all
times and plan to attract the best talent and team players.
b. Staff retention: Having hired the right staff and brought them on board, the battle is
far from over, these people must be kept interested in the job in the company as much
as possible throughout the contract tenure. To do this, the HRD ensures that each
person on board is kept as happy as possible with the limited resources available and
will endeavour to do every and anything to minimize the staff turnover or attrition for
this has implications on the corporate/project image, achievement rate, quality and
motivation. Thus, the project manager should do more than just hiring but keeping
staff interested long enough until the work is done.
c. Motivation: Closely connected to point (b) above, the HR must make the environment
not only conducive but one in which staff will desire to voluntarily work as long in
the process achieving the personal goals and objectives. Each person has their unique
personal goals and will do everything possible to get what they want regardless of
where this may be found, as long as it is lawful. If a competitor company or indeed
project offers better conditions of service, working environment or culture, naturally,
people will gravitate to that place and offer their best skills there. As earlier intimated,
motivation has to do with inspiring people’s inner resources to voluntarily keep on
working or doing something in a specified direction. Staff motivation methods take
different forms such as high net pay, capacity building/training, loans, work culture &
environment, leadership style among many.
d. Empowering: This is a broad term but in a nutshell connotes giving power to staff so
that they stand on their own during and after employment tenure. Whilst in
employment, they must be equipped with the necessary skills and knowledge so that
they continuously competently do a good job on their given tasks and assignments.
Staff feel secure and good if they are allowed to try out new ways of doing things or
given lee way to make decisions that they perceive important and appreciated for
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their effort(s) and innovation. In that way, they not only learn new things but gain
confidence in what they are doing. Every employee however has an eye towards life
after contract and spend considerable amount of time and energy preparing for the
rainy day ahead. This affects their performance. Thus, if an employer empowers them
to acquire competitive skills or “layup treasure” upon which to lean beyond formal
employment, they will certainly put in their best. The project manager then must be
interested not only in work related matters but beyond-how his or her staff are
preparing their exit strategies.
e. Succession planning: Attrition is a fact of life which none of us can successfully
evade. One way or the other, we all shall leave our current jobs by either death or
quitting getting another. This invariably means that a gap will be created where we
now sit but the job will still need to be done, regardless of our state. To forestall this,
the HR must strategically position a pool of staff that are potentially competently able
to take over once a person leaves. This calls for clear strategic and long range
thinking. Unfortunately, for some reason, even the most sophisticated organisations
have succession problems and wrangles. That said, others have very few problems
and will have been grooming a set of people or individuals way off to take on a
function once any one leaves. There is a cost however to this but it is far cheaper to
prepare for such an eventuality than not to. Recently, World Vision International
selected a new International President (Mr Jenkins) that succeeds the venerable Dean
Hirsh, but only takes over the mantle on October 1, 2009. In the interim, there is hand
over period of over six months but the selection process started over two years before
2009! Managers must think about these things and plan even for their own exit. I
know this is a touchy subject but must be done none the less.
Evidently from the foregoing, we can safely assert and conclude that HRM focuses more on
capacity building ensuring that the right staff cadre is kept on board to reach the desired
corporate objectives and goals.
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Strategic place/importance of HRM in project managementHuman Resource is an important function that cannot be ignored anymore. From a back yard
department to the forefront, HR demands that people be viewed as the most valuable asset that
the organisation has far above fixed or current assets. Some projects valuable vehicles above
staff and the first question they ask after a project vehicle accident is the condition of the car!
Their mind is more on pleasing the donor and how to explain but you will be surprised to learn
that sometimes sponsors are more interested in staff welfare than the machines. A vehicle can be
replaced not life. That is in no way encouraging carelessness with assets! That said HR is of
prime importance today in all entities because of its strategic connotations and implications.
Below we tabulate some of the reasons why we consider HR very important:
1. HR ensures staff retention and motivation.
Although staff cannot entirely be prevented from tendering in their resignation letters, they can
unwittingly be delayed or discouraged to by the way HR courteously treats them or attaches
importance to them. If HR is on hand all the time and ready to listen, people will be reluctant to
quit unless some very serious matter forces them to. It has been documented that money is not
the only motivator and thus, other non-monetary incentives can be strategically used and
exploited to achieve the desired goal. HR and apt managers have a hidden power to delay or
hinder staff departure if they have connected well with people. A bad HR practice as was at the
Quest (case study) definitely is a recipe for disaster and high staff turnover.
2. With correct HR input, efficiency and cost effectiveness is achieved.
Cost effectiveness and efficiency are the cries of many projects and institutions. Despite planning
and widely consulting before and undertaking is implemented, there is always “Murphy’s law”
along the way to disrupt things at the critical hour. In one breathe, everyone on the team is all
fired up and excited to do a task but in the next, everyone has quit and gone elsewhere creating a
gap in project implementation. HR comes in here to mitigate the impact of this staff attrition by
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ensuring that new staff quickly get into the vacant positions and continue flying the plane.
Eventually, this cuts down on costs, delays and enhances efficiency and effectiveness.
3. Ensures continuity as succession is taken care of.
As earlier alluded, it is important for any entity to acknowledge the reality of staff attrition in
various forms and prepare accordingly to avoid needless shocks and panic in future. HR plays
that strategic role of anticipating changes as well as developing a pool of potential successors so
that work does not stall. The Zambian Government used to be very good at this years go and
even had a specific department (Directorate of Manpower Development and training, DMDT)
whose primary function was to train and prepare staff for better service in future. Thus, the
Government rarely had staff gaps in the respective establishments. Some NGOs are also good at
that though very few and far between. That said, HR and project managers play this strategic role
of ensuring continuity.
4. Enriches jobs thereby improving staff retention.
Job analysis and enrichment continuously takes place in the organisation with a view to refine or
improve on the job richness that people do. If someone has been doing the same old procedure
for ten years, they eventually lose interest or concentration. In other cases, they turn into
“corporate terrorists” as they suffer from the founders’ syndrome or simply are frustrated. This
happens when new junior staff come into the project and soon surpass them rising to the top in
record time. To mitigate this and avoid other ramifications of a boring job or procedure, HR
explores ways to enrich jobs as well as ways of motivating staff such as added responsibility or
even reducing the present work load. Various tools are used to do this but Boydell has done
much work in that area worth consulting. To some extent then, the HR department and project
Manager must have the ability to tell and recommend appropriate changes periodically consistent
with the changes in the environment.
5. Builds and empowers people beyond the organisation.
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Professional HR practice aims at improving and empowering the softer qualities of a person so
that while they serve and after they leave the organisation, they will be far better than when they
first took up the appointment. In other words, HR turns blunt wood pierces into swords that
achieve far much more. It is said of John Calvin of Geneva (1509-1564) that people would come
to him for instruction as blunt tools but return to their countries as sharp spears! That is what any
HR practitioner or Project Manager should aim for. A project life is usually short and in that
time, the project staff must achieve both the project and personal goals and this hinges on
strategic leadership.
Some recent changes: From ‘Personnel management’ to ‘HRM’ to ‘People
and culture’
Consistent with the rapidly mutating way of the world, HRM has had different faces, emphasis
seasons and attention over a long period of time. From being an insignificant, non essential
discipline, the trends have been changing consistent with the way people perceive HRM. Grobler
et al16 attest to this assertion in their book “Human Resource Management in South Africa” as
follows: “Modern Human Resource (HR) is radically different from Personnel Management of
decades ago.” Among those that helped to change this perception is the venerable Peter Drucker
who held and taught that people were the most valuable asset of any organisation rather that a
drain to the pocket. If that is so, then it means that they (people) need to be treated well,
motivated and appreciated by way of good conditions, remuneration, reward and positioning.
Lately, however, as a result of the changing perceptions of this function, the HRM has been
termed variously. At first, it did not exist as a department probably because it was not considered
critical or assumed all human concerns were automatically taken care of once one got employed.
With time, it would appear that departments were set up and came under the umbrella of
“Personnel Management” which largely focused on hiring as well as firing. Again, as times
changed, Personnel Management encompassed aspects of motivating, capacity building, training,
succession planning among many things rendering the term “Personnel Management” inadequate
16 Grobler Pieter et al, Human Resource Management in South Africa, 3rd Edition, Thomson, 2006, pp2
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to denote all those aspects in capsule form. The term “Human Resources Management” ascended
to the throne and has been there for some time. However, as business took on an international
dimension, the term “People and Culture” is increasingly taking its rounds. This later
development encompasses people management, cross cultural mixed staffing, self managing and
virtual teams among many. We have no telling where this leads us next.
However, it is prudent for us to briefly give a definition of “Personnel Management” so that we
appreciate its distinction from HRM. Here is a makeshift definition:
“Personnel Management (PM) is that function of people management that focuses on the
logistical well being of staff enabling the organisation to reach its goals. This includes hiring,
firing, payroll, advances, staff loans among many” (Billy Sichone 2009)
This definition once broken down touches on:
a. Logistical staff well being. In as much as HR is concerned about such matters with
respect to motivation and retention, PM is equally concerned about the staff’s wellbeing
in areas that have to do with their logistical affairs such as office, appointment
letter/contract, settling, policy documents and whatever support a staff initially needs to
know or have when they newly enter, stay and leave the organisation.
b. Hiring. Many people think the sole function of the Personnel department is to “hire and
fire”! In a sense they are correct but not entirely because there is far much more that PM
involves. However, for this point we can safely assert that once the right people have
been recruited, the personnel department ensures these are interviewed, selected and
hired for the job on offer. This hiring involves drafting an offer letter to the would-be
staff member. In this regard, at project level, the Manager functions both as HRM and
PM both in one unless the project or program is large scale needing a specific staff to
handle those aspects. It is none the less critical for authorities to be abreast with what the
times demand.
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c. Firing. This is the sad and most painful part of the PM function, parting and tearing away
from colleagues you have worked with. If for some reason it becomes necessary to part
Company with a particular individual, the Personnel department has that duty to execute
what has been decided. Some time ago, a colleague of mine was instantly fired for
misconduct and the people that dealt with this matter were the Personnel Manager who
did it with great pain but had no option. Therefore, once a person steps on the wrong end
of the stick, yea, crosses the line, the Personnel department will be on hand to usher them
out! What a task!!!
d. Loans. As often happens, we all get hard up and broke once in a while. The only
alternative we have at such times perhaps is the organisational coffers and depending on
the organisational policy on loans, the Personnel department will again rise to the
occasion and give the exact position whether it is possible or not.
e. Advances. Closely connected to loans are advances which are technically very short term
loans. In a sense what a person does when they apply for an advance is to request a pre
payment before the stipulated right time arrives. This means when the right time arrives,
the person does not get their dues although they must work for what they got. The project
manager, with the help of the finance person must be well versed in these matters and
keep a tab on this one as it is sometimes abused. Some organisation however does not
permit advances for various legitimate reasons. Once again, the Personnel department
will be on hand to assist on this matter.
f. Leave. Keeping track of the accumulated days per employee may be a difficult task for
some but the personnel department keeps all these records and advise how many days one
has accumulated as well as processes requests that reach the office. Leave may be of
various types such as compassionate, study, local and annual among many. In each case,
the applicant fills in a form which is processed and approved accordingly, and leave pay
effected if allowable and relevant. At project level, the manager is the goal owner and
ensures the correct thing is done all the time.
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g. Health matters. Although HR deals with this aspect as well but PM ensures that staff are
in good health at all times so that they maximise their output. In addition, the personnel
department ensures that an appropriate health facility is accessible to staff at all times. In
some progressive organisations, staff and immediate biological family are catered for as
well. The project must rise to the occasion in the event their staff fall ill or have been
injured in the course or duty assuming they are still in employment.
h. Policy issues. As earlier hinted at, once staff initially step into the organisation, they are
blank except for the little research they have done on the said organisation. They come
with their own baggage, set of practices and expectations. It is the duty therefore of the
Personnel department to immediately hand critical necessary documents to such an one
so that they quickly peruse through, understand and know what to do while the iron is
still hot. Technically though, the HR department deals with this aspect but it is important
to make sure the organisational policies are on hand as soon as someone comes on board.
This entails a deep knowledge and appreciation of the extant policies by those that would
administer them. For instance, the project manager or personnel manager must have the
correct interpretation of whatever is contained in the policy document.
There are many other areas that our definition of PM touches on or does not that we leave for the
HR gurus to deal with in detail. Suffice it to say that HR and PM are different in focus and
approach although they merge as well as overlap in more areas than differ.
That said, we need to realise that we are operating in a fast mutating and dynamic world. Things
are changing all the time and so should our techniques in managing people. To give snap shot of
what we allude to, we give a brief description of some relevant current subjects in a global
economy especially for those international project workers. These are relevant for both the local
and international scene and worth musing over.
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International Human Resources management in perspectiveIn many senses, International Human Resource Management (IHRM) is pretty much the same as
the regular localized HRM that we are all accustomed to except that several parameters change
as we add the international dimension. One of the first culture shocks one encounters on the
international scene is the amount of relativity and just how people perceive the same thing
differently. As an international project Manager, you have to be armed with the right credentials
and traits to handle this relativity and to some extent, the uncertainty that goes with an
international assignment. In discussing IHRM, we cannot avoid the following points:
a. Third country employees: These are staff from a country other than the country of project
origin where the project originates nor indigenous to the work area. For instance, a US project
operates in Zambia but hires a project manager from Mali. This entails that they are expatriates
much like those from the country where the project originates.
b. Indigenous employees: These are local staff hired to work with a project of international
origin. These are treated as local staff rather than expatriates. These are far much easier to handle
for the indigenous HR practitioner because they easily connect and able to read the cues,
understand the values as well as perceive things in similar light.
c. Country of project origin employees: these are staff sent from the country where the project
originates with a view to either give technical advice or simply to get employed and in the
process acquire experience. These too are usually on expatriate conditions of service since they
have left the comfort of their home countries to work away from family and friends.
The above staff cadre will usually be interwoven in one multicultural team, each of them with
their own peculiar demands, work cultures, preferences and desires. The project manager cannot
escape the group dynamics that are generated by staff from different backgrounds and
orientations.
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For a fuller treatment of this section, refer to Schuler et al whose book is solely devoted to
IHRM. You could also refer to my book, “The Strategic Horizon” which has a larger and deeper
treatment of this section.
That said, we can safely say that international project management is here to stay and its high
time people started considering international assignments.
The virtual organisation and HRM
With the advent of the borderless virtual organisation, there is need to change the way we handle
HR matters. In the past, same location projects and teams could easily interact and get immediate
feedback about many matters but there is need for a complete paradigm shift in the mind of HR
practitioners. Whereas in a regular project, the manager could easily make decisions that would
easily be consented to or respected by subordinates and colleagues, the multinational virtual team
may have a different face and that for good reasons such as:
a. Time differences
b. Cultural differences
d. Different perceptions and orientations.
e. Communication challenges
f. Different expectations and interpretation of policy.
The virtual team dynamics are largely different from the regular teams as people cannot see each
other and somehow read expressions from each others’ behaviour. Granted, gestures also differ
but if they are in the same place, they can easily ask and correct the situation immediately unlike
in cyber space.
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With respect to practice, the HR practitioner must come armed with the necessary attributes to
handle the relativity that comes about with crossing time zones and cultures. For instance, is a
North American agrees with an African project colleague to meet on skype at 14 hours GMT for
a chat, the American must factor in an allowance of technological glitches, time delays and all
sorts of things that might come in the way. When they do finally get to communicate, the
American wants to go straight to business while his/her colleague wants to greet and find out
how things are at home! These and many other issues must be carefully managed in a virtual
environment. If the virtual organisation has staff scattered all over the globe, then there is need
for an extra effort to ensure people are on the same page and are responsible individuals of a self
managing team. In addition, the virtual team entails there should be mutual trust, accountability
and consistencies by all parties on board the organisation lest all things fall into disarray. That
said, there is no escaping this virtual organisation with all its challenges, the best we can do is to
position ourselves and brace for the challenges ahead.
Generation mix issue
Increasingly, the differences between generations are becoming apparent as people from
different eras meet and have to work together. The older folk seem to appreciate reverting to
rules and regulations as they work while the newer and younger generation would like to get
things as quickly as possible without much ado, many times disregarding policy or rules, which
they perceive as needless red tape and bureaucracy. When these two groups are on the same
team, expect some sparks initially but as the team members mature and accommodate each other,
expect a mutual learning experience, assuming each party is ready to learn from the other.
Increasingly, modern writers have recognised this matter and write about it. Their view, unlike
the older folk, is that as cultures collide and generations mix in one pot, perceptions invariably
will differ. This challenge is therefore worth approaching positively and managing well. The
author once worked in a program where the Manager was from an older generation while the rest
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of the younger team mates were from another age. There was often drama in the office until both
sides begun to appreciate each other’s perceptions.
Hiring for tomorrow
In the light of the rapid changes constantly taking place all the time, there is need also to alter
some time honoured practices such as how people are recruited as well as what to look for in a
potential candidate. The Manager recruiting staff and desiring to constitute a working team must
look far beyond the regular things that employers look for such as academic credentials,
experience and whether they are malleable or teachable. In as much as these traits are good,
essential and important, there is need to do far much more home work in arriving at the best staff
profile to work in projects of the 21st century. We suggest some things potential project managers
or employers should look out for in the potential team members.
1. Technologically apt and proficient. This means staff must be at home in a hi tech environment
where computers, machines and all modern gadgets are the norm and used as tools rather than
status symbol issues.
2. Team playing skills. Staff must be self motivated, responsible and proactive in their team
playing role. They should aim for collective good and success rather than individual brilliance,
although this has a place in the right context.
3. Exposure, preferably international. The world is getting smaller as globalisation makes inroads
into our world. Relativity is increasingly the norm as we head towards homogeneity of tastes and
perceptions. In the interim, our sharp differences remain and must be meticulously managed for
the team’s good.
4. Flexibility and ability to learn new skills set. In the past, our forefathers survived with one
skill set throughout life but things are changing and have changed. Staff need to constantly
acquire and appropriate a fresh skills set all the time so that they remain relevant and useful.
Rigidity and one track mindedness is the sure way to fall over the career precipice.
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5. Ability to work in the virtual organisation as well as the paperless office. In the past, offices
were filled with all sorts of paper work, red tape, bureaucracy and various policies such as the
dress code, corporate layers and the rest of it but things have drastically changed and so must the
employee of the future.
6. Goal and task oriented. This staff cadre must work on tasks in a given time frame with a view
to reach the goal in the shortest possible and most cost effective manner. Once they put their
hand to the plough, there is no looking back, as it were. Until the task is done, they will not rest,
given the time constraints in the click generation.
Bruce Tulgan, Carolyn A Martin, Richard Bellingham, Gary Salton, Terry Fitzwater and others
have done some extensive work on this matter and their books17 published by the Jaico
Publishing house is worth your perusal.
Recruiting and retaining the best talent
Today’s highly competitive world demands the best talent on board. To recruit and retain them
on your staff team is one of the most difficult challenges an HR practitioner faces. This is for a
good reason: People are looking for value for money, regardless of where they can get a good
job. It does not matter whether they are at home or abroad, if the skill set is relevant and equal to
the task, with demonstratable evidence to buttress their cause, then they are in business for as
long as they are useful and add value to the world. By definition, recruiting carries the
connotation of attracting the attention of potential employees or consultants for possible hiring
having gone through the selection processes. After successfully getting them on board, the next
challenge is to keep them interested enough so that they stay and contribute as much as possible.
Usually, the best talent is found among the educated, exposed and experienced people on the job
market but there is a price to be paid to retain them. These are called ‘Known quantities’
17 Refer to “Virtual teams” by Bellingham, Tulgan & Martin in “Managing the Generation mix”, Tulgan in “Recruiting the workforce of the future” Fitzwater in “Documenting employee performance” and Salton in “Organizational engineering” All these titles are published by the Jaico publishing house. Another book worth consulting is one by Manfred Steger called “Globalization: A very short introduction” by the Oxford Press. Steger sets the stage for global thinking exceptionally well.
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probably are probably past the job application stage. Instead, Companies and institutions pursue
them to consider joining their staff team. Alternatively, the organisation can invest in training
people with a view to fill in the future gaps. This is an expensive venture as well as a gamble to
some extent but this in and of itself may be the way to go depending on the context and what has
been agreed between the two parties (employer and employee). After all, modern and post
modern management practices highly encourage continuous training and staff
improvement/capacity building. There is no escaping unfortunately.
As regards project management then, HRM is a critical function that cannot be over looked.
If it is neglected or given a low view, the adverse off shoots soon begin to manifest in the
following ways:
i. High staff turnover (Staff leave the organisation or project and joint the next.
j. Reduced productivity (e.g. output lowers, time of doing something lengthens,
inefficiency, costliness, excuses etc)
k. Project sabotage (e.g. theft, fraud, collusion, disruption, carelessness, abuse of assets,
‘dirty deals’ etc)
l. Dysfunctional teams (instead of building synergy, people compete against each other, self
takes the centre stage)
m. Unresponsiveness (ignoring, responding at will, passive resistance etc)
n. Poor quality output (work done with little commitment, work done but with errors,
incorrect, poorly packaged, misinformation)
o. Poor time management (late arrival at work area, persistently working late)
p. Bad attitude to work and supervisors.(i.e. passive resistance)
q. Absconding without permission (e.g. absenteeism).
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r. Destroying of corporate image (e.g. by bad behaviour, obscene talk, fighting on duty &
other vices etc)
s. Poor interpersonal relations (turning to backbiting, gossip, rumour mongering malice,
cartels, busy bodies etc)
t. Increased morbidity
As we come to a conclusion of this basic HRM/PM introduction it is prudent for us to state that
Human relation issues are equally critical in project management as well as this impacts on the
ultimate project delivery quality. If staff are not well treated or their supervisors are weak in this
area, then expect an avalanche of problems. Poor HRM abilities is indeed an recipe for disaster
and confusion leading to all sorts of undesirable behaviour patterns that may include project
sabotage, dysfunctional teams or even disruptions with the partners/stakeholders. There is need
therefore to master these skills, internalise them and seek to reduce to practice the theory that we
learn. In addition, the Project Manager or HR practitioner constantly needs to frequently appraise
themselves as well as acquire new skill sets that would work well in the post modern context,
especially as we veer towards virtual teams as well as work group centred technologies. The ball
game has rapidly changed and continues to, hence the need to keep in step with the times lest we
fall by the way side. For instance, the Project Manager, who handles HR matters must get to
grips with the extant local labour laws, legal provisions, the local psychology as well as how to
best harmlessly wiggle him/herself around difficult situations with perceived difficult situations
that include handling stake holders (e.g. politicians), partners (e.g. other NGOs, target
communities, customers & sponsors), failure to which may have long lasting adverse impacts on
the project. In other words then, a Project Manager handles more than internal customers (staff)
but others who are connected to the project in one way or the other. This has a tone of public
relations, marketing and human resource as well. At times, Managers of large scale projects and
programs get blinded with their power/financial muscle and forget that project work and success
hinges on team work as well as support from other players in the environment.
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We have spent some time around this HR hill, defining terms as it were, it is high time we
progressed to something else. In the next unit, we consider quality issues as relates to Human
resources, stay connected!
Case study 1
Motivating People
“All organisations say that people are our greatest asset. Yet few practice what they preach, let
alone truly believe it.”, aptly quips Peter Drucker, that Management guru of our times. And yet
how so true this assertion!! Finkelstein quotes Drucker as it introduces the article “Motivating
People”. It is a lamentable fact that we have slid into the new millennium with relics of the past
still firmly clasped to our “corporate skins!” What can be done? How can we handle this hurdle?
What parameters can we employ that will help us to fight lethargy and demotivation?
Finkelstein points out four critical dimensions to rescue us. But before we proceed, it is fitting
for us to define what motivation is. Using Kreitner and Kinichi’s definition, we state that
motivation is “Those psychological processes that cause the arousal, direction and persistence
of voluntary actions that are goal directed” From this definition, it is clear that the factors
under consideration are the inward disposition and internal motions that ferment as one is about a
task or activity. In a nutshell, we are considering parameters that cause someone to feel good,
happy, exhilarated and satisfied to do a task.
Having briefly defined what motivation is we now tackle the four critical dimensions (Where,
who, how, and why).
In the first place, for anyone to function well, they need to operate in a conducive and palatable
environment, i.e. the buildings, office accommodation, furniture, “family” kind of work
Executive Excellence, April 2000 issue pp10 Organizational Behaviour, Kreitner R. and Kinichi A. 4th edition, pp 189
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treatment, freedom to contribute to the company goals and any outer gadgets that make life
worthwhile. It must be remembered that the average worker spends over 8 hours daily at the
work place and as such must needs finds the work place attractive and comfortable otherwise
work is reduced to a mere “necessary evil”. In the second place, the worker must have a sense of
belonging in the company. As new employees join a company, they come with expectations that
are either fulfilled or drastically altered, in which case many feel disillusioned. In other words,
the company culture must be one that is realistic, open, clear and framed in such a way that
mutual trust and teamwork harmoniously co-exists. The culture of two merging companies is
especially tried and tested when two hitherto different work forces converge, obviously causing
“sparks” which need to be extinguished through the evolution of a new culture. In a nutshell,
“culture is how people interact at work, how they support the mission, how they regard each
other, how they work together toward goals, and how they treat customers”. This definition is
all encompassing and deals with all the salient features of a corporate culture. If the right culture
is absent, it leads to losses and ultimate company failure. In the long run people become
egocentric rather than corporate goal focused. The culture contributes significantly to staff
retention rates as well as diversity and high employee turnovers.
The third parameter that rears its head is that of development. This is the “how” of the work
place. Workers must be given the skills to handle their tasks, through prolonged continuous
training. If strategies are clearly set, pursued to the end through appropriately trained staff, then
some positive progress is registered. If the “how” is not clear in peoples’ minds, they feel
incapacitated, directionless and demotivated. To the contrary, if they are capacitated and
involved in some way at the planning stage, as well as kept abreast with the latest developments,
they will “own the goal” and will wholeheartedly support it to the end. In other words, the
company must plan, train staff, and ensure that these appropriated abilities are utilised rightly.
Short and squeezed training sessions are not recommended for “practice makes perfect” as that
quaint old saying goes. People need to internalise what they learn and only by constant practice
do they perfect their skills. The fourth dimension is the all-time famous reward system. Many
“Motivating people”, Executive Excellence magazine, April 2000 issue pp10
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reward systems have appeared on the horizon, some fair while others horribly inhuman! The
universal one which has stood the test of time is that of compensating at the end of the service or
through periodic performance reviews after which one is paid some token of appreciation. In as
much as this method has worked well in the past, the present generation is more individualistic
and favours “Instant gratification” compensation. The worker of today is interested in seeing
immediate results as well as investing in the future, to secure the retirement. Unlike in the past,
one could bank on the retirement package and there after run “broke” as soon as the cash is
exhausted. In other words, immediate cash value is more ideal for the modern day worker called
the “X generation worker”. Interestingly, not only is cash crucial to motivate a worker, time off
and the psychic gratification are paramount today. In this hurried generation of hustle and bustle,
one will appreciate some time off work to pursue other refreshing activities (Such as family life,
holiday, set up own business etc) and then return, having “recharged the brain cells”.
Thus, we have unveiled what Finkelstein and others propose as the way to motivate today’s
worker. Me thinks this is an excellent and relevant article which ought to be read by every
practicing manager. The 21st century worker then, is looking for the four-fold dimension to work
effectively. As more managers pick up these jewels and pragmatically implement them, I am not
afraid of the result!
Source:
Finkelstein, “Motivating people”, Executive Excellence magazine, April 2000
Case study questions
Why do you think Drucker makes such a sweeping statement at the beginning of this case study?
Why do you think staff are viewed as a cost rather than a critical asset to the organisations’
progress?
What is motivation and how relative is it in a diverse cultural context/team?
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Comment on the X generation.
How can this cadre be motivated and kept interested in the organisation?
How can perceptions be changed of managers to cease considering staff as mere cogs in a chain?
List and briefly explain the four dimensions that will foster effectiveness in the 21st century
worker.
=====================================================================
Case study 2
Diversity management
With the rapid re-engineering that has been sweeping across the world’s businesses, one hardly
finds it difficult to stumble across literature that deals with the said changes. The media is also
replete with reports of company reorganizations every day. Indeed, these inevitable changes are
sweeping across the world like a typhoon and there seems to be no panacea to this traumatic tide.
What is really happening? Why this seemingly mindless closure of companies and the shift
towards diverse corporate companies? These and many other questions, the Organisational
Behaviour student seeks to determine and unveil. One aspect dealt with is that of nurturing and
maintaining a diverse workforce in this competitive environment. But why should we bother
ourselves with diversity? Why the countless studies?
Two excellent authors, Caela Farren and Bob Nelson have written an article entitled “Retaining
Diversity”. This is a brisk but clear treatise that high lights the necessity of a diverse work force
and how to retain the same. The said write up opens by stating that although recruiting a diverse
workforce can be challenging, retaining the same is even extra dicey. The article further reveals
four best practice methods to be imbibed so as to minimise the employee turnover. The retaining
of a diverse workforce is crucial because of the obvious advantages that accrue to the company.
Firstly, people from different backgrounds and races come up with different ways of carrying out
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a procedure as well as new and cheaper ways of producing a product. Closely akin to the first
reason is the fact that a rich diverse company will help the multinational corporation to sail more
easily on “foreign waters”-markets because valuable insights and connections are within the
corporate ranks. Thirdly, in keeping with the affirmative action, where minorities are given an
equal chance of employment, advancement will ultimately bring about more production and
harmony. Hitherto, the top jobs have been the private preserves of a few elite men. In the past,
women and people of colour have been relegated to the terraces. With the aforementioned
culture, a company risks missing out on excellent the contributions from the said minorities.
In the first place, open communication is highlighted, and rightly so. Communication is crucial if
any institution is to survive in any circumstance. Even marriage, to a greater extent, hinges on
effective communication. By this is meant that every one has a right to information at the right
time and must keep abreast with the current happenings within the firm. This entails talking over
issues, having access to the top executives and liberty to suggest innovations. Every one, despite
their colour, sex and creed must have a fair hearing. For example, at Pacific Enterprises18, one or
two top ranking employees sit before an audience and describe how they moved through the
corporate ranks. This offers tremendous encouragement to those beginning the corporate ladder
ascent. Berlinda Fontenot-Jamerson, who heads the Pacific Enterprise Diversity Program and is
herself an African American woman, testifies to the usefulness of this approach.
The second suggested best practice is that of training and education. All employees must be
given some form of training to sensitise them of the potential dangers of discrimination and also
about other cultures. Gross ignorance accounts for some of the discriminatory attitudes such as
ethnocentrism where one feels their colour, sex and race are superior to others. Thus, the training
and education will go a long way to clear defective stereotypes and prejudices. Furthermore, all
staff must be given similar opportunities and leeway to express themselves. At Microsoft for
example, two programs are in place to tackle the diversity issue. The first is an awareness
program designed to limit the influence of stereotypes while the second is a “business program to
18 An American company
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provide real-life situations, challenges, and solutions to diversity issues”G. In addition to the
aforementioned training, the companies should embark on staff career development that will
make them self reliant, thus building capacity.
The third best practice method is that of deliberately providing mentors to new employees. The
said mentor should be attached to a new team member and should meet at regular intervals to
exchange notes on the progress. A period of one year is recommended. In this way, the new
people will feel welcome and not lost. Digital Equipment19 has reduced minority turnover as a
result of the mentor program introduced into the company. The idea of mentors was nearly a
forgotten art until the world woke up a few years ago. Most of the world’s great personalities
have had mentors to whom they looked for inspiration, much like the ‘management gurus’ we
read about in our courses!
The fourth and last best practice is to make managers accountable. Far too many pay lip service
to the importance of diversity than they practice. Once given a platform to present a paper, they
give heart rending, tear evoking and moving speeches but as soon as they turn round to leave,
they discard everything! There is need to put parameters in place to ensure that minorities are not
only represented but are appreciated, as Roosevelt Thomas, Jr. would advocate. Top
management must be seen to tangibly and pragmatically support the diversity program. We learn
many valuable lessons from each other and ultimately the organisation benefits once the right
attitudes are internalised into the company culture.
Having outlined the best methods, the article hurtles to give some guidelines for a strong
foundation. To build a powerful superstructure, there is need to foster understanding on key
concepts, address all representation and diversity issues regularly. With these and other practices
such as cultivating team spirit, mutual trust, effective communication, we have no reason to
believe that a company will continue crawling in the dust of competitive disadvantage!
Source:
G Retaining Diversity, Excellence magazine-May 1999 issue page 719 An American company Diversity management, Excellence magazine-May 1999 issue page 8
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Farren Caela and Nelson Bob, “Retaining Diversity”, Excellence magazine-May 1999 issue
Case study questions
What is diversity?
Is it (Diversity) beneficial to the organisation? Explain.
“Bringing people of different cultural backgrounds and orientations into one team just promotes
friction and lower productivity. It also wastes a lot of time in the process” Discuss these
statements.
How can diversity be best encouraged and harnessed to reap the most out of a team?
How harmful is ethnocentrism in a company. Give examples from your work place or where you
have been/heard of it.
What is the affirmative action? Does it apply for Zambia?
Revision exercise
Give some ways of motivating people.
How different is IHRM from HRM?
What are the merits of a diverse work force?
What, in your own words is the X Generation and how does it impact on organisational quality
output?
How different is the virtual organisation from the regular as relates to HRM?
In your own words, define HRM and how it differs from Personnel Management.
Why is succession planning key in an organisation, project or institution?
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BibliographyBell H Cecil Jr & French L Wendell, Organisation Development, 3rd edition, Prentice Hall of
India, 1989
Bellingham Richard, Virtual Teams, Jaico Publishing House, 2003
Boydell T. H, A guide to Job analysis, British Association for Commercial and Industrial
Education, 1981
Brake Terence, Managing Globally, Dorling Kindersley, 2002
Bramham John, Practical Manpower Planning, Institute of Personnel Management, 1982
Clarke Alan, e-learning skills, PalmgraveMacmillan, 2004
Clegg Stewart & Dunkerley David, Organisation, class and control, Routledge & Kegan Paul,
1980
Crainer Stuart, The Jack Welch Way, Magna publishing co. 2003
Davies Anthony, Managing for Change, ITDG publishing, 2001
Dessler Gary, Human Resource Management, 10th edition, 2006
Farren Caela and Nelson Bob, “Retaining Diversity”, Excellence magazine-May 1999 issue
Fitzwater Terry L, Documenting Employee Performance, Jaico Publishing House, 2003
Flippo B. Edwin, Personnel Management, McGraw-Hill, 6th edition, 1984, International edition
Gebhardt E Joan & Townsend L Patrick, How organisations Learn, Financial World Publishing,
2001
Grobler Pieter et al, Human Resource Management in South Africa, 3rd edition, Thomson, 2006
Heller Robert, Managing Teams, Dorling Kindersley, 1998
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ILO, Labour Inspection, International Labour office, 1973
International Labour Organisation, International Labour Standards, International Labour office,
1978
Kakbadse Andrew & Analoui Farhad, Corporate sabotage, Jaico Publishing House, 2004
Krames A Jeffrey, The Welch Way: 24 lessons from the world’s greatest CEO, TATA McGraw-
Hill Publishing company, 2002
Langdon Ken & Bruce Andy, Strategic Thinking, Dorling Kindersley, 2000
Maylor Harvey, Project Management, Pearson Education, 2006
Morgan Gareth & Burrel Gibson, Sociological and Organisational Analysis, Gower Publishing
Company, 1979
Mouzelis P. Nicos, Organisation and Bureaucracy, revised edition, Routledge & Kegan Paul,
1967
O’Hara-Devereaux Mary & Johansen Robert, Global Work, Jossey-Bass Publishers, 1994
Papp S Daniel, Contemporary International Relations, Macmillan Publishing House, 1988
Peters J Thomas & Waterman H Robert, Jr, In Search of Excellence, Warner Books, 1982
Render Barry & Heizer Jay, Principles of Operations Management, Pearson/Prentice Hall, 2006
Salton J Gary, Organizational Engineering, Jaico Publishing House, 2003
Schuler S Randall, Welch E. Denice & Dowling J Peter, International Human Resource
Management, South Western College Publishing, 1999
Silbiger Steven, The 10-day MBA, Magna Publishing, 1999
Steger B Manfred, Globalisation: A very short introduction, Oxford University Press, 2003
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Tulgan Bruce & Martin A. Carolyn, Managing the Generation Mix, 2003
Tulgan Bruce, Recruiting the workforce of the future, Jaico Publishing House, 2003
Turell M, Training Analysis, MacDonald and Evans, 1980
Wanless Derek, “People-the key to success”, Banking World, December 1989
Unit 6
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Aim
The aim of this unit is to help student recognize the centrality of quality people management in
the organisation as well as highlight the changing perceptions on people management/HRM.
Objectives
By the end of this unit, students must understand:
a. Why staff need motivating
b. How quality staffing affects output
c. How to motivate staff/increase productivity.
Quality issues relating to HRM
Managing Human Resources can be both a joy and a taxing undertaking. It is a joy when people
working on the team are sincerely dedicated and diligent at their duties and will not rest until the
task assigned to them is done. A taxing drudgery when the job holders elect to do exactly the
opposite or engage in all sorts of destructive tendencies that disrupt the smooth flow of things as
well as destroy team work and spirit. The Manager has to be sufficiently equipped to
competently handle both scenarios Methods, Staff appraisal, continuous training, staff retreats,
team dynamics, self managing teams, coaching for performance, study tours, job rotation etc.
Staff need motivating for various reasons and one of the aims of the issues we consider in this
unit is just that. It is however helpful to mention briefly that staff come on board with
expectations and goals which must be seen to be fulfilled in the course of their service to the
project or organisation. If that is objective(s) is met, then they will have good reason to stick
around much longer other than just for merely earning a living. It is important to motivate them
because their productivity and productive levels largely hinge on this. Drooping spirits scarcely
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achieve much or go far in life achievement. One indication of a drooping spirit is the propensity
to and frequency of quitting what they begin at the slightest encounter of a challenge. To get the
best out of them, provide a conducive environment where their latent potential is encouraged to
come to the fore. In that way, they also discover their previously veiled talents and competencies.
In this unit, we consider a select sample of some quality enhancing methods in common use
today.
Methods of enhancing Human resource quality performance As hinted at above, this unit considers some tangible and tested ways of measuring performance
with some suggested improvements where necessary. A number of points are considered
beginning with appraisals which are by far the most common way of measuring performance
with a view to improve quality output though admittedly, these are variously applied and viewed.
Appraisals
Progressive entities have made effective use of appraisals with impressive results and benefits.
Appraisals have significantly contributed to staff productivity improvement where appropriately
and objectively utilised. Unfortunately, there has been a fair share of Appraisal abuse. Instead of
serving to advance the organisational capacity, appraisals are used at times to hound out the
threats and foes by the people in authority. Thus, an employee works in fear of being marked out
and consigned to the streets after that particular contract comes to an end. In that sense then,
appraisals play the unfortunate role of short-circuiting people’s career in the organisation as
people recoil fearing victimization.
The place of appraisal
Periodically, the project/organisation carries out staff appraisals. These self same appraisals are
meant to evaluate how team members have fared in a given time frame, what challenges they
encountered and what they intend to do about issues raised. As with other terms, appraisals are
defined variously. Their objectives are equally varied but the bottom line is to ensure improved
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quality performance within the organisation. What is the precise definition of the appraisal, why
appraise and how frequent should these be done? Professor Mwanalushi and Mr McMahon have
done a good job about appraisals in their little booklet “An introduction to Performance
Appraisal: The human resource evaluation process” They have said “The appraisal of people at
work goes on continuously. Indeed some kind of employee evaluation is carried out in all
organisations. This ranges from intermittent, informal and often ill-informed discussion between
managers and supervisors about individual staff members to highly formal appraisal techniques
based on comprehensive forms and procedures. Each time a supervisor issues a good word or a
reprimand some form of appraisal takes place…” from the above, we can see that the precise
definition is difficult to arrive at but what the authors (Mwanalushi & McMahon) are saying is
that the organisation has various ways of assessing its workforce with a view to establish their
capabilities in terms of strengths and weaknesses in the process raising productivity and quality.
Appraisals carry different meanings from organisations to organisation. Depending on the
objective, the appraisal may or may not hold a significant place. We must be mindful though that
appraisals are as much informal as they are formal. What ever we do each day tells a story and
creates an image. In progressive organisations where formal appraisals are imbibed, the
supervisor appraises the staff over a period of time, say one year. Depending on the rating, the
person’s contract may or may not be renewed. Increasingly, the period is being shortened to semi
annually as this enables the appraiser to capture much more relevant and useful objective
information. In that way, some level of objectivity is maintained.
The uses of the appraisal are basically to help ascertain the training needs as well as the growth
areas for the individual. Further, the individual is helped to see their own blind spots and then
quickly venture to correct the situation. Admittedly, we all are usually blind to our own defects
and some times do not even realise our greatest potential unless another hints to us. Thus, in an
Mwanalushi M & McMahon G, An introduction to performance appraisal: The human resource evaluation process Volume 1 #. 2 The personnel Management in Zambia series 1989 pp 1
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ideal sense, the formal appraisal is good because it is a relaxed time when people pause to take
stock of them selves.
The right spirit of an ideal appraisal
Appraisals have one major aim: improving performance. Any other use of the appraisal is either
derived from this goal or an abuse of its function. The right spirit of the appraisal is to be used as
an objective tool to assess the performance of an individual against a set of objectives mutually
agreed upon at the beginning of a particular period. This evaluation has a two fold goal. The first
is to identify the weak areas of some one with a view to offer any possible support so that they
reach the expected competence levels. The second is to check whether progress is being made
against set bench marks without which, we grope in the darkness and hope for the best. In other
words, appraisals are indicators of one’s performance over a given agreed period.
Sadly, in many places, appraisals are abused. This abuse shows up in many ways especially
where people are hired on contractual terms. Instead of using it as a performance improvement
tool, appraisals are used to settle old scores as mentioned earlier on. Secondly, they are used as a
whip to threaten operatives with dismissal. That said, a right spirit as originated by the designers
is to foster objective cordial empowering relationships between the assessor as assessed.
Types of appraisal
As hinted above, appraisals take various forms but below are some of them:
1. The Peer employee appraisal- This is the kind of appraisal where peers appraise each
other and give their thoughts about a particular person. One of the ways is to ask team
mates to comment about a person on a standard questionnaire while maintaining
anonymity. The questionnaire touches the strengths and weaknesses of a person. This
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approach is rich in that it helps the person get an idea of what others think about them and
have a 360* appraisal.
2. Rating- this is where a supervisor sits with the said staff and they review the period
together against set benchmarks listed at the beginning of the period. Using that
background, a person is tallied and given marks that determine their performance.
3. Descriptive essay- this is a situation where a supervisor writes a descriptive essay about
the perceived weaknesses and strengths (areas of improvement) of a given person and
gives it to the staff. A discussion then ensues based on that essay.
4. Ranking- In this approach, the employer ranks staff from the best to the worst based on
what the employer sets as the bench marks. This approach has a way of motivating the
perceived good employees while it shatters the “bad” ones.
Pitfalls of appraisals
Each of the appraisal methods listed above has its own pitfalls but here are the general ones:
1. Some of the appraisal methods are not objective.
2. Some superiors use appraisals to settle old scores.
3. The basis/ terms of reference for appraisal in some cases are not clear. As a result, some
come off injured rather than edified.
4. Sometimes appraisals are used to manipulate staff or are an organisational political tool.
5. At times appraisals kill innovation, the volunteer spirit or calculated risk taking. Staff
figure that they may not get any points for going the extra mile and content themselves
keeping within bounds.
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6. The appraisals are not comprehensive/holistic and as such do not capture all the aspects
of a person such as feelings, thoughts or factors that led to a particular outcome.
Merits of appraisals
1. They are a guide and help people to keep focused.
2. They ensure that only the relevant and competent staff retained.
3. They help in assessing the staff needs.
4. They help in team building as people begin to realise their potentials.
5. They add value to the organisation in that the appraisers and appraised are challenged to
soar to higher orbs.
6. Appraisals are a contact point for the supervisor and the supervised. Hither to, they may
have been caught up in the hustle and bustle of the workdays but at appraisal time, they
as it were, cool down and reflect together.
7. They have a way of helping people realise their strengths and weaknesses. In this way,
people take note of their growth areas and diligently work on them.
8. They motivate. Once given audience, aggrieved staff feel fairly treated and heard.
9. Improve quality & productivity as well as eventually cut costs.
Best practices
It is always wise to adopt best practices in project management as relates to Human resources
because this enhances the quality of output from staff. In addition these best practices once
properly bought into have a way of lifting the project profile as well as the entire organisation as
a whole. Best performing companies like DHL or FEDEX (although on recent 2009 Fortune 500
list, they may not rank exceptionally high) most likely have invested in creating a culture of
excellence, customer focus and timeliness. They most likely put a high price tag on great service
delivery because this pays back dividends many times over. To achieve this superior quality
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service, there is no short cut than to invest heavily in continuous staff training and improvement.
Staff must be facilitate to bring out their latent potentials to the fore and thus promote the
organisation as well as themselves. In regular Human Resource Management therefore, the best
industry practices must not only be imbibed but promoted as well. This entails meticulous
documentation and monitoring of all staff development as well as treatment processes. In the
ensuing paragraphs, we attempt to offer some best practices that would be handy in a project,
program or entire organisation.
Documenting the best staff practicesThere is need to document whatever takes place in the organisation for several reasons, one of
them being for future reference as the organisation seeks best practices. Another is for records’
sake, in the event there is a dispute or problem. In either case, the idea is to learn as well as
defend the organisation from whatever betide. Documenting staff performance is one of the best
things that an organisation/project can engage in because this remains a pivotal point for future
action. Documenting staff performance can loosely be defined as “keeping a record of something
or some activity relating to staff” or better still, as Fitzwater as defined it “the practice of
formally recording, in writing, your actions and discussions throughout the coaching and
disciplinary process”20. As we consider the documenting of the best practices, it is best to handle
this in point form as the ensuing sections demonstrate.
The first best practice is already alluded to above, that of documenting how things are done. The
can be done in several ways that includes the following:
a. logging: When staff begin a work day and knock off, it is good for them to log in and out. In
this way, their work hours are documented and paid accordingly, that is assuming they get in and
engage in productive work all the time they are in the company premises. This practice also
makes people conscience that they have a duty to report for work on time and subsequently
raises their productivity, all things being constant and equal. Further, this practice instils
responsibility and discipline to relevant staff as their pay is connected to their output. 20 Fitzwater Terry, Documenting Employee Performance, Jaico Publishing Hse, 2003, pp8
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b. Periodic reviews: In project management, it is a good practice when staff frequently meet at
designated times to review staff and project progress. As these meetings are taking place,
minutes should be jotted down and reports produced as a reference point for future reference.
Brain storming sessions are equally good times to get feedback as well as to build the team.
Where there is a shared vision and people pull together, there you find improved qualitative
output, although one or two people may be problematic probably because of a wrong fit.
c. Ongoing mutual feedback: Professor Mwanalushi has asserted that an appraisal always takes
place in one way or the other as people brush shoulders in the normal course of life and business.
This is true and must be recognised that we owe each other an objective and frequent mutual
feedback. Note that this feedback is mutual and can go either way. If possible, let this be
documented in some form so that a trail can be followed in the event of future learning or
dispute.
d. Appraisal: This is the most common way of assessing staff. As was demonstrated earlier,
appraisals are used to evaluate staff performance on a periodic basis with a view to improve
one’s performance and usefulness. In doing this, the quality of output is improved. Like earlier
mentioned, appraisals are of different forms and applied variously. For instance, a 360* appraisal
gives one of the best feed backs a staff can ever get, assuming their peers are objective and
sincerely want to see improvement. This particular appraisal ensures that colleagues
anonymously review each other and give feed back in areas that need improvement as well as the
perceived challenges an individual faces, perhaps unknowingly. All this feedback is documented
for future reference and learning.
d. Targets: Targets are benchmarks in themselves because a person is given tasks to perform in a
given time frame and the progress rate is documented. With repeated practice, it is expected that
the said staff will end up more proficient and will inform the job evaluation tool as well as set a
standard for future reference. Targets have a way of motivating self motivated staff to work hard
so that in the process they discover their hidden or latent prowess.
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e. Coaching for performance: As people come on board, they come with a lot of background
baggage which needs to be refined so that it fits into the corporate culture very well. This may
take time as people assimilate things in different ways and rates. Thus, in coaching for
performance, what we are saying is that the supervisor and supervised sit down together at the
beginning of a given period, set objectives and targets as well as document and then begin
implementing whilst mutual monitoring is going on. As opposed to the old mode where review is
only given at the end of the set period, the supervisor, being more proficient and skilled, moves
along with the said staff, offering advice and passing on skills whilst documenting progress
which they discuss at the end of the agreed tenure. In that way, the staff is built up and needless
tussles avoided.
f. Team building activities: this may include having staff retreats, outings or simply get together
occasions where staff spend time together to socialise as well as know each other better. In effect
this is a double edged sword, killing two birds with one swipe. This interaction enables team
building but also is a source of vital information for different staff which they would not
ordinarily give out. For instance, a tea party would reveal who loves what tea brands and thus
inform HR what type of tea to buy for the particular staff when a special occasion such as an
anniversary or birthday comes around the corner.
This list is by no means exhaustive but gives a good objective idea of what and how to document
staff performance.
Importance of quality in HRM
The importance of quality in HRM cannot be over emphasised. It is beyond dispute that to get
the best results, you need the best means, in this case being human and other resources. The
Human resource component is particularly crucial because people are like the rudder that directs
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and steers the gigantic ship in the required direction. An insignificant ant like person in relation
to a big ship does the thinking, charting the course and ensuring the desired haven is reached in
the given time frame. Thus, any company may be endowed with excess resources but if the
human resource, yea, top management and staff do not correctly fit in the context, expect endless
problems and disasters. Thus, we can safely assert that hire the best fitting competent staff and
you are off to a good start. On the other hand, hire mediocre staff, expect a multiplication of
problems in your project implementation. That said, we need also to say that the HR function
needs to be itself well orbed, fashioned and positioned. This means that the HRM practitioners
(Including the Project Manager) need to constantly sharpening their axe so that they always have
cutting edge technologies and knowledge that they pass on to the rest of the organisational team
as the culture is cultivated. HRM, like any other discipline is not static, it is dynamic in a
mutating context, as the case may be.
As we wind up, we need to re-echo our clarion call, “Hire the best talent and you are off to a
good qualitative start”!
Case study 1
In depth interview with Mr Sikapale Chinzewe, Human Resources
manager, World Vision Zambia.
April 2000 Lusaka.
An interview was carried out with Mr Sikapale Chinzewe, Human Resources Manager at the
World Vision Zambia office with a view to establish Leadership and quality practices in the
organisation, having adopted the Team approach as well as successfully survived a near total
close down. This interview focuses on quality, Human Resource and Leadership matters. World
Vision International as a whole has grown over time and in a way more complex than in 1950
when it began in that corner of the World-Korea. As a result of all the continuous international
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changes, World Vision Zambia has been affected as well. This interview therefore highlights the
most remarkable changes that have and will continue to affect World Vision.
Questions:
Q. Mr Chinzewe, tell us briefly about your self.
Ans: My Name is Sikapale Henry Chinzewe and I am currently the Human resources Manager at
World Vision Zambia. I am married and was initially trained as a teacher. My first appointment
was in the Luapula province and then I went back to school to study Business Administration. I
was at the Copper belt University and there after Joined World Vision. I was in the Evaluation
department and was later appointed Human Resources Manager in 2000.
Q. My! Your profile seems interesting! It seems you have changed fundamentally in terms
of career and now you are the HRM from evaluation, how have you managed? What have
been the benefits?
Ans: I believe that life is dynamic and people should be ready to change any time. I begun
working as a teacher when still quite young and therefore, it was easy for me to change. Further
more, I think I like taking up challenges as they come. As to how these shifts have helped me, I
think the training I under took at the Copper belt University (CBU) opened my mind a lot. For
example, I am better able to look at issues from both the Teacher and Business person’s
perspective. Hither to, this would have been impossible. Lastly, I have learnt that to be a
Manager is not to be bossy but to be a team player, thus, I do not suffer from the pitfall that many
teachers suffer from such as ordering people around, at least in Zambia!
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Q. Now Mr Chinzewe, What has been your most challenging time as a professional?
Ans: I have had many challenges in life but I can safely say that dealing with people has been
very challenging for me, how to motivate, inspire, coach people and solve issues as they come. I
have been at the helm of hiring and training staff at WVZ. These two aspects have been daunting
tasks because qualified personnel have been hard and far between as well as the ever shrinking
budgets! In a way, I have handled some of the worst characters imaginable and have often gone
home with my head spinning. Some time, I have noticed this stress creeping even into our home!
Another aspect has been to be at the helm of initiating changes in WVZ both from those that
were already in process at the time I took office and the new ones. We have been at the centre of
organisational cultural and structural changes where either some jobs are scrapped or others
created. As World Vision expands in terms of work force, so also, the needs for frequent and
continuous training at all levels. In the past we have failed to carry out some critical activities for
want of cash. We are now trying to find ways to sustain ably raise cash to cover the overheads as
we facilitate further training.
Q. World Vision Zambia has been embarking on Leadership, team and total quality
changes in the past few years, could you shed some light on this.
Ans: Yes indeed, World Vision has been undergoing rapid changes and re engineering so as to
get to the best operational levels. Thus, TQM, teamwork and leadership are all efforts towards
that end. We have reached a stage when organisational fluidity is essential. As I have often said
at other forums, “The only thing that is constant is change”, world vision is no exception.
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Q. Why has this been adopted, any reasons?
Ans: As I have intimated, the dynamic times demand that we move with the times. Like any
other organisation of the past, World Vision found serious operational problems with the
orthodox hierarchical management structure that proved inefficient. Therefore, in 1995, the
organisation embarked on a major re – engineering (as well as reorganisation) exercise so as to re
– align the organisation towards the best ministry delivery routes. This was a result of the
realisation that the organisation had inherited a rigid bureaucratic structure where most of the
individuals are either under utilised or over worked. A way had to be found which provide the
best delivery avenues at a minimum cost yet at high quality, thus, from 1995, we had
Management structural changes in a bid to arrive at the efficient structure. In some cases, we
have had to scrap some positions and thus, scaling down on the number of staff. We have no yet
arrived as this process is on going. In a nutshell, we have to change in keeping with the trends in
the partnership worldwide or else risk being obsolete and in efficient.
Q. In your own words, what is leadership?
Ans: In my own words, I would define it as the ability to inspire confidence in others. It means
being able to influence others towards a certain direction as a result of being intrinsically
visionary on long and short-term goals. A leader works alongside colleagues so as to unleash the
potential latent within them. A true leader is not “bossy” but a facilitator, inspirer, motivator,
coach and mentor. Let me add and say that a true leader is a strategic visionary thinker who
carries others along to a known destination.
Q. How applicable is this ethos to the World Vision and how sure are you?
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Ans: Oh yes it is very applicable! We are moving towards teams because we perceive that where
teamwork thrives, the output is higher. Like I said, without adopting leadership practices as
opposed to Bossy kind of management, we are done unless we slowly sell the ethic to the extent
that it is internalised into the organisation. It must be a company culture. As to whether I am
sure, I have seen it taking root in the World Vision National Office and in some Area
Development Programs (ADPs). Of course I must be quick to say that this is new and will be
opposed by some quarters that hold on to the past hierarchical structures. I cannot give a time
frame as to when we shall arrive, but given present pace, we should begin to see this more
pronounced in the next three years or so. We are getting there.
Q. Are you involved in these leadership innovations, and if so, what is your role?
Ans: I am definitely involved in various ways. I am part of the Management team and actively
so. In what we call Program Development Quality Assurance (PDQA), I head the leadership
component. I am also on the self-review team that we have decided to host periodically to take a
critical introspective look at our performance levels against the set benchmarks.
Q. Do you see the potential of developing this ethos in World Vision?
Ans: The potential is indeed immense because we now and continue to have the right people in
place. Hither to, we have not had many qualified staff but the trend has been towards hiring the
right staff. In the past, as long as someone was a Christian, they qualified for the job. But now,
we are looking for much more than the paper or a good testimony (although this latter aspect still
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remains pivotal), we are looking for potential, creativity, diligence and team player traits in our
candidates. Besides, Human resource is the best resource we have to hand. A well-trained and
motivated Human resource can accomplish much, especially when done as unto the Lord. I see
this culture slowly creeping into the organisation; this is a good and pleasant development.
Q. If so (preceding question), how do you think World vision will attain its objectives?
Ans: Talking about the way we are to achieve the aforementioned goals, the organisation is
determined to hire the best-trained Christians around who have the knowledge and skills. That is
why we have the Personnel Manager who handles the hiring, training and motivation of the
current staff. In a way, the HR is strategic while the PM is operational although the functions
will obviously overlap frequently. Thus, the burden is on these two departments to coordinate
and come up with ways to develop a team kind of environment. Our present goal is to train the
extant staff so as to help sharpen some individuals that are potential achievers.
Q. What are some of the hurdles you envision will buffet the organisation in the quest
towards that goal?
Ans: To say that we have no hiccups would be telling a half-truth. The path to organisational
transformation is fraught with many hurdles, the chief of which is Finance. Many plans hinge on
the availability of funds. We have planned many marvellous training sessions but alas, we have
failed to implement them. We think continuous and consistent training of staff is the only way
forward. One way we are trying to get round this issue is by writing project proposals about
capacity building. For example, recently we wrote and sourced funds from the US office to train
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facilitators in leadership. It is about $ 10,000 but I trust this will help. In days that lie ahead, we
shall continue to write, as the ADP budget cannot meet the demands.
The fourth hurdle has been to attempt to break those departmental “walls” that have been created
in the past. Apart from personal conflicts, it is true that we feel secure and content in our
confined specialty and are not willing to learn or allow others to intrude into our domain Our
catacombs are too warm and cozy to let any villain enter in. In a team setting, the players are
multi-talented and are willing to learn and overlap each other’s duties where need be. If a person
is absent, the work will not stall on that account but another easily fits in and then work
progresses. We hope to move away from the archaic culture where certain jobs are the sacred
preserve of some people. Admittedly, this is and will be an uphill battle.
Having asserted the above, we are determined to do our best in the circumstances. So far, so
good!
Q. How do you assess/gauge the progress, are you satisfied with the pace?
Ans: We are pleased to note that there has been a tremendous improvement in the quality of
reports. In the past, the reports were either scanty or too detailed but now we have adopted the
“methods of best practice”. Where we pick the best methods of doing and reporting activities
also, we have ensured that we have a standard report format. In addition, we make sure that we
respond to our partners in the stipulated time. Proactively is now normal. Generally then, the
progress has been good but we need to keep up the tempo and infuse a sustainable system that
will guarantee timely and quality responses to all stakeholders. In addition, the advent of
Information technology has been a tremendous help to the organisation because it has ensured
that we move faster while keeping in step with the outside world.
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Q. Quality is also a buzzword in World Vision circles, why?
Ans: For some time now, TQM has been a buzz word because management circles have
perceived it as the “silver bullet” that has suddenly transformed organisations from being
inefficient, rigid, inflexible and crippling bureaucratic to agile, responsive and continuously
mutating and learning organisations with near zero defects in the products and services.
Although we do not deal in tangible products (as World Vision), in a way we do and as such we
endeavour to produce services at the right time and place as the case may be. We desire to have
quality in all areas of our delivery system to the greater satisfaction of our stakeholders, in this
case being children and donors.
Q. What are the objectives of TQM?
Ans: The objectives of TQM are to have the best products and services at a low cost and yet high
quality that satisfies customers. Furthermore, TQM aims at eliminating defects in products and
services by avoiding defects within the system. Thus, the goods and services are of the highest
quality, low cost and yet what is in keeping with present consumer taste.
Q. What are your strategies to achieve TQM optimum?
Ans: Since we are in our preliminary stages in infusing this important process, we will largely
depend on the feed back from all areas the organisation.
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We will put certain parameters/benchmarks in place so that we can measure our progress
periodically. For now, we will rely on those key indicators.
Q. How do you ensure that it is not just another “program” or “management fad”
Ans: true as it maybe, we are determined to ensure that this is not just another abstract program
where we just make noise, clamour and then fizzle out. To avoid this pit fall, we will ensure that
we implement the changes slowly, but properly focused while armed with the right human
resource at hand. Change is inevitable, no matter what forms it takes.
Q. What mechanism have you put in place that you achieve your objectives?
Ans: The mechanisms we have put in place are the following:
1. We are encouraging team work within the ADPs and at the national office.
2. We have gone further to divide the country in to zones where we have a rotating periodic
leader for each given zone.
3. The PDQA21 at the national office among other things has been charged to ensure that all
the planned goals are on track and quality is in build in to the organisational structure. In
addition, the PDQA is mandated to propose, initiate, assess and write concept proposals
to potential donors outside World Vision. In other words, the PDQA ensures that
whatever goes out of World Vision to donors is in near perfect shape.
21 PDQA=Program Development Quality Assurance
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We will ensure that consistent and continuous training picks up in the organisation and also
by the same token ensure that the right people are hired to foster the organisational objectives
better.
Q. In the light of other NGOs with the same goals as WVI (E.g. CARE International,
PLAN International, Christian aid, CCF etc), how do you ensure that you keep a
competitive edge considering that you get donors from the same pool?
Ans: There is no competition at all! We have nothing to fear as we are in our own market.
Effectively, they are all in different markets from us. We may be in development quite alright
but our goals and objectives are completely different. In addition, our target group is
completely different. If that were not the case, then we would endeavour to cut a niche.
Happily, that is not the case. Having vehemently asserted the above, let me hasten to say that
we are in the business of wooing donors and satisfying our clients by providing impeccable
service. The customer is king in our business as well.
Q. How long has this process (TQM/Leadership) been going on?
Ans: Like I said earlier, it has been on going for some time and will continue.
Q. Just how much longer will this continue?
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Ans: It is difficult to put a limit on this process as it is on going, although we can attempt to
put benchmarks to that process and assess how we are doing at each stage. Otherwise, this is
an on going journey and must be taken at the right pace. A major paradigm shift takes time to
flower.
Q. Has training been necessary for this?
Ans: Of course! If any process is to take place in any organisation, there has to continuous
training of staff so that their minds are abreast with this dynamic world. Training should be
on going and frequent if the changes implemented are to pay dividends. Further more, World
Vision is changing rapidly and to keep in step with the times, we need human resource that is
apt, flexible and efficient at their tasks. Otherwise, how else are they going to develop?
Hither to, World Vision Zambia has emphasised on training and as such, our impact in
partnership has not been felt. In the region, we are probably the least trained. In addition,
training builds capacity and also motivates. It is high time we had a deliberate policy on
training so that people can stand on their own feet long after they have left World Vision.
Q. Who are your models/mentors in this whole idea of TQM/Leadership?
Ans: I am not ashamed to assert that Bwalya Melu and Sheldon Rankin inspire me the most
because they have a very clear vision, are articulate and excellent team players. Bwalya
particularly is my mentor, having worked with him closely over 4 years. He has a way of
helping you unleash the hidden potential within you.
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Q. What about current books on these trends, who is / are your most preferred
author(s)
Ans: I like many authors but none like Max De Pree, Osward Saunders and Stephen Covey.
The best books I find are Servant leadership, Spiritual leadership, Auto Biography of BC
Montgomery, the Bible and Green leaf. There are other books, magazines and periodicals of
course such as the ‘Executive Excellence’ magazine.
Q. Tell us about some of your personal goals.
Like every body else, I would like to improve my lot in terms of education when I find an
opportunity. As I have hinted, continuous training is critical as it sharpens one for effective
service. At one time, I quit World Vision but came back later. Now I am determined to stay
as long as possible and then contribute to the welfare of the organisation. My present job is
very challenging as I handle people of different shades, far different from what I ever
imagined but I know it is shaping me for better and bigger challenges. So, If and when an
opportunity avails itself, I will grab it!
Q. Finally, what are your goals and aspirations in WVZ?
Ans: My goal is to hire the best-trained and motivated staff on the market. Also, I would like
to see a teamwork culture take root where there will be less of the “Bossy” attitude but rather
a work environment where we view each other as colleagues, akin to football team.
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Thank you for according me this interview Mr Chinzewe, it has been good talking to you and
wish you the best in your future endeavours.
You are welcome Billy, it’s equally been a pleasure, and I hope you join in championing the
cause for TQM and leadership.
====================================================
Case study questions
What in your own words is TQM?
What do you think about having a specific department or group that focuses on quality? Give
some merits and demerits of this approach (having departments).
Who or what is a leader? How different is this from a boss?
What one quality do you think a leader must possess to remain fresh and relevant?
How best do you think organisation can remain attractive to donor support, despite the tough
competition on the donor funds market?
Incumbents are usually very confident and easily dismiss puny new market entrants, do you
sense any of this attitude problem in this interview? If so, what should organisations do to
avoid this fatal error?
Case study 2
Reasons why employees leave
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Organisations go through different seasons as they evolve over the years. This largely depends
on the context and industry the organisation is in. If it is a donor funded organisation,
conditionalities will apply too. If it is a profit making entity, different conditions as well will
dictate how and why staff are remunerated. Further, we can consider the environment, economic,
legal and political structure of a country where the entity is located. For instance, if the place is
war torn, politically unstable and highly volatile, it attracts other terms too.
It is often sad when an employee tenders in their resignation, if they have been star performers
while it turns out a grand relief when a time waster leaves through natural wastage. Many have
undertaken to research and crystallise the major reasons for departure. Among these is Leigh
Branham in his monumental work “The seven hidden reasons employees leave” and perfectly
summarized by the Sound view executive book summaries. It is an insightful article that explores
what he calls “seven hidden reasons”. The hidden aspect could refer to the unspoken or
undocumented reasons that almost never appear in the exit conference, where relevant. But are
these really “hidden”? Not exactly, except that they are discovered by personal experience or
informal interactions with the people that leave. Neither are the seven reasons exhaustive as
listed by him but suffice it to say that these reasons are indisputable. They give an insightful
excellent view to the manager so that they may be vigilant to watch out lest they receive a rude
shock when the resignation letter “suddenly” lands on their desk. They are startled because all
along, they were too preoccupied with their own world and did not realise that they had drifted
away from their operatives. It is instructive to learn that when people finally scribble their
resignation letter, they will have passed through various stages of disengagement. For them to
finally document means that they will have thought through their decisions, options and career
prospects. It is difficult for any external force within the organisation to turn the mental tide, the
bridges would have been burnt by then-Point of no return has been reached.
Among the reasons Branham points out in his book as to why people leave include the following:
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1. Disillusionment. When people join organisations, they come with a lot of expectations
and an agenda. For a season, most of them assume all the common problems that bug the
average organisations will have been a thing of the past. If it is their first job out of
college, they diligently run along for some distance without noticing any flaws. But alas,
the time comes when they begin to realise that things are not as rosy as they initially
thought. Much exposure to better organisations even worsens the situation and
consequently leads them to the human resource exit door. Others leave because their
working environment, interpersonal relations or expectations are not cordial or good
enough. Thus, when a competitor organisation comes along and dangles a better deal, the
person swiftly takes the next flight out of the organisation.
2. Secondly, people often quit when they realise that their training and current job do not
match. Others find that they do not have the right fit and thus by and by degenerate into
frustration, antagonism, boredom or a clear struggle where others sail plainly. Some jobs
demand that some one be technical, analytical or time bound while others are more
relational and dependant on what the day brings along. If a technical person is put in a
social/non technical job, they eventually feel caged and quit. There are exceptions to the
rule though, those with versatile fertile minds are able to wiggle around and still tick.
3. In the third place, some people feel abandoned and unguided when they commence the
job. Where the systems are refined and working, some organisation fall into a pitfall of
assuming people will “automatically fit in” and thus offer very little or no orientation. All
the organisation is interested in are results. Even the best self starter often feels stranded,
abandoned and alone. It is worse where the corporate culture is too formal, impersonal
and restrictive. Once thrown into the deep end, they are expected to swim to safety and
produce wonders. There is need to have a consistent coaching arrangement where people
are helped to settle and walked with along the way. This builds a sense of belonging and
reduces staff turnover. The other pitfall is lack of proper constructive feed back on many
issues. This leaves people wondering whether they are making headway or on the wrong
path. Sadly, in some organisations that abuse “management by exception”, people
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discover that they are in the wrong when they receive a warning letter or a sudden strong
reprimand. This kills morale and people begin to visit the newspaper job advert page and
eventually flee at the earliest opportunity.
4. A pyramid structure arrangement often blocks people’s prospects of advancement. If the
structure is too elaborate and narrow, people will see the road block from afar and
quickly look for an alternative that will cut the long route. Often time, external
organisations with better and fewer/flatter layers are more appealing to the ambitious.
Many people are in a hurry to get to the top as soon as possible and thus eventually leave.
The figure below attempts to show what an average organisation structure looks like:
Directors/CEO
More than just upward movement is the possibility of fluidly moving across the organisation
for one to enrich their job experience or develop within the organisation. Rigid organisation
curtail any attempt to move and thus frustrate people. The last straw comes when all
possibility advancement doors are blocked on account of internal organisational politics,
prolonged and frequent reorganisations as well as other external threats and limiting factors
such as donors, market loss and permanent road blocks.
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Top
Layers- Middle mgt
Layers-most people here
Managing Quality in Project and Human Resource
5. In the fifth place, people leave the organisation because they do not feel valued or
recognised. If they do not feel “at home” they will grab the earliest place where they will
be given the due dignity, support and appreciation. Many organisational structures are
bureaucratic and laced with a thick layer of red tape. Brain storming sessions or staff
involvement are non-existent, people are ruled with an iron dictatorial hand, from the
traditional management school. Progressive organisations however, value each team
member from sweeper upwards and consult widely from the internal customers. It is even
better where self managing teams exist as opposed to mere work groups. As people feel
the sense of community, are heard and valued, they naturally become reluctant to quit and
in turn market the organisation to the outside world.
6. In this fast paced global world, people find themselves always on the run. Decisions that
once took a year now take seconds and by that token speed up the work pace. Deadlines
are the order of the day coupled with a shrinking job market in places like Zambia. In a
bid to retain or maintain their competitive jobs and make the mark on the industry, many
do it at the expense of other equally important issues such as family life, leisure time,
leave or even engaging in refreshing personal projects such as home building. A dilemma
is created that raises the stress levels and in some cases wrecks people’s health. Prudent
and marketable people quickly quit. Sadly, the stranded stick around until they totally
break down. There is need to rest. All work and no rest kills the horse God gave you.
7. The last reason advanced by Branham is loss of mutual trust. When employees look at
their superiors, they look at them with some measure of cynicism and suspicion.
Whatever the leaders say is taken with a pinch of salt and never relied on. Leaders often
lose their followers’ confidence when they are insincere, unsure, inconsistent,
intimidatory or manipulative. Because of the betrayal, ill treatment or breach of trust, a
power distance is created and scarcely can be mended. Frustrated staff instantly fly away
at that point.
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Having looked at the reasons advanced, I would like to add a few more reasons that I feel
significantly add to the high staff turn over.
People leave when they feel unfairly treated by their superiors. Insecure leaders are
constantly sending intimidating gestures and messages that discourage the lower operatives
who eventually quit. Secondly, staff quit when unethical practices are tolerated by the
organisation such as window dressing of accounts or no proper documented referral policies
on file. Decisions depend on what the boss feels not policy. The third reason could be
insecurity. Traditionally, many people in Zambia have been accustomed to life long
employment and often feel insecure to be given short contracts lest they prematurely lose
their living. The pre-nineteen ninety two (1992) hang over still lingers in many Zambian
minds and needs to be quickly exorcised. The fourth reason is simply that other competitive
organisations have emerged which offer far more monetary rewards for the same type of job.
This enables some one to invest quicker, build their empires, build profiles or indeed better
exposure. By the time the contract expires, they will have had immediate benefit and moved
on to the next level. For instance, if working for your present employer offers you a steady
lower paying job while a shorter contract job offers you ten times as much as your current
job, we suppose you will elect to get the shorter contract and more money in one month than
would be earned in ten months. In effect, your value for money is higher now than at a later
date. Many out of college graduates prefer the big jobs for instant gratification. The fifth
reason could be that some organisations offer variety, challenges, are more versatile, lean,
agile flexible and fit in well with the present trends. People get incentives that betters their
lives albeit they be hidden such as transportation, leave pay, loans, bonuses, holidays or
medical. The sixth reason is when the persons’ personal goals do not agree with the
organisations’. The person finds the bad practices, behaviour patterns, lack of
leadership/direction, laissez faire attitude etc rife and unabated in the organisation, they feel
disappointed, disillusioned and fear corrupting their own good work culture/ethics. Thus they
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leave despite having a secure job. This culture thrives in the civil service where people live at
their own pace. They dare not quit as they value the perceived security. The progressive
professional feels crippled in such a setting and soon quits or conforms. That partly explains
why NGOs are reluctant to hire candidates from the civil service as though they suffer from a
plague.
These are but a few of the additions but we would safely conclude and say that the global
worker of the 21st century is looking for the best possible personal deals they can get hold of.
They are offering a skill and as such need to partner with progressive companies that are
relevant to the times. In fact, many of them commence their careers with a clear agenda in
mind-to employ rather than be employed. If their goal is elusive, they leave in search of
greener pastures.
Case study questions
Give at least five reasons why staff quit organisations/projects.
In your opinion, are the seven reasons advanced by Leigh Branham actually hidden?
What is your suggestion to increase staff retention and motivation?
How best can the Generation Gap be narrowed?
How did the post 1992 economic unfolding impact on Human Resource Management?
Revision exercise
Why is it important to hire the correct staff?
Give some ways which staff performance can be documented.
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What is the aim and spirit of the staff appraisal?
If you were the Manager of a soon phasing out project, how would you motivate your staff?
Give at least four reasons why employees leave organisations.
Do you think the project manager is the best person to handle HR matters? Discuss and give
reasons.
What is productivity and how can it be increased in staff?
BibliographyBell H Cecil Jr & French L Wendell, Organisation Development, Prentice Hall of India, 3rd
edition, 1989
Brake Terence, Managing Globally, Dorling Kindersley, 2002
Bramham John, Practical Manpower Planning, Institute of Personnel Management, 1982
Dessler Gary, Human Resource Management, 10th edition, Pearson/Prentice Hall, 2005
GRZ, Annual Performance Evaluation in Civil Service (APECS), APECS user guide, 1989
Kakabadse Andrew & Analoui Farhad, Corporate sabotage, Jaico Publishing House, 2004
Kapatamoyo Abel & Gunnigle Patrick, An introduction to Job Analysis and evaluation, Zambia
institute of Personnel Management, 1988.
Kinicki A & Kreitner R, Organizational Behaviour, 4th edition, Irwin/McGraw-Hill, 1998
Mwanalushi Muyunda & McMahon G, An introduction to performance appraisal: The human
resource evaluation process Volume 1 #. 2 The personnel Management in Zambia series 1989
Peters J Thomas & Waterman H Robert Jr, In search of Excellence, Warner books, 1982
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Schuler S Randall, Welch E Denice & Dowling J Peter, International Human Resource
Management, 3rd edition, South-western College publishing, 1999
Turell M, Training Analysis, MacDonald and Evans, 1980
Unit 7
Aim
The aim of this unit is to give an integrated view to project and program management so that the
student is able to intelligently appreciate the two and how they relate.
Objectives
By the end of this project, the student should:
Tie up all the loose ends of project & program management.
Distinguish between a project and Program
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Integrated Program management
For any project to successfully kick start, progress and eventually “phase out with dignity”,
there is a lot of work that is involved and goes on throughout in the back ground. Granted that
hurdles, challenges and frustrations will be faced by the front liners (“where the rubber meets the
road”) there is a powerful machinery that ensures the right thing is done at the correct time. From
inception, through the design and implementation stages, the way a project is going to function is
predetermined so as to ensure correct, efficient and cost effective implementation is achieved.
The wheels which makes this machinery work well is known as ‘Operations’. The careful
harnessing of the same to achieve the intended goal is called Operations Management. This
usually centres around the project core business without which the project will be defunct or
ground to a halt. Operations Management has been defined variously by different authorities but
its basic understanding revolves around ensuring that the operational gears of the entity are
functioning in tip top condition to create satisfactory product or service for the customer (i.e.
consumer, sponsor or donor etc). Roger Schroeder22 defines it as being “responsible for
supplying the product or service of the organisation. Operations Managers provide value for the
customer at the lowest cost making decisions for the operations function and by managing the
transformations process”. This elaborate definition attempts to give an anatomical production
oriented definition of operations management but could be further refined. It emphasizes a
number of key points such as decision making, functionality, process and indirectly quality. Any
process must have quality attached to it or else it is not worth undertaking as it risks being a
sheer waste of resources.
In considering integrated program management, we are talking about various projects clustered
together to form one huge program whose effect is greater than the sum total of all the projects.
In other words, there is some form of synergy that results and these projects together target
specific problems which when dealt with bring about a lasting impact in the area where the
program operates. We briefly explain the difference between a project and program below:
22 Operations Management: Contemporary concepts and cases, pp 4
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A project, as explained in an earlier unit is a specialised undertaking whose mandate is to deal
with a specific problem in a given time frame. In other words, a project has a definite lifespan,
start and end date. The project also passes through phases and is summarized by a log frame, if
that is the method chosen. A project is monitored at activity and output level (implementation
stage).
A program on the other hand is a large scale undertaking which also has a lifespan, targets and
benchmarks which are evaluated at some time. Strictly speaking, a program is not monitored but
evaluated because its constituent projects combine to feed into the program goal. In other words,
a program is made up of clustered projects whose cumulative effect impacts on a larger scale
than the separate individual projects. For instance, World Vision International runs Area
Development Programs (ADPs) around the world that implements interventions for long periods
of time between 15 and 25 years. Projects collectively form integrated development programs
that have periodic “add on” projects which come and go as their cycles elapse. For instance
many projects with different funding sources (i.e. Japan, UK , Korea or USA) might all be
clustered under one ADP but collectively deal with an issue in an area with a view to improve
the quality of life of the target beneficiaries.
In the corporate world, different programs focus on different issues but their goal is to sort out a
specific issue or develop some product that is needed to help the business. For instance, NASA is
to retire the entire space shuttle fleet in 2010 after completing the construction of the
International space station. In preparation for the post 2010 era, a number of programs have been
initiated whose mandate is to develop the next generation space vehicle fleet (Aires) which are
probably more versatile, cost effective and for longer range space travel. The said program
probably commenced several years ago in anticipation of the shuttle retirement and will
smoothly come in to supplant the legendary “STS” fleet which have worked well from about
1981 although two were lost in the process (Challenger in 1986 & Columbia in 2003). Other
programs exist in the motor industry whose main goal is to carry out R & D for product
improvement.
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Operations issuesFor a project or program to efficiently work well, a number of issues have to be in place which
include the structure, human resource, financial resources, teams, culture, philosophy as well as
the vision and mission statements.
The Vision and mission statements usually have a bearing on the strategy adopted and ultimately
influence structure. We briefly investigate each of these areas.
Vision
Every entity that gets into some kind of activity has a desired dream or goal at the end of the day.
No matter what activity or intervention engaged in, whether long term or short, big or small, the
entity has a mental picture of what it would like to see or be a given distant future. This is its
vision. Simply defined, we can state that a vision is the entity’s future position or what it would
like to be. We could still refine this definition and say that a vision is a desired future dream
viewed from the present podium. For instance, a project may want to see every child enjoying a
higher quality of life as is for World Vision International and state it as “Our Vision for every
child, life in all its fullness, our prayer for every child, the will to make it so”. This may appear a
lofty goal and perhaps not attainable but this is World Visions’ dream that they would like to see
a world where every child is secure, healthy, well cared for and happy where they (World Vision
works or not). Thus, in order to reach this goal, the said entities will aspire and position itself to
contribute to this vision and not rest until some semblance of this is attained. Thus, the project,
program or entity will state its reason for existence in broad terms justifying its existence as
encapsulated in its mission statement.
Mission statement
Drawing from the vision, the entity then proceeds to state its reason for existence in an elaborate
and all encompassing statement. This statement explicitly expresses the reason or justification
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why the firm exists and how it will attain its goals. In a nutshell, a mission is a broad statement
which explains in clear terms why the firm exists and if it acts ultra vires, there is no justification
for its existence and will subsequently not reach its goal. Following up with the earlier example,
World Vision International has the following elaborate mission statement: “World Vision is an
international partnership of Christians whose mission is to follow our Lord and Saviour Jesus
Christ in working with the poor and oppressed to promote human transformation, seek justice,
and bear witness to the good news of the Kingdom of God.
We pursue this mission through total commitment to:
Transformational development that is community based and sustainable, focused especially on
the needs of children.
Emergency relief that assists people afflicted by conflict or disaster.
Promotion of justice that seeks to change unjust structures affecting the poor among whom we
work.
Strategic initiatives that serve the church in the fulfilment of it's mission.
Public awareness that leads to informed understanding, giving, involvement and prayer.
Witness to Jesus Christ by life, deed, word and sign that encourages people to respond to the
Gospel.”
From the statement we learn that World Vision has a mission to accomplish in the world,
bringing about holistic transformational development in the lives of all people regardless of race,
creed, location or gender, from a Christian perspective. Note also that the statement shows
WHAT the organisation seeks to achieve as well as HOW it will do this, although the latter point
is further amplified in objectives (which are specific steps to achieving the dream).
At first glance, one can tell what a project is focussed on or what it deems important by the
project structure or organo gram. Depending on the interventions pursued, the project may have
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an elaborate or lean structure which either expands or contracts. For instance, if the project or
program is a relief focused, expect a number of food monitors and distributors. Expect the
structure to expand or contract periodically contingent of the nutrition levels. By the same token,
if it is a development program, the structure will progressively expand as the project cycles take
effect until the maximum establishment is in place. These will run all the projects under the
program and each Development Facilitator, being a specialist in that respective field, acts as
Project Manager while the overall program is managed and led by the Program Manager. To
illustrate what we are talking about, we have inserted two sample organo grams, the first (fig 1)
fully established and the second (fig 2) of a program in expansion.
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Structure or organo gram
Different structures at project level:
Fig 1 An elaborate organo gram showing program staff and their reporting roles.
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Driver
DF Agric.DF – Water &
Sanitation
Office Assistant
Development Co-ordinator
Program Manager
Program Accountant
DF HIV
DF XDF Health
Accounts
Assistant
Managing Quality in Project and Human Resource
Figure 2 An organo gram depicting program staff and their reporting roles
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ADPM
DF HIV DF-ChildrenDF
Agriculture
M & E Accountant
CDWG CDW CDW
Managing Quality in Project and Human Resource
Human Resources
For any project, and indeed any entity to thrive and succeed, the human element in
some way is critical. For now, human input cannot be avoided and still remains the
driving force in every undertaking. There is a lot of thinking, consultation,
collaboration, networking and implementation where a project is going on. To get the
best out of people therefore, there is need to recruit and hire the best talent on the job
market that will be able to diligently work and deliver at the end of the day. But hiring
is not enough, there is capacity building, training, team building and organisational
culture “indoctrination” that takes place in the intermittent period while the staff is
still on board before they eventually depart for one reason or the other. Thus, every
entity needs a human resource specialist that must handle all these delicate matters
that border on motivation as well as keeping people on board as long as possible.
Where this is not possible, the project manager must be sufficiently equipped with
skills to competently handle issues of that nature. A motivated work force with a good
leadership achieves wonders. In the absence of that, staff engage in all sorts of
sabotage, venting out their frustrations! None the less, the human component must be
well harnessed to contribute to the corporate goal congruence.
Finance department
The finance department is probably the most sensitive section, though not necessarily
the most important. It is sensitive in the sense that it is the nerve centre of the project
and if the wheels in this department are not well oiled or sufficiently efficient, the
whole project suffers, many times grinding to a halt. Financial management includes
all matters related to project assets (fixed and current) and how these are acquired,
kept and utilised. To effectively execute these functions, the finance department
institutes a system that ensures everything in the program is tracked and used as per
plan. This system is called an internal control as it is there not only to inhibit abuse
but also promote efficiency in the project. Specifically, the finance department
handles the following:
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Budgeting. This is done before and during the project implementation. Depending on
the project life as well as mutual agreements between sponsor and implementer, most
projects do a fresh budget each year, although a budget life time budget is drawn up
before the project actually begins with modifications along the way. Budgeting entails
knowing the costs as well as when the specific activities will take place.
Asset acquiring/procurement. Although this function is increasingly being handled by
the supply chain or purchasing department, the finance people are involved at every
stage because they are the ones who made up the budgets with input from others of
course. Therefore, when the right time to acquire assets arrives, the department
facilitates payment, bearing in mind the budget provisions.
Financial advice and training. Many assume that they know financial matters well
enough while others do not care about budgets at all. Their only interest is to see
things they demand acted upon. This is a weakness because finance has rules,
regulations and standards that must be observed before any transaction takes place.
Thus, the department offers financial advice and training to whoever may need
educating. In addition, management is constantly kept abreast with the financial
situation by use of various tools like cash flows, target low (standard minimum cash
balance at the end of every financial period e.g. month end), asset register, inventory
list, bank balance among many.
Financial reporting. Periodically, there is need to give feed back to whoever requires
it, especially the sponsor. A report is therefore generated and made available for
scrutiny and information to and by whoever is an interested party. The financial
reports differ from project to project depending on donor requirements and
specifications. Some require simple and summarised reports while others demand
detailed line by line report backed by a narrative variance report. In addition, the
report must be in a set format and be accompanied by a bank reconciliation for each
bank account maintained by the project. Rules around bank accounts also apply and
are effected by the finance department.
Internal control enforcement. As part of the finance management system (and this is
very critical to any auditor), the project has systems in place that ensure project
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resources are not only safeguarded but used for their intended purpose. This involves
how the bank accounts are handled, who has access and control to them, how
vehicles, computers, phones, office premises, motor bikes, bicycles, debtors, creditors
and all that is utilised or affects the program. The finance person must especially
watch out on debtors and creditors for these wreck not a little havoc. This system
attempts to ensure these things are used well and appropriately so that the project
functions efficiently.
Budget control. Although closely connected to an earlier point (Budgeting), this point
merits its own place. Once budgets are drafted with everything required factored in,
these provisions must be followed. Many non-finance people do not always have the
discipline to adhere to budget because they do not appreciate what impact every
transaction has on the overall budget. For instance, every over expenditure robs the
next line item in the budget of getting the required funds and may eventually not be
carried out for lack of funds. At one time, this author worked in a project that
exhausted its budget by quarter three of that particular year and had no money for the
last lap. You should have seen the confusion and disorientation in the non finance
guys! They forgot that they had over spent in about every line item they managed to
do! The function of the finance team is therefore to meticulously watch the costs and
ensure every one safely gets to the end of the year with a pay check because of
sticking to budget! Governments desperately need to learn fiscal discipline and I am
sure NGOs will go out of business. Many donors dread the red tape, bureaucracy,
misapplication or diversion of funds when it enters government coffers. Genuine
NGOs are far better in their financial controls and accountability.
There are definitely other functions that the finance department does but we need to
wrap up this point by stating that the said department is there to facilitate smooth
implementation of the project, in keeping with the set goals for that period as set
financial rules are observed.
Production department
The production department usually applies for a manufacturing industry but none the
less, all entities are involved in some form of product churning out. That in itself is
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production of sorts. But suppose we are in a fully fledged manufacturing firm, this
department receives specifications and raw materials and processes them to get a
product, usually with added value to the customer. This department does not act
arbitrary but has systems and processes that work to ensure that only required things
are produced having received feedback and instructions from other sister departments
such as the marketing, research, finance among others. Usually, in the manufacturing
sector, this is the core business centre of the organisation or project and the operations
department revolves around this area. In an ideal organisation or entity, the
production department works closely with other departments to produce quality
products timely, with the right systems (such as JIT) at the required standard of
conformance and specification. In the past when production was the main thing, all
other departments shrank into oblivion but with the realisation that quality is key, this
department cannot work solo lest it wastes resources by producing incorrect products
which in some case may be more costly when outsourcing would have been a better
option. A detailed description of this department is beyond description of this module
but suffice it to say that the production department is a equally essential “cog” in the
supply chain of a successful project or entity.
Marketing department
The Marketing Department has a number of functions but its principle aim is to build
a brand name thereby encouraging brand loyalty. Contrary to the common belief that
Marketing is only about sales, it is far more than that and includes, Market Research,
Product Development, customer satisfaction and retention, quality service delivery
among many. Therefore, Sales or market expansion is but a small component of what
marketing entails. In project management, some form of marketing takes place in the
quest to please or satisfy sponsors by doing a good job, in record time and of high
impact. As a result of this, the sponsor is impressed and probably pledges more
resources as well as tells ten others to equally contribute. This latter bit is some form
marketing department who had no clue whatsoever of what is involved in marketing.
Their aim was to increase sales in the absence or competition (command economy)
and at mediocre prices. People bought their goods simply because they had no other
choice but at the economic change over of 1992, most of these companies folded.
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Only those that saw the importance of the marketing function remain buoyant today,
far different from what they were then!
Public Relations
Closely connected to the previous point of consideration (Marketing), the public
relations wing seeks to among many things:
1. Inform the public and staff about what is going on.
2. Alert on what is yet to come in the year.
3. Correct wrong impressions/misunderstandings created within and outside the
organisation.
4. Defend the project from unjust public utterances.
5. Record, document and capture significant stories worth telling to the outside world.
This department, though usually viewed as inferior or unimportant actually carries a
lot of wait and preserves or enhances the corporate image of the entity or project. This
Public Relations (PR) department does a lot of back ground work and checks before
publishing or issuing a statement over any matter. It is therefore the mouth piece of
the entity and no other person is allowed to issue any press statement relating to the
organisation, unless so allowed. The reason is simply: To preserve the corporate
image and avoid damage control that ensues in the event of an erroneous statement.
On a positive note, the PR department goes ahead to uphold and enhance the
corporate image so that sponsors or donors are made aware of the entity’s existence.
In project Management, the ball again falls on the Manager’s lap, unless so delegated
to another functionary. The PR methods and avenues are many and contribute to
mutual understanding among partners and stake holders. Thus, PR is a critical part of
the program in the quest to maintain consistency.
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TeamsToday’s progressive entities prefer working in teams in order to build synergy. For a
long time to come, teams and team work will be the best practice and way to go in
order to achieve far much more than would ordinarily be accomplished. A team is
basically an integrated organic unit of people working on a common objective as well
as looking out for the common good of each other. The said team is a matrix of
individuals who look out for, interconnect, inter depend and overlap in their
functionalities ensuring that the project does not stall on account of an individual’s
absence or inefficiency. To function well, the team must be mature, organised, with
clear common goals and objectives. Teams are of different types and are
distinguishable from groups. While a group emphasises allotting duties and
responsibilities to specific individuals and assessing them by what their output, teams
focus more on a system and interdependence with a view to build synergy, collective
responsibility and success. Star performers are acknowledged but within a team
context rather than as isolated individuals. Some teams are self managing composed
of all professionals on board with a rotating leadership. Others are virtual in that they
do not physically work in one place but are interconnected by appropriate technology
such as video conferencing, skype, webbex, twitter, face book, email or whatever
facilities that enable interaction. By and large, most of the project teams around the
world work together in one locality with one person that heads the team, calling the
shots as it were.
Projects develop teams as they mature ensuring that the best team members are co-
opted into the project staff structure. Trends observed recently in project circles is that
groups are fast ebbing away and giving room to multifunctional or cross functional
teams. It has been observed in some organisations that a strong team work culture has
significantly improved the results of the project, although teams also have their own
fair share of challenges along the way. We highlight some of these common
challenges shortly but for now we state that team work is the way to go.
Challenges faced by teams
Team dysfunction
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At times, teams are crippled by internal wrangling resulting from egocentricism or
organisational politics. An off shoot of this is mistrust, acrimony and a myopic inward
looking mentality. People become unsure and spend more time looking over their
shoulders just in case some “matchet” carrying colleague is hot on their trails. Often,
when the power distance between the team leader and colleagues is very wide, this is
bound to happen. Another reason for this could be that the staff do not have the right
competencies and credentials forcing the team leader to act as a ‘goose chaser’. This
has a telling effect on the output and quality drastically plummets as a result.
Little buy in by new staff also contributes because they come in with their own un
checked baggage and operate as usual only to receive a rude culture shock when
others cry foul. In the teams that the author has been privileged to work, he has
repeatedly confirmed this development. Another contributor is lack of continuous
training of team members so that they acquire a fresh skill set as well as be on the
same page with the rest of the team. Half the team, the leader is light years away
while others are ignorantly groping in the darkness.
Vision and objectives unclear
Often times, in the quest to beat deadlines and impress the sponsors, projects
commence in earnest overlooking a lot of variables which back fire in the long run.
One of these back lashes is when people do not function as expected simply because
they do not know or realise the importance of the shared project goal, vision or
objectives. Had they been appraised during orientation, then the turn of events would
have been totally different. Usually, a small click knows the bigger picture and what
is at stake while the rest remain in the dark and therefore care little about their output
quality.
Inappropriate leadership style
At times, project teams are a circus and the chief clown is the project manager him or
herself! In such scenarios, the staff are highly demotivated, disillusioned and do not
put in their utmost. The simple reason could be that the leadership style is
inappropriate and out of step with the cultural and team norms. In Zambia, the power
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distance, perhaps influenced by the cultural and traditional managements beliefs
account much for the problems at hand. In extreme cases, the team leader becomes
self centred, disregarding anyone else. Some leaders personalise everything and treat
the project as their own farm or house hold totally trashing professionalism. Other
problems beyond the scope of this book could also be summoned.
Diverse cultures and orientations
Due probably to our diverse background orientations, our perceptions, values and
inclinations play a critical role on how we respond to the world around us. Some are
brought up in a time conscious culture while others use the sun to determine their
activities whilst others still place so much importance on interpersonal relations
(knowledge of each other) that impact on their responses to the world. Those that
value time are always on target and feel extremely uneasy if things correct or not, are
done at the wrong time. The other extreme is true for the other group who are always
reacting to circumstances rather than proactive. Now when all these characters are co-
opted into one team, the drama begins! One will be pulling in one direction at
lightning speed while the other will be half asleep! Not a little tension and acrimony
results. If this difference is not recognised early in the project life, the tussles continue
on and adversely affect the team effectiveness. Some eventually quit and head
elsewhere and the cost of replacement is quite high, having invested so much in
individuals. Griffin, in his classic management book tells of a case where some
Japanese and American engineers constituted a team to work on a project of mutual
interest. There was chaos in the team to the extent that the project nearly failed. One
part of the team had some preferences, like working long hours with no breaks in
between while the other was so time conscious and took frequent breaks at the right
time. The one loved open low open windows while the other preferred high closed
windows. These little things brought untold wrangling and acrimony. But it is good to
know that diversity is good and extremely profitable once correctly harnessed and
approached.
Differing ambitions
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Managing Quality in Project and Human Resource
With the advent of the generation X, there is a clear difference in the way people
perceive life. Their world view is totally different from the previous generation. While
Generation Y workers are content to progressively development their wealth base
over time, Generation X people are different, they demand instant results. Be that as it
may, people from the same generation have different ambitions and thus will react
differently. One would like to buy a house in the first year of employment while
another would not mind getting it the next year or prioritise something else. These
differences eventually come to bear on the team dynamics as well as how people work
or relate to each other. Having worked in projects for over a decade, the writer is fully
alive to this issue. But then, people respond differently to issues pertaining to their
ambitions. Some quit while others hang in there hoping things will change in due
course. This attrition, if severe, adversely affects the organisation.
Low motivation
One of the major killers of project progress is the issue of motivation. If staff are not
motivated, they find ways to vent out their frustration. Some of the ways may include,
back biting, pilferage, corporate sabotage, malice, late coming, absconding, increased
absenteeism, poor interpersonal relationships, unhealthy suspicions among many.
Once one enters an area of low motivation, it shows as people are indifferent, exhibit
little or no enthusiasm and to some extent careless with project assets. In Zambia, the
major motivator is the amount of net take home pay though this is not the only.
Competition rather than collaboration
Projects can be interesting places sometimes! Instead of being a haven for
development and peace, it sometimes turns out to be a place of aggressive competition
against each other! What suffers in the end are other vulnerable team members as well
as the project progress because people are busy outdoing each other! At other times, it
may not be amongst the immediate team members themselves but tussles between
sister projects which are supposed to be complementary to each other.
Imaginary dividing walls (by departmental walls)
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Managing Quality in Project and Human Resource
This happens all too often. People profess to be world class team players but in
practice defend their turf or ward off any intruder at any and every cost. The
imaginary silos do more harm than good in that they inhibit cross functional team
work as well as prop up red tape, bureaucracy and acrimony. Granted, we all need
privacy to do our respective tasks and callings but there is need for flexibility and
openness if a project or indeed, any entity is to succeed. Jack Welch23, that legendry
leader, loathed bureaucracy so much that he determined to kill bureaucracy, along
with it, the dividing walls of hostility. He believed in a boundaryless organisation that
facilitated learning from any point, anywhere, anytime. Since we are generally boxed
in our thinking and value our privacy too much, there is a tendency to hide
information and work solo and independently. While it is good to be independent and
competent, we cannot do without others. This leads to tearing rather than building the
team.
In the quest to build the team, it is prudent for us to consider the team building cycle
so that we learn how best to build the winning team that will consistently score as
long as the project lasts. We briefly consider the team building cycle.
Team building cycle
Team building is an arduous but rewarding task and exercise. It is arduous in the
sense that to get any meaningful semblance of a team, there is a lot of work
involved, the hours, efforts, costs and disappointments along the way. Sometimes,
the very people intended to be on the team are the very ones that turn round and
repeatedly tear down any tangible progress achieved. On the other hand, team
building is a rewarding task because of the elating results that it brings about the
fore. In an ideal situation, there are higher quality results, over lapping, continuity
and self managing, not dependant on one individual to get things going. A team-
building model developed in America best summarises the team building cycle or
phases. The first time people meet, they hardly know each other and
unconsciously start by sizing each other up (forming) followed by the red cards,
tussles, tip over and antagonisms as people get to know each other in terms of
their limits, temperaments and preferences (storming). At this stage, a lot of sparks 23 Stuart Crainer’s “The Jack Welch Way” is instructive, pp 115
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Managing Quality in Project and Human Resource
ensue and can either make or break the cycle. Once that critical stage has been
successfully crossed, people begin to settle down, know each other, and avoid past
pitfalls. At this stage, people sufficiently know each other and can safely joke,
brainstorm or tease one another without major repercussions (Norming). Having
known each other, their attention now shifts towards achieving results, since the
preliminary hurdles have been cleared out of the way. At this stage, people are
issue based, goal and target focused and will not easily be detracted by criticism
since they view challenges as opportunities and stepping-stones to the next level.
At this stage, the team is mature and self-managing. The petty power politics,
suspicions or daggers are long hurled away in preference for team effort and goal
getting. Many so-called teams rarely get to this mature refined stage in Zambia,
though exceptions exist.
The diagram below summarizes the team building cycle:
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Managing Quality in Project and Human Resource
American Model
Chaos stage
In this text, we have further refined this model by adding two stages prior to the
forming stage highlighted in the previous diagram. Our two stages emphasize the
point that before people ever come to the organisation, they are outside the system
which we can consider “roaming” around with no particular aim as regards the
FORMING
(Start)
NORMING
PERFORMING
STORMING
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Managing Quality in Project and Human Resource
organisation. Of course we know that they are part of other systems, teams and so
forth far from this system and have different orientations, goals, aims and ways of
functioning but when they take a step to join the firm, they come with hind experience
and disengage from the previous attachments. As they resolve to come, they pass
through the various induction phases such as interviews, orientation, negotiation,
contract signing etc and then subsequent entry on board the organisation. This whole
phase constitutes what I have elected to call the “coming” stage because it is a
conscious deliberate step on the individuals part to enter a “corporate employee pool”
from which the teams now begin to take shape. The model below highlights this
thought pattern:
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Managing Quality in Project and Human Resource
Refined American model
Chaos stage
[ Chaos stage ]
Equation: Roaming-> coming-> forming->storming->norming-> performing
Start
ROAMING
(Start)
COMING
FORMINGSTORMING
NORMING
PERFORMING
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Managing Quality in Project and Human Resource
Once on board, the hired staff cadre join their respective departments/units and areas
of specialization. This constitutes a dormant stage where groups exist and people
focus on their specific work area, passing on their output to the department head who
consolidates everything to make one report. If a functionary fails on their part, the gap
is clearly spotted and incumbents are penalised for their error. Furthermore, this is the
raw material stage for potential teams. As organisations realise the disadvantages of
groups, they opt for teams that are cross-functional which demolish the imaginary
departmental walls. This allows for information free flow, idea exchange and higher
quality output and outcome. To attain this fine performing stage is not easy, much
work, time and effort as earlier intimated, goes into this maturation. Apart from hiring
the right staff with the correct competencies, you need to integrate them into one
cohesive front that operates like hand in glove. To have an organisation that works
like the human body is marvellous because it will not only respond to stimuli but also
proactively position itself at the right place. A number of team building
techniques/approaches have therefore been suggested in the ensuing section and worth
serious consideration. Remember that these are but suggestions, you are advised to
think of other equally potent ways appropriate to your context:
Suggested team building techniques
These exercises are designed to build a cohesive team and the best way to build unity
of purpose in the organisation is to first make team mates realise the goal and benefits.
As opposed to working as “stand alone units” or concentrate on destructive
organisational politics such as position jostling, back biting and devouring one
another, the team players are made to realise that unless they pull together, they must
necessarily sink together and all lose out. To achieve this, the strategic team builder
should use various methods such as:
1. Making people have unity of purpose and goal. The leader should endeavour
to pull along the friends in a smart but systematic way to the extent that they
begin to see the whole picture, the pros and cons of what the organisation is
about or intending to do.
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2. The managers from different places of the same organisations should go off
together for team building exercises. This should preferably take place away
from the hustle and bustle of life with cell phones and land line phones
banished unless the critical calls. At that far-flung place, the managers should
engage in physical exercises such as mountain climbing, swimming, soccer,
relay race, boat cruise or going down some steep cliff. The exercises should be
designed in such a way as to enhance interdependence, connectivity and
teamwork. For instance, a team could go to a place like the boiling pot at the
Victoria Falls. In getting to the pot, a steep distance of over six hundred metres
has to be traversed. Along the way, the participants encounter a number of
things like the steep rocks, monkeys, a stream and some thick vegetation.
Strange sounds from Mother Nature are also heard. On arriving at the pot, they
see the marvellous swirling flow of water, relax and then head back uphill.
The journey back is the most challenging and many may fall by the way side
but others will pull them along until the original starting point is reached. The
team members then can go for a swim or continue on to soak in the Victoria
Falls spray. After all the fun, the team will definitely be more cohesive if
people are sincere and open with one another. Another place is the outward-
bound camp in Mbala, a secluded and quite place far from the conventional
civilisation. The scenery is good and ideal for brainstorming and team building
exercises. Akin to the boiling pot experience, the Mbala place is
recommended. Some other places include the Chishimba and Lwitikila falls
(Kasama and Mpika), Shiwa Ngandu (Chinsali), and the Chinyunyu hot
springs (Chongwe) among others.
There could be other places that have mushroomed across the country recent
years and the various management teams must take advantage of this. In a
nutshell, the watchword is innovation and tact to make the team glue stick.
Further, the team could elect to play games such as volleyball or tag of war.
These games make people pull together.
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3. Another way to build a team spirit culture is having regular brain storming
sessions where the Chief Executive Officer (CEO) or Project takes off his/her
status and contributes like any other person. The average African boss has
such an enormous power distance to the extent that it is nigh unthinkable to
view them apart from their office. But that notwithstanding, the ideal leader,
can and will delve to the lower orbs without much ado and intermingle with
everyone. In the brain storming sessions, the atmosphere is meant to be
informal where every one can say whatever they please whether it makes
sense as long as the general context is kept in focus. In other words, a subject
is laid before and all sorts of ideas are allowed, including the wild and weird
ones. At that stage, no one is right or wrong but as the team deals with issues,
they pick out the helpful ones while the less appropriate fall by the way side.
This brain storming exercise has a way of building objectivity, openness and a
desire to connect. Despite the fights and sometimes violent reactions, the
people know each other and subsequently build life long friends. In other
words, the friendships transcend the office as people become colleagues.
4. Once in a while, teams should spend time together by way of partying or going
out together just to have an informal time together. Socials could even extend
to the entire organisations at particular times, for instance at Christmas times.
Care must be taken here so that the focus is not lost.
5. Go rafting together as a team. White water rafting is one of the most exciting
activities one would ever undertake. The Zambezi rapids are said to be among
the most exciting in the world, meaning that they are some of the most
dangerous! Once the team commences the five hour trip down the gorges, they
entirely depend on one another for survival, for they go through places where
no man lives. At the end of the exhilarating trip, people have had fun together
and get bonded to one another. The Sobek expedition will have done its work
by giving you the rare treat.
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6. Watch the ants at work! If possible, create an area where ants can freely do
their thing while you watch and interpret as a team! Proverbs 6:6; 30:6
7. Another team building aspect you could consider whilst out there is to divide
the entire team into smaller competing groups and then give the groups one
puzzle which they will have to solve as a team. The wining team gets a prize.
A suggested puzzle is to let them hang sixteen nails on one (The seventeenth)
plus a plank. The first team to complete the task will be applauded. Watch
how they feverishly get to work as a team! See the Beaver like diligence!
Boat cruise, sports (e.g. football matches), group work etc. Closely connected to an
earlier point, in a workshop or conference environment, the work pressure is likely to
be high and knock out some. It is refreshing to have some team building activity such
as some popular sport, boat cruise group work, bus ride to some place, visit to the zoo
or any other interaction providing a resting valve. The next day, every one will come
to the meeting place exhilarated with something to talk about and look forward to
some more. Do not worry about those aching muscles, it is part of spicing up the
activity.
Culture
Culture has to do with the value system as a way in which a group of people operate
together. In this context, we are talking about how an organisation elects to operate
and conduct its business consistent with what has been spelt out in the mission
statement. In short, culture refers to the values, approaches and ways of doing
business. For instance, some projects and companies have espoused a teamwork
culture and whoever is to get on board must subscribe to this culture or else not be
hire, or be swiftly removed should they fail to two the line. The reason is simple, they
may infect others with the wrong virus and thus bring about team dysfunction. In
progressive entities, culture plays a major role in organisational success. To achieve
this objective, people must be oriented into the team immediately they get on board,
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“while the iron is still hot”, as it were. One organisation uses different formats that
includes, workshops, CD, policy documents as well as visiting the respective projects
around the country. That way, a person gets whole rounded in approach and would
most likely contribute appropriately or press the “eject” button should they realise it is
a wrong fit.
Philosophy
A philosophy is closely knit to a culture but this is different in the sense that it is a
system of believe or approach to something. For instance, Humanism is a philosophy
which focuses on man being at the centre of everything and thus, everything else that
is done points to the human being at the centre. A philosophy may not necessarily be
correct or the best way of doing something but that is what someone is convinced of
and thus disseminates it to others who buy in. Thus, if the philosophy is to hire the
best staff on any program or project team, then the entity will fashion its recruitment
drive in a way consistent with its philosophical approach. Organisations also need to
drill people in their philosophy immediately they hire or else they invite future
problems and backlash. For instance, Microsoft has a team culture and continuous
improvement philosophy. Thus, any one getting on board must subscribe to these
tenets.
Some frequently encountered challenges in project and program managementLike any other entity, project and program management is often beset with many
surmountable or insurmountable challenges, hence the need to hire competent project
managers and teams. From the start, projects have their own challenges which
impinge on their effectiveness and efficiency contingent of the complexity and critical
nature of the risk of challenge. One way or the other, each project has its down side as
well as its bright side which must be meticulously handled lest the program lands into
a ditch and dismal failure. Examples abound of projects that have been completed but
the ramifications still haunt us today. For example, while the Kariba Dam
construction was a major undertaking with immense benefits derived from it to this
day, the down side is that some animals and people were displaced forever without
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being compensated (humans). Further, the displaced people were pushed to the upper
infertile lands as well as others permanently cut off from their relations across the
river. To date, the displaced valley Tonga people around the lake are disoriented and
to some extent bitter. Another downside is that some rare bird species and varieties
were displaced and one wonders whether a comprehensive Environmental Impact
Assessment (EIA) was done to take into consideration of all environmental concerns
contributing to degrading the planet in peril. But from another perspective, millions
are benefiting from more than two countries compared to the few native inhabitants
who once roamed and cultivated the valleys decades ago. Some other challenges
include corporate sabotage, dysfunctional teams, organisational politics, cartels and
subjectivity among many others.
In this section then, we highlight some of the common problems faced by projects
across the world and offer some possible solutions to these. We shall do this in tabular form
so that our work becomes easier to grasp and execute.
Problem Cause Effect on
project
Proposed
solution
Delayed funding Delayed reporting or
feed back to
donors/funding source
*Implementation
disturbed and in
disarray leading to
panicking.
*Stakeholders/
partners’
commitment and
trust disturbed.
*If funding is
contingent on feed
back/reports or on
imprest system,
timely reporting is
recommended.
*Also get the best
competent
finance staff
Delayed
implementation
*Funding hiccups
*Stake holder apathy
& indifference
*Project not on
target
*Panic later on in
*Program well
bearing in mind all
possible
hindrances e.g.
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Managing Quality in Project and Human Resource
*Wrong timing and
poor programming
project life
*In extreme cases,
sponsor terminates
project.
*Donor fatigue.
*More costly for
the project.
farming season,
materials
availability etc.
*Continuous
stakeholder
engagement as
well as regular
mutual updating.
*Only retain the
best staff on your
team for better
results.
Sour relations
with sponsor
*Poor or no feed back.
*Little or no progress
on project.
*Unexplained delays
*Doing what was not
initially planned for or
mutually agreed upon.
*Suspension of
funding.
*Donor/sponsor
withdrawal.
*Good will and
mutual trust
disturbed.
*Be timely.
*Give timely and
correct feedback
(i.e. Reports,
pictures, impact
stories, significant
changes etc)
*Continuously
engage sponsor on
the triumphs and
challenges of the
project.
Premature
project closure or
reduced funding
*Sponsor/Donor
dissatisfaction.
*Target community
loses funding.
*Prepare and exit
strategy.
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Managing Quality in Project and Human Resource
*Theft
*Acting “ultra vires”
*Little or no progress.
*Fund sourcing
problems(e.g. as result
of global economic
meltdown or change
of government etc)
*Job losses
*Half done jobs
remain as white
elephants in
community.
*Product/service or
community
development
retarded.
*Transition well
ensuring all
stakeholders
understand exactly
why the project
has closed,
drawing lessons
there from.
Weak outcome *Incorrect assessment
of problem.
*Weak or lack of
commitment to
project by target
beneficiaries.
*Programming was
weak and thus wrong
activities or correct
activities done at the
wrong time.
*Weak or no “buy in”
by stakeholders.
*Killer assumptions
and risks over take
project.
*Donor/sponsor
dissatisfaction.
*Disillusioned
community.
*In some cases,
dependent
communities.
*Ensure correct
problem
assessment and
identification
takes place at
initial project
stage.
*Conduct EIA at
the beginning to
forestall future
backlash.
*Secure full stake
holder
commitment from
the start.
Document this
commitment.
*Schedule
activities correctly
and ensure
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Managing Quality in Project and Human Resource
resources are
available at agreed
times.
Dependence
syndrome
*Incorrect entry
processes.
*Different messages
to the community by
staff team.
* Terrible
ramifications after
project phase out.
*Partners stop at
output level as long
as project in
implementation.
*Target group
abandon indigenous
survival/coping
mechanisms and
become dependent
on project.
*Community worse
off than before
project
implementation.
*Initiative and
innovation killed or
reduced.
*Intended outcome
thwarted.
*Speak on unified
voice as a team.
*All staff team
members should
be abreast with the
latest
developments.
*Careful with
wording in initial
and subsequent
stages.
*Consistency
throughout project
phases.
Unresponsive
partners and
stakeholders/pass
ive resistance.
*Inconsistency in
behaviour or approach
by project team to
partners/stake holders.
*Delayed project
implementation.
*Poor quality
*Continuous
engagement of all
partners and
stakeholders.
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Managing Quality in Project and Human Resource
*Unexplained actions.
*No feedback.
*Disillusion by
community/stakehold
ers by not getting the
expected project
“goodies”
*Community/Target
group not
understanding the
project cycle.
*Clandestine acting
by project team.
*Lack of transparency
by project team
*Wrong timing of
activity (e.g. during
farming season etc)
output.
*Indifference.
*Consistency in
approach and
behaviour.
*Reverting to
Memorandum of
Understanding
(MoU) as you
argue/negotiate.
Hurried (rush
hour) spending
*Delayed project
execution.
*Unclear terms of
reference (TOR).
*Poor budgeting and
projection (asked too
much at the wrong
time)
*Too stringent
*Increased risk to
project resources.
*Abuse
*Over working staff
*Activities not
allowed to
“simmer” so that
they properly
contribute to the
*Ensure
implementation
plan is well done
and in sync with
all
partners/stakehold
ers’ schedule.
*At time of
signing
cooperative
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Managing Quality in Project and Human Resource
proposal (budget)
conditions e.g.
allowable or
disallowables
*Incompetent staff
team.
next level hierarchy
of objectives.
*Project appears
good at output level
but not outcome.
agreement/project
document Terms
of Reference,
(TOR), MoU
contract etc) with
sponsors, ensure
only realistic
conditions abide
in the document.
*Ensure frequent
and regular
consultation and
mutual feed back
with stakeholders.
*Assemble the
best team possible.
Huge back log
(e.g. funds)
*Procrastination and
laissez fair attitude by
all parties concerned.
*Weak or no
monitoring.
*Incorrect
programming
*Project viewed as
inefficient.
*Team management
competence
doubted.
*Donor/Sponsor
confidence affected,
mostly negatively.
*More costs on
repeat jobs.
*Strictly follow
implementation
schedule.
*Institute
mechanisms that
ensure constant
monitoring and
implementation
e.g. weekly plans
of actions (POA).
Poor quality
results at output
*No one is held
accountable.
*Donor
dissatisfaction.
*Embed quality
within the system.
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Managing Quality in Project and Human Resource
level *Lack of quality
monitoring tools such
as M & E plan, ITT
and variance
reporting.
No set standards
*Pull out from
project by sponsors.
*Discontentment by
target group and
other actors.
*waste of valuable
scarce resources.
*Make much of an
issue who is
engrafted into the
project team, are
they performers?
*Ensure
mechanisms and
systems are in
place e.g. M & E
Plan, indicators,
ITT, financial
reporting etc.
*Hold some one
accountable at
every stage.
Set binding
standards
‘White elephant’
phenomenon
(e.g. the
community does
not identify with
or abandons a
project or
structure)
*Community/
stakeholders not
involved or over
looked from start.
*Stakeholders do not
fully understand,
appreciate or
comprehend the
project, its cycle and
implications (No buy
in or shared vision).
*Exit strategy for
*Vandalism
*Theft
*Abandoning
*No maintenance as
target stakeholders
do not appreciate
project goal or
process.
* People are worse
off than before as
community
*Engage
partners/stake
holders from the
start throughout
project life.
*Consult
community at
every turn. Avoid
a top down
decision making
routine but the
other way round.
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Managing Quality in Project and Human Resource
project not good
enough.
*Stake holders not
adequately or properly
trained for project
close out.
*Strategic thinking
and acting weak or
lacking by community
and project
implementer.
structure has been
disturbed despite
the good intentions
of the project.
*Hand a copy of
the project
document from
start to end to
stakeholders.
*Project ‘hand
over’ should start
as soon as project
implementation
commences, do
not wait till the
last.
*Continuous
training of target
group so that they
can lead their own
development
processes with or
without your
intervention
(community led
response).
*Secure buy in at
or before project
start
Delayed
reporting/feedbac
k to donor
*Incompetent staff.
*Unclear standards or
deadlines.
*No definite reporting
*Donor displeasure.
*Funding delays.
*Bad image
created.
*Hire competent
staff.
*Review present
systems and
ensure they work
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Managing Quality in Project and Human Resource
date/deadline.
*Delayed
implementation thus
nothing to report on
deadline, thus buy
time and report late.
*Weak time
consciousness (i.e.
time orientation)
*Differing time zones
some times (e.g. if
sponsor is in Australia
and project site in on
cape Verde island.)
*Misunderstandings
.
well and are
relevant.
*Review
organisational
structure and re-
engineer or
reorganise.
*Set realistic
deadlines.
*Be proactive and
beat those
deadlines!
Inaccurate
reporting
*No M & E system in
place.
*Infrequent visit to
project site.
*Incompetent staff.
*Poor audit rating.
*Donor withdrawal.
*Loss of sponsor
goodwill and
trust/confidence.
* “Capital flight”
*job losses and thus
negatively
impacting project.
*Strong
monitoring system
put in place.
*Strengthen
quality within the
project (e.g.
quality reviews
etc).
*Counter check
and validate the
report by on site
visit(s).
Project extension *Delayed
implementation.
*More costs
incurred.
*Diligently follow
implementation
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Managing Quality in Project and Human Resource
*Target outcomes not
realised.
*Target outputs not
realised.
*Weak project
management team.
*Confidence levels
in project team
drops.
*Project may not be
replicated
elsewhere but
permanently closed.
schedule.
*Negotiate such
extension well in
advance.
*If possible, settle
for a no cost
extension.
*Do a fantastic job
in the “grace
period”.
Unrealistic
expectations
from
stakeholders (i.e.
sponsors, donors,
customers,
communities etc)
*Unclear objectives
from the start.
*Not stating mission
clearly from the start.
*Over stating your
project goals and
intentions.
*Differing statements
from same project
team over project
goal/intentions.
*Stake
holders/Partners
react negatively if
project does not
deliver according to
expectation.
*Disillusionment
*Hidden suspicion
of being “ripped
off”. Evil
suspicions
promoted.
*Gossip, malice and
passive resistance in
the
community/partners
*Set the tone and
be consistent in
what you say from
the start.
*Revisit your
entry processes
and state your
mission from the
start.
*Continuous
stakeholder
engagement.
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Managing Quality in Project and Human Resource
.
Sabotage or
boycott
*Frustrated
staff/partners.
*Disagreement.
*Theft/pilferage
*Acrimony
*Back stabbing.
*Malice, envy,
backbiting etc.
*Wastage of project
resources.
*Dysfunctional
project team.
*Attention diverted
from core issues-
development.
*Get buy in from
all stakeholders.
*Identify root
cause and get rid
of it.
*Transparency
and frequent
dialogue/mutual
feedback.
*Meticulous
monitoring of
potential problem
spots.
*Negotiation and
reasoning.
Misunderstandin
gs with civil,
political and
traditional
leaders (e.g.
political
interference,
suspicions etc)
*Insufficient
information
dissemination.
*Inconsistency on the
project team’s part.
*Unfulfilled promises.
*Abuse and ill
treatment of
community/stakehold
ers.
*Political
*Delayed project
implementation.
*Opposition.
*Sabotage.
*Hostility to project
and staff.
*State clearly your
allegiance from
the start.
* Political
engagement.
*Dialogue and
transparency.
*Involvement of
these stake holders
as well throughout
project life.
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Managing Quality in Project and Human Resource
engagement.
*Secrecy and
clandestine
manoeuvres.
*Regular mutual
feedback and
updating.
*Good public
relations (PR).
Arson (rare
though)
*Frustration.
*Evil suspicions.
*Secrecy
*No feedback to
stakeholders.
*Project loses
property.
*People keep away
and project stalls.
*Continuous
engagement.
*Proper security
around project
assets and staff.
*Become
‘politically
correct’.
‘Turf battles’,
territories and
labels
*Frustration.
*The race to be in the
limelight.
*Donor support rush.
*No proper regulating
ethics for all players
in the industry.
*Desire to please
donor and get all the
credit for success
stories.
*Project politicking.
*Competition
instead of
collaboration or
networking.
*In fighting
*Attribution to
various stake
holders.
*Collaboration
and networking
realising we are in
an interdependent
world and age.
*Information
sharing and
‘seeing the big
picture’.
* Contribution at
outcome level.
Double dipping *Lack of information *Waste of scarce *Create a local
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Managing Quality in Project and Human Resource
and reinventing
the wheel
sharing.
*Desire to please
donor without
connecting with local
actors.
*Selfishness
(egocentrism)
resources.
*Less community
development.
*Same people
benefit and
eventually become
wasteful.
*Acrimony in the
community.
data base
accessible to all
stakeholders.
*Frequently
compare notes.
*Share goals and
see how you can
collaborate.
We have briefly surveyed the integrated program landscape and must now hurtle to a
conclusion. As can be seen, the program equally needs to be meticulously managed so
that the best quality standards are adhered to and upheld lest the program be mediocre
in output. If it is not well handled, it can exist through its life span and leave no
lasting impact and at times leave dysfunctional white elephants. This quality is
guaranteed by the right staff, M & E approaches, embedded quality, frequent
reflection and application of right emergent strategies, long range strategic thinking
and acting, adopting lean and agile systems, reading the times, correct positioning and
breaking down the separating imaginary silo boxed kind of thinking that divides
departments fostered by the departmental walls. In a nutshell, the operation gears are
the ones that make things work. If the wrong leaders, team members or policy makers
are at the helm, be sure to end up a dismal failure as the program attempts to swim to
shore. Qualitative integrated program management pays dividends and brings about a
synergistic outlook to the intervention area. A well planned and implemented program
will yield longer lasting impact on industry, community or country. Investment into
Research and Development (R & D) programs is the need of the times rather than
specialising in reactionary measures as has been the case hitherto.
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Managing Quality in Project and Human Resource
Implications of delayed project or program implementationIf for some reason a project or program delays, a lot of things are thrown into
jeopardy evoking many of rippling dire effects along the line, some are very critical
while others insignificant. Whatever the case, delay is neither encouraged nor
desirable unless by mutual consent and agreement with the sponsor because each
stakeholder would like to see tangible results. To demonstrate why delayed
implementation is bad, we have attempted to list the off shoots of this delay may be.
1. More costly (in cost or no cost project extension)
2. Quality compromised
3. Interest and commitment may decline from stakeholders & partners
4. Complicates matters (i.e. partners inconvenienced)
5. Loss of business and funding (e.g. The Freedom tower deal with the Chinese)
6. Good will and image scarred
7. Risks increased (e.g. the recent global crunch, inflation, political, economic,
technological, social, globalisation leading to obsolesce etc)
7. Waste of resources may result (e.g. market research results, survey needing to be
redone etc)
8. Disfiguring the ultimate product or outcome as context may have evolved or
mutated with different actors all together. The long sought after lasting change may be
over taken by other events (e.g. Kopa ADP and ZamPalm, HIV pandemic etc)
Grant Management snap shotGrant management has been around for some time and involves funds from specific
donors, especially Governments. By definition, a grant is a gift and thus not to be paid
back though there are strings attached to its use and project execution. Different
funding sources such as AUSAID, NORAD, DFID etc have their own unique
requirements on the use of public funds in a foreign country. These conditions
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Managing Quality in Project and Human Resource
stipulate what can be done or not done using those particular funds as per donor
requirement. Each donor has expectations, rules, regulations as well as what they
expect to see with the use of their money. For instance, in supported USAID (USA
Government International development wing) projects, there are regulations termed
“Allowable” or “Disallowable” to regulate the grant execution. If any one does an
activity outside or beyond the set parameters, the grant will not absorb that cost
because it is termed “disallowable” meaning that the implementer rather than the
grant will bear the cost. Depending on the project document, certain things are
permissible (directly related to the project, as well as made in America, “Buy
America”) and expected while others are flatly forbidden (e.g. fire arms, bombs,
terrorist acts etc) or allowable with prior consent from the funding agency in
exceptional cases (e.g. using an airline other than a US airlines on international
travel). Thus, grants need to be meticulously handled ensuring that the laid down
regulations are adhered to. The project document stipulate what type of agreement has
been entered into as project agreements are of different types. A cooperative
agreement entails substantive involvement of the donor agency throughout the
projects life (i.e. the donor has a say and influence on project execution, sometimes
even interfere!) while other agreements give the implementer leverage and freedom to
implement without interference from the donor agency as long as they observe the set
parameters. When managing a USAID grant, just bear the following in mind with
respect to project expenditure: Costs should directly relate to the project. Remember
the acronym “NRA” meaning that the costs or expenditures must be Necessary,
Reasonable and Allocable to the grant. If the cost does not fit into this structure, then
it is disallowable and keep away from it. In evaluating the grant execution quality,
these conditions will be borne in mind and may lead to project premature termination
or even extension.
It is high time we transitioned. In the ensuing unit, we consider why numerous
companies and projects fail despite employing many world class quality systems &
strategies.
Case study 1
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Managing Quality in Project and Human Resource
The Fall of Quest
Note: This case study is mainly based on the recent troubles (1999) of a real computer
manufacturer.
1997 was a banner year for Quest Computer Corporation, a leading manufacturer of
personal computers. The company surpassed $15 billion in sales, nearly seven times
its revenues in 1992, the year John Clarke took over as CEO.
Clarke is a hard-driving, no-nonsense leader. His vision was to create a $30 billion
enterprise by the year 2000, but things were slowly started to crumble around him.
What once had been an open and productive atmosphere that cultured teamwork, was
now deteriorating under the strains of political infighting, cronyism, and allegations of
sexual harassment.
In the eye of the storm was Samuel Anderson, vice president of human resources.
Anderson and Clarke worked together in the eighties at another corporation before
Clarke came to Quest in 1992. Three years later Anderson followed. Anderson
immediately started using his relationship with Clarke to influence business decisions.
Anderson also leveraged his ties to discreetly resolve two allegations of sexual
harassment against him.
Although the majority of senior executives and managers believed Clarke was an
extremely tenacious and good executive, they also believed he was getting bad advice
and accepting it. Clarke, when asked about the sexual harassment complaints against
Anderson, replied, "People make things up. There is no way of knowing. People
spread rumors." This and other incidents further strained relations between Clarke and
the rest of the senior executive team. Busy with the task of running one of the world's
leading PC manufacturing organizations, Clarke began relying heavily on three senior
executives - Anderson, Senior Vice President Tim Hunt, and Chief Financial Officer
Barry Lynn.
The rest of the team felt increasingly alienated. Over a three-year period, starting in
1996, 10 top executives left the company and following them were several essential
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Managing Quality in Project and Human Resource
managers and supervisors. At the centre of this exodus was the bizarre dynamics
between Clarke and Anderson. Many believed that Clarke empowered Anderson to do
things way beyond his role in human resources. For example, Anderson had
significant influence on changing the organizational structure of the company,
determining what divisions ought to sell into what markets, and which products
should be sold through various departments. He also took steps to drive a wedge
between senior executives, strengthening his position with Clarke while inducing a
communications breakdown throughout the organization. Anderson had a list of
people whom he would constantly campaign against by advocating organizational
changes to lower their profile. Once he lowered their profile, he would start a process
of easing them out of the door. As one executive put it, "Anderson was instrumental
in deciding which people to bring in and which were no longer acceptable in the
company."
Clarke's reliance on Anderson baffled, and angered, other executives. Anderson was
very close to Clarke, and he had a huge impact on the business. Human resource
professionals usually do not play that kind of a role, as they are supposed to try to
bring the team together, but all anyone saw Anderson doing was creating divisiveness.
Instead of working together to fine-tune a coherent growth strategy, Quest's senior
executive team became disjointed and increasingly detached from the rest of the
company. Their inability to lead soon had an effect on the morale of almost every
employee within the company.
Two of Anderson's initiatives drove home the point of an executive team that was out
of touch with its workers. The first initiative was the building of a multimillion-dollar
on-campus cafeteria that included reserved underground parking for senior
executives. Prior to that, executives shared parking space with the rest of the
company's employees. The second initiative was the increased security on the eighth
floor of the corporate building. Here the executives and several key managers had
their offices; even though every other executive objected to the idea by arguing that it
created a hierarchical environment not conducive to a free exchange of ideas with
subordinates.
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Managing Quality in Project and Human Resource
Anderson was at the centre of almost every bit of chaos that existed within the
company. Clarke denied that Anderson had undue influence. "Every executive has the
same access to me," Clarke said. "I have always had an across-the-board relationship
with everybody. I always maintained a high degree of equality. There was no
favoritism." Clarke also maintains that Anderson had "very good relations with just
about everybody." Anyone who says otherwise, Clarke added, must "have an ax to
grind." Many former executives said they were reluctant to complain to Clarke about
Anderson because Clarke took personal offense, as if he were being criticized, and
because they feared winding up on Anderson's "list."
The erosion of the executive team came at a very bad time. Its main competitor was
starting to grab big chunks of PC market share by proving the viability of the direct-
sales model. When Clarke replaced the former CEO in 1992, his aggressive price-
cutting initiatives reversed Quest's direction and led the company to the top of the PC
market. But now, Clarke was much less decisive. As one former executive noted, "He
was paralyzed by the speed with which the market was changing, and he couldn't
make the difficult decisions." Clarke failed to see the opportunity of the web. Its main
rival was now selling over $2 million worth of products per day over the Web. In
1998, its rival surpassed Quest in desktop PC sales to U.S. businesses for the first
time.
The high turnover in the sales divisions led to instability that caused several high-
profile corporate accounts to take their business elsewhere. As people left, the
performance of the company started to degrade. Quest attempted to construct its own
build-to-order strategy by purchasing a rival company. This failed as it had no vision
to guide its direction.
Finally, things came to a head. Quest could not significantly reduce distribution and
manufacturing costs or boost PC revenues. Huge oversupplies of inventory adversely
affected Quest. While its main competitors grew at about 55 percent from the first
quarter of last year to the first quarter of this year, Quest's business fell by 11 percent
over the same period. By the end of this year's first quarter, Quest's stock lost almost
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Managing Quality in Project and Human Resource
half its value, and the company's first-quarter earnings fell far short of analysts'
estimates.
Then came the kicker, the forced resignations of both Clarke and Anderson. The new
CEO, Paula White, now has the massive job of turning a lot of infighting rank and file
into a cohesive organization. The leadership structure was severely damaged due to
the large number of people leaving Quest. Although a large number of replacements
were found, it is extremely hard to replace the collective experience of that many
people leaving in such a short time. To help rebuild the leadership structure, Paula
White has charged the interim human resource vice president, Samuel Wines, with
rebuilding the leadership structure. Samuel created a special leadership task force
team by hiring several new human resource specialists. You were brought on as a
training analyst to be a part of that team.
© Clark, D. R. (2004), Instructional System Design Concept Map. Retrieved April 1,
2009 from http://nwlink.com/~donclark/hrd/ahold/isd.html
Case study questions
Visit the following site http://nwlink.com/~donclark/hrd/ahold/isd.html and analyse the
case. What exactly was the central problem at this entity? How could it have been
remedied or avoided?
Why do you think Quest flourished?
What was the central problem in this organisation and how can we relate this to
project management?
How does this case demonstrate/illustrate the centrality of effective and proper HRM?
What is your view about the HR function in this entity was it too unduly powerful?
Justify your answer.
Do you think one individual has the capacity to disrupt and possibly demolish team
dynamics? Explain your answer.
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Managing Quality in Project and Human Resource
What lasting lessons do we derive from this case?
Case study 2
The Body shop International
This has been a dynamic shop network that has been lobbying various social
crusades especially those on the Environment. If one only heard about its activist
works, one would never imagine that the same entity could possibly produce excellent
products, whereas if one only knew about the excellent products, one could not have
imagined that this was the same unorthodox, blunt, rough and riotous shop! Yet both
these attributes mystically unite in this selfsame organisation!
For the body shop, it has meant changing all the time depending on the social needs
that confronted it. It has been built around the robust principles of Anita Roddick,
whose ways have been dubbed eccentric but highly relevant and profitable. Anita has
had a passion for social change and has successfully left her mark on the company
work culture. The Body shop has been an exciting and thrilling place to work at
because of the constant new challenges. But who is Anita and from whence does she
hail? What has she done and where is she heading to next? What prospects lie ahead
of the body Shop in ensuing years?
Anita Roddick begun the shops in 1976 and developed them. She, with the help of her
husband worked together and moulded the shop as they saw fit. Having owned a hotel
previously, they sold it to pursue other life long desires before Anita begun doing a
business based on natural herbs. The herbs business mainly focused on skin care, and
thus attracted women. With time, people developed confidence in the products and
thus, the shop picked up. It is now close to twenty years since the first shop was
opened and today, the shops are dotted internationally on the globe. Its presence is
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Managing Quality in Project and Human Resource
mainly in the UK but plans are under way to conquer more and new frontiers.
Although the body shop does not market its products, quality does it for the shops.
But who is Anita exactly? Anita descends from Italian-immigrant parents and has
some hind exposure to business although she never had any formal business training.
She got married to Gordon and turned their house into a hotel. As earlier intimated,
they sold it to pursue other things. It was whilst in that state that Anita begun a small
shop dealing with skin care, using natural ingredients. From one shop, the business
blossomed into a chain of shops that are a force to reckon with. Founded on Anita’s
strong principles of social good and environmental protection, the Body shop has been
so successful capturing international attention.
But what has made the Body Shop tick? What has been the secret behind the
phenomenal growth despite unorthodox business practices? For one thing, the body
shops have been a hive of activity, constantly changing with the times. A lot of
innovation takes place, is customer taste sensitive, strongly social and
environmentally conscious, possessing appealing, natural and personal attention to the
customer, responsive to the current needs and strategic in approach. In addition, the
goods are of high quality, the leader is daringly radical, possesses a good franchising
net work with a unique anti animal testing stance. All these attributes have blended so
well together so as to boost the company success while defying proven industry
norms. Further, we assert that the most important sources of this success have been
many.
The first source has been the environmental protection stand. Today, with the frequent
talk on the uncontrolled planet degradation, anyone raising a finger against this
scourge will receive a hearing. As such, the environmental crusade has highlighted the
body shop on the international scenario. For another thing, the unique and strong
community contribution thrust is an asset. The company believes that the company
has a moral duty to pay back, in some way, what is got from the community. This
stance alone is a powerful competitive advantage tool. Still further, the head of this
organisation, Anita Roddick, is a robust, diligent and candidly outspoken leader who
can not be easily ignored. When she yells from her tunnel, the world halts to hear her.
In addition, the ingredients used in the products are natural and do not allow testing
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Managing Quality in Project and Human Resource
on animals. The use of the environmentally sensitive methods receives a lot of
applaud from all corners of the world, thus the global acclaim given to the body
shops. It is a curious fact that the shops do not advertise, but the ingredients utilised
do the marketing.
Anita has been the single most powerful force in the company. Her management
philosophies are excellent though they are centred around her and are quite imposing.
If any will not toll the same line with Anita, they are surely on the warpath with the
iron lady. That not withstanding, she is an asset to the company in that she has led the
company to a strategic position, etching out a unique niche. Although there is a lot
more competition today, the shops continue to tower above rivals because Anita has
wielded certain potent attributes onto the company culture. For example, the company
is very sensitive to environmental and customer taste change, vibrant, agile, and
responsive maintaining high quality products. Further more, there is a lot of
innovation and ideas constantly flowing from Anita’s fertile mind. She has brought
about product changes, initiated projects, research and collaborated with powerful
NGOs to get mammoth tasks and changes done. Single handedly, she has resiliently
and valiantly stood against the world even in the face of major opposition from her
own employees. For Anita, dead orthodoxy is not relished but hounded out through
the window. Once she sees something and approves it, she will unflinchingly charge
like the Bull towards the goal, of course minding that the business continues to run
successfully.
Obviously, there are many lessons we can learn form such a dynamic company and
individual. Firstly we learn that if a company is to be successful in today’s hostile
business environment, it must be constantly alert and adjust with the times. This
means continuous improvement of products, be constantly learning, be more sensitive
to customers, maintain a “small company” atmosphere in the company, be agile,
contribute to the community, and add a “human face” to the company. Secondly, we
learn that a company must hire “Known quantities” as much as possible for these will
attract attention to the company. Not only should these be known people, but also they
must be creative, robust, resilient and diligent risk takers who will not mellow at puny
attacks. Anita is the very epitome of constancy. Thirdly, we must ensure that though
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Managing Quality in Project and Human Resource
star players are preferred, the must not be allowed to paralyse others. This is evident
at the Body shop where Anita is almost everything and no one dares cross her path.
This means that when she fizzles out from the business horizon, the company sinks
with her. An ideal situation is to have a “pool” from which to tap leaders. Anitas’
eccentric manoeuvres are uniquely good but their sustainability is questionable.
Fourthly, let it be noted that the company must be agile, fluid, unbureaucratic,
flexible, customer sensitive and must provide that ‘personal touch’ to their business.
Customers must feel individually appreciated and noticed. Myriad companies have
staggered to the company graveyard because of the loss of that personal and good
quality speedy service to customers. Fifthly, the company must maintain a clear
strategic mission that should, like the star that guided the wise men, lead the company
to its destiny without much ado. Sixthly, the unique and unprecedented product niche
must be guarded jealously. Not only must this be improved and expanded, but also the
products themselves must be improved continuously. The body shop is unique in its
social goals as well as in its use of natural ingredients. Others are copying this
uniqueness today but they cannot attain unto its unique prowess. From the afore
mentioned lessons, we can clearly see that the Body shop deviates widely from the
regular business trends. Although one’s hair stands on end when thinking about this
entity, yet a company can survive outside the norm, as long as it reads the times well
and acts at the right time. Timing and the right moves are what count. Having asserted
thus, let us be quick to say that it is safer to use the long tested and tried ways, though
with a strategic eye.
Looking at the way that the company has developed and evolved over the years,
especially in the UK, we have reason to believe that the body shop has a bright future
though this will be hard won. The business world is replete with companies that are
moving towards the use of the same natural ingredients that have hitherto made the
company have a strong uniqueness. The niche has scarcely been neither challenged
nor eroded. In the light of the emerging threats, it is imperative that the company
relocates to a more sustainable position that will strengthen the uniqueness. Among
the many things it will have to do it its quest to evolve into a better company is to
maintain and enhance its “personal attention” to clients, its sensitivity and
responsiveness to the changing demands and tastes of customers out there. Above all,
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Managing Quality in Project and Human Resource
the company must continuously be innovative, train human resource to take over from
Anita, and not lose focus on its community contribution ethic. Now that the body shop
is confronted with the titanic task of penetrating the American market, it must adjust
its gears very well because the issues it will face are fundamentally different from the
usual. For example, the American consumer tastes will differ. Further more, the big
social concerns such as the environmental crusades are not as hot issues in the States
compared to Europe. Added to the list of potential hurdles is the legal environment,
trade restrictions, approval criteria of products by the American authorities, the
difficulty to recruit people with a like passion as those else where in the body shop
network and the threat from more apt “copy cats”. One other concern is the age-old
stance of not advertising. On the American market, if a company will not advertise, it
will not be noticed and book a place among the company graves. These and many
strategies that have eked triumphs in Europe may not carry the day in the States. That
notwithstanding, the Potential market is there as long as the following are observed;
Firstly, the company should strategise, by initially carrying out a market research and
then looking for the best way to enter the market. One way could be to produce some
exceptionally high quality products that can be given free to some key clients for a
start. Powerful policies and structures that will ensure sustainability over time must
further support this strategy. We suggest that initially, only one outlet initially be open
and then spread wings depending on the performance of the same. As such, there must
be an allowance for a pay back period of say two years. This may mean running at a
loss for a while before breaking even. It would be wises that the shop hires “known
quantities” that wholeheartedly imbibe the Body shop ethics and who will fearlessly
champion the entity causes. Alternatively, the shop could identify the “Big” social
issues on American soils, adopt them and champion the same. Furthermore, the
community contribution must be elected carefully so that it is relevant. Natives could
be trained who will easily accomplish all these. In addition, we think that the Anita
grip over the company must be modified to allow more liberty for the shop mangers.
Apart from franchising, the company must now reconsider its stance on marketing. In
the UK, absence of direct marketing may work, but the American situation is
different, therefore, due care must be given. It is true that what has made the shops
thrive all a long has been the risky ventures and unorthodox methods, but this new
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Managing Quality in Project and Human Resource
prospect calls for walking circumspectly lest failure dents the company image. The
legal environment as well ought to be watched carefully and if possible, the best
lawyers and partnership/collaborations are sought. If an American partner can be
found, a partnership knot could be tied. Lastly, the company must strengthen its niche
by adopting new strategies that will highlight the uniqueness of the products. Topping
those qualities should be the high standards and usefulness of the products. The
community contribution must come in by and by though must be highlighted in the
mission statement too.
As Anita and colleagues peer into the future, what would you suggest they do? Should
they launch full throttle onto the American market?
SourceBower, Bartlett, Uyerterhoeven, and Walter, Business Policy: Managing Strategic
Processes, 8th Edition, Richard D. Irwin
Case study questions
What has distinguished the Body shop?
Would you classify Roddicks’ approaches to business as ethical and regular?
Mention two critical ingredients that have contributed to the Body shops’ success.
As the Body Shop prepares to enter the international market, what advice would you
give to its management?
What are some of the pitfalls and weaknesses of the body shop? How can this be
rectified before it is too late?
Revision exercise
Differentiate between a Project and Program
What do you perceive are the advantages of a program over a project?
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Managing Quality in Project and Human Resource
What does the word “Integrated” emphasise in an integrated program?
What information does an organo gram give about a program?
What is Operations Management and how relevant is it to programs and projects?
Which influences the other in formulation strategy or structure?
Explain the significance of a vision and mission statement in an organisation.
“A Program equals the sum total of its projects under it only.” Discuss this statement.
BibliographyBaker Larry & Douglass Merril, Time mastery Profile: How to manage your time
more effectively, Carlson Learning Company, 1992
Baker Susan, Sustainable Development, Routledge, 2006
Bamberger Michael & Valadez Joseph, Monitoring and evaluating Social Programs in
Developing countries, World Bank Institute, 1994
Brake Terence, Managing Globally, Dorling Kindersley, 2002
Burnes Bernard, Managing Change, FT Prentice Hall, 4th edition, 2004
Buttrick Robert, Project Work out, 2nd edition, Pearson Education, 2000
Campbell J David, Organisations and the Business Environment, Butterworth
Heinnemann, 2002
Clark, D. R. (2004), Instructional System Design Concept Map. Retrieved April 1, 2009 from
http://nwlink.com/~donclark/hrd/ahold/isd.html
Dessler Gary, Human Resource Management, 10th edition, Pearson/Prentice Hall,
2005
Grobler Pieter et al, Human Resource Management in South Africa, 3rd edition,
Thomson, 2006
Heller Robert, Effective Leadership, Dorling Kindersley, 1999
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Heller Robert, Managing Teams, Dorling Kindersley, 1998
Kakabadse Andrew & Analoui Farhad, Corporate Sabotage, Jaico Publishing House,
2004
Langdon Ken & Bruce Andy, Strategic Thinking, Dorling Kindersley, 2000
Maylor Harvey, Project Management, Pearson Education, 3rd edition, 2003
O’hara et al, Global work, Institute of the Future, 1994
Peter Paul J, Certo Samuel C, The Strategic Management Process, 3rd edition, IRWIN,
1995
Render Barry & Heizer Jay, Principles of Operations Management, Pearson/Prentice
Hall, 2006
Salton J Gary, Organisational Engineering, Jaico Publishing house, 2003
Schroeder Roger, Operations Management: Contemporary concepts and cases,
McGraw Hill International edition, 2008
Sleight Steve, Moving to E-Business, Dorling Kindersley, 2001
Steger B Manfred, Globalization: A very short introduction, Oxford University Press,
2003
Stevenson J William, Production/Operations Management, 5th edition, IRWIN, 1996
Zambia River Authority, Project Noah’s Ark,
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Unit 8
Aim
The aim of this unit is to train or equip the student with case study analysis skills by
dealing with different case studies.
Objectives
By the end of this unit, the student should be able to:
Identify and note the key quality issues that have made the entities succeed or fail.
Create new case studies from the local scenario.
Identifying quality in practice
This unit is devoted to case study analysis with a special emphasis on quality issues
as documented in recent cases. Most of these cases have been discussed in different
day to day text books and other media and would therefore be a good practice point
for the student. To get detailed case studies, students are advised to consult the source
materials such as Bower and et al as well as the local dailies. The internet is replete
with various case studies that would give the student more practice. The author would
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further recommend that students broaden their reading scope and attempt to build live
case studies as they see them in the world around them. Thus, case study after case
study is tabulated which the student should read and attempt answering the case study
questions at the end of each scenario.
Case studiesCase study # 1
Ben and Jerry’s Homemade Ice Cream Inc: Keeping the
mission(s) alive
If one has heard of the Body shop’s strong social change goal, then, the Ben and
Jerry’s Homemade Ice cream Incorporation will be a good reminder. The company
was incorporated a partnership comprising two long time friends, Ben Cohen and
Jerry Greenfield in 1977. It was an immediate success and has advanced to be a
powerful No.2 on the ice cream market (as at 1990). The success story is attributed to
a number of factors, which we endeavour to unravel.
From the outset, the founders did not design the company primarily for profit making
but rather with a strong thrust towards social change. Their aim was to bring about as
much Community change and thus their policies and values thus far has been directed
towards that goal. Since we know that the destiny of any entity is not entirely in our
hands, the Ice cream business blossomed and has been moving from strength to
strength as more consumers get captivated by the delicious multiple flavours on offer.
The Company rests on very strong principles that are worth noting. Firstly, the
company has a strong belief that the yawning earnings gap between the top executives
and a new entrant is immoral. This is a sad but common phenomenon in America, and
as such, the company has endeavoured to minimise the discrepancy by imbibing a “5
to 1” wage condition. This means that the highest paid employee does not get more
than five times the lowest paid, thus minimising the disparity. Secondly, the company
has from the beginning emphasised quality and timeliness of service. By this, the
company endeavours to continuously improve its Ice cream quality, flavour and
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packaging while in the same breathe ensuring that the customer is treated as king,
with maximum satisfaction. As such, all the employees take it as priority to serve the
customer first and also keep true to their word. Thirdly, this high quality and speedy
service hallmark has turbid the company to a strong unique position where all other
imitators find difficult to copy. Further more, the strong social change outlook of the
company marks it further from the rest. In a nutshell then, the company has beaten
out a clear path all these years having upheld its social obligations as well as the
internal ethics such as the “5-1” wage condition as a beacon. In this twofold thrust, the
company has prided itself.
Having laboured to show that the company built by the duo is very strong, we hasten
to say that not all has been rosy lately. Like any other growing company, the entity
has been encountering hurdles. The first has been that as more people have been hired
over time, not everyone espouses the ancient core values. Since the company is now
more complex, profit making and possesses a powerful presence on the market, the
new employees possibly do not whole-heartedly imbibe the values. While some
appreciate the said values, others question their relevance and usefulness. Secondly,
many, including the outgoing CEO, Chico Lager, feel that the company must throw
off some “obsolete” relics which tie down the company and impede further
development. They argue that the company is past the napkin stage and must
modernise some values, especially the “5-1” wage condition. They (opponents) argue
that the company can neither retain nor attract professionals due to the unattractive
pay and compensation. Why should one sacrifice a better wage for a lesser paying job
where one is even over worked? Thirdly, the “5-1” condition opponents further argue
that the company is in a competitive environment where only the best must be hired or
else the company sinks. From these views, we can clearly see that the company was
divided into two camps, one with Cohen (adherent to) and Lager (opposer of) on the
other. This was the turbulent atmosphere in the company that Chuck lacey was soon
to take over in the ensuing few months following the September 1990 final decision
making meeting. His interest lay in the fact that he was the one to steer the ship
henceforth. As such, he had to be most objective and not appear partisan.
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But does that mean all the “obsolete” values of the past have been overly and
pointlessly imposed? Nothing could be further from the truth! To the contrary, these
values are the ones that have won battles for Ben & Jerry all these years. For instance,
the company has been powerful and competitive from the beginning because of its
unique social change policies. By that token, some people have been buying and
popularising their products. We must go further to assert that the non profit ethic in
those earlier days was excellent in that the employees knew full well that theirs was
more of a service than a wealth amassing venture. Thus, this has meant less pay,
fewer over head costs and lower price but high quality products to the customer. The
consumers have not only been continuously satisfied but have also felt they were
contributing to a worthy cause. But like they say, “what goes up must come down”,
Ben & Jerry’s Inc’s weapons of yesterday are blunt and must constantly be revised
ensuring that they remain current and strategically relevant. This may mean
modifying some traditions or discarding some practices as the case may be. The
difficulty with the present crisis at Ben & Jerry is that the points of contention lie at
the very heart of the company, without which, one of its distinctives will be lost. This
will weaken the company “punch” and become like the rest. In our view, Chuck
Lacey must approach this scenario very cautiously, taking to heart the pros and cons.
He must be seen to be objective, though forward looking. If it means changing the
points of contention, the reasons must be fully furnished and the history books re-
written. If the present status quo is maintained, then alternative ways must be found
which will attract and retain staff because a high employee turnover in itself reflects
badly on the company.
In a nutshell, Chuck lacey must be objective, strategic and wise. When the decision is
made, he must be ready to go full throttle in implementing the decisions, all the time
keeping an eye on the market. A divided house is a sure recipe for disaster but also,
we must acknowledge that change is resisted at all costs, especially if it impinges on
time honoured hallmark values. That notwithstanding, we are confident that the Ben
& Jerry will surmount all these hurdles with agility and hurtle towards a brighter
tomorrow!
Source
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Bower et al, Business Policy: Managing strategic processes, 8th Edition, Richard D
Irwin.
Case study questions
What is the secret of the Ben and Jerry partnership/company?
What would you comment on its policies/philosophy?
How can things be improved in this global context?
Suggested case study question answers
What is the secret of the Ben and Jerry partnership/company?
What would you comment on its policies/philosophy?
How can things be improved in this global context?
Case study # 2
Effective leadership
Leadership has now taken the centre stage in Management circles as this has proved
to be more effective mode to unleash the latent potential within fellow team members.
As opposed to the now obsolete way of the traditional “Bossy” kind of management,
the latest trends of leadership permeate the organisation with a fresh fragrance of new
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pragmatic motivational ethics. This is what the book, “Effective Leadership” by
Robert Heller seeks to address.
Without much ado, this small book of only 70 pages summarises what one needs to
know about effective ways of leadership. The said book, divided into three sections,
presupposes that one is already a leader and seeks to sharpen his/her leadership
prowess, hence the title “Effective Leadership”. Having asserted the above, let me
hasten to say that the person first encountering the whole subject of leadership will
also grasp a clear understanding of what the principles of leadership are as the book
defines what leadership is in the introduction and then progresses to deal with the
whole complex web of learning to lead, leading others, improving effectiveness and
inspiring excellence in others. But wherein does effective leadership consist? What
exactly is effective leadership?
Leadership is simply defined as the ability to influence and inspire others towards a
goal. Effective leadership goes a step further than the aforementioned definition.
Heller accurately defines it as “the key to truly effective leadership lies in mastering a
wide range of skills, from implementing and administering processes to inspiring
others to achieve excellence”. As can be seen, this definition states that for one to be
effective, they must have a wide knowledge in many a field and be able to make the
most of every opportunity that presents itself. The leader, among other things, must be
visionary and able to inspire confidence in others by being a challenge, trusting
others, being a mentor, a coach, able to motivate via compliments and rewards, able to
seat with subordinates and give an empathetic listening ear. The said leader does not
content him/herself to know about the general things regarding the workmates but
goes out of his/her way to know the back ground details which might affect out put as
well as the best ways to delegate and build a team spirit among workmates. This may
well mean taking time off to visit team members on the job, at home, in a social
gathering, having informal chats over a drink or cup of tea as well as going for
workouts together after hours. This has the effect of reducing suspicions and
prejudices that people harbour. Once people feel valued and needed, they open up and
are willing to take on bigger challenges as well as risks to innovate and promote the
Effective leadership, Robert Heller page 5
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cause of the organisation rather that remaining indifferent and aloof. They “own the
goal” as it were, due to the effective leader’s presence.
The effective leader is systematic, highly organised and focused on what he/she wants
to achieve. S/he sets benchmarks of quality, time frames and is determined that others
catch the ropes as well. This further means that the said leader is continuously willing
to listen and learn from others who ever they may be (Whether young or old,
subordinates or superiors etc.), gains experience by the day, and makes every effort to
master own function as well as others’ functions. The time has arrived when one must
be multitalented and has a good working knowledge about other disciplines. Gone are
the days when the Manager knew next to nothing about Marketing or finance, for
example. The 21st century leader must have a firm grasp of all the areas in order to
confidently lead. Apart from the afore mentioned points, the leader must ensure
he/she is able to detect strengths and weaknesses in others and positively facilitate the
strengthening of the positive sides while correcting the weak sides. Having done the
above, in the second section Heller hurtles along to deal with the preparatory work to
leadership, which culminates into forming teams over which the selfsame leader,
exercises authority in a prudent and efficient fashion. Under team work, the issues of
delegation, communication, decision making (through discussions and brain storming
sessions initially), goal setting, analysing problems and giving support to staff in
agreed areas of implementation are dealt with. The last section of the book talks about
the all important areas of motivating others, establishing a vision, generating ideas,
ideal management style (in this case, open management), boosting achievements and
finally, being competitive with respect to the outsiders. This competitive advantage is
realised by first treating the internal customers Employees) well who in turn will go
out of their way to treat the external customer most diligently and courteously.
Remember, the customer is king! This approach to business works wonders for the
organisation in that it produces product loyalty and woos many more to the company
products. High quality and low prices cannot be over emphasised. Furthermore, the
effective leader must develop an apt acumen to network, identify and exploit
opportunities through taking risks as well. SWOT analysis and frequent market
researches are critical. Further more, the leader must be bent on success and all out to
win. As we begin to enjoy the book, it suddenly draws to a close having clearly
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scanned over the whole subject spectrum excellently. We therefore heartily
recommend the perusal of this book by those busy executives and indeed, those that
would aspire to be effective leaders of tomorrow because this book is a classic tool,
dealing with the very heart of leadership. In our estimation, the book is destined to be
a best seller and is a must for every leader worth the salt!
Source
Heller Robert, Effective leadership, Dorling Kindersley, 1999
Case study questions
What, in your own words is Leadership and how does it differ from management?
How does leadership impact of organisational quality?
Suggested case study question answers
What, in your own words is Leadership and how does it differ from management?
How does leadership impact of organisational quality?
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Case study # 3
Marks and Spencer: Sir Richard Greenbury’s quiet
revolution
Today, almost no fashion and quality conscious English person is ignorant the St
Micheal brand. It is a brand that has stood the test of time and has continuously been
improving. Half the time, consumers do not bother to find out from whence and why
this brand exists. A brisk sketchy background is handy at this point.
The origins are simple and soon told. Two fine gentlemen, Michael Marks and
Thomas Spencer opened the first shop as a partnership in 1894. Michael was a polish
Jew while Spencer was probably Scottish. Upon agreement, they established their
shop that sold small items costing very little and thus, their quaint marketing heading
“Don’t ask the price, its one penny.” It was one penny indeed because the store
ordered in bulk and in turn sold the high quality goods cheaply. This attracts scores of
clients. As time went on, the stores gained a reputation of stocking very high quality
but low cost goods. This has been one of the most powerful competitive tools that has
marked out the company from the rest. Michael and Thomas worked tirelessly until
the chain stores begun to be dotted all over the United Kingdom and lately has been
penetrating further into other international markets such as the USA, Canada, Eastern
Europe, Asia and Hong Kong. These new frontiers present fresh challenges seeing
that the environments are totally different from the UK setting where the company’s
hub rests. But that is not the end of the story, the company is now run by some
descendants of these great pioneer entrepreneurs having taken over the mantle when
their kinsfolk withered away. It is interesting to note that the next generation of
Directors included, Simon Marks, son of Michael, and Israel Seiff. These two married
each other’s sister further cementing associations. With the passage of time however,
more professionals were hired except that the system did not give them leeway to
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introduce new innovations due to the strong bureaucracy. Sadly, all the brilliant ideas
fell flat to the ground. That explains why when Sir Greenbury was appointed, he
turned this gloomy picture right round. Under the leadership of this man, the shops
have blossomed having a wide product range especially men’s clothing and women’s
undergarments. The Chain store also deals in food as the other product, representing
40% of the total group turnover.
But what has been the secret of the Marks and Spencers’ success? A number of
reasons come to the fore but the following reasons will suffice. Firstly, the shops have
maintained a customer sensitive approach. In saying this we mean that the Chain store
has ensured that the customer remains king, calls the shots and gets maximum
individual attention. Secondly, there has been a deliberate effort to ensure that the said
customers get a speedy and high quality service. Efficiency is the word! Parameters
have been inserted which ensure that the customer is not inconvenienced at all.
Thirdly, but closely akin to the second point is that the shops are a convenient place to
shop because of the wide product range that provides everything under one roof.
Flexible shopping hours is yet another great convenience. Fourthly, the shop has been
strategically placed, exploiting the latest technology so as to keep ahead of the times.
The shops anticipate customer tastes and go ahead to supply the goods. Further more,
because of the bulky nature of the stores’ orders, they bargain and get concessions,
which significantly cuts costs and enables lower prices to the customers. In the sixth
place, the internal working environment is excellent! Having cut down on staff,
Greenbury successfully infused an excellent teamwork spirit where the employees
work together like ants to achieve a goal. They corporately, diligently and constantly
make the most of the every opportunity to the extent that there is mutual trust and
interdependence among them. Each person is valued as a necessary part of the team,
working as an organism. It is worth noting that the company cares for the welfare of
employees knowing that the ‘internal customer’ must be satisfied first before the
outside. In keeping with this belief, employees are individually attended to. As such,
the said workers put in their best all the time and will stick with the company to the
end. This loyalty manifests its self in the way that the company image is jealously
guarded and the “restless present product calibre dissatisfaction”. Traditionally, the
company has had one of the best compensation policies, being ardently devoted to its
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staff. In addition, the company rewards those that excel. This further motivates
employees to excel in their calling. These salient points are the ones that have largely
led the triumphs of the past for Marks and Spencer. Let it be known also that effective
communication within the firm has been highly valued as it has kept the stores
marching as ‘one man’ with a similar goal and aspiration. No longer does top
management merely dictate decisions top-down but rather, the employees are made
aware beforehand what is going on and to some extent given leeway to suggest some
valuable ideas. Greenbury opened the door to “freedom of expression”. Management
is now participative. Hitherto, decision making was the private preserve of only a few.
If we were to be brisk about the key aspects of the Marks and Spencer strategy, we
would simply say that the St. Michael brand has been jealously guarded and
constantly improving. If people come across any St Michael brand, they will
automatically assume that it is of the highest quality and worth the price. The said
brand has been consistently of high quality but low price thus commanding the huge
product loyalty.
Having described the key areas that have made M & S tick, we now proceed to
examine the mastermind behind all these innovations-Greenbury. As earlier intimated,
this gentleman has done a lot in refining and shaping the entity. His major strategic
moves have been the building of partnerships with suppliers. This entails restricting
the sources of materials by entering agreements where periodic audits are conducted
by the M & S officials to ensure that the supplying company’s facilities and materials
meet the agreed high standards. In these days of International standards (ISO),
perhaps these companies must subscribe to and be certified by ISO. Furthermore, the
shops which hitherto (until 1985) dealt strictly with cash or cheque have introduced
financial services where a client can buy goods using some kind of credit card. Since
world trade is rapidly hurtling towards credit, it was necessary to keep abreast with
the trends. The card method now accounts for over 20% of all M & S sales. In a bid to
expand the market, the shops have made frantic efforts to spread locally and
internationally via franchising. Hitherto, on the local scene, the shops were located on
the main streets and in major towns but now, there has been a shift to open outlets in
the out skirts and the smaller towns previously untouched. This is where the greatest
growth potential lies. While the other competitors confine themselves to the big
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towns, Marks and Spencer has strategically been spreading its tentacles to the utmost
parts of the UK and beyond. Internationally, there has been some success recorded
though more could be done. As earlier intimated, the shops are sparsely doted over the
European continent and other parts of the world. We must also hasten to say that
Greenbury has brought about a ‘minimum inventory’ culture where very little stock is
kept in the stores but ordered and supplied to customers in the shortest time frame.
This just in time approach has significantly reduced overheads and thus enabling the
company to keep its product costs and prices low. In addition, there has been an
expansion of product ranges covering the entire family and with high quality long
lasting clothing. The deliberate effort to strengthen the brand name as well is worth
noting. Furthermore, Greenbury has scored a first in dismantling the old bureaucracy
that firmly clutched the entity in the grip of family control, and inflexible standards.
Although in the past, this management style may have succeeded, time is ripe to
strategically change towards a fluid and agile company. Flushing out bureaucracy is
the only way to survive in the hotly competitive environment or else risk running
aground. The ascendance of Greenbury to the helm has been a blessing to M & S,
though more reforms are awaited.
As the company moves to a more complex and fundamentally different international
market where peoples’ views and tastes are different, M & S will do well to take heed
of the ensuing points, although international expansion is inevitable, the company
must move in slowly and meticulously. Initially, a skeleton manpower will do,
accompanied by a lot of marketing and good high quality goods. This initial entry
presupposes that the market has been studied thoroughly to ensure that the customer
needs and wants are ascertained exactly. Market survey and research are crucial at the
initial stages, lest the resources be wasted. Another option is to appoint a local agent
who knows the market very well and has a powerful distribution network as well as
many outlets for the goods. This also means using local but high quality materials that
will be appealing and attract the customers, thereby creating more product loyalty. A
consistently high product image should be the hallmark of the entity abroad as they
have been in the UK. Having produced classic goods, it is also imperative to ensure
that the products are well positioned on the market so much so that the same are
differentiated from the rest. One way is to have these selfsame goods find shelf space
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in those agency shops spread across the country. Another way is to have a uniform
international brand except that the local conditions are taken into account. In an
extreme case, the M & S must merge (In those particular countries) with some local
company possessing an extensive outlet network so that the products have a larger
surface area of being sold. Should this chain store take to heart the above, as
Greenbury has aptly quipped, “In the 1990s…the customer is not only king but
dictator”, we are very optimistic that the stores will surmount all hurdles with greater
agility, and then sail to zenith glory!
Source:
Bower et al, Business Policy: Managing strategic processes, 8th Edition, Richard D
Irwin.
Case study questions
What are your views on the St Michael brand?
What is the one factor that has made St Michael a house hold name?
How can the Marks and Spencer improve its profitability?
Suggested case study question answers
What are your views on the St Michael brand?
What is the one factor that has made St Michael a house hold name?
How can the Marks and Spencer improve its profitability?
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Case study #4
ABB Deutschland
The Asea Brown Boveri (ABB) company is an entity that suddenly appeared on the
scene. In a sense, the said company already existed as two separate companies,
Brown-Boveri (BBC) and Asea, but only merged on January 4th 1988. Hitherto, these
companies had been fierce competitors but secretly merged to form an even more
formidable force. The surprise announcement on January 8 shocked the world because
this was the most unlikely marriage of all time!
A brief background of the two companies will be handy. Asea is Swedish in origin
having been founded in 1883 and headquartered in Vasteras and its strength lay in the
technical competence. For many years, it had been consistently successful until it
plunged into a strategic miry bog in the seventies, its strength became its weakness.
Asea had become arrogant, unresponsive to the market, sold at a loss and was crippled
by the huge bureaucracy at HQ. But a turning point came in 1980 when Mr Percy
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Barnevik, the first none engineer CEO, was hired. He did a tremendous turn around
job and towed the company back to safety. He did this by eliminating losses,
internationalisation of the company, establishing profit centres and dismantling the
bureaucracy. This was a hard but necessary task that saved the day for Asea.
As for the Brown Boveri, the story is slightly different in that the company was not
financially on the rocks but the problems that engulfed it were that of in fighting for
superiority emanating from the strategy earlier set by the founders. The company
founded in 1891 by Charles Brown (an English man) and Walter Boveri (a German
national), also boasts of high technical expertise, although less diversified relative to
the Asea. Over the years, the company experienced rapid local growth and
international expansion except for a few dry patches during the world economic
recessions of the 1930s. The demand for the quality technical products propelled the
company into further profitability although this was curtailed after the second oil
crisis. It was suddenly confronted by declining demand, increasing competition and
the heavy leaning on one core competence that ceased to be strategic. The highly
focused strategy of the 1960s and 1970s backfired by 1980. But what was this
strategy, if we may ask? The strategy was that the company was to produce high
quality goods and market them. The company adopted a “Think globally but act
locally” approach wherever the company spread its wings. The chief reason was that
each market was unique and that the people on the ground were the ones who
understood the market exactly. As such, each subsidiary was locally autonomous and
managed by local nationals though owed allegiance to the holding company. This
strategy initially worked very well in that the company knew and handled the market
well having understood the local tastes, habits and was viewed as a indigenous
company. This in itself was a powerful competitive advantage tool fostering market
expansion. Things began to change when the autonomous subsidiaries developed and
clashed in the same market, though coming from different standpoints. The company
presence was largely in Germany and Switzerland. Fierce competition ensued to the
extent there were squabbles between two subsidiaries! Although cooperation was
verbally advocated, mere lip service was worsened by the interventions from the
Princes who opposed any attempt at implementing the overall company ideals. This is
in keeping with the old adage “old habits die hard”, clearly shown by the business
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unit independence that still carried the day. This mess was a direct result of the local
autonomy which, in this case resulted in disaster as the subsidiaries outgrew their
local market and ventured abroad where they collided. None was willing to bow out
of the race. In the end, there was duplication, waste of resources and inward looking
so much so that the company ceased to respond to the customer needs and by that
token, experienced stagnation in market growth. As though that were not enough, the
German subsidiary, on account of its size was unwilling to bow to the head office
whose sales were lower than it. Thus, the relationship between the two subsidiaries
became difficult to manage. Each was hurling sand in the others’ eyes until the merge
took place. Now that all is in place, we anticipate that their profitless squabbles are a
thing of the past, having been dealt with in three ways. Firstly, the new holding
company has decided to standardise products so that they are the same cost,
packaging and quality in the whole market. Secondly, there has been a move to reduce
on the hitherto extensive product line. This will ensure concentration on a narrower
range that is by far more qualitative. Thirdly, the company has worked out a
framework so that the duplication and wastage of resources is eliminated. This will
also add to the strategic positioning of products as this will eke out a niche for the
brand.
The developments that took place on January 4th 1988 and the subsequent meeting at
Cannes caused a stir and raised more surprises in peoples’ minds. The said meeting
basically dealt with four issues, the first being on strategy, then on organisation,
followed by behaviour and lastly on financial targets. Each of these were crucial but it
is worth noting that these goals were equally eye catching as they were not expected.
For example, the declarations by Koerber on the 1991 DM 500 million profit goal and
the fact that power lay in the highly focused strategy akin to the defunct BBC were
revolutionary statements. If we were one of the executives from Mannheim, we would
have been puzzled and also had a lot of explaining to do back home, especially
looking at how our sister companies had been at each other’s necks. Further more, we
would have trouble convincing my subordinates that the rivalry of the past was over
and that we had to join hands with our “Brothers and sisters” across. We would have
had to reorient them to the fact that the times had changed and many things were to
change as a result. In the new setting, the goal is one, though the decision making, to
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some extent, to be decentralised and that all subsidiaries henceforth had create
service, customer and profit centres with an eye towards the overall corporate goal. In
addition, the organisational changes were equally shocking because the head quarters
would be at Zurich with only minimum staff. This meant some would lose jobs or be
deployed. Explaining all these changes would take time because change is always
resisted especially the sort that threatens to unleash job losses. What my perception
about the apparently shocking reforms is that it entails more work, quality, customer
focus, speedy service, continuous improvement, “reading of the times” and frequent
innovations. No longer would we merely boast about “quality attracting customers”. It
is time to be outward looking and also to slay the evil suspicions and rivalry that have
plagued the past companies. It is also high time to look out for the opportunities that
have hitherto eluded the company while it focused its eyes inwardly. Time and energy
wasting hereafter are relics of the past and are relegated to the company bone yard.
Obviously, the Mannheim contingent had expected that their already much maligned
highly focused strategy would be bullet riddled but alas, it was hailed! The reasons for
this strategic choice by Barnvik is because he perceived, and correctly so, that once a
niche has been eked out, it is difficult to replace, let alone rebuild. That which has
taken years to establish, the good will and the excellent brand name can not simply be
thrown to the winds but rather be guarded jealously. As such, we think that the wise
eagle eyed Barnvik discerned well when he made that particular strategic choice, as
no other better alternative was available then and now. The chosen path of
electrotechnical and other related areas was excellent. The cutting down on staff, costs
and the closing down of some unprofitable subsidiaries were all very difficult, painful
but inevitable decisions. Thus, having synchronised the two companies to form the
formidable ABB, we can comfortably turn to the other side of the bed and sleep
soundly for a while until the next strategic planning time!
Source:
Bower et al, Business Policy: Managing strategic processes, 8th Edition Richard D
Irwin.
Case study questions
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What do you think about the BBC and Asea consortium? Was it a wise move after
all?
How best do you think ABB should have responded or crafted its strategy problems
and integration?
What is the central success key factor for the ABB?
Suggested case study question answers
What do you think about the BBC and Asea consortium? Was it a wise move after
all?
How best do you think ABB should have responded or crafted its strategy problems
and integration?
What is the central success key factor for the ABB?
Case study # 5
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The Kentucky Fried Chicken (Japan) Limited
Getting started in a foreign new market can be a nightmare. This was the experience
of the Kentucky Fried Chicken in Japan, where their products were not appreciated
until certain unorthodox methods were devised. Back in the USA, the fast food sold
like hot cakes but in Japan, it had to take the likes of Loy Weston and Shin Ohkawara.
But who are these maverick individuals? From whence do these folks hail? Loy is
American and has vast experience in the Far East, having laboured in Japan during the
Korean War. Weston had been intrigued by the oriental culture and studied it
thoroughly before returning to the States. In many ways than one, he was the right
man for the job. On the other hand, Ohkawara is native Japanese and has excellent
local contacts. He too has vast experience having worked for the giant printing firm,
Dai Nippon of Osaka. The pair is simply marvellous when working together.
For a long time, the Mitsubishi Company had desired to popularise chicken sales in
Japan but had had problems. As such, the said company approached Kentucky Fried
Chickens (KFC) with a view to start up a partnership in Japan. KFC willingly obliged
as they were planning further international penetration. The only problem that
confronted the partnership was the lack of the right human resource, which was
solved when the above mention duo were hired. These were valiant men equal to the
mammoth task.
Initially, as earlier intimated the Fried Chicken shop went in with the all time popular
American dish and menu, which to their surprise was a near disaster. The local people
preferred other dishes! For the Natives, fish and not chicken was the meal! After
several dismal attempts, the duo devised survival strategies. As would be expected,
cash was the need of the times. KFC International came to the aid and got the KFC
Japan on its feet once again. Weston and Ohkawara figured that their only survival
strategy lay in the innovations that met the local needs best. As such, they introduced
some local foods like fish on the list, though not formally approved by head office.
This innovation proved extremely successful because the locals loved the taste,
service and quality of the food. In a short time, KFC Japan begun to blossom and
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opened other outlets as the demand grew. Today, KFC Japan is a shining example of a
KFCI outlet that has adapted to the local scenario and excelled.
But as expected, the apparent independence of KFC Japan was not well received by
all concerned stakeholders at KFCI. Their arguments run as follows: firstly, the added
dishes are not on the list of the KFCI products worldwide, why should KFC Japan be
unique? Secondly, some feel that the shape, size and the design of the kitchens in
Japan are not akin to the standard KFCI allowable. The Outlets in Japan are slightly
smaller and slightly crammed together. Thirdly, the quality of food and the place
where the food is prepared is not to the KFC international standards, although may be
acceptable by the local standards. Fourthly, the apparent disregard of, and hostility to
the KFCI by the KFCJ management irks many. KFCJ wilfully refuses to neither obey
nor implement uniform standards and also questions every suggestion that comes
from KFCI. Quality standard auditors from KFCI also have a tough time with KFCJ.
This situation has led to a situation where KFCI is seen to be interfering with local
operations worldwide. In general, KFC is not managing its international operations
well because of two reasons. Firstly, for many years, the head office neglected the
international operations and let them run independently as well as fend for
themselves. They grew like ‘wild grass’ with little or no outside interference or
guidance. How then, can HQ suddenly begin issuing orders at this late hour?
Secondly, though closely akin to the first point, the HQ has not effectively
communicated with the subsidiaries the new strategies. Having had such a weak and
fragmented background, there is need to come in slowly while explaining the new
approach. The top management must be sensitive to the unique views of each KFC
outlet because the new and excellent strategies if insensitively and wrongly applied
will lead to another disaster. So far, the KFCI has handled the situation badly.
It must be realised that although international uniformity is required in multinational
companies, certain standards are not applicable in some cultures, although the
principle remains the same. This scenario is what obtains in the fast food franchising
business and demands organisation, strategic vision, financial muscle, high quality
fresh food, speedy service, wide menu selection and knowledge of the local cultural
traits. Unlike the other products, food is very sensitive and affects the very
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foundations of some one. It takes time for one to convert to new foods, especially if
they are exotic. That is what confronted KFCJ. Talking about these impediments
means that the Kentucky Fried Chickens must alter its strategy to suit the prevailing
local circumstances. In as much as a uniform international menu is desirable, room
must be given for the local KFCs to add the perceived delicacies, of course bearing in
mind certain principles. Firstly, these ‘offshore’ outlets must maintain the highest
hygiene standards that cannot be faulted either locally or internationally. This calls for
more accurate planning ensuring that minimum stock is kept thus lessening the mass
destruction of the food, after specified time limits. Secondly, The Company must
“think globally but act locally”. This will entail still delegating some muscle in the
local management to make local strategic decisions, of course in consultation with the
HQ. Effective communication is crucial prior to any implementation of plans. The
Dick Mayer ‘stages theory’ of country management is plausible because it is
progressive and fosters better overhead management. The three stages advanced were
the following:
1. The entrepreneurial stage where there is a lot of managerial orientation. This
needs goal-getters like Loy Weston. At this stage, very little bureaucracy or
inflexible control is applied. This is at the initial stages of foreign market
penetration.
2. The second stage involves the involvement and appointments of local baronies as
management. This ensures that the same champion the cause locally and help the
natives to accept the company easily.
3. The last stage is marked by the appearance and hiring of professional managers
who run the company henceforth. This has been the stage at which KFCJ has been
at daggers drawn with the HQ. Professional Managers are generally viewed as
strategic thinkers, objective and accurate observers, who can easily read the times
and ably anticipate trends. In a nutshell, the professional managers are long term
planners, as their plans are sustainable.
By all standards, this approach is fine as long as it still remains conscious of the
unique local needs. If the above management proposal is anything to go by, then it
means that the KFCI management must change and standards set which must be
imbibed by all. As earlier intimated, the background notes about KFCI are not
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plausible, but time has come when the house should be made orderly again. To
achieve this, patience, training and much discussion has to go into it. Let the lessons
learnt from the past experience serve as a beacon to avoid a similar mishap in future.
This means KFCI getting involved from the initial stages all the way through to the
maturity of the same outlet. We have reason to believe that present hostile reaction
from the foreign field is largely due to the past neglect by HQ, much like how a child
would react to a long absent parent who suddenly appears issuing marching orders!
This brings us to the question as to how to handle the present independent minded
staff like Loy Weston. Though he has been elevated to Vice president for the North
Pacific, he still is viewed as obstinate. In many ways, the hot criticism is not
justifiable for the following reasons; Firstly, he was made that way by the company,
when they did not support nor nip his unorthodox tendencies in the bud. As such, he is
merely acting consistent with the past culture. Secondly, care must be taken to
recognise that Weston is a goal-getter and by that token has certain strengths that
others do not possess. Further, he has a thorough knowledge of the market, tastes, and
the culture which no other person from the West may possess. His vast experienced is
unequalled as well.
Thirdly, let it be noted that Weston is a “known quantity” in the north Pacific as well
as all the Pacific rims of the Far East. This goodwill alone should make KFCI tread
carefully lest they lose some market. Believe it or not, some people’s presence on
board speaks connections and quicker market triumphs. Our suggestion is that Dick
Meyer should directly talk with Weston rather than the arm chair criticism tactics he
has employed hitherto. Weston must feel valued, respected and saluted for the
excellent feats he has thus far achieved and then reason with him about the new
strategies. Let it never be forgotten that Weston has studied some law privately, and
so, he is bound to react eccentrically if not diplomatically approached. Care must be
taken to ensure that KFCI is not merely reacting with an individual rather than a
wrong principle. We say so because the criticism seems to be aimed at an individual
rather than a practice. Having laboured to table the new strategies, he must be gently
told to choose whether to tow the same line or leave. Past follies must be
acknowledged and then the new strategies asserted. Alternatively, Weston could be
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moved to new markets where penetration is needed. He may not easily countenance
this frequent shuffling though! Lastly, he could be recalled to head office as one of the
Directors so that he can see the dilemmas. If still unyielding, sadly, KFCI must part
with the man, for the 21st Century manager must be learning all the time and flexibly
change with the times. This painful decision must be arrived at after the KFCI has
done a critical self-audit. Could it be that the internal system is faulty?
Having cleaned the house, it will now be possible to spread the wings wide, flap them
and then fly to success!
Source:
Bower, Bartlett, Uyterhoeven, Walton. Managing strategic processes, 8 th Edition,
ISBN 0-256-115191-5) Richard D Irwin.
Case study questions
What do you think about KFCJ’s strategy?
Is Weston the best person to manage this international assignment?
What do you think about their (Weston and colleague) innovation to deviate from the
standard, was it a compromise of quality?
Is Weston worth retaining on board?
Suggested case study question answers
What do you think about KFCJ’s strategy?
The strategy looks great given the context but must continue to be refined because of
the many dynamics in the business environment.
Is Weston the best person to manage this international assignment?
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I think so though he gives one some fright making one’s hair stand on end. But one
thing is sure, Weston knows his job and is a good initiator of business where others
would have lamentably failed and embarrassingly returned home.
What do you think about their (Weston and colleague) innovation to deviate from the
standard, was it a compromise of quality?
They are great guys. Leaders take risks and in this case, they read the times and acted
although ultra vires in some way. Each context is unique and demands different
strategies which they did. As for quality, well that is a talking point. There is need to
keep the quality high but the parameters also must be contextual in some instances. If
that is not possible, use the same high standards but make them relevant to the given
context.
Is Weston worth retaining on board?
If he is critical to the continued success of the entity, it may be prudent to keep him
while grooming another to eventually take over from him. Drastic moves may hurt the
company.
Case study # 6
The Harvard Business school
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In 1908, the Harvard University opened its Graduate Business school doors for the
first time. Never will those earlier days be forgotten because this long overdue school
of business was as critical at that time as it is now. When President Eliot sanctioned
that it be opened, his decision was for all time in the sense that a myriad have
benefited from that decision. Although the move largely came as a result of
complaints from the industry and the perceived need of the times, it was high time to
introduce a course that was dynamic, relevant, flexible, informatively analytical, high
quality and yet remaining a business program.
But what exactly caused Eliot to create this program? It is a curious fact that as early
as 1869, prior to his ascending the University presidency, Eliot wrote about the need
of a curriculum that was relevant, high quality and helpful but which eluded him at
the time. This idea, it seems stayed latent in his mind and was finally hatched in 1908.
It must have been a brave day for Harvard. The undergraduate program had become
obsolete, abstract and was moribund due to its impracticality on the field. The
graduate school was no better either. The extant courses were rigid, static, of
questionable quality and did not address the needs of the times. This resulted in low
calibre graduates churned out who failed to perform on the industry. Naturally, the
Industry felt cheated. Further more, the curriculum prior to 1908 was basically
textbook oriented, far detached from reality. This was what the new graduate school
sought to address.
As expected, where standard norms of practice have been set, it is not easy to initiate
change. This has been the lot of all who have had a vision that threatens to change the
established status quo, for many will resist change at all costs. Of course the reaction
differs from person to person but largely those who feel most secure in the prevailing
status will strongly oppose any position threatening innovation lest they lose their
creature comforts. Eliot and the subsequent presidents had to wrestle with different
shades of opposition. Granted that standards must be set which must stand the test of
time, the rapidly changing business environment, unlike the scientific facts, demands
programs that remain strategic. In the light to these hurdles, the president had the
option to remain silent and walk out of office peacefully or he could have continued to
defend the obsolete programs against outside attacks.
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Eliot passed on the mantle to Edwin Gray, (the first Graduate Business School Dean)
who continued the work initiated by his superior only that his focus was on the
definition of the school. The question that begged answering was “What is a graduate
school of business?” In attempting to answer that question, a cross section of people
were asked as to what they thought. As many answers as interviewees were collected!
Thus it was difficult to define exactly but with time, it became clearer. Having
collected views, Gay went ahead to make some strategic choices, which included
formulating unique business courses that covered relevant issue experiences on the
industry. These courses were backed by data collected from research, which data
helps in making informed judgements and decisions. Further more, in order to attract
government aid, he opted to collect data from a business area hitherto untouched- the
small retailers and then came up with a database. This database was further refined in
subsequent years. In addition, he made sure that the courses were pragmatic, current
and flexible in nature. The heart of the business courses lay on manufacturing and
marketing, which dealt with the production as well as the distribution aspects of the
business. Gray ensured that the best high profiled professionals such as George Elton
Mayo and Fredrick W Taylor were got on board the Academic staff. These two star
lecturers waxed eloquent in their fields. Mayo is famous for his monumental
Hawthorne studies while Taylor is an authority on scientific management theories.
Also to hand was the magazine, later called the Business week which further
publicised the work at Harvard Business graduate school. All in all, the school was far
above its peers if any. But why did Gay take such pains to strategise? As earlier
intimated, the extant courses were irrelevant and abstract so the existence of a new
program had to be justified or else be treated like any other. Secondly, since it was a
new program with no prior record or experience, it was necessary to continuously
tailor it to the current needs and this was possible through input from without the
institution. Usually, time is the best judge, it either vindicates one or confines them to
the “academic and professional dust bin”. Gays’ efforts paid dividends because his
innovations bore fruit, for they were extremely successful despite set backs due to
high over head costs, suspicions and sometimes outright hostility from other
colleagues.
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As the years rolled on, the school begun to take shape as more students enrolled and
went out into the industry. Many however, did not complete for two basic reasons.
Firstly, the majority of them took up jobs after finishing the first year while others
abandoned the course due to the unsuitable nature of the curriculum.
After an eleven year distinguished career, Gay passed on the baton to Wallace Brett
Donham who took office in 1919 and remained Dean for 23 years, in which time
more changes took place. These changes ultimately put the school on the map as
unique, superb and the centre of education evolution. Donham refined the curriculum
further by introducing more teaching methods that met the current needs. He was the
first to introduce the Case method that ultimately became the standard way of
teaching at Harvard. In the Case method, a professional from the industry would be
invited to give a talk painting an actual scenario and then ask the students to come up
with a solution. There after, another sitting would be convened and the said
professional would discuss the case and answer questions from the students. In this
way, the students learn how to analytically look at practical cases and solve the
problem. This was and is an excellent way of teaching because the students feel part
and use their brains. Initially, financial problems and resentment bugged the Case
method. Some members of staff, preferred the well tried and tasted methods which
bore students, to the strange new method. In the fullness of time however, the case
method vindicated Donham by their usefulness and popularity.
As though the case study method was not enough, as earlier intimated, relevant new
courses were introduced to cater for the needs of wartime. America was involved in
the World war two, the following courses were tailored towards the contemporary
scenario. The first course was that of the Industrial Administrator (IA), a short
program to equip staff who were going into government service connected to defence.
The second, akin to the first was equally good as it taught statistics and other related
war functions being a Statistical course. But after the war, Harvard rose to the
challenge and offered another course- “Retread” program that basically was aimed at
people who had been employed in wartime and needed retraining. It also focused on
Chief executives who needed retraining. The aforementioned innovations show how
the institution has moved with the times, built strategy, and has constantly kept
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improving. Donham phased off the academic horizon in the early forties after an
equally illustrious career, having laboured tirelessly to shape the Business school.
Today, if one went to Harvard, they would not believe that this University has gone
through many evolutions so as to arrive at that most competitive position. Obviously
in arriving at this position, much energy and sacrifice has taken place. The earlier
days were hectic because the School had to find its feet, the need for self-identity, the
opportunity grasping, and then hiring the right and articulately robust staff. This
process took time.
Having surveyed the Harvard case, one cannot fail to learn many valuable lessons.
The first lesson to take note of is that an organisation takes time to find its position on
the industry, but this comes from painstaking strategic thinking. The second lesson we
carry home is the fact that organisations must continuously read the times and ensure
that they know what is going on and thus respond appropriately with hind sight.
Thirdly, the organisation must ensure that it remains flexible and has the right people
in place, who are ready to change with the times. Fourthly, the organisation must
ensure it remains relevant and ahead of the times. It must respond to the situations
confronting the same. Fifthly, the institution must ensure that it not only churns out
quantity but quality graduates by having quality programs. Lastly, once the institution
has achieved success, it must fight resting on its past laurels but rather constantly
continue looking for ways to improve all the time.
All the above, Harvard has achieved to the finest levels all because it has been ready
to change and yet remained the business school of the times, if only others would take
a leaf!
Source:
Bower et al, Business Policy: Managing strategic processes, 8th Edition, Richard D
Irwin.
Case study questions
What do you think about the development of the Harvard Business school?
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Do you think Business schools are essential and helpful? Explain your answer.
Is the Case Method analysis to business appropriate in a dynamic global business
context?
Do you have any suggestions on how The Harvard Business school can improve?
Suggested case study question answers
What do you think about the development of the Harvard Business school?
It was an excellent development and definitely went through many defining moments
as each new leader took over the mantle of the school, long before other Universities
and countries had ever thought of that idea. The school is there today and boast of
being one of the best and without doubt, it has some of the best business thinkers and
theories floating around the Business market today. For a long time to come, Harvard
will remain the place to be!
Do you think Business schools are essential and helpful? Explain your answer.
They are essential as they sharpen one’s latent skills and potentials. They help some
one identify their unique competencies as well as encourage them to fan to flame what
they have already embedded in them. In other words, the business schools, just like
theological schools do not make the man but sharpen them. For a long time, Japan did
not have Business schools as they probably did not view them necessary but it would
appear things have been changing, given the rapid global dynamics.
Is the Case Method analysis to business appropriate in a dynamic global business
context?
Definitely! It gives the student an opportunity to simulate with real live cases that they
may or may not encounter later on in their careers. In that way, they will be better
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prepared to handle scenarios better than someone who has never exercised themselves
in that way.
Do you have any suggestions on how The Harvard Business school can improve?
There are many ways to improve but one caution would be that Harvard needs to
remain a learning entity lest it rests on its laurels and fizzle out of the lime light. Its
good to have a brand name but this could also prove your undoing.
Case study # 7
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Salvatore Ferragamo, SPA
Very few people have left such an indelible mark upon their generation as Salvatore
has. It is now over 30years since he died and very little of his classic convictions have
been altered or adjusted to suit the prevailing circumstances. He was indeed a legend.
Tracing his history as a shoemaker will leave echoes in ones’ mind long after reading
his biography. This is surely a mortal to emulate about perfection in quality products
and commitment to good business ethics.
Perhaps for the curious reader, a brisk history will be handy. Salvatore’s life is easily
told but it leaves an awesome legacy. Born at Bonito, Italy, at only age 9, he made an
excellent shoe for his sister saving her from shame. Then by age 12, he was the choice
shoemaker in his locality such that at only 16 years he left for America to seek
greener pastures and to train, but not even this voyage satisfied his quest for quality
and design. As a result, he formed his own firm making shoes and subsequently found
his products in the Hollywood films. This really put him on the charts such that by
1927 he had a booming business. But as many people say, “There is no place like
home”, he trekked back to his native Italy where he continued the business. There
also, the trade blossomed as well having become renowned for creativity, quality and
excellence. Salvatore had three business philosophies that are still cherished by his
heirs to this day. These are:
1. Be honest and fair with employees, suppliers, and customers,
2. Build a product of the finest quality, and
3. Provide excellent value for money.
These are firmly wielded upon the chests of his family, the present proprietors of the
gigantic multinational company. After his demise, the widow, Wanda along with her
children picked up the broken pieces and have worked tirelessly the last 30 years to
see the company to where it is today, so big and different from what it was three
decades ago. Today (1990), the company has a very fine international brand, well
known for guaranteed high quality products, and has ironically sustained a loyal
clientele all these years. Other product lines have also been introduced along the way,
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although women’s shoes and clothing remain the core of the company. It maintains a
strong international presence in Europe, America and Asia but like in every case,
Salvatore’s position is under threat from competitors, who would undercut and are
more market focused. It was precisely this reason that the Salvatore board of
Directors, comprising Wanda and her six children sat to consider seriously the
proposals put forward by Mr Mazzalovo to enable corporate growth from the 1990 $
200 million to $ 400 million in 1995. It was a tense and crucial meeting because some
of the proposals potentially threatened the age-old hitherto unquestioned standards
such as rapid decision making and incorporating non-family members to run the
business on equal footing. Considering the turbulent business environment,
Mazzalovo’s arguments were so potent such that a dilemma resulted in the family
whether to abandon the past and surge ahead full throttle with new policies or to reject
the proposals and stick to the past until the company finally ground to a halt?
From Mazzalovo’s presentation he clearly showed that if any significant growth was
to take place, the following steps were to be taken. Firstly, a self-audit had to be taken
to ascertain the strengths and weaknesses that were inherent. His immediate findings,
subject to a thorough research, were that the major weaknesses that plagued the firm
were that the family values often overrode the corporate strategy, in effect, the
company did not have a strategy at all! It was found that anything that appeared at
variance with the family values was discarded without further discussions, even if it
was meant to propel the company further, the family axe fell at the root of the idea.
This showed itself in many ways such as reserving all the decision making
management jobs to family members, no form of “brain storming” sessions, but a top
down form of management, product focus rather than team work or customer needs
were the thrust, slow centralised decision making by top family management. Further
highlighted weaknesses were as follows: The company was inward-looking and not
market focused, not caring what the customers needed but churned out what was
thought the customers would want to buy, relying on the 30 year old goodwill. It was
also evident that no reading of the rapidly changing market was extant so as to
formulate aggressive relevant strategies. The other pitfall was that teamwork was only
practiced among family members and the personal touch to the customer was absent.
Although the three Salvatore values were firmly up held, Mazzalovo concluded that
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no effort was made to motivate employees or to satisfy customers. In fact, the
company did not really know why people bought their products! Where as other
competitors were diversifying and targeting the younger, more fashion conscious
generation, Salvatore stuck to the old styles of yester years with slow minor periodic
product launches. Aggressive marketing was generally neglected . But does that mean
Salvatore has nothing good to offer? We do not think so, to the contrary, as
Mazzalovo concluded, the company has a number of excellent strong points from
which premise to dive into the river of success. These strengths as follows: Firstly, the
company has a luxuriously powerful brand name. Every quality conscious individual
knows that any product from Salvatore is of the highest calibre, quality and durability.
Secondly, the quality of products is excellent, second to none in the industry. Today,
it is not a question of churning out mass products but quality should permeate all
aspects, without which, the product name deteriorates to the background. Quality is a
powerful marketing tool in its own right. Furthermore, the company has immense
financial resources to freely re-invest in the business on a long-term basis, which
others do not have. With the correct information and cash, Salvatore can perform
wonders. Not only is there sufficient liquid cash, the company is endowed with
perhaps the most powerful business people around. This unique family has the best
men and women who potentially could turn the company upside down within a short
time, if they so willed. The issues of customer sensitivity, marketing, morale would be
things of the past if modern management principles were imbibed, of course within
the context of the original core values but in a modified sense. Being a multinational
Company, it has the prowess to hire the most experienced and dependable
managers-“Known quantities” as the common business phrase goes. With all this
immense potential, we turn to look at the opportunities that lie untapped. It is a sad
truth that apart from the women’s shoe line, other opportunities are either
underdeveloped or ignored on account of keeping “Family tradition”. Tremendous
opportunities lie at the doorstep, all that has to be done is to open the selfsame door
and let the opportunities in or else risk losing market to other competitors who are
sparing no efforts to snatch as much of the market as possible. Opportunities
especially lie in the “Ready to Wear, RTW” market. New product lines such as
perfumes, bracelets, watches and jewellery could be introduced so that no foothold is
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given to under cutters. Men’s products like ties, shoes and clothes must be enhanced.
As suggested, professionals must be employed specifically to champion these brands.
In addition, the products generally must be market focused and contemporary, yet in
the same breath maintaining high quality and consistency. Coordination and effective
communication must be implemented to ensure that target groups are effectively
catered for such as the young, fanciful and fashion conscious must feel at home with
the brand. Salvatore is so strategically positioned and must be proactive rather than
reactive, as has been the case hither to. It is high time to be the universal trendsetter
once again. More frontiers must be conquered such as Africa whose markets are
beginning to open up. These opportunities must be grasped because threats are galore
and will eventually overtake the company. If we were to advise Wanda on
Mazzalovo’s proposals, we would encourage her to imbibe them whole-heartedly
though with two cautions in mind. The first is that she should ensure that the best
strengths from the two eras are taken into account, for example the quality. Secondly,
ensure that the brand name and niche remains firmly rooted in the company culture
and also that the corporate structure is clearly defined. In the main, it should remain a
family undertaking but new and brilliant ideas must be given a fair hearing before
being discarded. This under taking is a make to break situation and so, due meticulous
care must be taken.
With that twofold caution in place, and having shaken off the shackles of past follies,
we are confident that Salvatore will surge to even higher international market growth,
which in itself is bad news for competitors!
Source:
Bower et al, Business Policy: Managing strategic processes, 8th Edition, Richard D
Irwin.
Case study questions
Why do you think Salvatore succeeded at such an early age?
Was the trip to America helpful to his success? How?
Do you think Salvatore is correctly positioned for the current global market given the
succession issues and rapid dynamics in the world?
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Suggested case study question answers
Why do you think Salvatore succeeded at such an early age?
He seems to have discovered his talent and strategic strength at an early age,
improved on it and exploited the resulting competitive advantage and market gap.
Was the trip to America helpful to his success? How?
It was in the sense that he got international exposure as well as marketed himself there
despite all the challenges he faced along the way. International exposure is key,
especially in this global economy.
Do you think Salvatore is correctly positioned for the current global market given the
succession issues and rapid dynamics in the world?
Potentially, the company is correctly positioned only if the succession wrangles are
quickly sorted out independent of the company. If this is not corrected, the company
is headed for the corporate graveyard, where myriads before it have ended up.
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Case study # 8
Bill Gates and the management of Microsoft
He suddenly appeared on the computer horizon and has been there ever since. His
name is Bill Gates, probably the richest and most influential man on this terrestrial
ball. At 14 he had a company and by age 35, he was the Chief executive officer and
Chairman of the Goliath Microsoft Company, except this time, this modern Goliath is
invincible on the computer Market. Gates has sustained a powerful intense love for
computers from his youth days and has continued to improve his mastery over
computer software programmes and this has surely rubbed on to the company teams.
But from whence has Microsoft hailed and what has made it so powerful? What has
been the “silver bullet” and who have been the major key players?
For one thing, it is very clear that Bill has been at the helm of the Microsoft success.
He, along with Paul Allen, a childhood friend started the small unknown company in
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1975, having had a short stint with MITS in New Mexico and then proceeded to open
up Microsoft. The early days were rather rough because Microsoft was unknown in
the computer forest where giants like IBM reigned supreme. Armed with only three
workers, knowledge and determination, the company commenced business in New
Mexico, later moving to Bellevue, Washington. Slowly but surely, Microsoft found its
feet in the relatively new computer industry. Market positioning is a crucial stage.
Knowing that for Microsoft to be spotted, there was need to be aligned to some big
name, hence the choice to develop software programs for IBM was hardly surprising,
this being an excellent strategy. Having noticed that many were more involved in
hardware, Bill and Allen figured that the Software would be the need of the future,
what insight they had! As such, they plunged headlong and developed many
successful software programs such as BASIC and COBOL. These programs were
excellent that Microsoft begun to licence out their products to the computer giants of
the day. The said software programs were IBM compatible for example. In the
fullness of time, Microsoft exploded and proved too big and independent. Thus, this
entity has sailed to higher heights ever since.
But what has been the secret behind Microsoft, when myriad companies in the same
industry have folded up? How has it managed to defy all company demise, but to the
contrary, managed to blossom further? A number of reasons can be advanced when
we analyse its progress against the competitive background from which it was hewn.
Firstly, Microsoft etched out a powerfully unique niche. Its software products had
such unique features which rivals failed to copy, components like the operational and
application packages. Secondly, Microsoft has always been customer focused, in most
cases reading the “writing on the wall” as well as anticipating what features the
customer would like. To that end, the customer has been the one to determine the end
products. In addition, there has been speedy attention to the customer needs and
orders. Thirdly, there has been continuous improvement on the programs ever so
often, so much that the programs are improving every year. Microsoft has always had
a special place for programmers and developers no wonder the phrase “reverence for
the Programmer” is strongly upheld. Not only is there a special place for the
programmer, Bill Gates has created an intensely exciting atmosphere in the company
as there is commitment to graphics user interface and an efficient development
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process. This has been the backbone of Microsoft. Furthermore, the company has had
aggressively strategic marketing ventures and teamwork has been the company
culture from the beginning. The Gates leadership has cultivated an informal but highly
charged atmosphere where people will do their job excitedly, many times working
late. It has been fun to work at Microsoft, not so much the pay but the goals. A
consistently watchful strategic outlook has made Microsoft the trendsetter in the
industry. As can be seen, Microsoft’s success cannot be solely traced to setting the
standard for PC operating systems but rather its strength lies in the integration of
programs so that one can work in more than one program at the same time. In the past,
these programs were independent and could not be integrated, but now this hurdle has
been overcome with the advent of windows. Furthermore, the dynamic and strategic
leadership of Bill Gates whose insight into computers, zeal and determination to
succeed has wrought success for Microsoft. The hiring and nurturing of the best
college graduates and professionals is another way Microsoft has stood out from the
rest. These graduates are sharpened and contribute brilliant ideas to the product
development. Also, Gates has been careful to hire only the right people with the
appropriate acumen, expertise, experience and must be “ Known quantities” equal to
the task. The products, by that token have been of continuously improving quality,
much to the pleasure of customers. As Microsoft has been becoming more complex, a
deliberate effort has been made to maintain a “small company” culture so that the
personal touch is not lost with time. Contact with customers is vital. Whereas in the
past, Microsoft only concentrated on churning out high quality impeccable programs,
it has also gone further to cater for consultancy and customer service. This has been
another plus.
All the above has been achieved by the fiery zeal and determination of basically two
men, Bill gates and Paul Allen. These men, as earlier intimated, worked closely
together until Allen was taken ill in 1983. Bill continued to herald the Microsoft torch
which has radiated brighter over the years. Bill possesses a peculiar simplicity about
him that one cannot fail to notice. He is self-assured, creative, energetic and intense.
The CEO also has a clear mind, insight into multiple issues and very daring too. When
he is about a task, he works feverishly and relentlessly until the mission is
accomplished. Software innovation is not for the fainthearted. Determination,
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diligence and hard work distinguish him from other Chief executives. As one would
expect, such a high profiled man is very passionate and demanding until results are
produced, most of the products being time bound to keep a head start. The irony of it
all is that this zest is contagious because Bill gives as much individual attention as
possible on e-mail and other wise. He works closely with the developers and keenly
reviews everything they do. Together, they have been able to develop such classic
programs as MS-DOS, Word, Excel, Fortran, and Power Point. Apart from these
programs, other developments have been in the operating systems and applications
software, headed by Steve Ballman and Mike Maples respectively. This team has
fought computer “wild beasts” and triumphed! Furthermore, Bill has continued to
champion the development of other multimedia software programs. This man in
particular has been highly inspirational and sensational; ideas never cease to flow out
of that mind!
Now that Microsoft is unquestionably the most powerful organisation in the computer
software industry, many problems have begun to buffet it, which the Gates
administration have and will wrestle with. That Microsoft is and will be the foremost
software giant in the 21st Century is beyond doubt, but to maintain that leadership is
quite another another issue. For one thing, there is a general feeling that the
organisation is fast losing the “small company” culture due to its complex nature.
Although vigorous efforts have been made to resist this decay, change is inevitable,
unless the company is fragmented into smaller units. The said complexity means that
the company by bits loses the fluidity, agility and the “family-ness” of the entire
organisation. Time was when Bill knew everyone by name but with a nearly 14,000
workers worldwide, it is practically impossible to know everyone. Closely akin to the
afore mentioned is the slow but sure increase of people who do not really identify
with the initial passion, intensity, sacrifice, team work, high quality output and the
continuous improvement goals that engulfed the forerunners to the present Microsoft.
Today, it is feared, many join Microsoft with the self-gain motive rather than the love
for the job as well as longing to see new products churned out, far ahead of any
competitor. Continued growth and complexity has meant that the single Redmond
campus has proved inadequate. There is need to expand and probably explore other
sites although this will lead to a further “unity” disintegration in the sense that the
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pace of development will not be uniform. Saliently, more professionals have had to
be hired as well as train staff within. This is no mean task at all. Furthermore, the
popularity of Microsoft programs has far outstripped the ability to satisfy the demand.
Today, it is unthinkable to imagine a computer without the Microsoft programs, as the
integrated operating and application programs are literary in every computer! This has
led to a situation where even the newly introduced consulting and customer user
services are far not equal to the demand. All these are business opportunities lost.
If we were to advise Bill Gates on what to do to remain buoyant, we would suggest
the following:
1. It is good that Gates has acknowledged that Microsoft is no longer the same as in
those formative years. It is far more complex and naturally the centre of attraction
World over. Thanks to his accurate foresight, Bill acted prudently long before
hand in appointing Shirley and then Micheal Hallman as COO. But Gates should
do this more often as need arises long before slothfulness creeps in and solidifies.
2. Bill should continue to be strategic in approach while the Hallman focuses on
operations, ensuring corporate agility.
3. There is need to sharpen the customer sensitivity needs and to be as personal as
possible.
4. Innovations and niches must continuously be explored. This means that Microsoft
must not rest on its laurels but strive to be the trendsetter, where rivals find it
difficult to copy. They must have a satellite approach where information is shared
freely and quickly sent across the entire organisation.
5. Quality must run in all spheres of the organisation and products. The service must
be speedy, timely, personal and customer satisfying. The products also must be
excellent, always adding new features.
6. Every person joining the corporation must be a team player and have a similar
passion for high quality and continuous product innovation. These traits must not
be trifled with nor treated lightly.
7. In an extreme case, where Microsoft becomes too big to be governable, it must be
split into small units. This is a very sensitive line to tow though.
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8. Training of staff must be stepped up more vigorously than hitherto, so that they
are inculcated into the company culture.
9. Effective communication is a must, more than ever before. Management by
exception is becoming a must but this should not compromise detail and
meticulousness.
10. The right information must be on hand all the time. As we know, one can have all
the money but without information, all efforts are endangered because of the
rapidly changing environment. Time and opportunity can only be redeemed when
the correct information is at hand. This information is very crucial for strategic
decision making. Also, everyone in the organisation must know what is going on
at any time and no one relegated to the “information vacuum”. This tends to make
people feel left out and as such, they will not put in their best due to lack of the
same goal empathy.
11. Aggressive and constantly refined marketing strategies must be put in place.
12. Diversification is a welcome option where possible, but ensures that the core
values of the company are preserved and enhanced. More computer accessories
can be developed as well as an expansion of the present consultancy and customer
services.
13. Give incentives to those who bring in excellent product innovations that are
viable.
14. Continue to hire “Known quantities” that have the same corporate goals as
Microsoft. Having qualifications is one thing but being a team player is quite
another issue.
15. Watch the market meticulously, and “benchmark” backward to ensure that the
nearest rival does not get too close. Further, watch out for those unknown entities
that might come up and undercut Microsoft. Recall that Microsoft itself was once
a start up feeble company compared to the giants like IBM. The picture is entirely
altered today because the “Big brother” despised the once “non entities” like
Microsoft. Due to its size and power, it felt secure. Frequent market research and
“market reading” are crucial, remembering that rivals are always prowling around
looking for an opportunity to seize.
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16. Watch out for bureaucracy that has crippled many powerful organisations. This
“vice” tends to slow down the pace of development and corporate agility. The
company structure must be kept as “flat” as possible, meaning that although a
defined and organised structure should be in place, the layers must be kept at a
minimum.
17. Keep information as secure as possible. Developmental secrets must not be leaked
to anyone or else rivals will pick them and outdo Microsoft. This means
information must be classified and accessibility restricted to a few. This must be
clearly explained to all employees that the issue at hand strategic rather than
mistrust but a strategic move.
As Microsoft hurtles into the 21st century, and observing the above points, we are not
afraid of the results. Let those who try to compete with Microsoft do as they please,
we have the powerfully innovative and strategic Bill Gates team, and as such, we can
safely rest our case!
Source:
Bower et al, Business Policy: Managing strategic processes, 8th Edition, Richard D
Irwin.
Case study questions
What do you think about Bill Gates as an individual?
Do you think Microsoft is invincible on the software market? Give reasons for your
answer.
What one thing has made Microsoft succeed over the years?
What should Microsoft watch out for if it is to continue succeeding?
Suggested case study question answers
What do you think about Bill Gates as an individual?
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He is certainly a marvellous gentleman, hard working, innovative and very creative in
his own right. He is a leader determined to succeed at all costs.
Do you think Microsoft is invincible on the software market? Give reasons for your
answer.
Not quite but for now, it dominates the global computer software market no doubt but
we have no telling for how much longer because lesson from the past seem to suggest
that anything can happen. Consider the once invincible IBM, where is it today? Its
almost in the shadows of the computer industry!
What one thing has made Microsoft succeed over the years?
Creativity, quality and innovation!
What should Microsoft watch out for if it is to continue succeeding?
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Case study # 9
WAL-MAT STORES, INC.
Wal-Mart was probably the best place to be in at the end of 1993, as it had been
experiencing continuous phenomenal growth for a number of years. It was voted
among the richest companies by the Forbes magazine and had captured the fifth to
ninth spots of the richest American companies. For a number of years Wal-Mart had
been an exciting place for any that worked there, especially under the inspiring
leadership of Sam Walton who had left a huge complex company at his death. Wal-
Mat had exploded from a small insignificant entity to a giant multinational chain of
stores. Now it was by far the biggest in the market, with no rivals to benchmark with.
By that token, David Glass and Don Soderquist, the CEO and COO faced a mammoth
task to maintain the much-heralded triumphs of the past despite changes in the
business environment. But what propelled it to such heights in such a short time?
How secure was their leadership position in the market and how profitable were the
diversification efforts?
After running some small businesses, Sam opened the first Wal-Mat shop in 1962 and
slowly steered the store to success. The secret of his business, as is the case for many
discount stores, was to offer goods and services at a discount, say 10% from the
standard market price. This was possible through bulk purchases and bargains with
suppliers. The source of this company’s success lay in a number of excellent
strategies. Firstly, Wal-Mat invested in technology where all the latest information
was captured, analysed and sent around the Wal-Mat stores via satellite. While other
shops were still using outdated methods, Wal-Mat had this powerful tool thus having
a competitive advantage. This enabled the company also to put in place a Just in Time
system where goods were ordered and delivered speedily to the customer always.
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Inventory, although still very much part of the business was minimised. In this way,
the customer was better served. Secondly, the quality of goods sold was excellent, at a
lower price. This undercut the bigger shops which sold the same goods but at a higher
price. Thirdly, the Wal-Mat employees worked like ants building a castle or Beavers
felling a tree. Teamwork, modern management styles (e.g. “management by walking
and flying around”) and customer focus all blended in so well and complemented each
other to make Wal-Mat a force to reckon with. Those brain storming sessions for
example, made people feel important, appreciated and heard so much that when they
put their hand to the plough, all their souls were involved. Last but not the least, the
choice of placing stores in the neglected “little one-horse shoe towns” was superb. In
a nutshell, the company is what it is because of the technology, Satellite
communication, speedy customer service, teamwork, management style, location,
pricing strategy, cost consciousness and continuous customer taste sensitivity. Wal-
Mat etched its niche very well.
But being at the market apex has its own nightmares. Every time, there is fear of
losing the top slot to some unknown competitor. As such, the giant must watch out all
the time. What are the things to be done to maintain market leadership, if we may
ask? For one thing, Wal-Mat is far much different from what it used to be in those
formative years. Then, it could afford mistakes and still forge ahead, the picture
however, is different today. The company is big, complex, multinational and
diversified. It is also the centre of attraction from the press. Wal-Mat still stands a big
chance to maintain its position if it sticks to the good old company ethics of
teamwork, continuous ethical and quality improvement, and effective communication,
though in a more complex setting. In addition, the company must continue to be
customer focused, be a learning organisation and etch another niche in all new
products. Company agility, quality, timely customer service, aggressive frequently
changing marketing strategies must be the hall mark of the company. Furthermore, the
company must look for ways to ensure that the pricing system, although lower, is
within the law because frequent lawsuits dent the company good will. Also, Wal-Mat
must not tire meticulously studying rivals despite being the market leader,
technological advances and excellent cost saving measures of the past must be
maintained, if not enhanced.
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Having looked at the sustainability of success, we now pass on to analyse the
effectiveness of the diversification into the food industry. As you will recall, Wal-Mat
in those earlier years specialised in non-food products but in the last few years, the
food service component has come in. As will be noted, this industry is potentially
very profitable if well managed. For example, in 1992, it was worth $ 16.3 billion.
This is a lot of money! It is also on record that the presence of this food component
increased the customer traffic because it was very convenient for shoppers. Under one
roof, customers found a whole spectrum of needs from clothing to food, at a cheaper
yet high quality standard. Furthermore, the 24 hours, seven days a week operating
service were convenient and flexible for the customers. In that way, Wal-Mat had
loyal customers who would willingly walk in to buy everything at whatever time they
pleased. Clearly, the food industry has come in handy as a complement and booster of
the earlier business niche. In these turbulent days, a head start as well as another niche
is crucial. Only a few things must be observed to maintain effectiveness. Firstly, the
food quality must be second to none. This entails that the food must be fresh and of a
fine taste! Secondly, the price must be lower than anywhere else. Thirdly, the
customer tastes must be the driving force all the time. Fourthly, the service must be
superb, including outside catering. Fifthly, this food component must be developed in
such a way that it is intergrated within the Wal-Mat brand name and always be
enclosed within the large Wal-Mat product shops. At a later date, separate food shops
could be opened when the fine Wal-Mat food brand name has been firmly established.
With the advent of these potent developments, the spirit, focus and passion of Sam
Walton must live on in principle, despite attacks from rivals, which attacks show that
Wal-Mat is still feared and admired! Forward with strategic Wal-Mat!
Source:
Bower et al, Business Policy: Managing strategic processes, 8th Edition, Richard D
Irwin
Case study questions
What do you think contributed to Wal-Mat’s exponential growth over the years?
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Why has it maintained its lead in its respective industry?
How can it develop to better levels?
Suggested case study question answers
What do you think contributed to Wal-Mat’s exponential growth over the years?
Many factors have contributed among them being: Good pricing, continuous
improvement, good customer care, diversification, high quality products and services.
Why has it maintained its lead in its respective industry?
Continuous quality improvement and strategic thinking coupled by strategic acting.
How can it develop to better levels?
It should never stop being a learning organisation. It should also watch those new
industry entrants!
Case study # 10
SERENGETI EYEWEAR: ENTERPRENEURSHIP
WITHIN CORNING INC
Few companies have gone into a “coma” and recovered like Serengeti Eyewear
Company did. Being a subsidiary of the Corning Inc, Serengeti was destined for the
company grave having continuously been dogged by financial losses in previous
years. In 1985, the last straw broke the camels’ back as a decision to shut down
Serengeti was passed. As expected, not all agreed to the decision. Zaki Mustafa was
one of them and thus requested that the ailing company be given another chance of
resuscitation. After protracted discussions and persuasion, Serengeti won another
chance to prove its viability.
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Having been given the leeway, Mustafa and friends asked for independence from the
bureaucratic Corning Incorporation. Thus, the new Serengeti management team took
over the mantle of the company and then went right ahead to do the “organisational
surgery” which, among many things included the following:
1. The company workforce reduced from 135 to 35, and these 35 were unswervingly
committed to the company. The remnant were not the best but the resolved. As
such, Serengeti had people with one goal and aim.
2. The second was to reposition the products in the market. Hitherto, the products
were not properly positioned. Repositioning meant that the company revisited its
target, marketing strategies and response to the customers. It aimed for a product
niche.
3. Quality and good pricing were carefully implanted into the products, which had
not been the case hitherto.
4. Customer sensitivity was noticed as a major weakness in the past. This time, the
Customer was to be king and every effort was made to maintain satisfaction as
well as product loyalty. In the past, what was produced was not what customers
needed and wanted but what Corning perceived people would want.
5. Personalised service was emphasised. As seen in No.4 above, the customer
transactions were impersonal. The Mustafa regime determined to interact more
closely with clients.
6. Partnerships with clients became the norm. This meant that some of the Serengeti
staff members were to be attached to the outside suppliers to ensure quality and
timeliness of products out-sourced. Also, the consumers could freely contribute in
the product design they wanted developed.
7. The Brand name was heightened so that the customers knew that they were
dealing with the high quality, reliable and technical Corning products.
8. Teamwork was noted as the key to success in those turbulent times. This same
philosophy is still deeply ingrained in the company culture.
9. Modern Management principles were imbibed by Mustafa and associates. This
entailed allowing a free and informal working atmosphere to prevail. People were
not strictly supervised or held in suspicion. This strengthened the team spirit.
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10. The company survived closure and then was “weaned off” from the main so that it
could operate independently. In these turbulent times, a company must be fluid,
agile, always learning and flexible, which was made possible independent of the
bureaucratic Corning Corporation.
11. The marketing strategies were sharpened placing the products on the market,
ensuring that the “Opinion leaders” were seen wearing the glasses as well as
giving out some free glasses in the initial stages.
12. Specialists, who easily discern the customers’ taste, have been doing the designing
of new products.
In a nutshell, Mustafa led Serengeti in the turn-around by repositioning products,
customer sensitivity, ensuring continuous quality improvements, modern management
practices, and Company sovereignty. These attributes propelled Serengeti eyewear out
of the financial quagmire. Having come out of the “near death” mishap, Serengeti
awoke from its slumber and continues to this very day. Serengeti has made headway
and is a force to reckon on the market. It has sustained its growth basically because of
three reasons. The first is that Serengeti has won back the distributors’ confidence. In
the past, mutual trust was lost but a lot of work has gone into “mending the fences”.
The distribution channel is now thriving and in addition, the distribution channels
have been broadened touching a wider coverage. The second reason is because
Serengeti has gone international. After successfully establishing itself locally, it went
on to the international scene where it sold its products. It has a presence in Europe,
Canada and Asia where production and research is carried out. The third reason is the
continued expansion of product lines. When Serengeti was coming back to life, its
product line reduced from 230 to 53 because it had to concentrate on its core
competence products. Now that that scenario is past, Serengeti has flapped its product
wings again. These innovations and products have been immensely popular and in
keeping with the continuously changing consumer tastes. The advent of new
technological feats has boosted the company, especially the Serengeti Drivers
sunglasses. The afore mentioned three reasons have been possible because the
company has had excellent pragmatic leaders who have had an eagles’ eye towards
what must be done. There has been constant reading of the times to the effect that the
company is always alert, not sitting on its laurels. Serengeti has had a number of
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hurdles along its pilgrimage to success, hence the need to watch out. Among the many
challenges has been the interference from the Corning Inc top management who have
many times tried to curtail the companies’ apparent independence. Probably there
have been some fears in the Corning management circles that Serengeti has been too
liberated and may eventually prove difficult to keep under the Corning umbrella. But
this cannot be, for the legal papers are in place! Closely connected to the problem we
have advanced, is the fact that the unprofitable years have been footholds for
adversaries to attempt fostering absolute control over the Serengeti. In as much as the
company (i.e. Serengeti) would like to institute a Just in time inventory environment,
it has proved elusive in certain years, as was the case in 1990 when more stock was
marooned in the warehouses because of poor sales. Apart from those problems, the
usual operational hurdles have begun to cling to the company. As Serengeti has been
growing in both sales volume and staff, so has been the complexity as well. Back in
1985, with only 35 staff, every member of staff was counted upon, including the top
executive, who would also take part the daily chores, such as packing! The picture is
entirely different today potentially giving room to a generation to come up that knows
not those earlier ethics, values of diligence, self sacrifice, resilience and simplicity in
relations. Thus far, the tenaciously held principles of teamwork and strategic
orientated thinking have held the company together like supper glue amidst all the
storms. As the future lies enshrouded in mystery, Serengeti stands a great chance to
successfully bull dose her way to the future. This is because Mustafa is an excellent
General Manager. He is one in whom all the attributes of a 21st Manager reside.
Mustafa has excellent management style because he has the following values wielded
on his heart. Firstly, he holds that the rigid type of management is obsolete, as people
are mature enough, not needing a “watch dog” kind of approach. He also firmly
believes that people must be allowed to express themselves, be involved in
brainstorming sessions, smooth information flow to all and that staff internalise
shared values, without which, the company is doomed. He makes people feel valuable
and worth much more encouraging them to do better each time as they exert
themselves. Furthermore, he holds that mutual trust is crucial if teamwork is to be a
reality. The team work conviction entails that the relationships must be excellent and
should go beyond the office environment. It is worth noting that in those earlier years,
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some lowly placed staff did come to terms with the team and family spirit that was
being cultivated in the company. Mustafa has gone beyond the ordinary manager in
that he ensures that his staff are well cared for in all spheres. He has been heard to say
“I regard myself not just a business manager, but a surrogate father to our people. I
say to our employees, “You worry about your work, I‘ll worry about you.” “I am a
friend, and I do it because I get a lot of pleasure out of it.” What a Manager!! Here is
the epitome of a caring Manager! This shows that he does not only care about the
balance sheet or profits but uses the same in a different but effective ways. Trust and
value are mystically married in his chest.
With the rapid ascendance to the limelight has meant that all decisions have a bearing
and repercussions on the company image. In the past, the company could afford some
errors and not injure the sales or image but today, every move is meticulously
watched by both friends and foes. Against this background, Serengeti got entangled
with the Eclipse launch question. Eclipse was a new product that was developed and
was to be launched on the market by Serengeti. As always, the idea was floated
around and there were many opinions over the same. Some thought that this had to be
shelved, as it would be a failure in the light of other stronger brands like Ray ban. It
was feared that a collision with Ray ban would actually “Eclipse” Serengeti’s image
all together! Others however thought that the launch was overdue and had to be
launched immediately. Still others think that the product should have been launched
provided the following are taken into account:
1. Enough market research has been done and favours the launch.
2. The price and quality are what customers want and accept.
3. Ability to undercut Ray ban on pricing.
4. Aggressive sustainable and progressive marketing strategies will be employed.
5. Must emphasise the unique qualities of the product, establishing a product niche.
6. Team approach is still as strong as before.
7. A test launch must first be instituted and in some cases, market segregation
employed initially.
On the above premise, it was strongly recommended that they launch.
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Thus far, Serengeti has proved its robustness, flexibility, and strategic foresight
therefore many are confident that it will continue to glide among the agile
multinational giants of tomorrow!
Source:
Bower et al, Business Policy: Managing strategic processes, 8th Edition, Richard D
Irwin.
Case study questions
What do you think of the company’s staff reduction strategy (downsizing) from 135 to
35? Is this practice recommended, especially in difficult times like a
recession/depression time? (E.g. the 1930s and 2008/9)
List the success factors that have led to Serengeti surviving a near death experience
and rising to prominence.
Suggested case study question answer
What do you think of the company’s staff reduction strategy (downsizing) from 135 to
35? Is this practice recommended, especially in difficult times like a
recession/depression time? (E.g. the 1930s and 2008/9)
The answer to this deep and searching question is really relative. On school of thought
does not at all favour staff reduction for any reason at all while another thinks that is
the way to go if profitability being the main goal of business is to be achieved. The
job losses in a recession is another topic altogether but students should discuss this
matter and come up with tangible solutions worth falling back on.
List the success factors that have led to Serengeti surviving a near death experience
and rising to prominence.
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They are many but obviously the one main success factor was TQM in all the
organisational processes, products and service. Strategic thinking and acting certainly
played a big role to this success.
Case study # 11
Virtual team work
“Teamwork is the key word” declares Vic luck, the Chairman of world-renowned
Accounting and consultancy firm-Coopers & Lybrand. Teamwork being the
keyword for the successful company of today and tomorrow, Collaboration is the
Buzzword. Turn every where today; there is a shift towards collaboration and
teamwork so as to reap the best qualitative results. Vic Luck has vast experience
having worked in big companies such as Philips, Ford and Chrysler. These are
giants in their own right as they have well-established brand names. Reading the
article “Teamwork is the key word” from the CIMA Management accounting
magazine, one cannot help but notice how even the service industry is no exception in
the march towards quality goods and services.
Coopers & Lybrand is in the service industry providing consultancy services all over
the world. There is a sudden outburst of consultancy demands on the said firm every
where, especially in Asia. But what is the secret of this company’s success story?
The chairman gives us a number of hints, which are condensed in the following
fashion:
i. Teamwork is highly emphasised. The consultancy firm has 11,000
professionals world-wide. Only collaborative teamwork will do in such
circumstances or else risk running 11,000 “stand alone consultancies!” The
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consultants sit together and brain storm an issue and then come up with one
answer which is the best for the purposes.
ii. Quality standards. Despite the increase in demand of services Coopers is
careful to maintain high quality standards, For it is these very high standards
that put Coopers on the map.
iii. Point system and rewards . The organisation gives points and probably
rewards for outstanding performances. This acts as an incentive to the team to
work hard and attain even higher heights. This has the effect of ensuring
continuous improvement in the services rendered to clients.
iv. Shared Knowledge . The firm has one big database to which all consultants
can avail themselves. Vic Luck has been at the helm of building this network
and has done well because this has propelled collaboration and teamwork.
There is a sense of having one “global team” in this IT24 setting. Shared
knowledge is another buzzword because without information, one is doomed
to failure. Capital alone is not good enough. The firm is getting the benefits of
having one big database, as information is very crucial today if the firm is
going to be strategic. The world is changing very fast, hence the need for the
right information at the right time, and that to teams! “The reliance on shared
knowledge rather than on the individualistic approach is one of the greatest
changes in our business”, quips Luck confidently.
Given the four reasons above, one cannot fail to see that teamwork has turboed
Coopers & Lybrands to the apex of the consultancy business. The hind experiences at
Chrysler, Philips and Ford perhaps have given the Coopers chairman the insight into
gaining a competitive advantaged position. High quality standards and continuous
improvement through teamwork are the only way forward for Coopers and Lybrands.
The article ends with an aptly brisk statement “With Luck, Coopers will probably pull
it off”. This is a fine way to think of a firm and the players therein!
Source:
CIMA Management accounting magazine January 1998 pp 18
24 IT is Information Technology
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Case study questions
What one trait has brought about success to Cooper?
Comment on what Vic Luck’s experience has on corporate success.
Given the glitches encountered in internet connectivity today, how do you think
Coppers has reaped the technology benefits?
Suggested case study question answers
What one trait has brought about success to Coopers?
From the case study, team work, virtual teams and the effective use of the internet. It
would appear that Coopers makes much on who gets on the teams.
Comment on what Vic Luck’s experience has on corporate success.
He certainly has been around and is no doubt a known quantity capable of delivering
once put in any setting needing a strategic mindset. There is a way in which hind
experience shapes us, curves our world view as well as refines our competencies. We
become experts at out trade and easily plain sail where others plummet, thanks to our
hind experience. But again, our past success and experience can be the recipe for
disaster, because we do not know better than the new circumstance we encounter.
Given the glitches encountered in internet connectivity today, how do you think
Coppers has reaped the technology benefits?
It has because they probably got there before others realized the potency of the
internet and are thus more experienced as well as competent in virtual team playing.
With the continuous improvement that we are witnessing today in the IT world,
Coopers are poised to reap even better returns in days to come.
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Case study # 12
Team players at Saturn
Companies and projects largely succeed contingent on the strategy and approach they
exploit. Some work better in groups while others work better in teams. Most of
today’s successful entities work in teams. Thus, the brisk and resourceful article by
the Executive Excellence bearing an interview with Mr Brian McClelland, Vice
President of People systems at Saturn Corporation is extremely handy. We spend
some time analysing it and draw lessons for our application in the quest to etch a
unique niche.
The interesting feature is how the giant Motor Company like Saturn is using teams
and Managers to make headway in its pursuit of industry for leadership. Reading the
article brings to the fore how companies are turning the tables “upside down” in that
the traditional approaches to management and planning have fallen by the way side.
For example, Saturn no longer uses the term “Human resources” to refer to its
workforce because the team spirit is deeply ingrained into the culture of the
organisation. The interview gives the impression that Saturn is a continuously
improving and learning Company. There is a deliberate effort to train and educate
team members for a minimum of 92 hours every year! It is believed that as the team
players are sharpened in problem solving as well as people skills, this will lead to
more satisfied customers and ultimately product loyalty and expansion. This points to
pervasive Total quality in all spheres of the organisation. Saturn was initially put on
the wheels of Team spirit and onto the quality van by the founders who most probably
read the times. The writing on the wall is very clear for the successful company of the
21st Century. The chief reasons why the founders saw the need to engraft teamwork
and quality was the realisation that modern success on the market demands that the
internal customer (employee) is satisfied so that they can put their full weight behind
any implementation plan. It is widely believed that if the people who actually do the
job on the ground (operatives) are involved in the planning and to some extent
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charting the future course of the organisation, they will fully support the
implementation stage because they feel they “own the goal”. At Saturn, teamwork
has worked very well because of the aforementioned people, despite having a
diversity of employee classes are viewed as important to corporate success. Among
the many classes at Saturn are those who are unionised and those who are not. All the
classes are well handled and generally have one goal in mind- To make Saturn the
leader in the Motor industry.
The quest for quality products and market leadership is achieved via two vehicles
given below:
i. By including customers in teams. This helps the organisation know exactly
what the customers need and also ensure that the company is proactive
anticipating customer tastes. Furthermore, the inclusion of customers in the
planning stage helps to build loyalty. If ones` needs are met and actually
exceeded, the same will see no need to jump over the fence to another rival.
ii. The organisation has embedded five shared values in its mission statement to
which all team members must subscribe and adhere to. These values have been
internalised very well at Saturn because the team members actually live out
these values! This is a desired position for any strategically inclined business
of the 21st century. The five values are:
1. Team work
2. Excellence
3. Trust
4. Respect
5. Continuous improvement
All the five values highlight the fact that Saturn has a clear direction and transparent
objectives. The impression created is that customers are left to exclaim, “Who
wouldn’t want to be associated with Saturn?”
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But that is not the end of the story, Saturn also benchmarks other excelling
organisations. This is crucial because once the secret of success is known, the
organisation makes the correct manoeuvres so that it maintains or ascends to the
pinnacle of the market. The effects of these values are evident in the lives and work
culture of all Saturn workers.
Although Saturn has made tremendous strides towards quality leadership, there is still
more they hope to achieve. In the spirit of continuous improvement, Saturn is not
content neither will it rest on its laurels. They are ever making innovations so that the
customer is more than satisfied. The greatest asset that Saturn possesses as it attempts
to be more agile, is the immense brand loyalty that has accrued over the years. Their
immediate plans are to put a product- the midsize Saturn on the market. The company
(At article time) is confident that the customers will love this product. Saturn has used
teamwork and managers very effectively. It is not afraid of the future because quality
is their best weapon coupled with the best management practices.
Furthermore, Saturn has scored another first by having a lady Chairman in the person
of Cynthia Trudell. In a major car company, this is both a plus and potentially a
powerful marketing tool.
Reading about Saturn’s teams and the incredible achievements make one look forward
to visiting the plant and keenly observe TQM at work raking in Market success
through teamwork!
Source:
Executive Excellence magazine, May 1999 issue, page 18.
Case study questions
What is the place of TQM at Saturn?
Why do you think the corporation no longer use uses the term “Human Resources”?
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How well has Kaizen worked at Saturn?
Would you like to work at Saturn? Why or why not?
Suggested case study question answers
What is the place of TQM at Saturn?
It would appear that Saturn makes much of quality and as such, TQM is very critical
to success. Without applying these techniques, there is just no way of succeeding.
Why do you think the corporation no longer use uses the term “Human Resources”?
From the case study, the corporation has a learning culture that ensures a team work
culture is strengthened and internalised in the entire organisation. As a learning
organisation, Saturn is reading the times and trends and uses promotes appropriate
words to foster corporate growth and comradeship.
How well has Kaizen worked at Saturn?
‘Kaizen’ is a Japanese word for “continuous improvement” and it would appear that
Saturn is hot on the path of relentless improvement on its products so that its
competitors do not outdo it. It (Kaizen) certainly has done wonders at Saturn.
Would you like to work at Saturn? Why or why not?
The student should give their answer and give reasons for their answer.
Case study # 13
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Sherwood stores
Sherwood is a retail grocery store chain that has a network of 14 outlets in a
particular city. It has a goal of establishing 10 more outlets in the next five years so
that the total should rise to 24. As at now, the expanded network has established a
computer based information system that allows it to perform efficiently at all times.
The system is both closed and open at the same time, meaning that within the
company, the system helps to monitor the amount of stock in stores, the rate of use
and the reorder level at which new stock must be ordered. This reorder level helps to
cut costs and ensures only optimum stock levels are maintained all the time.
Furthermore, the system keeps links with the outside world-the suppliers and sends
order information as well as reports the quality of materials last ordered etc. Thus, this
system ensures continuity, no shortages or those costly production stoppages on
account of lack of materials. Also, the systems is used as a tactical tool to analyse the
quality, the rate used, the demands and the information for onward transmission to the
top management for strategic decision making. It can be seen that the system helps to
meet the company objectives of control, cost cutting and enables management to
handle the distribution system, process and analyse trends and make long term
decisions that will affect the company. In these times of Just in Time (JIT) inventory
management, the system helps efficiently. Looking at the system, as earlier intimated,
it meets all the three levels of information required to run the organisation. Firstly, the
system caters for the operational level as it helps to monitor stock and alerts when the
reorder level has been reached. Secondly, the system caters for the tactical level in
that the said system generates information for analysis so as to either control the
operations or see whether any more stock needs to be bought or reduced. Thirdly, the
system provides for the strategic level in the sense that the decision making is easier
with the analysed information from the tactical level. At this strategic level, the long-
term decisions are made, and without adequate, relevant information, it is difficult to
make correct forecasts.
Sherwood is a modern company that potentially has a competitive advantage provided
it makes good use of its information system. The customer of today demands quick
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services and will not mouth any delays. Also, the overheads must be kept as low as
possible to increase the profit margins.
Source
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
What are your impressions about the store chain?
Is it likely to sustain its competitive advantage?
What are some of the key ingredients that will contribute to success?
Suggested case study question answers
What are your impressions about the store chain?
It is a very efficient and progressive entity that is like to remain in profitable business
for a long time to come. The chain store shows and has adopted, internalised all the
techniques necessary for any entity to succeed in this ferociously competitive world.
Is it likely to sustain its competitive advantage?
Naturally, if it continues on the learning path and continuous improvement in its
processes, customer care and right pricing as demonstrated in the case.
What are some of the key ingredients that will contribute to success?
The major key is that it places quality on a high podium in all it does, whether
customer care, service, process or responsiveness. In short, TQM seems to have been
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well embedded in the chain store. One hopes this efficiency continues even after the
expansion from 14 to 24 stores.
Case study # 14
Tip Top Diner
Tip Top Diner is a budding restaurant with an increasing clientele. Most likely, it has
an excellent reputation of having good menus and as such, people rush to have a bite
from there. It seems as the market has increased over time, the eating place has begun
experiencing problems handling clients due to the demand for its menu. The overall
objective of the restaurant is “to provide good service at low cost and to make a profit
of 10% of the total sales volume.” Therefore, there has been concern lately to
diagnose the problem and then offer possible solutions. A number of root causes have
been identified as below:
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1. The workers and staff do not seem to be well coordinated and most probably,
there is no proper leadership or system of doing things.
2. There seems to be an absence of a team work culture.
3. There seems to be an information breakdown. Either the information is not well
analysed, not available or just not timely.
4. It seems that the entire restaurant is overwhelmed with the good demand such that
there is hardly any time to sit and analyse the trends so as to think strategically.
5. The facilities on the other hand may not be adequate and may need revisiting by
way of increasing them, modernizing them or simply replacing them to the
increasing demands.
6. There seems to be an absence of a computerised information system that helps to
forecast, control or know what stock levels to have at any given time. This system
will help to produce the food freshly at the right time and avoid things like
shortages of some ordered food. Customers get irritated and go away.
Furthermore, customers want to be served timorously.
Having discovered some of the possible root causes, the company must respond by
realigning itself again to the right levels, the customer needs and demands, the right
facilities, the right staff, building the right culture by way of team work and most
importantly, installing an IT system for prompt analysis and decision making. The
opportunities for market expansion are great and if poorly handled, will lead to a slow
death of the restaurant, as customers will gravitate to other competitors.
The scenario at Tip Top Diner is one that can be simply solved by using Information
Technology through installing on line systems that will automatically tell the status
quo. Another thing worth noting is training staff to use these gadgets and also by
motivating them in various ways. Can you suggest other ways?
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
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Tip Top Diner is an excellent budding restaurant, if you were the proprietor, how
would you improve and expand its operations?
What one factor would you focus on as you head towards market expansion?
Suggested case study question answer
Tip Top Diner is an excellent budding restaurant, if you were the proprietor, how
would you improve and expand its operations?
Clearly, the restaurant has the goodwill and right clientele but needs to invest more it its operations management so that things change for the better. The Restaurant cannot afford to squander the opportunity already in its lap and grasp. Thus, our recommendation is that quality should be all pervasive and embedded within all operational aspects. In that way, the process will then guarantee better results. Lessons must be learnt from other successful fast food entities like KFC or McDonald. Bench marking them wouldn’t be a bad idea. With respect to expansion, the strategy must be crafted right using SWOT analysis and other tools that will help the organisation identify and exploit its core competence.
What one factor would you focus on as you head towards market expansion?
If I was at the restaurant helm, I would focus on TQM in all operational aspects of the
restaurant. Our service and products must be as perfect as can possibly be.
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Case study # 15
IMPACT OF TECHNOLOGY
echnology has had a tremendous impact on our daily lives in unprecedented
ways. Almost in every area of life today. In one way or the other, a computer
system has been at play, making it universally applicable. The impact cannot exactly
be measured because it is too big as it permeates all sectors of society whether
privately or publicly. Were we to recount one by one where it is utilized, want of
space to list down all the areas would be the limiting factors.
T
For instance, the advent of IT has brought about efficiency because information that
previously took many months to process only takes a few days or hours to deal with.
By that token, decisions are made intelligently and promptly unlike in the past. In
addition scanning has even made things extra easier because entire texts and photos
can simply be copied and pasted on another text in very short moments. In the stores
for example, the online inventory system not only helps in security controls but helps
to give an up to date picture all the time.
Another impact is that IT helps individuals to work quickly and conveniently thereby
hastening the processing of transactions, with proper orientation, IT helps to develop
the company as well as give it a competitive edge above its rivals. In other areas such
as debt collecting and accuracy are some other impacts that IT has brought. In the
past, a lot of mistakes and debt collecting was far more strenuous than today in that it
was difficult to track down defaulters or those who received loans elsewhere but
bolted to another area. With the advent of IT and establishment of a database, such
people can be detected and tracked down. Further more closely connected to what has
just been highlighted; at the simple click or punching of some buttons, an entire
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profile of someone can be displayed on the computer screen. Thus, mistakes are
avoided at that stage.
Apart from increased efficiency and stock control, IT helps the organisation to
maintain or expand a market share in the market. Clients like an accurate, efficient,
friendly and attentive service delivery system that matches with their needs. If any
given company can provide that, the said clients will mob around the company like
moths to a light. IT is here to provide this service.
Thus, in our view, IT is here to bring about the virtual office remote application for
school, e-commerce prompt and current updating of information & books as well as a
strategic tool to achieve higher heights of service. I would encourage any company
worth its salt to enter the new millennium on an efficient note via IT!
Case study questions
What other impacts has Technology had on day to day life?
In your opinion, is it possible to ignore technological developments? To what extent?
Suggested case study question answers
What other impacts has Technology had on day to day life?
The student should give answers that are ‘outside’ what has already been highlighted
in the case above.
In your opinion, is it possible to ignore technological developments? To what extent?
It is clearly not possible to totally ignore technological advancements. What is
possible is to manage its use so that technology does not rule but is a tool for us.
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Case study # 16
TORONTO OFFICE SUPPLY COMPANY
Toronto office Supply Company is a budding little entity that has over 30 branch
stores, having begun with only one-store two years ago. It quickly proliferated into
and around the Toronto Metropolitan area. As a result of this expansion, it became
difficult to keep track of stock levels among the branches resulting in mistakes and
high expenses to maintain the stock. Not having accurate information timely and
promptly is extremely costly. As such, there has been talk towards computerising the
entire system so as to bring about efficiency and to eke a competitive advantage. But
to put up this system is not as straight forward as it appears because certain key
people have different opinions and objections towards the installation of a
computerised IT system. For example, Gerald Clark, the president of TOSC thinks
that what matters is the growth of the company rather than a new computer network
system. As such, he has devoted himself to the same rather than the operations.
However, the escalating costs have forced him to addresses the issue by Hiring
Marple leaf Associates to advise on the computerisation. Having been advised on
setting up a wider area network (WAN) using a central chip, Clark presented his case
before his staff for consideration.
As expected, there was some dissent. Charles Robertson for example felt the initial
installation and computer purchases costs are too high to be justified. He thought
waiting few months should bring the computer prices down. But this
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recommendation, although true and plausible overlooks issues such as the rapid
technological changes as well as the unavoidable high initial installation costs.
Another officer, Sarah Blake thought that the company was about to purchase
obsolete computers that would probably soon not be compatible. Sarah is right but it
must be noted that technological changes are too rapid and one cannot possibly cope
with unchecked continuous changes. The best is to either purchase the latest
computers and network at a higher cost or simply settle for this one & then upgrade it
with time.
Having looked at the two objections, the consultants’ recommendations are examined
as well. After careful consideration, it is found that the recommendations are
potentially good if the meet they immediate and long term needs of the company. As
such it is impossible to be up to date. Another thought is to ask the consultants to look
around on the market and identify an advanced but cost effective system that is
relevant current, “upgrade able” and probably long lasting from another supplier. One
thing is certain preferences & opinions will always differ but what counts is whether
the system and network delivers the goods as per customer requirements.
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
How can the company best improve its efficiency, apart from what has already been
suggested in the text?
Suggested case study question answer
How can the company best improve its efficiency, apart from what has already been
suggested in the text?
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The student should examine what is on the table and already suggested by the
consultant as well as the two objections raised and then offer their own solution or
simply consolidate what is there though they must give reasons for their answers.
Case study # 17
KRIEGE CONSTRUCTION COMPANY (KCC)
Kriege is a construction company operating in Western Canada. It wishes to
automate & computerize its construction proposal procedures. It hired a consultant to
analyse the situation.
The situation on a ground just now is that the company has no previous experience
with computers except for word processing programs for secretarial services. As such,
most of the managers have no prior experience with computers. So what should be
done? When should this exercise be commenced?
Kreige hired consulting firm (Read & Owens) though Mr Kaline have suggested that a
proposal system using an insite data base management system that has been tried
elsewhere. The choice of the Macintosh program to run the insite package is an
excellent idea because the same (insite) is user friendly for all including the managers
who have little experience with computers. Kaline have suggested to get started in
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two months time. If you were part of Kreige decision makers, what would be your
position on this matter?
Source
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
If you were part of Kreige decision makers, what would be your position on this
matter?
What do you think about the insite program? Will it help matters in any way?
How best do you think a new computer system should be adopted, let alone
introduced for the first time to a company with no previous connections to computer
like Kreige?
Suggested case study question answers
If you were part of Kreige decision makers, what would be your position on this
matter?
If I were part of KCC, we would not object to that proposal because company policy
does not hinder us though Mr. Kriege and the owner of the consulting firm are close
circle of friends. We are pretty optimistic that objectivity would not be lost, if not
enhanced. The customer needs would be better met in this way. At another angle,
Kaline, we are certain will have taken all factors into consideration. In our thinking,
he (Kaline) should have looked at the cost effectiveness, versatility and compatibility
of the recommended program.
Having taken into consideration of the above factors, some problems would still
stubbornly surface if KCC goes ahead with Kalines’ present recommendations. We
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think the costs, would be either high or low affecting future cash flow. IT is constantly
changing so the recommendations are subject to change with time.
What do you think about the insite program? Will it help matters in any way?
The insite program is potentially good and might help the organisation very much.
However, the ethical concerns raised must be handled objectively so that things do not
back fire in future. The student must demonstrate that they have understood the case
and give reasons for the answer they give.
How best do you think a new computer system should be adopted, let alone
introduced for the first time to a company with no previous connections to computer
like Kreige?
The student should suggest practical ways that will help the organisation adopt and
internalise the software bearing in mind that most of the managers do not have
computer skills if not opposed to them! The student must empathise with the
managers and suggest practical ways that will help matters such as training,
sensitization among many options.
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Case study # 18
STATE MUTUAL LIFE INSURANCE COMPANY
Mutual Life Insurance Company is an entity that has been rapidly growing and
changing from strength to strength. Changing by leaps and bounds, Mutual has kept to
its main objective of providing quality service to its upper middle class insurance
customers.
In the past years, the changes in the environment have been so rapid and in the quest
to keep abreast as well as position itself competitively, Mutual life has taken
advantage of the Information Technology. Commencing with automating in
information systems in the early 70s, Mutual proceeded to upgrade most of the batch
systems to the extent that by 1980, the company had drastically changed in keeping
with the trends. As earlier intimated, the target group is the upper middle class and as
such, all efforts are designed to please, capture, satisfy and service the target
customers using the information technology strategy. Another strategy put in place so
as to maintain an advantage is the introduction of new products periodically, yea, in a
shorter time. How is this advantage to been achieved? A number of ways come to the
fore. Firstly, the company has continuously launched new products faster via the use
of IT. Secondly, the company has used IT to guarantee quality in goods. Thirdly, the
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company has utilised the Internet to boost the use of e-commerce, is online, real time
and fourthly has exploited the possibilities of using the virtual office.
In the fifth place, Mutual Life Insurance Company has ensured that they diagnose the
customer needs and anticipate them, thus being proactive. The customer is king in
these times.
As Mutual Life Insurance Company continues evolving using Information
Technology, what new thing must it do to remain competitive?
Source
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
What do you think about Mutual Life’s competitive strategy as relates to IT?
How best can the entity beat other competitors in an ever changing environment?
Suggested case study question answers
What do you think about Mutual Life’s competitive strategy as relates to IT?
The competitive strategy of Mutual Life is very good and it would appear the entity
has grasped the correct essence of IT though the strategy continuously needs refining
so that it remains fresh and relevant all the time. In short, the organisation should
change with the times by being timorously responsive to the changing context.
How best can the entity beat other competitors in an ever changing environment?
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Quality is the key factor buttressed by appropriate cutting edge state of the art
technology. The said technology must be effectively exploited to strategic ends or else
the potent weapon in their hand may not be advantageous as should be the case.
Case study # 19
CLARK CONSULTING
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Clark consulting is a company that has been in business for many years but has not
used an expert system before to handle any of its cases. With the advent of
information technology, the said company has been forced to use an expert system to
help in decision making in certain areas. Expert systems are computer programs that
have been developed lately and use some kind of artificial intelligence to help come
up with proposed decisions in a very short time. These self-same systems can advise
appropriately, and in many instances act as experts in certain areas. Their
recommendations, most of the time, are as good as an actual human expert responding
except that they have certain limitations that make the human brain superior. For
example, expert systems have no emotions or any ability to treat exceptional cases.
Generally, expert systems are helpful.
As such, when a company wants to carry out an evaluation as to the potential sales
leads, an expert system will be handy, as it will ably give indications. With respect to
selecting potential stores sites, develop an effective sales incentive program and the
supply of legal advice about corporate taxes, expert systems will help greatly. But to
diagnose problems with plant production equipment, the expert system may not help
much because it has limitations. Such issues need a good flexible and inquisitive
human mind that may not be possible with the extant most advanced artificial
intelligent computers.
As Clark consulting treads this new route of consulting using advanced expert
systems, they are uncertainties along the way, should they go ahead or abandon this
whole exercise?
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
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Managing Quality in Project and Human Resource
What is the place of Artificial intelligence in today’s world?
How can this program be used as a competitive tool in today’s world?
What do you think about the expert system about to be adopted by the Clark
Consulting?
Suggested case study question answers
What is the place of Artificial intelligence in today’s world?
Artificial intelligence has been gaining ground over the years especially in the
developed world where computer programs have been developed which have
spectacular capacities such as being able to learn things, much like the way a child
learns as they develop. At the moment, artificial intelligence may not be that
pronounced but the future certainly holds promise for its eventual triumph. Some form
of intelligence is seen in robots, advanced space grafts and planes etc. Thus, we can
conclude that artificial intelligence is advantageous and finds much ground in today’s
world.
How can this program (Expert system) be used as a competitive tool in today’s world?
This helps in the quality of decisions made as well as improves the efficiency of the
user. For instance, decisions will easily be made in a shorter time frame.
What do you think about the expert system about to be adopted by the Clark
Consulting?
This is an excellent system as long as it is used in appropriate places especially in
quantitative or statistical related decisions. The qualitative may still need the human
mind still. If the one part is handled by the expert system, then that is half the work
done and brings down the work load!
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Case study # 20
TREXEL ASSEMBLY INC
Trexel Assembly Inc (TA) is a budding Company and has lately recorded
unprecedented exponential growth. There has been an excellent expansion rate but
alas, the organisation is reaching levels that it cannot sustainably manage. The
Company seems bugged by a number of problems, largely hinging on the use of
Information Technology (IT). In as much as it is successful, it is threatened with
failure in the long run because it has a Management Information System (MIS) that is
obsolete (for its purposes) as well as suffers from multiple glaring errors in data
capture especially to do with the payroll. Those two problems have somewhat
crippled relations among staff and may ultimately precipitate disaster at a later stage
unless immediate emergency measures are put in place such as:-
1. Setting up a more powerful, versatile and relevant system.
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2. Continuously training staff to adequately handle all issues.
3. Installing an online system that will update records promptly and
4. Considering changing programs or designing ones that suit the local needs.
Having diagnosed the underlying problem of this particular IT component, some staff
(probably line managers) have suggested to management that most of the problems
can be sorted out. For example, Frank suggested that more clerks be hired to ensure a
quick delivery of materials but others think appropriate updated technology should
take care of this thereby eliminating the need to hire more people at a costly note. As
for the purchase of new software for accounts receivable, still others think updated
levels of the same system may deal with this although the cost component worries
them. They are however open to purchase the said software as long as it is compatible
with current system. Tricia is a casualty of the faulty system arising from data capture.
Going by what she has reported, some have concluded that the program may be
entirely to blame because some errors may have occurred during data capture and
processing. There appears to have been very little review before processing. If the
problem is truly with the program, the company may consider changing software
suppliers or better still buy a new program or update the present one to an online one.
With the new system in place, these problems with be things of the past and then
focus will shift to other more critical issues. What route should Trexel take?
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
What route should Trexel take?
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Suggested case study question answer
What route should Trexel take?
The answer to this question is relative. The student may elect to go for a complete
change over to another system, update the existing one or simply employ more
competent staff to minimise problems. For instance, should the organisation elect to
hire new staff, there is need to continuously train them so that they have the correct
competencies which in itself is costly but eventually pays dividends. Should there be a
complete overhaul of the system (change over), the initial costs may appear
astronomical but will be cost effective in the long run. In addition, output quality will
be enhanced as well. In either case, the student must give a tangible reason for their
answer.
Case study # 21
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BABBIT INC
Babbit, Inc is a wholesale sporting goods firm that serves clients in a two state area. It
has developed a local area network accessed by all sales people as they go about their
business by way of micro computers remotely connected to the main frame. This
connectivity helps them to find out the credit limits & inventory of particular lines of
goods that are in store at a particular point in time. Granted that this one of the latest
technological developments (of using note pads line is good in and of itself though
concerns were raised as to the security of the system thus, the aim of this report is to
deal with the following queries raised.
1. The threat of unauthorized access to the e-mail system.
2. The unauthorized access to the LAN and to the main frame financial
accounting data base.
3. The risk of theft of the note book computers and the software and data stared
on them.
You have this question placed on your table. As chief IT officer at Babbit Inc., you
are requested to give a response to these concerns, giving your opinion on each point
raised. Give an analytical answer bearing in mind that this may have a bearing on the
company competitiveness. Should Babbit continue with this LAN?
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study question
You have this question placed on your table. As chief IT officer at Babbit Inc., you
are requested to give a response to these concerns, giving your opinion on each point
raised. Give an analytical answer bearing in mind that this may have a bearing on the
company competitiveness.
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Suggested case study question answer
Analysis and recommendations
The fears are indeed legitimate and the following proposals should suffice to inoculate
the system from possible interference:
Firstly, the issue of unauthorized access to the LAN and the mainframe is real in the
sense that people called “hackers” and other intruders can have access by either
stealing passwords or introducing programs that unlock the system. In the worst
circumstances, they even introduce viruses that ravage the system! In our opinion, all
these fears can be allayed by introducing secret passwords (which we have) that can
be used and frequently changed to eliminate all possibilities of someone stealing the
same to unlock the system. Another effective way is to have edit rights given to
specific people only authorized to access, edit or change data. Others must be barred
from these rights. Finally, the organisation can install “fire walls that will act as a
shield and off any intruders, by possibly sending alarm to the owner of the system.
Continuously updating and installing current anti-viruses is another must to ensure
security.
Secondly, the threat of unauthorized access to the e-mail system is generally the same
to the above except that some mechanism must be put in place to stop people
intruding (these have been). One of the ways is to licence people and define special
boxes for them with passwords known only to them. Fire walls are handy here too.
Thirdly, the risks of note book computers & software data to be lost can be dealt with
in a number of ways such as backing up, Insurance, pass wording or licensing the use
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of the said computers to particular staff only so that if anyone else has access to them,
the computers will not respond (the note pads). With the above safe guards in place,
we have no doubt that all is well although you will note that we cannot guarantee
security though we can certainly minimize the risk by installing both physical &
software controls i.e. passwords, fire walls or restricting physical access to the
computers at hand.
Your feedback is highly appreciated.
Case study # 22
NORTHERN PAPER CAMPANY
Western Paper Company, a very busy and expanding company has been
experiencing complaints of inaccessibility by clients and as a result, a threat of losing
them is emerging. This thorny issue has bugged management and inspections
department suggests that people (staff) hold the line for personal use which is
detrimental to the organisation. What should be done to rectify this hurdle? A number
of options have been advanced such as the procurement of special equipment &
software for the private brunch exchange (PBX), as well as centralised the external
calling system both these options look good.
In terms of equipment, it is advisable to buy handset control operator consoles cabling
& distribution boxes as hardware. There is need to buy compatible software each of
these will add to advancing the probability of opening up the organisation to clients.
The hardware for instance will be useful to protect software as well as provide the
needed service. Once the PBX is in place, it will help to allocate phone lines
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automatically and ensure the clients get preference access to the company. This
should improve the connectivity tremendously.
Obviously, any system raises concerns. In this regard the following concerns will
surface. Firstly, is the equipment and software compatible and agreeable with the
company needs? Secondly, how durable & relevant is the soft & hardware? Thirdly,
will the proposal new gadget(s) be cost effective in the long ran, bearing in mind that
the initial costs might be high?
Northern Paper Company has a real problem at hand and it can be only sorted out by
the right soft and hardware, relevant & in keeping with the corporate needs.
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
If you were at Northern Paper Company, how would you react and sort out this
problem? Would you adopt and recommend the PBX option? Give reasons.
Suggested case study question answer
The student should first of all give their initial reaction and course of action they
would take to sort out the bagging problem. In the second place, the student should
state whether they would go for the PBX and why. If not, let them give reasons as
well as offer alternatives.
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Case study # 24
STERLING INDUSTRIES
Sterling Industries is a company involved in the textile manufacturing industry,
having developed segments of its information system over time, with multiple updates
& upgrades. As a result of these modifications, the system has been grossly inefficient
and has caused a backlog of as bad as six years in some cases! There have been
demands in one quarter to have the system completely over hauled. What should
sterling industries do about this dilemma as the fragmented system is more of a
liability rather than a help? Below is a suggested route out of the problem offered by
some company staff in one brain storming session:
A number of steps are here suggested to deal with the problem as follows: -
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1. Have junior management make a firm commitment towards the development
of the new system. This assertion trickles down the structure as people will
view it as important.
2. Have the relevant people prepare for the study in terms of orientation,
appraisal, and survey prior to any formal general meeting.
3. To launch the entire exercise hold a kick off meeting signalling the changes to
hand.
4. Then define the business processes, what is going to be done, how and when
so that a common understanding is arrived at.
5. Furthermore, there is a need to define the data classes as all the different
batches of data will haw specific locations
6. Sixthly, proceed to define the executive perspective as to what the outcome is
expected to be
7. Having set the executive perspective, proceed to assess the actual business
problems at hand. This process helps to sort out the problem where it is
exactly.
8. As the build up continues, there will be need to further define the information
architecture, what will be the set ups? What are the components to include or
leave out? There are some of the questions to tackle at this stage. All of them
must be listed down and then.
9. Determine the priorities in relation to the resources and commitment in (1)
above. After this has been done then
10. Ensure that a review is done at this stage of the information system so that
management can make comments before a final draft is done.
11. The last but one stage is to recommend an action plan to deal with the problem
to hand in keeping with the earlier findings and the crown the whole exercise
by.
12. Reporting the results against a background of the objectives set up.
Having followed the above steps, it is expected that the results should improve,
especially if the data processing management and user management sectors are
properly co-ordinated during the study. The data processing management section must
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process data quickly while the user management sector must ensure that the actual
needs of the customer are taken into consideration at the planning & implementation
stage rather than just guessing what clients need & want.
With the right procedures & people in place, sterling industries will easily surmount
these problems and begin to clear the menacing backlog. What does Senior
Management think?
Source
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study question
You are in Senior Management and are expected to respond to this proposed route to
correct the problem at Sterling Industries. Convene a meeting and then write a
response, giving additional views as well as Management position on the suggested
solution. 300-500 words should suffice.
Suggested case study question answer
The student should state whether Management agrees to the proposal or not with
tangible reasons in each case. Remember that corporate image is at stake here.
Case study # 25
Pine Products Company
Pine Products Company has been expanding since it began 5 years ago. To maintain
its phenomenal grow. There is need to have a very good efficient system that can
handle a huge volume of work. The present system is slow, inefficient and naturally
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has raised discussion between Pratt Williams with his son, John Williams. Pratt thinks
that it is prudent to establish two remote data entry sites as well as one printing
Station to cope with the demand. In this way, the new outlets will not fall into the
same problem as the other two outlets. In addition, Pratt thinks the present inefficient
system should simply be updated to meet the current situation. On the other hand,
John thinks the prudent thing to do is to replace the entire system rather than
upgrading it as doing so will cosmetically solve the problem. What should pine
Products Company do? What options are available?
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
What should pine Products Company do? What options are available?
Suggested case study question answer
What should pine Products Company do? What options are available?
The first option is to simply upgrade the current system in terms of memory capacity
expansion so that it becomes “bigger” & faster.
Secondly, just dispose off and buy another system because it will not only be efficient
be versatile but, flexible and more cost effective in the long run.
The third option is to limit the use of the old system to certain functions while
exploiting the remote outlets to be installed in the two areas.
Pratts’ recommendation is probably better although more costly because new system
is current, flexible & versatile. In this way there will be no need for a remote terminal
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as everything will be online & in real time. The old system will still lose time to
accomplish its tasks.
As Pine products proceeds on its quest for efficiency, we think the options listed
above would be handy. We say so because they are more realistic and cost effective.
As for the use and installation of a server for the remote terminals, it is a good option
but slows down progress significantly. An overall online, real time system is far above
John’s and Pratt’s recommendations.
Case study # 26
CF INDUSTRIES
CF Industries is a company, like many others, who have been in business but due to
the pressure, there has been a backlog of work. The delay is so great to the extent that
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some cases are two to three years behind and lie in the “In” tray. As such, CF has
embarked on developing an information system that will help clear this entire
backlog, update files and then give strategic guidance to the said entity. In doing this,
CF has resolved to use a 4th generation language, which, it is hoped, will be both user
friendly and versatile. However, to implement this resolve, a plan has to be in place. If
we were at the helm of the implementation, the following would be our proposed
plan:
First and foremost, we would define the problem and know what needs to be done.
Secondly, we would set the objectives for the user support centre i.e. Help users
acquire abilities to enable them develop information systems tailored towards both
individual and departmental needs.
Thirdly we would ensure that the role of consultants is clearly defined so as to avoid
overlapping, inefficiency or unnecessary overheads. We would ensure that among
other things the consultants provide training, technology assistance, and management
of data as well as onsite consultancy services.
Fourthly, in carrying out the above-mentioned task the consultants will help maintain
a number of “tools”. Among them would be the main frame and microcomputer-based
tools as the case maybe. These tools will carryout adhoc queries, modelling and
analyse applications. With that in place, we would crown up the entire exercise in the
fifth place by instituting a framework of policies that will govern the systems
development discipline. Embedded in the policy will be the ensuring of quality in
areas such as data security, validation, testing controls documentation as well as
operations management covering issues of security, backup and accessibility.
Having done the five cardinal steps above, we would then venture full throttle to
implement the program using the 4th generation language. Armed with the above
system, we are not afraid that CF will surmount all hurdles. Do you have any other
quality suggestions to further improve the situation in addition to our suggestion?
Source:
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Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study question
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Do you have any other quality suggestions to further improve the situation in addition
to our suggestion?
Suggested case study question answer
The student should originate new ideas that will either complement or side line the
ideas and steps thus far suggested in the case study. The aim is to sort out the backlog
and improve qualitative efficiency at the entity.
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Case study # 27
Munson Beverage Corporation
Munson Beverage Company owns 30 warehouses and the distribution equipment
necessary to supply a variety of soda products to retailers throughout the Midwest. It
(the company) is computerized and has been seeking to keep abreast with the trends.
To do this, the company generates and exploits various reports that contain valuable
information used at different management levels. Some reports are daily and
operational while others are tactical reports handy for middle managers to control
operations. The third set of reports is at strategic level from where the top
management get valuable indicators for strategic decision making so that the
organisation is steered to safety and properly positioned.
Among the reports that are generated and churned out are the following:
1. Aged accounts receivable reports. (aging analysis)
2. Balance sheets.
3. Current merchandise inventory lists.
4. Employee earning records.
5. Fixed assets and equipment inventories.
6. Income statements.
7. Payroll sheets.
8. Schedules of accounts payable.
9. Schedules of accounts receivable.
10. Sources and uses of funds.
11. Stock out lists.
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All these reports are useful and appropriate depending on what one is doing. For
example, if one wants to find out the status of the company stock or debtors, the
balance sheet is handy especially if compared with the previous period. Although
these reports are excellent and useful they will be more relevant if they are on line,
current and frequently updated. Furthermore, one more report may be handy to
include that gives a picture of the market share held, the product and the main
competitors/rivals in the trade. It is helpful to have a periodic market research report
for strategic purposes. Could you recommend any software to increase efficiency and
quality?
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study question
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Could you recommend any software to increase efficiency and quality?
Suggested case study question answer
Could you recommend any software to increase efficiency and quality?
If we were asked as to whether we would recommend any new software for the organisation so as to mark up the efficiency levels, we would suggest that a constant updating exercise be done often so that the programs remain versatile, current and relevant all the times. If any new software is on the market, we would ensure it is tested before it is adopted, of course bearing in mind the overhead costs and whether it is keeping with our corporate goals. As the organisation expands with warehouses dotted all over the country, a wide area network that is on line may be handy at some stage so that at all times, information such as stock levels and records levels are automatically updated for all users to have a correct picture. The times demand the prompt action at all times by all. Today, we believe information is the most valuable tool for proper control, operation and strategic decision-making Munson Beverage Corporation stands a chance of excelling given its potential advantage to hand. Alternatively, the organisation could consider adopting an online Just in Time (JIT) system. This significantly cuts down on storage costs.
Case study # 28
REPORT ON SRC PROBLEMS
A scenario has arisen in your company requiring your response, decision making and
expert pragmatic steps to heal the ailing organisation. An expert was hired to carry out
an organisational operations audit/evaluation and has come up with the report given
below. Further queries have been raised and you are required to respond. Read the
findings and respond to the case question.
=============================================================
TO: The Director
FROM: Chitunguza Maloza – Consultant
DATE: 27/02/2009.
SUBJECT: REPORT ON POOR PERFORMANC OF SRC
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Introduction
A survey was carried out by our firm to ascertain the root causes of the dismal
performance of the organisation in recent years (2000-2008). The survey covered all
areas of the organisation ranging from management style to all the delivery systems
hinging on time management. This entire process took place between 15 th-23rd
February 2009 and the report on our findings is here presented.
Objective
The objective of this survey was to find out the root causes and reason for the dismal
performance of the organisation.
Methodology
The methodology used in this enquiry covered both qualitative and quantitative
aspects. The questionnaire method was used as well as person to person interviews
conducted. This was a 100% enquiry and thus no sampling was used. The data thus
generated was subjected to our SPSS software although some parts of the quantitative
questionnaire used Epi info.
Findings
The survey established that the organisation was grossly inefficient in a number of
areas that led to the poor quality and un-timeliness of report submission. Among the
major possible causes of the problems were:
1. The high turnover of staff.
2. Lack of proper training and orientation.
3. Constant disturbances (interference) and interruptions of professionals
assigned to a task.
4. Lack of time consciousness and goal setting.
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The survey also discovered that although SRC was well equipped with modern
equipment, there was probably a serious management problem that led to a poor and
uncohesive fragmented teamwork spirit among staff, although on paper, the reverse
was portrayed.
In the study, the following were the problems identified as well as assumptions taken
in arriving at conclusions.
Problems & symptoms of malady
(i) There was a consistent trend of late report submission and in many cases,
contract breaching in terms of time frame.
(ii) There was a high employee turnover leading to serious gaps on many
projects.
(iii) The assignments/ contracts turned out more costly than anticipated due to
either poor projection or longer than planned project completion.
(iv) There were more errors in the systems installed leading to frequent “fire
fighting” stints to staff and thereby contracting ‘bad will’ from clients.
(v) There were low quality reports & systems in the organisation’s output.
This would be traced to the calibre of staff hired.
Assumed problem root causes for the above issues were:
(i) Low morale among staff
(ii) No cohesive team work among staff
(iii) Lack of a strategic leadership vision
(iv) An archaic Management style.
In our findings, we feel that either the poor management of the staff may
contribute significantly or else the delivery system is not properly aligned. In an
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ideal situation, the right staff and systems must be so well aligned to the extent
that every product churned out is of a high quality. As it is, management does not
seem to be conscious of time or the corporate image created outside, as long as a
task is done anyway as time is not a factor. But nothing could be more damaging
in this modern age than not to stick to contracts, especially those that are time
bound. Once a task is done within bounds and above expectation, the corporate
image rises by that token, and customers (internal and external), who are king,
market the organisation to many more clients. Having briefly analysed the
possible problem root causes, we now proceed to give some of the possible
solutions that will hurtle SRC out of its present doldrums.
Firstly, the organisation must strive to hire and maintain seasoned ‘known
quantities’. It is not enough that one is a professional but are they adept and apt to
do the job efficiently in a given time frame?
Secondly, the organisation must begin to be strict with deadlines and timeliness.
In other words SRC must set realistic timeframes and work round the clock to
accomplish the task. The shorter the time frame, the better. This hurdle can be
surmounted by attaching the right people to the right tasks. In short, people must
be equal to the task.
Thirdly, the organisation must only take up enough tasks at any given time to
avoid a situation where the organisation fails to handle all the cases. Failure to
accomplish tasks reflects badly on the organisational image. This calls for an
honest introspection to discover the capacity limits.
Fourthly, the organisation should ensure that professionals attached to tasks are
not interrupted or interfered with at all. As the situation is, staff are often being
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shifted from task to task midway and thus their usefulness is drastically reduced,
since their energies are spread thinly across the organisation.
Fifthly, there is need to constantly motivate staff either by remuneration, team
work, challenges or the right conditions of work. Other incentives could be
include giving them time off and not disturbing them once on holiday. Although it
is a good gesture to have bought them cellular phones, conscious effort must be
made to minimize disturbances on the off working hours or holiday times.
Recognition of outstanding individuals & teams must be catered for in the scheme
in one way or the other.
Sixthly, there is need for continuous training of staff, not only while on the job but
sometimes to take refresher courses. Usually, in busy organisations like SRC, the
temptation is to work on endlessly without giving staff a breather to “recharge”
their brain cells. There is merit in not only training but also taking time off to do
something different which is less time framed. Training has a way of motivating
and exposing people to new experiences that would be handy in future.
Seventh, quality standards must be jealously guarded. ISO certification is
recommended and lastly, if the present section leaders or managers fail either to
tick or comply, they may need to be replaced. This extreme recommendation must
be taken with great caution and the highest level of objectivity because replacing
any professional is very costly business. It is costly not only in terms of cash
involved but also training to orient someone to align themselves to the corporate
expectations.
CONCLUSION
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Thus, having looked at SRC, the survey team concludes by stating that the
organisation is potentially very viable and able to recapture the lost market if only it
works on the delivery systems ensuring that quality and customer focus are
intertwined into the corporate culture of the organisation.
Source:
Schultheis & Sumner, Management Information systems, McGraw-Hill 1998
Case study questions
How best can the company turn itself around into an even more high performing staff
team?
Point out some of Deming’s management principles in this case. (Refer to the famous
14 points)
Suggested case study question answer
How best can the company turn itself around into an even more high performing staff
team?
The student should give more ideas outside the ones that have been mentioned in this
case. It would be good if they could think through the case first and from experience
or what they research add new dimensions either ignored or not raised in this case.
Point out some of Deming’s management principles in this case. (Refer to the famous
14 points)
The case has many of the principles that Deming taught in his famous 14 points as
tabulated in his classic book “Out of the Crisis”. Deming believed that 85% of the
problems in organisations were caused by Management practice and policy. The
student must identify these ideas scattered across the case as well as other teaching
taught by other quality gurus.
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Case study # 29
The following write up is based on an article that appeared in The Post in February
2002 and talks about technology. Read through the write up and answer the questions
that follow.
_____________________________________________________________________
“Deaf go Mobile phone crazy”
For the long time, technology has been tailored specifically for the totally physically
able while the people with disabilities have had their special needs relegated to the
terraces. But now the tide is changing. One of the many ways this has changed is the
introduction of user friendly and specially tailored technological gadgets.
The article “Deaf go mobile phone crazy” introduced a totally new product by Nokia.
Heretofore, cell phones have been restricted to the domain of the able bodied user
clientele but with the advent of the cell phone that can capture text messages and send
them, much akin to the e-mail facility, it is now possible for the deaf and dumb to use
the facility. From the report, the gadget can capture data, process it and then send it to
other people. The vibrator on the phone alerts the receiver of the message who opens
and reads it. Thus, more and more people can communicate in some way.
But what are the advantages of this gadget in comparison to the rest of the mobile
phones?
(i) The phone can be used by more people.
(ii) The phone is portable
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(iii) It looks pretty much like the rest and thus will not raise attention and
curiosity from on lookers.
(iv) Not very expensive to acquire.
In as much as these clear advantages are helpful, this new technology has some
disadvantages such as
(i) The text messages are short, clipped and often incomplete sentences.
(ii) Propensity to be misunderstood – messages
(iii) Give greater problems to people who prefer sign language to inputting the
English text.
(iv) Texting quickly becomes expensive and
(v) The short messaging service (SMS) may not be immediately received.
(vi) Disturbs and interferes with nearby hearing aids.
Doubtlessly, the new Nokia 9210 communicator mobile phone is an asset that will
go down the annals of IT history as one that helped open up the mobile phone
door to the deaf. It is expected that this technology, albeit not perfect, will
continue to improve each time.
What then are the implications to the MIS World? A number of answers come to the
fore.
(i) There will be increased communication among people across cultures,
physical health status and location.
(ii) It will be cheaper and quicker to send messages due to the portability of
the gadget.
(iii) It will be more convenient to use the mobile phone to send short e-mails as
opposed to the desktop or laptop.
In times to come, the phones will turn out to be proper microcomputers that will do
most of the functions a desk top can do, only that it will be carried in the palm. We
eagerly wait such a time.
Source:
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The Post, February 2002
Case study questions
What is the distinguishing mark of any Nokia product?
What accounts for Nokia’s success?
Suggested case study question answers
What is the distinguishing mark of any Nokia product?
No doubt, the distinguishing mark of all Nokia products is the pervasive quality in all
their phone products. Nokia, a Finnish company, has been in the phone business for
some time now and has capitalised on its core strength, ensuring that it is continuously
improving on its products to the satisfaction of its customers. The phones have the
right features, meet specifications and are fit for use in almost any locality in the
world. For instance, Nokia is by far ahead in the Symbian technology which makes
their phones more flexible and ‘updatable’. In addition to the product, there is a Nokia
site which continuously offers customer support and phone update software. Thus,
QUALITY products and customer care distinguish Nokia.
What accounts for Nokia’s success?
As mentioned in the previous answer, Nokia has identified its core competence and
differentiated its products from other phones on the market by embedding quality in
all its genuine products. The moment one comes across an imitated Nokia product
(whether from China, Malaysia, Thailand etc) they can easily tell as well as verify
using special codes or consult the relevant internet site. In addition to its quality
products, Nokia has an excellent after service support system which advices, cautions
or supports all Nokia users. The final thing is that Nokia makes much of quality
standards and ensures that it remains ahead of all other possible competitors by
improving there by cutting a unique niche. For instance, Nokia has been strong on
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Managing Quality in Project and Human Resource
Symbian phones, software but not memory or music phone editions. This is now
being dealt with as Nokia releases many other phones each with a specific focus and
target market group such as music, memory or PDA/smart phones. This move keeps
Nokia gaining more product loyalty for a long time to come. Always focus on your
core competence.
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Managing Quality in Project and Human Resource
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Case study # 30
UNION BANK GOES UNDER
On the morning of February 14th 2001, the Union Bank, a force to reckon with in
banking, suddenly closed its doors to business. Like many banks before, it went the
way of the financial graveyard having been around for over a decade and a half. But
what exactly went wrong at the Union bank for it to be shut?
Not much information was released in the article “Union Bank goes under” which
appeared in the Times of Zambia on 14th February 2001issue but for all we know, the
bank failed to comply with the Banking and Financial services Act. The Bank,
according to section 81 of the said Banking and Financial services Act cap 387, failed
to meet its obligations. Two basic reasons have been advanced, both hinging on
financial ratios. It is a requirement by law that any commercial Bank must maintain at
least three accounts with the central Bank (Bank of Zambia) for it to be licensed to
operate. There should be a current account that can have any minimum balance. The
second and third accounts should be reserve accounts, acting as a security in case of
problems. The one is a local currency account while the other is foreign. As at the
time of closure, the liquidity ratio had to be at least 15% of all the total deposits but
have since been revised to 30%. This means that, If $ 10,000 is deposited in a given
month, $1,500 (15%) or $ 3,000 (30%) has to be in the reserve account at any given
time. Note that this is a liquidity ratio computed by the following formula
Reserve acct balance X 100 = % Where X = 15% or 30% at the present legal
requirement
Total Deposits
Or shown by the liquidity ratio Current assets – Stock = X Times
Current liabilities
This entails that all Banks should have a security deposit with Bank of Zambia to
show that it is viable and able to pay all liabilities in case of any adverse event.
Furthermore, the above assertions also allude to the fact that a bank should have a
capital investment liquid over and above the afore – mentioned percentage. Currently,
it stands at K3.75 billion or $ 125 million. Any drawings “eating” into this figure
would indicate that the bank is in trouble and may shutdown. As such, the deposits
must be either equal or exceed with drawals at any given time as long as the minimum
K 3.75 billion is maintained all the time.
In both those two cases (liquid core ratio and the capital ratio) the Union bank failed
to comply. It seems the management were drawing from the core capital cash and thus
caused the central Bank to swiftly move in and shut down the ailing Bank. We fear
that many more financial Institutions are on the “financial institutions death row” as
their liquidity ratios seem unfavourable. Thus far, the following banks have sunk in
the same perilous waters:
1. The Bank of Credit and Commerce International (BCCI)
2. Capital Bank
3. Meridian BIAO
4. Chase Trust Bank
5. African Credit Bank (ACB)
6. Prudence Bank
7. National Savings & Credit Bank (Now resuscitated) etc
In our thinking, ratios analysis is a critical indicator of the health of a given company.
Thus, the article and subsequent ones are fair and accurate. If we were to advise
banks, we would hasten to point them to these ratios as well as warn them against
practicing illegal things such as money laundering and “cleansing dirty drug cash”.
These taint the Banks’ image or indeed any organisation. Many feel that since their
fixed asset base is big, then the liquidity ratio is immaterial – nothing could be further
from the truth! Let us watch those ratios meticulously all the time!
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Source:
Times of Zambia. Issue No. 11, 054, Wednesday 14th February 2001.
Case study questions
Comment on the many Banks that have closed down in relation to quality.
What do liquidity ratios indicate?
Suggested Case study question answers
Comment on the many Banks that have closed down in relation to quality.
Obviously, the Bank closures noted on the Zambian scene was not a pleasant sight,
especially so that the economy was in transition from the 1992 economic
liberalization. The changeover was in one sense very good and a time of opportunity
but in another sense, it was a disaster for others. It would appear that the many Banks
that went under had very weak financial ratios and thus offered poorer quality
customer service which in turn caused some to migrate to other perceived better
entities. Some however, like the Meridian Bank crushed suddenly because of a capital
flight when people heard unfounded rumours that the Bank was bankrupt and would
soon fold up. That panic saw unprecedented withdrawals which sealed the Banks’
fate. Despite the super quality customer service and offerings, the Bank sunk. Many
others were to follow in the long trail of failed Banks, of which Union Bank was such
a one.
What do liquidity ratios indicate?
Liquidity ratios give an indication of the liquid soundness of an entity at any one
given time. They may give the earliest signs of a weakening entity which ultimately
translates to other qualitative issues which negatively impact on both the customer
and entity.
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Case study # 31
MARKS & SPENCER PROFITS CONTINUE TO SLIDE
Very few have not heard about the successful Marks & Spencer chain store of the
UK. It is by far the number one clothing retailer having experiencing phenomenal
growth for many years until 1998 when it bagged an unprecedented profit of £ 1.2bn.
But now, like many other businesses, the growth and profits have eluded the chain
retailer lately. The company appears to be buffeted by disappointing results from
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every front to the extent that it has had to shut down a number of strategically placed
stores in mainland Europe as well as sell its US business outlet. These developments
signal a drastic reversal in the hitherto prosperous company. What is happening? Are
things well with Marks & Spencer?
In the article, “Marks & Spencer profits continue to slide” which appeared in the
Wednesday May 23rd 2001 Post issue, we see the company experiencing turbulent
times. It is still viable and is making strides to address the adverse situation.
Marks & Spencer has had problems for some time now, and as such, it has embarked
on a restructuring program, so far having cost a whooping £ 335.4 million. The goal is
to make the said company, agile, profitable and more customers focused again, thus
returning to profitability. In order to carry out this mammoth task, Mr, Vendvelde, the
M & S Chairman, has put a number of strategies in place. These strategies will ensure
that sources of finance are identified and utilized accordingly.
Largely, the cash will come from sales, disposal of assets, closing of non–profitable
centres, job cuts as well as relocating from the expensive & luxurious Banker Street
headquarters office to the cheaper Paddington Basin new head office. The pending job
cuts for instance, will reduce the work force from the present 3,500 to 1600 in 2003.
Having sourced the funds, the company intends to address the problem areas such as
the adult clothing division where the problem specifically lies in the women’s wear
section. Once the exact problem root cause is diagnosed, appropriate steps will be
taken to reactivate that area and any other. Furthermore, the retail chain store plans to
invest more in the food and services areas. Other possibilities exist but in all the areas,
greater quality and appeal in a better store environment will be the hall mark.
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All these strategies look fantastic but as Vandevelde quips, “The results will not be
seen over night, but our customers will see a gradual and progressive improvement as
changes take place”.
The risks associated with the raising of funds from within is that the various stake
holders such as share holders may not be entirely pleased because the company will
appear to be shrinking instead of expanding. Furthermore, the company may not
declare big enough dividends and thus lose stockholder confidence. Other
disadvantages could be the job losses as well as a potential major shift from the
traditional strength of retailing into the service industry.
On the other hand, advantages come with raising cash from within one of them is the
minimizing of debt costs as well as not changing the capital structure fundamentally.
In the long run, when the company is viably profitable once again, the chain store will
declare more and bigger dividends. This is a survival time and the times demand that
the company mutates swiftly or risk tumbling to the ground, like many others have
done. The Dynamic competitive business environment forbids M & S to stand at ease
but must of necessity act swiftly and drastically.
We agree with the M & S strategy as long as a proper SWOT and environmental
analysis has been done. Also, we will vouch for the M & S more if appropriate
contingency measures are put in place in the event of the worst coming to pass. Issues
such as a superb cash flow must be guaranteed after the restructure. Further, we
strongly feel that these reforms must be implemented diligently, prudently, slowly and
cautiously. There must be a continual reading of the environment to make sure that M
& S ekes out the best route.
After all is said and done, we have no doubt that we shall continue to enjoy the high
quality goods from Marks & Spencer many years hence.
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Source
The Post newspaper, Wednesday March 23, 2001. Issue # 1738, pp 8.
Case study questions
What has really caused M & S to tumble?
Do you subscribe to job losses and outlet closures in time of profit loss? Explain your answer.
Suggested Case study question answers
What has really caused M & S to tumble?
The real cause of the profit decline is not fully explained in the article but some hints
and indicators are clear. Among the reasons which may have caused the decline is that
the shop chain probably expanded too fast, diversified and thus “sucked in” all the
little excess cash that could have previously been available. The other reason could be
that quality standards had declined considerably relative to new industry entrants or
other competitors. The diversification, although good, could have forced the company
spread its resources thinly as well as spend more money in the non-core issues.
Do you subscribe to job losses and outlet closures in time of profit loss? Explain your
answer.
It is difficult to give a definite answer to this question because people hold various
views. Some firmly hold that in turbulent global post modern times, life time
employment and job security is out. People must accept the fact and prepare for the
rainy day to get another job once one contract comes to an end. As such, they feel that
re-organization and re-engineering are ethically correct and the way to go. Others
violently oppose this view and think it is a violation of human rights some what. They
say that a job is a right and in the event of separation, people must be warned and
prepared to transition well in advance with the company bearing the larger cost of
preparing people. Further, they argue that instead of job losses, pay cuts across the
board for a n agreed period may be better than sacrificing some people while the big
fish get away with it.
384
Thus, the student must clearly express the view on this matter in the light of the
current global crunch.
Case study # 32
Interview with start up local businessman, Mongu
An interview was carried out with Mr Kudra Bashir who happens to be the
Managing Director at a small but drastically budding restaurant in Mongu town –
Western Province. Kudra has been in business for the past 5 years having engaged in
various businesses from the Salt trade to the current Food industry business. There
have been many challenges in terms of the growing fierce competition but Kudra is
not the type to be daunted by such threats. The same gentleman hails from Uganda
and has studied among other courses, a Diploma in Business studies. He intends to
pursue either the ACCA or CIMA qualification to strengthen his financial acumen.
The inter view is part of the fulfilment of the Advanced Financial Management course
for the MBA program. As intimated, the interview was carried out with a view to find
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out how Mr. Bashir, a seasoned Business and Finance person, runs his organisation as
well as his views on other related issues. The said officer has travelled widely and is
greatly exposed in the region as well as holding a short working stint in Namibia.
Kudra is a beacon in our times of someone who has combined Finance with a strong
management strategic eye.
Questions.
1. Please tell us briefly about yourself.
My name is Kudra Bashir and I was born in 1970 in Uganda. I was raised and
trained there until after school when I left Uganda to go to Namibia to help my
Uncle run his business. I was there for six months in which time I successfully
ran the Motor spare parts and textile business. I was so successful to the extent
that we opened an outlet in Okahanja, outside Windhoek. Apart from
managing the entire business, my job entailed preparing the bank
reconciliation as well as maintaining the stock levels. There after, I left and
came to Zambia in 1996 when I linked up with my brother and started
assisting him with his business. With time, I felt I needed to weaned off and
start my own business. Thus, I begun the first business in early 1997 by
buying groceries on credit from my brother and sold them in the corridors of
Mongu. My line of trade in business was in groceries such as cooking oil and
salt. After succeeding, I opened up my present business premises from which I
have been operating since. I am married with one daughter.
2. What have you studied and how long have you worked?
I pursued a Diploma in Business studies at the Makerere University and then
attempted another Diploma, this time in Business Administration with the
Cambridge international College in England. I also did a local certificate course in
accounting called CABS (certificate in accounting and business studies) I intend
to pursue professional financial studies either in the Association of Chartered
Certified Accountants (ACCA) or Chartered Institute of Management Accountants
(CIMA), I feel this will help me greatly in my business and financial prowess. In
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terms of my working experience, I must say that I have not worked for any place
except in Namibia where I managed a business for six months. Part of my job was
to source, procure and control the use of stock in the business. In short, I was in
charge of the sourcing and use of the cash. After that stint, I went straight into
business where I have been both the MD and chief financial officer. Among the
things I do is to ensure that there is a proper accounting of cash, planning its use
and controlling the budget. On the strategic plane, I am always scanning the
business environment to ascertain the trading climate and then respond
appropriately.
3. Just how exactly did you source the initial capital to begin your company
and how do you sustain it now?
As I mentioned earlier on, I started more or less as a street vendor on behalf of
my brother where we agreed that I should sell on his behalf and any profit
margin there from would be mine. I worked hard and saved some capital.
When it was time to open up my own place, I got a loan to cover the fixed
overheads such as rent and wages. I started with six people working under me
but I intend to cut down by two, since the profit margin has not been as much
as before. Talking about sustenance, the business has thus far sustained it self
as the income has been enough to break even. I do not strictly get any outside
help.
4. Have you been in one business only?
No, I initially began with a grocery shop where I sold a wide range of goods
including cooking oil from Lusaka as well as salt from Namibia. These two were
the pillars of my business. In 1998, I opened a barbershop and Photocopying
services, alongside the grocery. I had in mind to open up a business bureau but
due to the rising competition, I fizzled out this aspect and remained with my core
business. In 2000, I switched from the grocery shop and went into the food
business where I feel comfortable, comfortable in the sense that we have captured
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the market, less competition and have a good customer loyalty. Our strategy has
been to produce high quality products and yet maintain lower prices than our
competitors. Many think that when the quality is high, so also the price, but I think
otherwise. Thus far, I have been in this business and no regrets!
5. How has been the business in the food industry and where did you get the
cash to start the same?
I must say that we are doing well though our profit margin has narrowed though
we are able to break even and invest some. The source of my funds was two fold.
The first was to sell my old stock, keep the cash and re invest it. The second was
to sell some assets.
6. If I may ask, why did you pull out of the other businesses instead of
attempting to beat competitors?
I could have but at the time, my strategic instincts told me that I did not have the
muscle to hold on for long since my competitors were bigger, well established,
better net worked and had access to credit facilities which I did not have. In
addition, they had the capacity to increase or reduce the price on goods that would
have been fatal for me. In short, they had competitive advantages in terms of
economies of scale as well as access to credit purchases.
7. How long have you been in financial circles?
I can’t claim to be a typical financial specialist but I think every person in some way
is a finance person , though the degree varies depending on the profession. That not
withstanding, I have been a finance person seriously fro slightly over five years when
I begun to apply my business training lessons.
8. How much money, on average goes through your hands per year?
I have had varying levels of cash going through my hands but I will give a
very good estimate for the businesses I have done before and now. In the
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grocery shop, we used to make about K 300,000 per day, which translates to
about K 84 million per year while in present business, we make about K150,
000 on average per day which turns out to be in the region of K 40 million. In
a nutshell, the income fluctuates depending on the business climate that day.
9. In your own words, what is Financial Management?
In my own layman’s definition, I would say that it is how you source money and
what you intend to use it for so that it does not diminish but expands as well as
spent in such a way that priorities come first for your satisfaction. It is basically
the sourcing and use of the money.
10. What type of Financial Management do you do apply in your business?
I try to use the modern Management methods where we build a teamwork kind of
approach. I try to train and motivate our workers so that they develop confidence
and do things on their own while I am out of office. Though we are small, I look
for ward to a time when we shall be able to test our present applications.
11. What are the critical factors you consider in making a decision?
Two things, Firstly, I consider the amount of profit I will raise and the risk
involved. In any business, the profit and loss factors affect our choices, though the
bottom core line of any business is the profit orientation. Before a decision is
made in any area, profitability should always be first. Having considered the profit
and risk involved, we must not forget the leisure as well.
12. What is the difference between Financial Accounting and Financial
Management?
In my mind, these appear to be basically the same in the sense that they are both in
business, though there is a difference. In my thinking, Financial accounting has to do
with collecting, processing and interpreting transactions that have already taken place
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in the past (by using the cash book and drawing up reports etc) while financial
Management may not necessarily involve cash transactions but merely the sourcing
and application of funds. This means that in Financial Management, we are projecting
the source, planning the use of and how much cash flow we expect to have during the
period under consideration.
13. Would you classify yourself as a Financial Accountant, Management
Accountant or a Finance Manager?
I think I am a Finance Manager because I source funds and ensure that it is used
appropriately. I also look for potential investment opportunities.
14. In choosing to undertake a project activity, what are some of the things
you do before making a decision?
I look at the capital involved, the risks and the returns expected. Another
critical factor is the competition at hand. In our present business the capital
was enough to run the same. The potential cash flows were done as well as the
estimates and discovered to be potentially profitable.
Thus, one has to count the cost in terms of cost, sources of finance, the
competition, cash flow estimates and the pay back period to recover the
investment.
15. How do you evaluate performance after implementing an activity – the
value of money?
We firstly set benchmarks and then periodically assess how we are
performing. We tell this by reverting to our records on a weekly basis. I do
this on Sundays.
16. What are the key indicators in the question above?
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The key indicator is whether we are meeting our targets as well as the profits
yielded in a given period, say quarterly.
17. Have you dealt in shares before? Why did you do so?
No, I have not dealt in shares at all but I know what they are. Shares are amounts
of cash at the stock market what one acquires to have partial ownership of an
entry in return to get a profit or dividends. In other words, when one buys shares,
they are buying a portion of a company by investing money. They forgo the
immediate use of the cash in the hope of a better yield in future.
18. At the Eatrite how do you fore cast financial expenses?
We do forecast frequently so as to avoid unnecessary expenses. When we forecast,
we input our projected income as well as the intended expenses before we actually
begin the expenditure.
19. As the business has expanded and mutated, how have you managed it?
Initially, I started with 6 people but as we have progressed and acquired skills, we
have come to a point where we need to cut costs. My immediate thoughts are to
reduce on staff and motivate the remaining. Thus far, we have built a team culture
and I motivate my staff in many ways such as giving them a day off, giving salary
advances as well as giving them tokens of appreciation. I also pay them timously
every month end.
20. Has the expansion/growth been rapid or slow?
The growth has been there but slower than anticipated. I am optimistic that we
shall see better days in the future.
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21. Tell us about the discounted cash flow techniques that you have used
before.
I do not know them in details but it has to do with the value of money now and in
future. For example, what K1, 000 can buy to day will not be the same in two
years’ time. Thus, the discount cash flow techniques have to do with projecting
values of cash flows, in inflationary terms at a given percentage rate. In my
business, I am always conscious of the value of our Kwacha and ensure I either
invest the cash in stock or assets. In that way, we beat losing the value for money
especially in high inflationary times such as what we have experienced most of
this year when the Kwacha tumbled against the US $.
22. What are some of the financial risks you have taken before, and how did
you overcome them?
Business itself is a risk but the greatest risk I have taken is going into a joint
venture with someone with a view to buy a capital item across borders. I trusted
him since we had done some business together before but he disappeared after
giving him cash. I keep hoping that he will return as 3 months have already
passed. This has left me struggling financially but I know I will pull through.
Trusting someone was a major risk because I could have run bankrupt but I will
sale some personal assets to source funds
23. I suppose you have been found in an organizational restructuring process
before, how expensive was it and what were the results?
Not really except the changes we intend to effect in our business shortly, then I
will have and idea. It will obviously cost money to lay off some one and to pay them
their terminal dues. As a result, we hope we can be more efficient and save costs
thereby increasing the profit margin.
24. In your organization, how do you handle excess cash?
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It depends what you mean by ‘excess cash’ but in my case, I do not have the
excess cash in that sense of the word because there is always need for more.
However, the times I get a bit of cash I reinvest it by procuring assets or investing
it in another viable venture.
25. Do you classify yourself as a strict Financial Manager?
Not really but I am very strict with my business cash and investments!
26. What is your view about Historical Accounting with respect to the
modern trends towards inflation accounting?
Initially, the idea of historical accounting is good but the practicability of the
same. You find that the actual situation on the ground is different as assets either
appreciate or depreciate in value. The prudence concept teaches us to capture the
cost not the present value. Therefore, the historical is helpful to give us an idea of
what value to attach to an asset so that we can ascertain the present value.
27. How do you think Zambia/ your Organisation can improve Financial
Management?
I have always thought that education is the key. People need to know the
implications of financial management so as to beat impulse expenditures. Also
people need to know how to budget, source funds, explore markets and spend
appropriately. This applies to both my organization and Zambia at large.
28. What controls have you put in place to ensure that the systems are on
course as well as protecting your back?
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I ensure that people in the restaurant are given specific responsibilities, which they
fulfil across the day. I have also put a system in place to control stock as well as to
record every transaction. Up and above what I have said, I conduct a personal
time-to-time supervision, of course taking care to make them feel responsibly able
to handle their job without me.
29. Have you ever worked in a commercial company before? If so, where?
As I early intimated, I have not seriously worked for any commercial company
except the Namibian stint and my own business.
30. Do you receive funding and what is your role?
The answer to the above question is both a no and a yes because I rarely get
funds from outside. Even the few times I get a loan, I ensure that it is within
manageable limits that I quickly service. Generally, I determine to work within
the limits of my budgets.
31. I notice that you have some insight into computers, where did you acquire
all this knowledge?
I did a basic training course locally with the Systems computer company as well
as using a computer I bought. I was quiet good but could have been much better
by now if I had not disposed off the Laptop.
32. How helpful is IT to your work?
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I have not applied it much except typing some things. Initially when I bought my
computer, I intended to open up a business bureau but I changed my business
strategy.
33. What finance packages are you conversant with?
I am not conversant with any Financial package.
34. Which package do you as Eatrite use and why?
At the moment, we do not use any financial package.
35. Kudra, you seem to be widely traveled, where have you been so far?
Well, I haven’t exactly traveled far but I have been in the region abit. I have been
to Kenya, Tanzania, Namibia, The Congo, Sudan and Zambia.
36. What are some of the titles you like and would recommend to people?
The one I find most helpful is Frank Wood’s book on financial Accounting.
He does not only deal with accounting but various finance principles.
37. Do you have any words to those would be Finance Managers like
yourself?
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I would encourage them to aim for higher goals but it is very important to have the
basic professional ethics and know the risks or profits of an undertaking. I
strongly recommend studying prior to launching into the sea of business.
38. Do you have any Mentors that have left a mark on your life?
Yes of course! I have some; one of them is my uncle in Namibia, who passed on
to the business acumen and survival business instincts. I also learn from fellow
competitors though we may not have direct interaction, by knowing what they do.
39. What are your future plans from here?
I intend to improve my qualifications as well as expand the business!
Furthermore, time and opportunity permitting, I hope to diversify.
Well Mr Bashir, thank you very much for according me this interview. I wish you
well in your future endeavours.
Any time Billy!
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Bibliography
Case study questions
Do you think Kudra will succeed? Why or why not?
What distinguishing trait should he employ to succeed?
What chances are there for Eatrite to sustainably succeed and expand?
Suggested Case study question answers
Do you think Kudra will succeed? Why or why not?
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Certainly, Kudra will succeed if he implements all the plans that he has laid down and
mentioned in this interview, such as pricing, quality and strict financial/cash flow
management which many SME fail to master. Clearly, the market where he is
operating offers a lot of opportunity which the natives may not immediately see.
What distinguishing trait should he employ to succeed?
As earlier mentioned, those three factors pricing, quality and strict cash flow
management. But quality must pervade all these ensuring that the customer is
consistently treated well as masters.
What chances are there for Eatrite to sustainably succeed and expand?
Eatrite can and will definitely successfully expand if given the right leverage,
attention and due diligent attention. Sustainability comes in overtime as the business
is nurtured and grown like a child until it becomes mature. As it expands, quality must
be embedded in everything to the end that Eatrite distinguishes itself from the rest
thereby cutting a niche.
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Case study # 33
“TESCO to spend £2.25bn in Asia”
In its continued unprecedented growth rate, Tesco is expanding by leaps & bounds.
Recently, The Post Newspaper of May 15th 2001 reported that the successful
supermarket chain was about to spread its wings wider as it penetrates other regions
of the world. This phenomenal growth rate raises not a few eyebrows in business
circles. What after all is Tesco? Who is at the helm and what strategies are in place?
How is this growth and expansion being managed? Is it sustainable? All these
answers beg objective answers.
For one thing, the article “Tesco to spend £ 2.25bn in Asia”, does not give us much
data about the genesis of the said firm but one thing we know is that it is probably the
biggest UK supermarket chain. It has been around for a long time and has been
making large profits to warrant its rapid expansion program all over the UK and
beyond. As a supermarket, the said chain deals in a wide variety of goods ranging
from fresh fruits, snacks clothes and hardware, all under one roof. The great
advantage is the self-service and an excellent customer focus, and response. The chain
store has distinguished itself in unique top quality service, goods pricing, as well as
the product type. For example the fruits and vegetables are strictly checked when
bought to ensure standards are upheld. Also during their stay (fruits and vegetables)
on the shelf, they are constantly monitored and replaced after a certain time frame.
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The Terry Leahy (Group Chief Executive) led team is simply marvellous too as they
are strategically focused yet intensely customer sensitive. Their management style is
equally good as it motivates staff, causing them devote themselves more to the cause
of Tesco. Thus with such a progressive management style, good team culture, strict
quality control, Tesco is on firm rails to success. No wonder it is expanding rapidly!
As a result of good strategic manoeuvres, the chain supermarket has spread like
gangrene all over Europe and is now making giant strides to establish a presence
further a field on the International market. Thus far it has a presence throughout
Europe, Thailand, South Korea and Taiwan. With unrivalled profits of over £ 1bn in
April 2001, Tesco is now making headway to consolidate its Samsung–Tesco joint
venture where it presently holds 81% of the stock. In addition, in its quest to expand
globally, it is to increase the number of shops in Korea, Thailand and Taiwan. Further
future expansion is set to take place in Japan, China and Malaysia. This is where the
biggest world economies have shifted to and for Tesco, the sky is the limit.
In our assessment, the expansion and growth is within manageable limits as the chain
store is growing at rates that are alright, not too fast nor too slow but strategically
optimum. The management style and strict quality standards have won a multicultural
market niche and customer loyalty. This has opened a way to the international
scenario heading towards a global presence. The company is not only concerned
about the balance sheet but the corporate image and customer satisfaction as well. The
continued growth brings with it a lot of challenges, which need to be meticulously
handled. Circumspection and prudence have to be the hallmark of any management
team.
Thankfully, Terry Leahy leads an excellent team who have the same strategic vision,
goal, passion and aim for the supermarkets. They all want to see Tesco rise higher &
higher in market expansion and stockholder returns. They could have easily opted to
limit the expansion to Europe alone, by merely increasing the number of outlets, but
in this global economy, it is incumbent upon management to sanction further
expansions to all areas imaginable. The shop tentacles must reach as far as possible.
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By that token, the growth rate can be said to be sustainable as this is not too much or
too little. In financial management terms, the growth rate equation comes in handy.
The said equation brings into perspective the stock holder returns and satisfaction.
Not only should profits rise, but also the value of shares as well. Thus, the equity
growth rate is measured by the following equation:
G = Change in equity
_________________
Beginning of Period equity
Where G = growth rate, the change in equity compared to the equity at a given point
in line
Thus, although the article does not directly mention, we think Tesco is growing
sustainably as the key business parameters such as profit margin, asset turnovers,
equity ratio and retained earnings rate are all in good proportions. As such the
company is to spend a total of £ 2.25bn over the next five years. We can thus safely
rest our case and watch the Tesco blossom further on to the global market. Although
it is tipped to expand at 10 stores per year until 2005, we have reason to believe that
the profits made as well as the reinvested cash will effectively capitalise the
expansion program. Already, Tesco has 24 stores in Thailand, one in Hong Kong and
seven in South Korea, giving it a firm expansion point, having carried out self SWOT
analysis.
Source:
The Post News paper, 15th May, 2001 issue # 1732 Page 10
Case study questions
What one strategic weapon should TESCO use to succeed on the Asian market?
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Suggested Case study question answer
The one strategic weapon is to imbibe and foster total quality throughout its systems and
standards. From the write up, it is evident that Tesco has taken great care to maintain product
quality and monitor it very well. This should be replicated throughout the shop chain holding.
Quality must pervade the chain in other words.
Case study # 34
BAY BANK BOSTON
Handling community can be unsettling, if not traumatic, sometimes. Those
companies and individuals that aspire to work among and with the underprivileged
must brace for tough times of misunderstanding. They must labour to be accepted as
part of that setting or else their efforts will be in vain. As soon as they appear, they are
either appreciated or repulsed on sight. If misunderstanding is bad enough in a
culturally more homogeneous society, what more in a diverse cultured setting where
minority groups exist and strongly feel discriminated against?
This is the scenario that the Bay Banks Boston with other Banks found their firms
entangled in. While attempting to be socially responsible and helpful, their efforts
were overturned and perceived as racially discriminative. For a long time, the
minority groups, especially the Blacks in the United States have felt marginalised,
side lined and relegated to the poverty terraces, to the extent that they have to literary
survive. The situation at hand depicts a situation where the local commercial banks,
having previously withdrawn from the non profitable “Inner city” loan investments,
401
were making a comeback. In the quest to do so, a number of past practices were
exhumed from the data graves and splashed all over the local media. This brought a
lot of tension for a long time, stretching right across the year 1990.
The said banks under the umbrella of the Massachusetts Bankers Association (MBA),
and headed by Richard Pollard (Chairman of Bay Bank Boston) had realised the lack
of investment in house loans in the Boston area, where the majority of the poor black
and Hispanics resided. In an effort to be socially responsible, they set out to address
the need. This was done in the most professional way by applying all the required
procedures such as prior interviews, application, assessment and response. As the case
may be, certain critical information had to be of a certain standard if one was to
succeed. Unfortunately, many of the minority did not qualify on account of their
abject poverty status and thus felt discriminated against. The standards were
universally the same, but, unknowingly nor intentionally, 28% of the blacks’ loan
applications were rejected while only 10% of the whites were. This revelation fuelled
not a little heat in the area, but was the bank guilty of discrimination? It is difficult to
tell but we have reason not to think so, because from objective analysis of the data,
the procedures were followed and naturally, many failed to score. Subjectively, were
we in their shoes (minorities), perhaps we would have felt the same, since the
qualification criteria was not exactly known. Furthermore, on the objective plane,
many people default and have bad credit histories, how can they be trusted with more
cash? On the other side, the allegations must not be entirely dismissed because the
evidence shows that the whites were “Coached” and given preferential treatment
despite being in similar circumstances with their minority counterparts. Perhaps
whites are comparatively more honest and have a better good will, we have no telling
exactly. Remember, “there is no smoke without fire” as the quaint ancient adage says.
However, if we were in the credit loan business, we would also follow the same
procedures and demand standards to he followed, lest our company closes down on
account of bankruptcy. Another thing that ought to be noted is that community always
will feel they have a raw deal of the national cake and as such, will fill their fellow
402
creature’s ear with the sad tale of their afflictions. That is consistent with human
nature, although where possible, efforts must be made to mitigate the hardships.
As chairman of Bay Banks Boston, Pollard saw the investing in the inner city as an
opportunity for expansion as many others had left this market unattended to. This was
to take place by opening branches as well as installing 30 ATMs. Although not
exactly profitable, it was good to build a good corporate image in those regions. As a
senior executive at the bank, the issues that would concern me the most is to develop
a good image, be seen to be positive, helpful and concerned about the local
development. The Bank had no option but to stand as a shining example of social
responsibility and pro activeness in either giving loans or helping out in any
sustainable way so as to build personal capacity in the natives. Thus, Pollard did well
to initiate and implement the above-mentioned strategies. These potentially gave the
bank a competitive edge. But having asserted the above it is prudent to say that in all
strategic manoeuvres to create a good impression, care must be taken to ensure that all
procedures and standards are upheld to the letter, shifting only where permitted by
head office. The principles are basically the same but the application is what differs.
Further, the entity should equally be concerned about the allegations of discrimination
levelled against the Bank because these have far reaching implications in terms of
good will and relevance to the community. No stone should be left unturned to ensure
that all that get loans have credit worthiness and have a historically clean record.
After thorough investigations relating to allegations raised, the Bank should issue a
statement while working behind the scenes to correct the situation if found wanting. If
not guilty, the Bank should candidly and objectively explain the procedures carefully
and rest the case, of course looking for better ways to minimize the future charges.
The truth of the matter is that complaints cannot be completely eradicated but only
minimized.
Following such a serious allegation, it is suggested that the Bank retraces its footsteps
and then makes amends. It should revisit its polices, checking whether the charges are
biased or not and look for ways to reduce to future offence. Furthermore, the Bank
should look for ways to help but remain strategically profitable. This may well mean
partnering with other banks or joining hands with the state. Strategic alliances are
403
helpful sometimes. This is a common cause affecting all. Another drastic move would
be to withdraw from the community all together or diversify to include other areas
such as school adoptions etc. Withdrawing has other adverse implications and must be
taken as a last resort. Aggressive marketing must be stepped up consistently by
issuing brochures and adverts highlighting the positive good the Bank is doing in their
midst. The marketing should also show the customer care focus and products on offer
to them. For example the advertisement should show that the bank has come at their
doorstep with ATMS!
For Pollard, the double work at the MBA and at Bay Bank was a test of his mettle.
From the reports he received, statistically, it gave a hint of what was going on exactly.
Statistics are mathematical estimations and conclusions, giving an idea. In this case,
the impression given was that the minority were rarely succeeding compared to their
white counterparts. This gives homework for anyone for the statistics would affect the
new policies in the sense that future ones would avoid the past bit falls that seem
discriminatory. But as we know, statistics change over time depending on a number of
factors such as the status, season, sample, time or indeed information passed on.
Another thing is that even in interpreting objective statistics prejudiced people are
subjective. Apart from statistical findings, political pressure mounts and will take
various forms such as demonstrations, new coverage or even violence, as was the case
in the Rodney King case of 1992. In our case study, there was so much political heat
generated to the extent that the Banks were forced to bow down to some demands and
bring in some innovation.
The political environment must be carefully handled or else this can derail progress.
For example in the case at hand, the politicians (and clergy) did not care for the
welfare of the Bank as to its sustainability but fanned to flame all the negatives with
their demands. Granted, the Bank has responsibilities to the community as per law
and good practice, to go beyond profit, but equally, the community should also be
realistic. If the Bank can plough back some benefit without being coerced, it is
commendable and raises the image but the new innovations must be done in the
context of a well balanced economic strategy. In the case of the Bay Banks, the Bank
404
innovations must be sustainable while those beyond must be backed by public funds
or in collaboration with other institutions.
Finally, Bay Banks and others can rise above these problems, eke out a niche and
prosper, if only they mind the social corporate responsibility as well as plan
strategically to survive!
Source:
Bower et al, Business Policy: Managing strategic processes, 8th Edition, Richard D
Irwin.
Case study questions
What is the best way to handle community projects/ social undertakings?
Do you think Bay Banks were correctly positioned in that market?
Suggested solutions to the case study questions
What is the best way to handle community projects/social undertakings?
As rightly stated at the beginning of the case study (Bay Banks), matters dealing with
humans and human nature are delicate and difficult to handle. It is difficult to come
up with ‘one fits all’ answer because whatever one does for the less privileged, it is
bound to be perceived differently by the recipients. For instance in the case above, the
standards were the determining factors to get a loan not race or skin colour. Humans
will always find an explanation to pacify their anger or failure. Thus, the best way is
contextual though some suggestions can be offered. One way is to involve the target
group right from the start and walk with them through the project cycle journey so
that transparency and accountability is your defence. In the final analysis, we settle
405
for the fact that we cannot fully satisfy everyone no matter how we try though we
should do our best to employ the best practices.
Do you think Bay Banks were correctly positioned in that market?
The answer to this question is both yes and no depending on what angle you are
looking at this question.
It is correctly positioned in the market if it exploits the yawning gaps and
opportunities left by other Banks that have deserted the place. It also has an
opportunity to raise its profile by providing ATMs and other services that have not
been previously available in the Boston area.
The Bank is not correctly positioned on the other hand because it runs the risk of
being labelled racist and failing ethically. If those allegations persist, the goodwill
may crumble eventually and finally affect the Bank. The Bank needs to define clearly
why it is in the area, whether to make money or just to make a name. Having decided,
then it can safely justify its existence in the area, otherwise it may eventually even
lose some money to defaulters or outright robbery.
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Case study # 35
Adam Opel AG (A)
On November 9th 1989, an epoch making event occurred between the West and East
German border. After 28 years, the dividing wall of hostility obeyed gravity by falling
to the ground, amidst much jubilation. There had been a world of differences between
the Capitalist West and the Communist East Germany for many years. Now the time
had arrived when least expected especially following affirmation pronouncements of
Honecker (77) for the wall to crumble.
Following the events of November 1989 things begun to drastically change in East
Germany as the border was opened to the rest of the world akin to opening the dam
wall flood gates, people poured into West Germany to look for employment and also
to experience their new found liberty. Those were epoch making turbulent times
indeed for the political and economic scenario. Politically, people were tired of many
years of inhuman tyrannical dictatorial leadership and were calling for a change of
Government rule in East Germany. At last the hour had come.
Whilst still in power at the time, the communists had ruled with an Iron fist, treating
people like mere “things”. They did not allow other political parties or any opposing
views to theirs. As such, any dissent was drastically and firmly dealt with. Usually, it
was violently crushed so that others would be deterred. But in those turbulent times of
January 1990, a new political breeze was blowing with people freely hoisting West
German flags, clearly stating their preference of German unification. By the same
token, the stubborn Communist Government remained obstinately and tightly in
control but of course with lost ground, times had changed drastically in the revolution.
407
On the economic front, East Germany, although believed to be the most prosperous
among the Eastern States lay in ruins. The economy was in tatters, a weak currency,
poor and obsolete products that were neither competitive nor desirable. Essential
commodities were neither competitive nor desirable. The said essential commodities
were in chronic short supply and very expensive by the same token. The
manufacturing industries were over staffed and operating on huge losses.
The people employed were largely on family lines and thus resistant to change. Due
to poor circumstances and polices, the economy was state controlled and as such the
market forces could not freely reduce the prices by the forces of supply and demand
as happens in Market economies. In addition, the State had all hierarchical structures;
sentencing decisions to long wait before approval or rejection. Bureaucracy was at its
best and no innovation or quality improvements were allowed. Many a brilliant
project died on the drawing board because some political figures did not fancy the
idea. Worst of all was the rampant corruption that gripped all sectors of the economy.
This crippled or stifled any further advancement.
As such, in January 1990, after the revolution had swept across Eastern Germany, it
brought about lasting changes. A number of challenges and implications therefore
confronted Louis R Hughes, the Opel chief, as he attempted to conduct a market
survey with a possibility to investment. Among the implications of the revolution was
that he had to tread most circumspectly, read the political scenario, build relationship
and attempt to strike deals for investment. Obviously, the developments in East
Germany attracted scores of other investors to the country, much like a moth to a
flame.
In the motor industry, renowned companies such as the Ford, Peugeot and
Volkswagen were all clamouring to strike some deal for either partnerships or
buyouts. This meant that Hugh had to act swiftly to outwit other competitors.
Although the economy had been State controlled with a record of over employment
coupled with poor, derelict infrastructure, the future potential of reaping benefits were
408
immense. Louis envisioned using the “native” nature of Opel as a competitive
advantage in the quest for market penetration. In future, it would mean replacing the
dilapidated obsolete machinery, raising the quality, re–engineering as well as
establishing a manufacturing presence of international standards. All these thoughts
must have raced through Hugh’s mind as he took steps to meet the Kombinat leaders
in East Germany.
Obviously, one might have the financial resources but lack critical timely information
and the acumen to network which in itself is perilous in business circles. Therefore,
Opel had to overcome some hurdles and grasp opportunities that came their way.
Some of the problems faced were largely political. The Eastern regime still wanted to
hold back but the people on the ground demanded change.
The top brass was highly corrupt, uncompromising and refused to change with the
times. Thus, to get things done, one had to carry a bribe then things could be swiftly
and diligently attended to. But as at January 1990, things were slowly beginning to
change though bureaucracy and ceremony still held sway. Another problem Hughes
faced was language. He overcame this by hiring the right people to assist him. In
terms of opportunities, they were vast.
The East Germany company leaders seemed enthusiastic to have a change of products
and management. It was simply amazing to notice their honest object and willingness
to collaborate so as to change things for the better. One would have thought that they
would have stubbornly remained proud to defend their obsolete poor quality products,
but not so. This was a grand window of opportunity. Another window was the
abundant cheap labour nearer to Western Europe. Hitherto India, Korea and China
had been viewed as the cheapest but they were far flung nations.
The East Germans were not only cheaper but honest and well educated too. Thus, we
can see that the labour market was large. Another opportunity was the potential 17
Million market for the high quality “East German” cars which would be churned out
409
by Opel (Opel was considered a German Company though wholly owned by General
Motors of the USA).
The options that Hughes had then were three fold. Firstly, he had the option to
concentrate on the western market and not bother about the east; after all, Opel could
hardly satisfy the demands in West Germany. The second option was to come to the
East through the West. This was advantageous because East Germans preferred and
believed that West German cars were better. The third option was to simply go to
other third countries where labour was even cheaper than the East especially so that if
Germany was to reunite, the expenses would dramatically rise to match international
standards, thus eroding the current advantages. All these three options lingered in his
mind as he tabled his case to other Board members.
If we were in Hughes’s shoes, our arguments would be that we go ahead and invest in
East Germany for a number of reasons. Firstly, the proposed investment, in our view,
is viable because the industrial sites are already in place just needing changes. The
complex designs are already in place and once the modern cutting edge technology is
installed, it would be cost effective. Besides, the labour market is currently plentiful.
Secondly, having established good relations and rapport with both the natives and the
key decision makers they prefer Opel as opposed to other potential investors because
they feel Opel is indigenous and therefore known. This is a huge opportunity for
effective market penetration. Thirdly, there is a lot of enthusiasm from both sides to
get to work together improving the present chaotic status. Willingness is the key to
international trade. Lastly, the potential market is vast. A population of 17 million
speaks a great market opportunity. Besides, the East Germans are educated and would
willingly put in their lot in design, marketing and selling the product. Being aware
that after presenting these arguments at the February7th , 1990 GME strategy board
meeting Bob Eaton would not let Hughes go unscathed. Most probably, he would
want to know what the chances of success for Opel are, how ahead of the other
competitors Opel is, how swift Opel is and what the over head costs would be. Armed
with our data “pack” all the queries would be adequately answered giving him
statistical data as well as relevant qualitative information such as the accrued good
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will and good corporate image as an indigenous company, which others do not have,
the company strategic movements, networks established, prior meetings with the
Kombinant and also the fact that Opel have the right cadre of people on board called
“known qualities” in East Germany. These arguments should put to rest all anxiety.
From a strategic stand point, Hughes’ goal to become number one in the GDR is a
possibility only if he comes up with a sustainably organic fluid strategy. Presently,
Volkswagen carries the day but a good strategy could dislodge them. The said
strategy, among other things should address quality and customer issues. There is
need to raise the quality to high international standards to the extent that the customer
is considered king, well treated and served. In addition, the strategy should include the
setting up after purchase customer service which includes repair stations all over the
country. Apart from carrying out frequent market research to establish the customer
needs and wants, the cars churned out must be low cost and the right price for
customers.
Furthermore, the strategy must address the networking framework, which should
involve befriending the key decision makers as well as being community conscious.
This may well mean producing more ‘green’ cars that do minimum harm to the
environment as well as our contributing to social needs and causes. In addition, the
Opel marketing must be consistently aggressive and relevant. Hughes’ two-step
multifaceted proposal seems superb because it will ensure that 10,000 Opels are
assembled and serviced as well. The second aspect or stage of bodybuilding is equally
good provided this is done at the optimum time and with the right infrastructure.
If Hughes presents his case well in the Norstand and at GME or OPG, we are
optimistic that they will fully rally behind him, though some might initially have some
reservations. The issues of political instability, labour market, infrastructure would
beg answering to clear some minds. Hughes should convince them of the potential
growth market value, the willingness of their counterparts, the cheap labour and the
envisioned political stability. Other issues such as eventual labour cost rise and
absenteeism could easily be dealt with by introducing modern Management methods
of teamwork, which are not only cheaper but motivating as well. The weak work
411
ethics, unstable exchange rates and poor infrastructure are part of the package, which
can be worked on and improved over time. He would have to show them the long-
term goal and benefits.
Despite all the hurdles that confronted the possible investment. Hughes stuck to his
Eisenach plan because of the aforementioned reasons of potential growth, niche
potential, cheap labour and the potential 17 million market representing 25% of the
population. Having assessed Hughes’ capabilities and insight into the East German
market amidst turbulent times, we think his is potentially a good success chance. It
seems his financial and MBA backgrounds have shaped him well for the task. Some
of the pluses to his credit are his ability to appoint and use German nationals to
achieve his goals. He created a team culture and built excellent relations by the same
token. His insight into the advantages Opel has such as being indigenous,
consciousness of a moving target, contacting top business and Government leaders as
well as the focus on a market niche were all excellent ideas deserving applaud.
Having said the above about Hughes, we draw a few lessons for application. If a
foreign investment is to be undertaken successfully, the following points must be
taken into consideration. Firstly, the political environment must be initially assessed.
Is it right, conducive and stable? What are the Government policies and how will they
affect the business? Secondly, the social environment must be assessed. Is there
appropriate infrastructure? Does the organisation have the right distribution channels?
Is there enough and cheap labour? Thirdly, the cultural environment and attitude must
be taken care of. Are the people open to investment or xenophobic? How do they
view us, as foreigners or indigenous? Fourthly, the legal environment must be looked
at prior to launching out. What law will be asked in the event of a dispute etc? All
these must be grasped and then applied appropriately as the case may be. These were
the issues at play when Hughes was surveying East Germany in January 1990.
By that token, Opel achieved an early market leadership in East Germany, having
applied the right principles mentioned above (i.e. political, social, culture and legal
assessment). In particular, Opel sold second hand Opels, serviced and repaired them.
It marketed well, did a market survey as well as networked with the key decision
markers in the East whereas Volkswagen may have over looked these and went ahead
412
to use their good will only. It could be that Opel was swifter in response relative to
Volkswagen. Given the above background, Opel will retain its number one slot
because of the cheap labour, because of the reasons earlier advanced provided the
right business acumen is consistently employed. The goal of becoming global in
approach is another competitive advantage for Opel.
Being global entails implementing and maintaining the best standards that are ISO
certified (international standards of quality). It means Total Quality Management,
teamwork and modern management practices come into play. This takes time to
culture but armed with a visionary leadership and determination, it is an achievable
feat for Opel. It may seem an insurmountable task but we are confident that the
Hughes led team will steer Opel to success, let us seat tight and watch them perform!
Bibliography/source
Bower et al, Business Policy: Managing Strategic process, 8 th Edition, Richard D
Irwin
Phillip Coteora: International Marketing, 9th edition, McGraw Hill
Case study questions
What do we learn about change in this case?
How best can it (change) be handled in relation to quality?
Suggested Case study answers
What do we learn about change in this case?
Strategy must not be static but change with time. Different contexts call for different
strategies if you are to be successful. When there is a transition from a command to
Market economics, there are great changes that occur in the economy and later
stabilise as things harmonise. It is also a time of opportunity which the astute business
eye swiftly grabs for their good and prosperity. This case also highlights the fact that
quality is non-negotiable and must be pursued at any and every cost.
413
How best can it (change) be handled in relation to quality?
As someone has aptly quipped that “the only thing that is constant today is change” is
probably correct in most senses because it is practically impossible to remain stagnant
in a global economy. Many forces are exerting influence on our lives today and it is
thus only reasonable to embrace change with the view to manage and harness it for
good. Change also entails that our standards change a bit more frequently to a higher
level. Thus change has catalysed quality improvement.
414
Case study # 36
The Legendary Jack Welch and General Electric
Corporation
When Jack Welch took over as chairman and Chief Executive Officer (CEO) of
General Electric (GE) in April 1981, the once Legendary Company was again at cross
roads. At 45, he inherited a huge conglomerate that had a tall structure, rigid
operations, bureaucratic, and highly diversified. The company; built originally to
exploit Thomas Edison’s patents, was too large and complex and had thus become
inefficient and potentially uncompetitive. Not only was it in many businesses, it had a
large work force and had been divided into multiple smaller Strategic Business Units
(SBU) and yet with only a limited successful life span. A solution had to be found,
and that came in the person of Jack Welch.
Jack Welch has been known to be a maverick, tough, determined and resilient in his
approach to management. An only child and holding a PhD, Welch is the man of the
times as he has managed to achieve the unimaginable, due to his foresight, candour
and resolve to succeed. As soon as he took over the mantle, he commenced his
momentous revolutions by assessing the status quo and what ought to be done. He
discovered that GE, though admirable, was in effect not as competitive as it ought to
be thus, the changes of restructuring & re engineering the organisation. This meant
among many things, destaff (down size) by 34%, giving more lee way to managers,
developing a team work culture, brain storming, adopting an open management style,
being customer focused, working in partnership with stakeholders as well as aiming
for perfection in quality. Impeccable excellence has been the goal. He achieved this
by hiring the right staff while relieving those that were not ready to change. As a
leader, he has always been visionary, articulates the vision, & passionately owns the
vision and relentlessly drives it to completion.
415
By 1993, GE had achieved the unimaginable. It was by far the most complex and yet
agile company. It had a lean work force, was continuously learning was aiming for the
1st or 2nd slot in every business and where not possible, it pulled out so as to
concentrate on its core competences. It is on the road to success but certainly, the
strides hitherto are significantly great.
But how exactly did Jack Welch accomplish these shifts? What roles did he play?
Reading through his profile, one concludes that he had certain leadership traits which
translated into action. For one thing, he broke down GE into smaller manageable semi
independent businesses with managers freely making decisions on critical survival
decisions. For another thing, the Organisation was at cross roads, whether to continue
marching to the company bone yard or to mutate and live. Change was inevitable.
Thus the changes needed a maverick, clear and strategically minded person. Welch,
qualified on that score and went ahead to take bold fearless steps, setting goals and
targets. He determined that GE should be better than the best in all areas. But as one
would expect, his innovations were opposed, as they tended to threaten people or put
them on edge all the time. Change is generally resisted but he undauntedly faced the
opposition.
In the quest to improve GE after the rapid positive changes, which left thousands
jobless, the organisation adopted a continuous training approach where everybody
attended some kind of training. For chief executives, a program called “workout” was
instituted in 1989 where the managers would go off to some location to brain storm,
exchange ideas, recharge their minds and dream up new routes as well as share
methods of best practice. Rather than discussing plans, GE executives discuss
strategies, which they implement in their various companies, depending on their
mission statement. The heart of the workouts is to bring about cultural changes
overtime assuming and knowing that change is resisted at all times. Looking at the
Lincoln philosophy and Jack Welch’s, one cannot fail to see that in principle, they are
similar, only that Jack Welch is more aggressive and operating in a more hostile and
416
dynamically competitive environment. Lincoln thought customers, suppliers and share
holders were to be treated well in order to maximise on benefits, so does Welch.
However, there is one fundamental difference between Welch and Lincoln’s style.
Lincoln was highly individualistic and rewards depended on output while Welch
believes in reduced numbers of work force while paying more as well as getting
higher profits with a thriving team work culture.
When compared to other legends such as Riboud, Barnvik or Mccoy, one notices that
there other people were excellent managers but conventional and working within a
framework. Welch is different in that he believes in constant unpredictable change-
his maverick traits again rear their heads.
Looking at GE today, it looks very fine and alive once again, especially as it crosses
into the 21st century. A new lease of life has been infused into it and as such, we can
optimistically look to the future for greater things. Sail well O’ GE.
Source:
Bower, Bartlett, Uyterhoeven, Walton. Managing strategic processes, 8th Edition,
ISBN 0-256-115191-5) Richard D Irwin.
Case study questions
What do you think about ‘workout’ with respect to team building and strategic
thinking?
Do you consider Jack Welch the regular CEO? Mention some traits you admire about
him.
Suggested case study question answers
What do you think about ‘workout’ with respect to team building and strategic
thinking?
417
It is an excellent technique depending on your organisational work culture. In itself,
work out includes aspects of serious brainstorming in a conducive environment where
people just abandon themselves to dreaming and thinking, sometimes mentally
simulating some ideas which they later document and apply where necessary. Its more
than just a talk shop but involves serious intentions to implement as well as derive
best practices. In the workouts, no one emerges winner but everyone benefits and thus
builds the team. Some of the best brilliant ideas at GE were probably generated in
those “workout” sessions.
Do you consider Jack Welch the regular CEO? Mention some traits you admire about
him.
Welch is clearly a maverick, one of a kind CEO. His style and manner of doing things
remains unique to this day because the gentleman was his own man provoking you to
bring out your best. He would push you to the wall until you brought out what exactly
you wanted and intended and then he would pick up the ball and run with it as if he
were the originator.
Some of the traits admirable about Welch are listed below:
He was passionate about continuous improvement.
He was open minded and ready to learn from anywhere or anyone regardless of status,
rank or position in life. Ideas were his meat and drink.
Jack was never satisfied with the status quo or the seemingly “good Corporate image”
that GE had and turned the company upside down until it was the most admired
company in the world.
He was not afraid to make decisions and ready to take the ramifications of any of his
decisions.
Welch is a systems thinker as well as one that thinks outside the box.
He loathed mediocre quality output and ensured the six sigma worked for GE.
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Case study # 37
Harcourt Brace Jovanovich, inc.
For a long time, General Cinemas (GC) had been one of the most successful
businesses holding the industry leadership. It achieved this through many strategic
manoeuvres such acquisitions of profitable diversified businesses. One of these was
the Pepsi bottling agency, which it sold at the all time industry record of $1.7 billion.
This sale, by all counts was monumental, releasing a lot of disposable cash flow,
which GC had to spend. As is the trend, the cinema business had fallen on hard
ground lately and there was need to diversify.
It was this critical decision that captivated the GC executives on 14 th December 1990,
led by Richard A Smith to ponder up. The issue at hand was whether to acquire
another company, Harcourt Brace Jovanovich, inc. or not. Was it going to be
justified? How potentially profitable was HBJ? Would it add value or be a mere
liability? These and many questions begged answering before any strategic decision
could be made. Tabling the issue before the board, Smith brought along some experts
who were going to throw some light on the HBJ purchase potential
The decision largely depended on whether the purchase would be in line with the
corporate goals as well as whether this would add any competitive advantage to the
organisation. In many ways than one, the purchase of HBJ was the major step into
unknown “territorial waters” since HBJ’s business was largely in the book publishing
industry. While General Cinemas’ primary objective was to “create value for its share
holders by providing a total return–appreciation in the market values of its shares plus
dividends well in excess of the rate of inflation”, it was critical to consider
diversifying in another industry that was relevant, sustainable, potentially competitive
and manageable. The Cinema business was in a slump, hence the need to diversify.
But what exactly was the HBJ like? How did it feature on the industry?
From the data available HBJ was potentially very profitable, although had been losing
a lot of ground for the years 1987-89 and for a good reason. Before advancing the
reasons for the dismal performance, it is fitting to state that HBJ was in at least 5
categories where it (GC) did business and stood within the first 4 slots of market
leadership. It was basically the book publishing industry where it produced college
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texts, elementary and high school texts, text publishing, professional journal
publishing as well as the legal texts for both undergraduate and post. All these were
opportunities, which needed to be strengthened to achieve market leadership, with a
little more capital outlay and strategic planning. For example, in the legal/bar review
program, the company held sway of the market as most of the standard texts in law
were bought post and undergraduate students. Having said the above, we return to our
earlier intimation that HBJ, unfortunately had been in declining market share stage,
what were the root causes, if we may enquire? A number of reasons may be advanced
but the following immediately come to the fore. Firstly, there was a clear lack or weak
“disciplined” leadership resulting from not being focused or changing with the times.
While other competitors were carrying out frequent market researches, continuously
improving and responding to customer desires, HBJ was slow and in some cases did
not change at all. Secondly, product development had been extremely slow, almost
non–existent. There were rapid changes such as customized publishing, changes in
desires by the states or indeed new developments in the industry that needed
captivating. The third reason was simply a failure to achieve its goals of rapid
curriculum development or market expansion strategies. For instance, its market fell
from 8.1% to 7.0% of the market share. Fourthly, the declining HBJ was failing to
cost key popular authors to sustainable remain with them. As such, from being a
giant, HBJ was slipping from a secure position and needed urgent capital injection to
reverse the trend. But what were the key success factors which would revitalize HBJ?
The following needed to be addressed immediately: In the first place, there was need
to reassert the leadership for selected disciplines rather than spreading capabilities
across many areas, “spreading resources thinly” as it were. Where there was a
competitive strength and advantage, there resources should be directed rather than
investing for the sake of it. Secondly, there was need to attract and maintain a strong
well tasted and renowned editorial staff who were ready to change with times while
keeping focused. In the third place, there was need to train sales staff to sharpen their
prowess. Their customer care and marketing skills needed consistent serious attention.
In effect, the entire company needed to develop a culture where everyone was a
marketer and sales person, keeping customer priority all the time. From the afore
mentioned, it is clear that HBJ is potentially very competitive if it maps out a clear
strategy which will eke a niche for it as well as propel it to greater market expansion.
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While desiring to expand, it was critical to “read the times”. What were the trends at
the time of the acquisition probability? The present trends then were the states,
increasingly were conscious of their own peculiar needs and thus had boards that
determined which curriculum books and publishers to contract. Secondly, there was a
noticeable increase in the number of students of diverse background. The market was
no longer predictable and uniform. Thirdly, there was an increasing skill gap in the
classroom as the student had different orientation and training in their backgrounds.
There has also been a decline in enrolment in some sectors.
As for the future, the trends were leading to a greater fragmentation where customers
would call the shots. In other words, each customer would order and buy what they
needed specifically. Another trend was the integration technology in the classroom.
This means that as we move on to CD ROMs, Videos and Computer Software as they
will increasingly be the norm rather than hard copies. It has a way of condensing
large volumes of data, books and information cheaply and information on a CD. This
curtails that people will access information cheaply and quicker. The other trend will
be the growth of potential international markets, spanning international boundaries
hurtling towards a global setting. Furthermore, there is an emergence of the used
books wholesalers, photocopying and the difficulty to keep customers loyalty as
quality improves. The implications therefore for HBJ and GCC is that they jointly
have to work on ways on ways to handle the changes so as to “keep above the water”,
far ahead of competitors. Firstly, there must be a strength, weakness opportunities and
threats (SWOT) analysis and then proceed to carry out market researches (local,
international or global, as the case may be). Thereafter, a curriculum must be
developed while closely collaborating with the state and academic officials so as to
come up with exactly what they want. If this is done quickly and frequently, it will
guarantee sustainable market growth and leadership. Lastly, there must be production
of the materials, providing for some free gratis copies foe instructor and teachers.
Accompanying the products must be the initiative to deliberately orient the new and
young inexperienced instructors. These are some of the avenues to capture and
maintain leadership, apart from hiring the right people in the right places.
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In our view, the possible acquisition makes sense because the said company already is
an established company, with a lot of good will and good book brands. Its
international presence is another plus. We say it is a good buy guardedly though, as
long as certain parameters are put in place. The debt issue must be addressed, the
focus must be set, mission statements clarified, the revision cycle shortened, more
cash flow injected into HBJ, manufacturing costs selling costs reduced (Through
employing team work, TQM etc) as well as being willing to wait for some time to get
returns. Marketing Strategies must be sharpened and intensified as well as the
constant reading of the market trends. HBJ/ GCC must be customer sensitive, flexible,
agile, responsive and exploit the latest cutting edge Information Technology gadgets
extent. It is risky but an excellent opportunity if done on time bearing in mind the
advantageous nature of things like bank bonds.
Looking into the future, we do so with a sense of optimism to encourage General
Cinema to go ahead with the purchase, provided the safety gadgets are in place!
Source
Bower, Bartlett, Ufterhoeven, and Walton, Business Policy: Managing Strategic
process, Richard D. Irwin
Case study questions
What do you think about corporate integration?
What does this case teach you about the value of a strategy?
Suggest qualities of a good strategy.
Suggested answers to case study questions
What do you think about corporate integration?
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This is good depending on the motive and corporate strategy. Granted, the initial
“teething” problems will need contending with but if the integration results in synergy
and a right fit, this is encouraged. However, investors must meticulously watch what
they enter into. As for the GC case, they are encouraged to go ahead but with caution
and strategic mindset.
What does this case teach you about the value of a strategy?
This case clearly teaches that one has to be careful and plan well long before
venturing into something lest they live to regret. Clearly, the case also teaches that
strategy must be organic and relevantly fresh to add value or else that which was once
a successful strategy may turn out stale and out of date. If the strategy implementers
do not realise in time, resource wastage may result. For instance, hard copy books are
in danger and face competition from e-books. GC must therefore ensure that e
publishing be incorporated as well.
Suggest qualities of a good strategy.
The strategy must:
1. Be ‘invisible’ to competitors.
2. It must be organic and flexible.
3. Strategy must be both long and short range in outlook.
4. Strategy must be both reactive and proactive.
5. Periodic strategy audits and reviews/evaluations must take place if to remain
relevant and competitive.
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Case study # 39
RU 486
In October 1988, Edouard Sakiz, chairman of the French Pharmaceutical company, groupe
Roussel UCLAF was caught up with a critical discussion regarding a new product RU 486, whether to market it or not. The said product, when used in conjunction with another synthetic drug (synthetic prostaglandin) was 90% to 95% effective in causing a miscarriage in the first five weeks of a pregnancy. The discussion outcome was critical because various extreme reactions had been received from the public world over. Some pro-life groups violently opposed it and threatened legal and physical violence while other, pro-abortionists, equally lobbied for RU 486’s sale as they viewed it a mere reproduction control pill.
Edouard Sakiz, a trained Medical Doctor was at the helm of the ultimate sale of the drug developed by his company, Roussel UCLAF, partially owned company by Hoecst of Germany. The person at the centre of actually developing this drug was Etienne – Emile Baulieu, also a Medical Doctor by training, who specialised in the study of steroid hormones. He had made his mark after scoring a number of successes but this discovery was not as applauded as before, despite his claims to be attempting to help women. He once declared saying, “I want to help women. I have not dedicated my life to abortion. I am not anti children. I have three children and seven grand children. But women die in botched abortion, two hundred thousand of them every year. Ru 486 can save them”. These passionate words went unheeded as they were viewed to come from a murderer. Interestingly, Sakiz and Baulieu were long time acquaintances from University days and had worked closely together. This issue was but one of their collaborative efforts. What was Sakiz to do? Was he to sanction the marketing or not? What would be the implications on the organisational image? These and myriad other questions begged answering before launching out full throttle.
As chairman of the organisation, Sakiz had a number of principal responsibilities regarding RU 486. For one thing, he had to ensure that corporate sales went ahead in whatever sphere as new products were launched. Like any other competitive organisation, he wanted sales to grow, and by the same token, satisfy the stakeholders too. The second responsibility was to be strategic in approach, ensuring that he mapped out a route that best placed the company on safe rails of expansion. Thirdly, he had the responsibility of steering the company in all types of weather, including turbulent times such as these to do social good. The company believed that it had a strong social responsibility to plough back some of the benefits into the community that in itself
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was a marketing strategy. But in the fourth place, there was a corporate image to protect at stake. Many had threatened to boycott the products if the RU 486 product launch took place. This would dent the company image and have adverse effects on the overall sales. Sakiz had to count the cost meticulously. How then were Sakiz and other Roussel executive go about making their decision on RU 486?
A number of ways could be suggested but we feel this is a very delicate issue needing concerted efforts and minds to settle. People need to be united from the beginning. We think that these mortals were firstly going to use the experience in other countries, how it had been received, used and the effects. For example, in China (with the largest economy & population in the world) and France, this drug was legalised although under restrictions. In the USA, by 1988, the Reagan Administration largely rejected RU 486, although indications showed that the Anti–abortionist pulse was waning. They could have argued that the responses were relative and there for segment the sales to the countries that allowed the use of RU 486.
The second way was to allow people vent out their woe as much as possible and wait for them to cool down. Once people express themselves for a long time, they get tired and fizzle out. RU 486 was new, and like any other new thing, change is opposed. A case in point was the initial introduction of the pill, which was violently opposed in the earlier years, but by 1988, it was treated like any other medication so also the RU 486 issue. In addition RU 486 needed time to be accepted in people’s minds and all queries answered such as its side effects, success levels and any other unanswered question.
The third way forward though closely connected to the second, would have been to strongly establish a campaign to be open and show the positives of the said drug, how it would help women and how successful it was. For instance, it would help control the world population that if unchecked would hit above the six Billon mark in 1999 or above. Thus if corrected, the world population could be contained leading to a healthier world. These and many other advantages had to be highlighted. As to how exactly the executives were to go about deciding, in my view, they were supposed to be open to each other, brain storm and come up with a common decision on the way forward, whether, to go ahead with the launch, delay it or discard it all together. The implications had to be weighed very carefully. If we were asked as to our opinion whether the drug RU 486 should be marketed in France, China and the USA, we would advise them to go ahead in France and China but move slowly in the USA. It seems to me that the USA market was not yet ready as the decision had political and other registration hurdles needing many years to straighten out. In our perception, the USA, being an open society, though religious was to open up slowly. Depraved fellows exist in the USA in large numbers who do not care a whit about ethics or life as long as it was perceived good for them. They were pliable. Already, indications were that opposition was declining. By 1989, 59% of the US population thought RU 486 was okay and should be sold freely to the States. The major hurdle was the Food and Drug Administration (FDA) registration, which would probably take many years. A drug cannot be marketed in the USA unless approved by the FDA whose procedures take six to ten years. My
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second suggestion then, is that while waiting for the market to “ripen”, they should register with the FDA either themselves or through some other institutions. Lastly, the company could sell by mail to individuals in those respective countries where this is legalised or acceptable.
The RU 486 case was indeed a complex one because any decision was clearly going to go against the grain of many a society. Imagine for a moment contending with the Catholics and the Pro-life group? Perhaps we need to redefine when Life actually begins.
Yet in the same breathe, the companies ought not to abandon their social responsibility. If I had my way, standing on a sound Biblical premise, we would have probably opposed the abortion Bill because it goes against ethics and perceived as murder. By 1988, over 24 million babies had been legally murdered in USA! That is an entire generation wiped out!! What would have been your take?
Source
Bower, Bartlett, uyterhoeven, and Walton, Business Policy: Managing Strategic Processes, 8 th
edition (ISBN: 0 – 256 – 115191 – 5) Richard D. Irwin
Case study questions
What is your position on ethical matters raised in this case study?
Would you have gone ahead to sanction the drug development despite the odds?
How could the company better handled the FDA matters?
Suggested Answers to case study questions
What is your position on ethical matters raised in this case study?
Students give their convictions from an ethical point of view. Let them express their inner most deepest feelings on paper. The answer to this one is relative coupled with one’s religious beliefs.
Would you have gone ahead to sanction the drug development and sale despite the odds?
From a purely business, health and humanistic perspective the development and sale of the drug would have been approved but from a moral and ethical perspective, this would have probably been stopped or opposed. Again, the answer is relative. Students should offer their thoughts on this matter thereby demonstrating their analytical prowess.
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How could the company better handled the FDA matters?
Applying in advance and stationing someone in the USA to follow up matters. Further, the corporate image building antics should have continued and approval statistics periodically reviewed.
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Case study # 40
Smith & Wesson to change hands
When Greg Hutchings took over the reins of the Tomkins Company as Chief Executive Officer
(CEO), he immediately went full throttle to turn around the company. From a mere £ 17 million puny engineering firm to a global giant turning over £ 5 billion a year, Hutchins had achieved the impossible pending to be listed among the management legends.
The once obscure, simple engineering firm begun to change from about 1983 when Hutchins commenced implementing his mammoth development drive which among many things, included acquisition, expansion and diversification of the company business. As such, the Tomkins bought off many companies such as the Smith & Wesson, the Baker Rank Hovis Mc Dougall, Lawn mower makers, Murray and Hayter, and grocery products manufacturer Red wing. It was a bold and risky investment venture but Hutchins undauntedly went ahead. For a while, all went well but slowly, change and decay begun to set in resulting from myriad problems rocking the company. But what went wrong? Why did the company begin to decay after glittering so brightly? A number of problems are highlighted in the article “Smith and Wesson to change hands” that appeared in The Post issue # 1732 of Tuesday 15th May 2001. The said article begins with the sentence suggesting that Smith & Wesson was to return into US hands having been owned for 14 years by the UK based multinational, Tomkins. The article highlights the fact that as the Tomkins begun to expand into a conglomerate, it became too large, bureaucratic, rigid unresponsive, complex and too diverse. As a result it was neither as focused nor strategically responsive to the rapid business environmental changes. In addition to the complexity and bureaucracy, a chain of lawsuits trailed the company. Sadly, the maverick CEO also contributed by abusing office that led to his resignation in October 2000. All these problems then, caused all the subsidiaries not to thrive as expected.
The only way forward then was to reduce the probability of totally running bankrupt by a change in strategy. The viable option available at the time was to shed off the non-essential & non–core businesses, hence the selling spree that ensued. These changes, although necessary, were costly in that many issues had to be addressed such as reorganisation & restructuring costs.
Nearly all the earlier mentioned companies have been sold off with Smith & Wesson as the latest (as at May 2001). The said latter company was purchased at $ 112m in 1987 but sold 14 years
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later at only $ 15m. Sources say that it is even a wonder that S & W managed to sell at all, since the company is battling to survive due to the string of litigation battles as well as its shaky image back home having displeased certain quarters about fire arms sales.
The Tomkins financial crisis was so critical that the very existence of the company was threatened and needed drastic solutions to rectify problem. As earlier intimated, this came through restructuring and selling off all the non – core companies, thus saving Tomkins. Today, it is slowly returning to its directed goal of engineering. But why did Tomkins land in this mess in the first place?
Source
The Post Newspaper, Tuesday May 15th 2001. Issue No 1732 page 14
Case study questions
Why did Tomkins land in this mess in the first place?
Suggested Answer
(a) Case study question suggested answer: Why did Tomkins land
in this mess in the first place?
In my thinking, perhaps the company initially had too much excess cash and decided to invest at any & every opportunity. It seems that no proper risk analysis was taken in terms of the company sensitivity, return on equity, net present value, capital structure and the cash flows that would ensue. Ideally, before embarking on any project, there is need to carry out a detailed cash flow analysis to predict how viable a business could be in the short or long run e.g. 5 years hence. Thus, we can see that human factors of personal preference or the unguided quest to achieve and conquer were at play. In the end, the company is at the brink of collapse. We clearly see that the fact that we have excess cash flow is no guarantee that the same favourable providence will continue, hence the need to be meticulously watchful.
With the sales gone and investment risk minimised, Tomkins can now shift its focus to its core – competences that will ultimately carry the day for it.
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Case # 41
RICHARDSON HINDUSTAN LIMITED
Gurcharan Das took over the reins of the Richardson Hindustan Ltd (RHL) in January 1981
after an illustrious International career with the Richardson Vicks International (RVI, Mexico) & General foods. Relinquishing an international job was a major decision as this was the second time he was returning to RHL, only that this time as its President.
RHL had been a subsidiary of the RVI for a long time until Indian government pressure forced it to change share-holding ratio from 55% to 40%. Despite the changes, the RVI still maintained an influential position because it had its main decision makers stationed there. The forced change in share holding by the Government had forced other equally renowned companies such as the Coca cola and IBM to leave the country because they refused to compromise or dilute their share holding. Not so RVI.
As earlier intimated, RHL is part of the Richardson Inc of the USA whose main product and strength lies in producing cold alleviating “vicks” and other related products to deal with the skin. RHL itself was originally formed as an engineering / building firm to construct a chemical plant for RVI but eventually took over the marketing of the RVI products from the local RVI branch.
This holding presence went on until the aforementioned changed RHL went through different Managements and eventually proposed capital structure change despite many hurdles from the natives and Government who viewed it as a foreign and exploitative company. In an attempt to overcome these challenges, the RHL Management had tried to please the local conditions by participating in social activities and attempting to invest in the community pleasing projects . In that way, the company avoided some tax. As time went on however, problem after problem surfaced and buffeted the organisation as people clamoured for influential positions as well as build personal empires.
It was at this critical time that Das was hired. He found a divided house. The company was cash strapped, morale was low, hostile labour, adversarial labour management relations and high management staff turnover. Because of governmental price controls, Management for years had stressed volume, selling at any price and producing at any cost. Furthermore, there was jockeying for power, functional empires, international conflicts, obsolete traditional management style and low mutual trust. Phew! What a time to take over! But this was his inheritance and thus had to be determined to iron out the problems and burn the dross in the process lest he sunk with
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the rest. The first thing he did was to assure RVI that all would be well and then went ahead to hire the right staff while keeping the marketing goal in mind. With the right people on board, he ensured that they were continuously trained until a team spirit and culture began to take root.
Having changed the attitude, his next task was to pacify the local conditions while maintaining good relations with the holding company. Parts of the local stakeholders were the shareholders, customers and the Government. To do this, he embarked on product quality improvements, open participative innovation management style, customer focus as well as aggressive marketing campaigns. It was whilst trying to please all stakeholders that he entangled the campaigns into producing ayurvelic, a product that though socially helpful, was not in line with the RVI corporate products. To produce this would have meant diverting from the original strong marketing bias to manufacturing. This would potentially put him at variance with the RVI, and yet it was critical for RHL to receive preference treatment from the Indian Government. No doubt, this initiative was perceived as palatable and constructive to the local community by local key stakeholders but not RVI. The second thing, which was potentially controversial, was his proposal to sanction the production of dextro to be supplied to the RVI, which is the largest consumer in the world. Both these ideas were superb but would put him at daggers drawn with the RVI. This was a risky step but inevitable in the circumstances and would only be justified if Das convinced them (RVI) that both these would keep the international quality standards as well as the RVI regulations. These were bold steps marking out Das from other illustrious managers like Koerber or Bartlett.
The advantages of the two major products (Ayurvelis and Dextro) were that these would firstly not only rake in a lot of profits but also boost the company image in that both the Government and community would be satisfied. If you were in Das’ shoes, what course of action would you take?
Source:
Bower, Bartlett, Uyterhoeven, and Walton, Business Policy: Managing Strategic process,
Richard D. Irwin
Case study question
If you were in Das’ shoes, what course of action would you take?
Revision exercise
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How has the case study exercise helped you?
Have you been able to create case studies for your use?
What place does quality have in strategic thinking and planning?
Suggested answers
(b) Case study questions suggested answers
To case question: If you were in Das’ shoes, what course of action would you take?
If I were Das, I would seek to present all my facts to headquarters, statistical and otherwise. Having shown them, we would highlight the advantages such as profits and corporate image. I would point out the problems such as tax that could be significantly reduced. I would also show them the team we lead as well as their determination to succeed. All these persuasive arguments should carry the day, I hope. If others argued on policy and organisational international standards, I would show them that our situation is a unique case and thus merited to be treated as an exception to rule. We would show them that this is part of marketing and the winning of local goodwill for future days.
For Das, the appointment meant being a leader, a mentor, facilitator, and coach. He had to be visionary and determined to succeed while keeping within the limits delimitated to him. Having been exposed widely, he thought he could summon all his experience, exposure and proven to lead an organisation so that it would ultimately come up as the best subsidiary to RVI. This was his goal and passion, evidenced by the changes that occurred shortly after his taking over as RHL manager. In the twinkling of an eye, the once potentially defunct RHL was soon full of life and making headway. He viewed himself as one who motivated people whether they be marketers or not, so that they have customer satisfaction uppermost of their minds. Despite his excellent efforts, complaints still lingered from certain quarters, which is part of management. His was to lead RHL to conquer more market while maintaining a high goodwill from all stakeholders. Looking at Das’ prowess, he strikes me as close to Loy Weston except that Das has acumen to articulate things and the patience to consult and negotiate. Weston, on the other hand, has no time because he views himself as the decider on the ground. Once he sees a goal, he will go right ahead without consulting the head office and offers no apologies for his actions.
Das is very calm attentive and prudent but equally decisive too, after wide consultations.
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Having surveyed Das’ situation, I can safely assert that Das’ career options are many. He could choose to remain in RHL, or rejoin RVI and indeed go in to writing. Furthermore, he could also take up a political career as he has a heart for mother India as well as his strong benevolent pulse – In our view, we see a great leader in Das, slowly but surely budding and will soon blossom at noonday. His vision, strategic eye and focus merit out emulation.
(c) Revision questions suggested answers
1.How has the case study exercise helped you?
Helped the student to appreciate different scenarios related to quality in live case situations.
Helped student develop analytical skills.
2.Have you been able to create case studies for your use?
Yes, if have been a careful reader and been practicing exercises/reading.
3.What place does quality have in strategic thinking and planning?
Very high, it is the “silver bullet” for success in the global economy today and for a long time to
come. It is critical and the main thing in corporate, project or entity success.
Unit 9
Aim
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The aim of the unit is to sensitise the student on the dismal failures of TQM despite faithfully
and meticulously applying world class TQM approaches as well as to prepare the student for any
eventuality on the field.
The unit also aims to demonstrate that TQM is not full proof as well as offer some antidotes to
TQM failure.
Objectives
By the end of this unit, the student should:
Know why TQM has repeatedly failed as well as challenges it faces
Understand the possible root causes of this bad trend
Formulate survival strategies for their own respective entities/correct this TQM ‘malaise’
Quality challenges and why it fails“Where the super human fails to tick, TQM easily sails through”
BS
Although TQM has become a household name in many industries, high company or project
failure incidences still abound. Many once promising and well meaning entities have landed in
the corporate bone yard despite the frantic efforts to mutate into profitable organisms regardless
of the standard ISO certification as well as meticulous stringent project applications. What
exactly goes wrong? At what point do myriads miss the road? Is this confirming the long held
suspicion that TQM is just a passing fad? This unit briefly explores why TQM seemingly still
lamentably fails in some instances and what drastic remedial measures to apply.
As earlier intimated, it is an established fact that Total Quality Management (TQM) has been a
buzzword in the last few decades in the progressive industrialized western and far eastern
countries. In Japan however, TQM has been there slightly longer than five decades dating as far
back as the mid and late nineteen fifties when E. W. Deming proclaimed quality principles as a
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lone voice in the wilderness. Today, this is not only in discussion form but is a goal sought after
by every progressive organisation across the world. There is increasing demand to embed quality
into all aspects of the processes and products such that TQM becomes virtually invisible to the
naked eye but automatically permeates all spheres. It is, as it were, smartly intertwined and
internalised into the corporate culture. Unfortunately, there have been myriad testimonies that
have buffeted the “quality shores” which suggest that TQM is a lamentable failure and just one
of the passing “Management fads”. Many have undertaken to explain the root causes of such
dismal failures among them being Brown, Hitchock and Willard whose classic book “Why TQM
fails and what to do about it” gives valuable insight into the frequent TQM pitfalls. There is
scarcely any book on the market that diagnoses the problem and offers tangible solutions as this
book does. Many other authors also state that it is one thing to have a TQM program running in
the organisation but it is quite another to continuously score long after the certification process
has taken place. Hence, it is good to note that TQM is no guaranteed universal panacea but an aid
towards attaining the “silver bullet” principles.
As we scan the TQM book plethora, it is fitting to reassert that the no book provides a 100% full
proof solution to organisational woes but they merely contribute to the ultimate complex
solution. As Brown et al and other TQM gurus have rightly stated, the TQM remedial books do
not attempt to supply a magical answer for success, but rather, they provide useful information to
guide efforts so as to avoid a recurrence of similar pitfalls in future. This author presupposes that
the readers of this unit by now know what TQM is having somewhat dealt with it in a previous
unit. But just in case some reader has not done their duty, we re-echo the question: TQM, what is
it? Well, TQM can be loosely described as that approach where the procedures, processes and
outcomes of any activity are of the highest quality with no defect at all. This presupposes that
quality is integrated within the system and activities need not be repeated. Doing something once
with all perfection is the goal thereby cutting costs and raising profit.
Definition supplied by this author
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The TQM failure scan commences with the examination of the probable reasons why
organizations fail to kick start or take off during activation stage. Start up includes the initial
stages when the organization embarks on TQM initiatives. Myriad stories abound of many
companies that begun well but alas fell by the wayside along the TQM path. Among the major
reasons for failure is basically lack of top management commitment. This is a situation where
management either does not support the initiatives at all because some key people in the strategic
orbs do not see the relevance or do not believe in the importance of the same. Grand statements
are proclaimed in support of TQM but in practice there is clearly no commitment from the top. In
short, they do not buy into the concept. Progressively, this indifference trickles down to all
departments. Some early signs of such indifference and lack of buying in includes the over
scrutiny of any expense related to the TQM process or a mere lip service without any firm
commitment to the process by the senior staff as well as the junior operatives. Another sign is
lack of deliberate awareness campaigns resulting in almost everyone in the organisation being
aware of what is going on. No emotion, excitement, interest or even awareness is spontaneously
generated. Indifference reigns as it is a matter of duty. Why should people lose sleep over
something they are unaware of? In a place where TQM information is the private preserve of the
select few, lethargy and sloth thrive the most because people have not seen the idea value. In
such an environment, it is possible to have world-class internal control and processing systems
and yet come to ruin, as people’s hearts are highly indifferent. Yet another deadly sign is when
people fix their eyes more on the balance sheet and cash flow rather than the real issue- customer
satisfaction. This is a more enduring lifeline as opposed to the traditional cash centred
organisation. The information age demands knowing as well as anticipating the customer tastes
and trends and there by strategically positioning oneself long before hand. Sadly, many do not
want to spend much money on what they perceive as a mere unnecessary cost centre. This mind
set leads to multiple sudden midway project abandonment as the profit and loss picture begins to
show reduced gains.
But how do executives more vividly and specifically show that they are not committed? The
following signs immediately come to the fore:
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1. When actions speak louder than words, they do not “live the talk” but merely offer lip service
to the initiatives without moving an inch to support or denounce the moves.
2. When behaviour does not demonstrate commitment. For any quality effort to succeed, it must
be seen that the top executives believe, support and are committed to the cause of that effort.
Commitment is an intellectual characteristic, a personal attribute that cannot be mandated or
imposed from outside. It is something you believe in and demonstrate in your practices. The
absence of this shows itself in the way the executives interact with customers by not caring or
minding the actual needs of the said people. This manifests itself when the customer is not the
moving cause of the continuous quality strides. Furthermore, it shows itself with the time spent
with customers, the suppliers not considered as partners and the little time spent on the shop
floor. In addition, the time spent attending quality-related education and training as well as
permeating it to other organisational staff.
3. Lastly, when the executives seem to mind too much the amount of cash spent so that the
initiatives are implemented as “by the way” or scarcely sustainably supported.
Having highlighted the above, we briefly offer a number of ways management demonstrates its
commitment. These include learning the quality related concepts and skills, embarking on a one-
on-one coaching rather than a bossy commanding approach, regularly collectively reviewing the
quality and customer satisfaction data as a team, establishing reasonable quality goals that
challenge everyone to readily espouse the process, enthusiastically talking about TQM efforts
with employees rather than keeping them in the dark and keeping information under “lock and
key” limited to the top executive orbits only.
All the above is achievable provided there is sincerity, candidness, varying the time and
frequently talking with people on the work floor. Management By Walking Around (MBWA) is
critical and to some extent more thorough than Management By Exception (MBE). The other
trait is to implement home grown popular quality improvement projects that all the people will
own rather than abstract ones. In addition, the efforts must be allocated sufficient resources that
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show the importance and centrality of TQM. Sadly, half the time, many organisations are
reluctant to provide for sufficient budget allocations to ensure sustainability and continuity of the
initiative. Lastly, the best measurement and monitoring parameters must be installed at the onset
using the available state of the art technologies. These appropriate measures could include the
financial, operational, employee and customer satisfaction. Incidentally, even employees are
“customers” of the organisation needing satisfaction that ultimately motivates them.
The second major reason for the dismal TQM performance in recent years is the poor timing and
pacing of the TQM implementation (Rapid strategy obsolesce). Some companies, though well
meaning, set sail upon the high quality seas with all the momentum and robustness that can be
marshalled without counting the cost. They go to sea in a canoe instead of a Titanic ship
equivalent and thus sink just off the coast. The start up stage has ruined not a few companies
who have finally abandoned the entire project as a sheer waste of time, resources, unworkable
and unrealistic. On the other hand, others have not read the times as well as the pace of achieving
goals against set benchmarks. Complete change takes time and sometimes may take many years
to realise. As a known fact, change is often resisted and requires time, tact, patience,
perseverance, craft, smartness and a clear mind to effect major paradigm shifts.
The third reason for TQM failure is when organizations waste education and training, they do not
tenaciously seize the opportunity, as it were. That aside, although the organisation may engage in
staff training, the value, quality, effectiveness and usefulness of the same may be questioned as it
does not translate into action, thus paying dividends. It is important to have a deliberate
continuous training policy that ensures that people are constantly being trained to achieve
maximum output. We live in a dynamic world and as such, there is need to spend time
sharpening our selves so that we can successfully forge the battles that lie ahead. A new skills set
relevant to the times is of essence. Change is the only constant at whatever level, and so must our
mindset be as well. Training and education may seem expensive but actually, TQM proves that a
well-trained staff cadre are motivated, unleash hidden potential and ultimately pay back tenfold
to the organisation. In the quest to achieve zero defects, training is paramount so that people
acquire the right skills and acumen to effectively articulate issues. Someone has humorously
quipped saying “If you think education is expensive, try ignorance”
Anonymous but Crosby the quality guru said something similar in his book “Quality is free” of 1979
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The fourth reason is the lack of short term, bottom- line results where companies are told to
expect instant tangible full scale results in a short term. Although TQM is long term in outlook,
yet the organisation must sow quality seeds expectantly. They should watch out for and record
any small victories and successes. It is these small strides that compound to make the bigger
picture over time. In as much as we should not be overly expectant, there is room for this so that
the vision and momentum remain alive. Thus, the organisation must focus more on process, not
results, as the organisations’ scarce resources are poured into the quality activities without
demonstrating results. Always remember that TQM is a process not a one off event.
In a nutshell, the first phase illustrates the fact that people struggle to learn about TQM and its
principles. Early efforts generally involve implementing quality improvement projects by using
the tools and techniques of TQM.
What then can be done to increase the probability of succeeding in implementing the TQM
initiatives and sustaining them? What tools can be employed to help future success?
Among the many ways to improve the success chances are the following:
1. Justify the costs and timing of the TQM initiatives. This may well mean taking time to
compute and show the cost benefits of engaging in the project. All arguments must be
summoned to show that TQM actually pays more dividends than what is invested into it,
though it may be long term in nature. This should be done prior to undertaking upon the
quality initiatives.
2. Continuous staff education and training must be taken as priority. People can only be
motivated and learn to be proactive when they are properly educated. An ignorant work force
is a sure recipe for disaster. Technology and practices are dynamic, hence the need to be
enlightened and kept abreast with the dynamic times, if not ahead. Also, time must be taken
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to enlighten people that TQM is not just another passing craze but must be internalized to
succeed. They must endeavour to integrate quality into their own thinking system rather than
treat it as an abstract pilgrim management fad which is independent of the very core business.
For instance, project staff must learn and appreciate the project goal, good programming,
grafting good and workable log frames, good M & E plans, relevant indicators and
assumptions. They must also learn the best practices as well as laid down standards. This
demands time and repeated investment in staff development.
.
3. Implement the strategy while avoiding bureaucracy and red tape. When the people are
properly trained, as in (2) above, and the strategy crafted, the organisation should ensure that
the right people and time are at hand. This should be done within a framework that is flexible
and avoid the old slothful ways that take many years to effect tangible change.
4. Using the right measurements. The right parameters must be put in place whether they are
financial, operational, or other appropriate tools/scales. The right benchmarks must be set up
and the key indicators securely in place. The project must use verifiable indicators,
implementation schedule, Gantt chart and bench marking among many others to foster
qualitative projects and programs.
5. Watching the appraisals. The traditional appraisals tend to discourage teamwork and
continuous improvement as the appraiser may use the time as an opportunity to settle old
scores. The new appraisals must aim at bringing about mutual help and encouragement for
both the appraised and appraiser. This should be a time of retrospective self-review and a
time of setting new goals rather than a time of axing each other. It should be a time of
refreshing, charging the cells, as it were. Projects must adopt holistic and objective relevant
appraising systems such as coaching for performance which emphasises on-going staff
mentoring or the 360* appraisal which gives feedback on staff from more than one angle.
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6. Watch the reward system. The reward system in place should be appropriate, equitable,
realistic, relevant and encouraging to people. The system must be attainable and challenge
the people to greater heights of productivity as well as foster the team work ethos. Both the
executives and workers must be compensated appropriately so that they all feel valuable.
Post modern entities prefer teams and team work over individual star performances although
this mode (individual) is equally helpful in its own right.
7. Check the power structure, where does it lie exactly? Are your employees empowered?
Do they feel that they are equally important stakeholders in these initiatives? Do they “own”
the moves? If the power lies only in the top brass and not shared, by way of teamwork, very
little will be achieved. Once teamwork is in place, the number of hierarchical levels will be
cut tremendously, as people learn to overlap and complement one another. Sometimes, the
actual power does not lie in the formal office but in opinion leaders. Half the time however,
power is vested in a few people holding high offices. Also the structure which has multiple
onion like layers causes bureaucracy to encroach and build thus reducing the organisational
agility and flexibility. This detrimental status militates against total quality attainment quest.
Empowerment of employees is crucial because as their competence is built, so also their
liberty and usefulness. Said differently, there is need to check the power distance, minimize
the layers and promote a community team spirit and environment.
8. Review the current management crop and beliefs to ensure they are relevant. Half the
time in the past, there was the top-down kind of approach to management where the top brass
were miniature territorial kings. In other words, the boss reigned supreme and passed all the
corporate laws and decisions without consulting anyone. Decision-making was the private
preserve of a select few. We have however arrived at a stage where the managers are
facilitators, change agents, catalysts, mentors and coaches. From the “bossy” management
approach of yester-years, we have shifted to the strategic leadership approach to
management. Leaders are men or women who influence other people towards a vision by
moving them to unleash the latent and hidden potential within them. By that token, Leaders
are team players and trust others.
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9. Test the systems in place whether they are in perfect shape. Are the sustainable? Do they
leave any room for or prevent defects and errors to creep in? Do the systems promote or
hinder further development? Are they appropriate and adequate? Every effort must be made
to ensure that the extant systems are in such a way as to ensure minimal defects. Thus,
quality must be built and integrated into the system so that when a product or service is
churned out, there will be no need of a redoing of the same. In a nutshell, are the systems
enabling or inhibiting operational efficiency?
10. Ensure a continuous learning culture is imbibed in the organisation. Gone are the days
when either someone specialised in only one thing or the time when once one studied a trade,
they lived to use the same old knowledge throughout their careers. The “this is how we have
always done it” syndrome is now obsolete. It is time to be open-minded, innovative and
creative, expect change as well as take as leap strides if possible. The organisation must
constantly watch the persistent and constant changes in the environment and then respond
appropriately whether proactively or retroactively. Kaizen is the Japanese buzzword for
continuous learning and improvement. Agility and flexibility marks out a progressive TQM
soaked organisation.
11. Encourage brain storming and best practices implementation. Many organisations,
though claiming to be learning organisations, often fall into the reactionary trap of merely
adopting new techniques as a survival strategy. But progressive organisations encourage and
nurture brain storming, innovation, creativity, documenting and adopting best practices. The
silver bullet often lies there. However, staff are often apprehensive about imbibing new ideas
rapidly because the new strategy may just backfire into their job loss, as Peter F Drucker has
highlighted in his book “Concept of the Corporation” of 1945. Staff need job security and
then you see just how fruitful they become! They are also afraid to bring about new
innovative ideas lest they stab themselves or others in the back-they fear blame or loss. Job
security probably explains why the Japanese have succeeded from height to height, although
the recent global blizzards also threaten life time employment there as well.
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Finally, as one peers into the TQM future, after all is said and done, it is envisioned that TQM
will graduate from being a mere buzz word to being the main thing, having addressed all the
tangible areas that affect the organisation. All indications show that the future will demand
quality in all spheres. Thus far, the world has witnessed at least three revolutions, the agriculture,
the industrial and the mega technology revolution. Could we safely assert that the quality
revolution is yet another in the making? The 21st Century organisation will only soar to higher
heights of competitive advantage only to the extent it flies on the swift and golden TQM wings.
We trust that by now that we have sufficiently whetted your appetite to go to the TQM source
itself and mine the sweet truths for yourself. We encourage you to spare no efforts in your quest
to find, read and lay your hands on the classic TQM resources as they could make the difference
between your fortune or doom.
BibliographyBeatty Jack, THE WORLD ACCORDING TO DRUCKER: The life and work of the world’s
greatest management thinker, Magna Publishing co. Ltd, 1998
Brown Mark, Hitchchock & Willard, Why TQM fails and what to do about it, Irwin, Inc., Burr
Ridge, IL, 1994
Burnes Bernard, Managing Change, 4th edition, FT Prentice Hall, 2004
Henderson Gordon, “Quality is the key”, Banking World, October 1990
Kaswende Kingsley, “Bureaucracy complicates business process-Swart”, The Post, September
29, 2005
Norton Bob, Testing for excellence in one week, Hodder & Stoughton, 2000
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Oakland John S. & Porter Leslie, cases in Total quality management, Butterworth Heinemann,
1994
Oakland S. John, TQM: Text with Cases, Butterworth Heinemann, 2003
Render Barry & Heizer Jay, Principles of Operations Management, Pearson/Prentice Hall, 6th
edition, 2006
Schroeder Roger G, Operations Management: Contemporary concepts and cases, McGraw Hill,
4th edition, 2008
Stevenson J William, Production/Operations Management, IRWIN, 1996
Vroman William H & Vincent Luchsinger, Managing organisation quality, Irwin, Inc., Burr
Ridge, IL 1994.
Case study 1
General Motors Corporation
A few years ago, General Motors was by far the most powerful and successful organisation in
the Motor industry. By all standards, no other company could compare its market dominance,
size or financial muscle! By that token, General Motors Corporation (GMC) bathed in its glory
for generations. It is now over ninety years old, which record is rare to have in these turbulent
and competitive times. To be around for such a long time is one thing but to maintain leadership
in a particular market is quite another experience. Many companies have shot up like meteorites
and have disappeared as fast as they came. This has not been the case for GM because it was the
champion for many decades. How ever, GM has not had it easy lately. It had a crisis in 1992
when it recorded a net loss of $ 5 billion! It was at cross roads and any decision to be made was
definitely going to affect the future of the company. But what led to this crisis? Why is GM
transforming today? These are some of the answers that the article “Deeds, not Words” answers.
This is a classic article because it begins where GM went wrong and what it is doing today to
rectify the past follies. The following are some of the reasons why GM nearly collapsed without
realising it:
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i. GM grew too big and powerful as a multinational organisation after the Second World
War. This led to Complacency, stubbornness and arrogance.
ii. The company was highly focused on the financial figures, variances, and profits not
quality. The Profit and loss as well as the balance sheet is what mattered most.
iii. The products it made were not as customers wanted them but what GM deemed fit as
“What customers were going to want and buy” There was no consultation or choice for
the buyer.
iv. The Management style was probably another reason. Since GM was huge, there was a lot
of bureaucracy before any suggestion could be dealt with.
v. The quality of the products was taken for granted as of standards that customers
would like, not knowing that the Japanese were rising slowly from the atomic ashes
through the legendary lectures of Deming and Juran.
vi. The company did not focus on its core competencies but because of its size, GM took on
many other businesses, which were not competitive in the long run.
All the above led to the crisis of 1992 because the environment had changed so drastically over
the years while GM remained static like monument. As earlier intimated, the Japanese entered
the Motor Market with superior quality products which ultimately under cut GM`s market
dominance. By 1991, the Japanese had triumphed already!
A critical decision was made to restructure the mammoth Company by carrying out drastic
changes. Among the major changes implemented was the down sizing of the central workforce
from 13,000 in 1992 to about 1,000 in 1999. Further changes included the following:
i. Adopting the best practices through out the system. Only the best methods of doing
things were to be in place. This meant comparing how certain processes were done
within the international GM network and picking the best way to do some thing. For
example, a number of ways how to fit an indicator on a car is tried until the best method
is found, having zero defects.
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ii. Be proactive. The company had to be agile and flexible, while anticipating customer
taste changes.
iii. Meet customer needs. GM had to change to being customer driven. What the customer
wants is what carries the day. No longer will GM determine for the customer. As such
there was need to be constantly be in touch with the customer.
iv. Reduce the product introduction cycle time. Previously, it took many years to release
a new car on the market, but a deliberate move was made to shorten the period to months
and in some cases, weeks! We are told that GM plans to introduce a new car every 28
days on average! Now that is a feat but a necessity. This is to be achieved by having
strong teams that will brain storm and come up with new models.
v. Do away with the businesses that are not directly linked to the core competencies.
These may be profitable but if they are not competitive, they are to be divorced from GM
so that they can fly away to success on their own. This has been the case with Delphi-
once part of GM.
vi. Imbibe teamwork and continuous improvement. GM had to improve in quality and
also never again rest on its laurels! This is the only way forward as time for
individualistic tendencies in the business is long gone.
vii. Include customers in the planning stage. These are both the internal (employees) and
the external. If these are included at planning stage, success is almost guaranteed because
they will produce and buy what was agreed on at acceptable, if not superior quality.
GM went full throttle and implemented the survival strategies. Since the company is big, it has
not been easy to steer it back to leadership in the industry but the said company has scored many
successes, some of them unprecedented. The sales have gone up while the market loss rate has
reduced and the profits have shot up again. From a net loss of $ 5 billion in 1992, to a net profit
of $ 2.3 billion in 1997, this is by all means a feat! In five years, the Titanic Company is being
steered to safety and is definitely going to avoid the iceberg! As earlier intimated, GM is in top
drive to recovery though a few impediments still linger in the way. The President, John F
Smith, is optimistic that his organisation will surmount all the hurdles because signs of new life
are clear for all to see. For example, the company will introduce 23 new cars and Trucks within
three years. Now, this is speed indeed!
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Among the major concerns is the fact that GM is still the High cost vehicle producer in North
America. That not with standing, the important thing is that GM is on the right track having
thrown away the relics of the past that made it rest on its laurels. It is gratifying to note that GM
is determined to have agility and speed as its hallmarks. In all these efforts, TQM lies at the
heart or else the giant will tumble and die!
The market leader of the 21st century must take heed of GM`s mistakes and sail to safety while
the `Market dominance day` is yet young.
Source
Executive Excellence
Case study questions
What was the fatal error that GM committed and continues to?
How can GM get out of this trap which it repeatedly relapses into?
What do you perceive the permanent solution to the losses that GM faces?
Case study 2
Nike!
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Nike! It is now a well-established brand and one hardly needs explain to another. This goodwill
clearly demonstrates how a company can so establish itself amongst rivals and customers.
But what is the secret for this success? Who has been at the helm of all this and what does the
future hold for such a company? The Company has been around for slightly close to three
decades, having started in 1972, using Mr Bowerman’s kitchen as a factory. At that time, Adidas
reigned supreme on the American Sports shoe market. But today, Nike dominates the show. The
swoosh logo glides in the higher orbs holding over 30% of the market while the next rival trails
far behind at 19%. The curious question still lingers in our minds, “what has made Nike become
a household name?” Studying said entity, the reasons are crystallised in the following points:
1. From the beginning, most of the key people in Nike have been former sports stars who by
that token have had contact with the customers as well as have had insight into what the
customers would want and need in future. As a result, Comfort and design have been well
catered for.
2. Quality has been at the heart of every product that has been churned out of the factory.
Knowing that quality not only retains product loyalty, it also markets the product to other
potential buyers.
3. Teamwork has been internalised at Nike. It is not a mere abstract buzzword but is part of the
company culture. Teamwork is a lot harder in a more complex company.
4. Aggressive marketing methods. Nikes’ marketing strategies are second to none. They are all
encompassing and leave no stone unturned. With the Chief executive officer (CEO) at the
helm, every employee is involved. Further, Nike has signed contracts with sports stars who
market the brand effectively.
5. The people employed at Nike are those that have a strong affinity for teamwork. Hitherto,
team players have been preferred to specialists. It has been primarily ability to function not
qualification per se. The team culture has permeated through out the company. People are
infected with the “team” fever rather then being confined to a particular department.
6. Decision-making has not been confined to the “top brass” as the only think tanks. It is
gratifying to notice that the management has realised from the beginning that the people who
know the market are those closest to it. As such, collective brain storming has been the norm.
Although the company does not have regularised meetings, the said forums are excellent
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times of discussions as contribution not “office” is paramount. This liberty creates an
atmosphere where people feel heard and appreciated. As a result, they “own the goal” once
an agreement has been reached. Nike has scored a first in this area.
7. Minimal structure level has kept Nike buoyant. A complex company usually has a multi
layered structure system. As Nike grows more complex, there is a temptation to create more
layers of command thereby creating a big organisation that is “top heavy”. This adverse
situation has been resisted so far at Nike although ultimately, formal hierarchical structures
will be unavoidable. Thus far, bureaucracy has been kept at bay as this kills motivation,
initiative and slows down the development pace. The company of the 21st century needs to
remain fluid in order to survive competition, which Nike has been hither to.
8. Low priced but high quality products has been a major weapon Nike has exploited
effectively. While others have priced their products on a higher note, Nike has found a way
of producing low priced and yet high quality goods. This mixture is very rare and hard to find
in the same one product. Thus, Nike has had economic products at attractive rates and
superior quality. This has been a way to under cut the traditional giants in the sports wear
industry.
9. Further more, Nike has been sensitive to customer needs and wants. In other words, what is
produced is what customers want and need. It is probable that the customer is involved in the
planning stage to get what they want. It is also worth noting that Nike has been constantly
“reading the times” and has always been alert to the changes in the customer tastes and
wants, which the bigger and more established companies have neglected. Nike has been a
learning organisation, being gender sensitive too. This sensitivity is portrayed in the effort to
ensure women have out fit to their specifications and taste.
10. Continuous improvement in ways of doing things has been imbibed right through the
organisation. The founders have always thought that there is always room for improvement
and as such, the products and services are always improving. The Japanese “kaizen” concept
has been internalised well and every one is aflame with this passion. This is seen in the
timely production of goods, delivery and the constant product improvements in keeping with
the latest trends and preferences.
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11. Not overly controlling staff in their tasks but allowing innovation and initiative to blossom.
In other words, the top managers have not dictated what ought to be done in a particular
situation but rather, they have and will give general direction of what is to be done.
12. Excellent communication channels have been maintained always. Smooth information flow
is paramount to keep abreast with the times. The key people must know what is going on in
the company at all times.
13. Nike has diversified in its products. Out of the factory are churned out both shoes and apparel
which caters for the not-so-serious athlete as well. While maintaining the core competence,
Nike has developed sports wear for other sports like golf, tennis, soccer and football. As
much as 270 different products were on offer in 1983, and this trend continues.
14. The captivating exercise trend in America has been a major boost in Nike’s favour.
Americans have generally fallen in love with exercise because of its benefits health-wise. As
such, this has made many, even the not-so-serious athlete, to purchase some sports gear, and
obviously, the natural choice has been Nike!
The above reasons then have put Nike on the map. It would be grave injustice to leave out the
main architect of this excellent organisation as it would be akin to denying the presence of the
sun at bright noonday. The man behind the wheel has been Phil Knight, a very aggressive and
competitive man, who himself was once an athlete. It is said that before leaving University,
Knight wrote an exam business proposal paper which he later lived out as he advanced in his
chosen business career. He teamed up with Bill Bowerman, his former coach, in this venture.
Initially, Phil did not entirely throw his weight behind the small “Kitchen” firm but later devoted
himself to the same. As would be expected, the first few years were turbulent, especially that the
company lay in the shadows of towering multinational companies like Adidas. Determination is
what counted. Having got off the “teething” stage, there was no looking back for Phil as he
propelled into deeper territories. His acumen, insight and management style immediately sunk
into the company culture so much that probably by the time Jeff Johnson, the first full time
employee jumped on board, the culture had been sufficiently implanted. Knights’ management
style is excellent because it reflects the modern manager in action. Among his firm beliefs is the
fact that people should be given some leeway to do certain functions with minimal supervision
and interference, provided they are given some general guidelines. In addition Phil Knight
strongly holds that continuous improvement is a must for every flexibly agile company. His
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preference of team players rather than specialists is very deeply ingrained in the team spirit
manifesting itself in the brainstorming sessions that he himself instituted. In those meetings,
status is cast away as no person is called master- all are free to contribute, no matter how crazy
an idea. Unlike many a traditional leader, Phil believes that the office is merely a vehicle to
facilitate further efficiency rather than an end in itself. Perseverance, insistence on quality,
resilience, consistency, customer sensitivity and the robust marketing strategies are core assets
that reside in Knights’ chest. Armed with these convictions, Nike stands a better chance to
maintain its market top slot. But why should we begin talking about losing the top position, since
Nike is securely strategically placed at market apex? Is there trouble lurking somewhere? The
danger is that the organisation has been growing at an unprecedented rate resulting in a false
sense of security. It is feared that there is an unseen slothfulness, stubbornness and complacency
creeping into the organisation as a result of three basic reasons. Firstly, it is the fact that Nike is
so well established such that other rivals are hardly heard about. This alone makes the company
staff to rest on their laurels. It is feared that other yet unknown entities are slowly making inroads
into the market unnoticed and will undercut Nike. The second danger is the size of the company.
In a decade, the company has grown from720 people in 1978 to over 3,600 people in 1982,
meaning that the company has become too complex to manage. Nike is at crossroads, where
some formal structure is inevitable, risking strangling many a cherished norm like brainstorming
and initiative. Bureaucracy will encroach and the company will become slower, less agile and
inflexible. Teamwork is now an endangered species. The third danger that rears its ugly head is
the fact that Nike is now multinational. Hither to, it was a local brand name but in the late 1970s,
it scaled the national barriers and plunged onto the international scene. Different people have had
to be employed from different cultures, backgrounds and views. Sadly, not all appreciate the core
values that have characterised Nike from the beginning. In addition, maintaining a competitive
edge on the international scene is no easy task. The organisation must meticulously use relevant,
customer sensitive and dynamic marketing strategies that are continuously improved.
Furthermore, the organisation structure must be kept minimal or risk retarding organisational
progress. Nike faces the dangers of feeling secure on the market throne while the deadly
gangrene is silently spreading. These dangers are not uniquely for Nike alone but to all gigantic
companies.
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In the quest to curb these ensuing dangers, Phil suddenly appointed Woodell as the Chief
Operating Officer (COO). This choice was for obvious reasons when we analyse Woodells’
profile. Firstly, Woodell is a former sportsman and has vast experience. Most importantly, he has
this administration prowess probably second to none. Despite being paralysed in both legs,
Woodell has the acumen to handle operational matters better. As Nike arrived at the complex
crossroads, it needed some one best suited to handle this fragile company needing to stabilise and
yet continue spreading its tentacles far and wide. In the same vein, it is interesting to notice
Knights’ eagle eye for the future and the insight for the present times. Woodell will concentrate
on the daily operations of this titanic company, while Knight on the strategic- the long-term
goals of the company. This will give Knight the time to concentrate on the external environment
such as the customer needs, anticipated trends, the changes in the environment and formulate
remedies. Although Knight could have picked another person for the office such as Strasser, the
man of the times equal to the task was Woodell, who we trust steer Nike out of the threatening
operational hurdles.
Obviously, as Woodell assumed the mantle of the organisation, queries were raised as to his
suitability but we trust that Woodell will do an excellent job since he has years of hindsight and
experience in the organisation. Having been around long enough, he probably has insight into
where the potential problem areas might lie. As such if we were the one in Woodells’ shoes, we
would be positive about the situation, in that I would be objective and face the problem head-on.
My first task would be trace where we have been, where we are and where we hope to go. We
would do this by firstly scanning through the entire organisation checking for the human
resource to hand. Then we would check out the extant system to see whether they are compliant
to the overall company goal congruence. After that, we would also find out the available
financial and material resources to ascertain the human resources development potentials. With
these facts in hand, we would proceed to brainstorm, alongside with everyone, the possible
routes to take. Since the culture of teamwork is already deeply ingrained, my task is already half
done. Hence, all we would is to ensure that the present core values are enhanced, minding the
present dynamic complex setting. Furthermore, it would be our goal to anticipate changes over
the ensuing years taking into account the instability in the environment and the need to be
flexible, agile, fluid, customer focused while maintaining the highest quality product standards.
We would also want to motivate my staff by giving them incentives for innovations and by
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adapting best practice methods. At a future date, it may be necessary to diversify further, or to
cut down brand ranges and concentrate on core competencies as the case may be. An extreme
move would be to break down the company into smaller units that are more easily run. Our
overall goal would be to ensure that amidst all these changes, the customer remains king, is
served on time and kept satisfied always. The keywords would be the long held ones, though in a
more complex setting. We would fight the myopic view of being confined to a department but
would ensure that people have a broader picture of the entire organisation in their minds. Our
sense of purpose and mission must be maintained with the same sharpness as in those early
formative years.
Nike will continue to grow at that phenomenal rate and, like other multinational giants in other
markets, Nike will soar to still higher heights, far above danger!
Source
Bower et al, Business Policy, McGraw Hill,
.......................Executive Excellence, April 1999
Case study questions
What does the Phil Knight story teach you?
If you were to engage in a similar start up business, what would you focus on?
Unit 10
Aim
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The aim of this unit is twofold. The first is to demonstrate why TQM appears invincible while
the second is to activate motivations for all entities to embrace TQM at every level.
Objectives
By the end of this unit, the student should:
Appreciate TQM as a competitive tool
Consider TQM as standard bearer/trend setter
Quality now and in future
The quality revolution has now reached unprecedented levels and global proportions, far more
than what the original proponents ever imagined in their wildest dreams although their firm
conviction on quality necessity was dead on target. They at one time were lone voices in the
wilderness and perhaps despised or ignored by their countries of origin but now are venerated
whose legacy is sought after and perhaps improved upon. That is what often happens with
completely new ideas and innovations, they are initially ignored, opposed and disregarded until
proved useful or another adopts them and succeeds. Then the sleeping giant wakes up but is far
behind. At one time, this author attended an orientation program of a Palm tree plantation where
the Project Manager was explaining why and how the project was critical to economic
development. As he waxed eloquent, a number from among us kept mumbling some doubting
sentiments as to the viability of the said flowery project until he made a land mark statement. It
went something like this: “This palm tree will reach full commercial productivity by year six and
those of you doubting today and reluctant to join as out growers will realise too late to benefit, as
you will be six years behind!” This statement made every one sit up and pay more careful
attention. This is what happened to the Americans when the Japanese bought into the quality
teachings of the Quality gurus of the 1950s and afterwards. As we speak, Japan is probably the
leading country in quality matters as evidenced by their repeated success and market share
expansion over the years. If anyone thinks of the Toyota, Sony, Mitsubishi, Nintendo, Nissan
and Yamaha brands for instance, the basic assumption is that these genuine articles are of the
highest quality and will meet, yea, exceed customer expectation and satisfaction. Toyota for
instance is probably the leading motor company in the world, by passing General Motors,
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Crysler or Ford which were at one time the undisputed global market leaders. What is the secret
of Toyota’s success if we may ask? The answer is simple and soon told-Quality. Because of
excellent quality in all angles, the Toyota brand is cheaper, higher quality, efficient and
comparatively easier to maintain, purchase or resale without much ado. These and many other
traits, today’s customer desires and will willingly pay the extra cash for better quality-value for
money. But then, that is partly what the scenario is today, what will quality be like tomorrow
and beyond? Admittedly, it is difficult to state exactly where this ever complex quality craze will
lead to because so many changes and innovations are introduced every day. What may be the
latest today may drastically be obsolete and out of date the next day. At rare times, what was
considered inefficient and out of step yesterday may be brought to the fore once again with some
modifications of course. That is what happened in part to the Saturn Five rocket engine or the
record player disc which had been trashed but exhumed because of their unique properties. The
Saturn rocket used in the Apollo mission project appears to have been retired after 1973 but have
now been adopted for the Aires space vehicles that replace the Space Shuttle fleet after the 2010
retirement. Similarly, the record player disc (some form of CD) of the 1970s was trashed only to
see the light of day in the late 1990s into the new millennium except that laser technology was
adopted this time. That is what technological development is about, always changing and ever
advancing. At the core of all these innovations if the quest is to get better quality is the need to
ever innovate, create and fashion better products than before. Thus, returning to our question
about quality’s future, we can safely assert that we are neigh already past the TQM stage and fast
advancing to other quality enhancing models that will carry the day for us. For instance, Sigma
six and PERT, including many other innovations, qualitative and quantitative are on the market,
all clambering for attention and promising phenomenal world class super profits and success for
any entity that would adopt them. Sadly, most of these innovations are probably the same old
ideas dressed in a modern garb or just mere passing fads. But in the midst of all these
uncertainties lies the silver bullet. This calls for a stronger discerning eye.
That said, we can safely assert for sure that certain things will definitely happen although the
greater part of the iceberg remains veiled to the naked eye and submerged below view. In the
ensuing paragraphs, we attempt to open up what we perceive as what will happen in future.
Virtual teams refined and preferred
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For one thing, the quality revolution has and will increasingly usher in a new culture of
interaction across the world. Historically, we have known and trusted same time same time same
place teams which interact physically as well as jointly work on one project at a given site on a
daily basis. But quality will increasingly favour virtual team working where people will work in
self managing virtual teams with a federal net work arrangement, with practically no core or
head office. Team leadership will devolve and get better. In addition, one team member will be
connected to more than one team (multiple teams) and will successfully function, delivering on
their part. Matrix teams will be normal, ethical and encouraged. Consequently, knowledge work
will be highly valued especially in the weightless economy. Today, same geographical location
teams are the norm but tomorrow this is likely to change. As a result, costs will be drastically
reduced because a team leader will be able to communicate via video conferencing media or
other to be developed technology and give guidance as though they were physically present. By
that token, decision making will be quicker and thus increase working pace and speed. That said,
a network of thousands of knowledge workers akin to Vic Luck’s Coopers and Lybrand (Case
study) network arrangement will be the order of the day. Team members will be well versed and
better trained to efficiently work as team members of a diverse, geographically dispersed global
teams which will be divided by different time zones and cultures. Relativity will be better and
more competently handled. In short, cyber work will be the preferred mode of team work.
Virtual companies take centre stage in cyber space
Closely connected to the virtual teams mentioned earlier on, the mode, structure and type of
companies is increasingly changing and will continue to. Today, large multinationals with a huge
international workforce is the order of the day but may not necessarily be tomorrow. The
Executive Excellence magazine of 2000 predicts that virtual corporations are on the increase
with the advent of e-commerce/business. Today, anyone with internet access can just log on to
the relevant website and order a vehicle or whatever they desire at the click of the button. Most
of these genuine companies advertising on the internet exist with a large workforce behind them
working feverishly like beavers to satisfy the customers. Thus, they have huge overheads to keep
that work force running efficiently but these are now giving way to virtual companies which may
not have that huge machinery behind it. Some of these virtual companies are one or two man
companies operated in the comfort of their living rooms but with wide and deep connections
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with manufacturers. Once an order is pressed, in the nick of time, an automatic online order is
sent to the supplier whose systems operate on a Just in Time (JIT) arrangement will quickly
assemble the order and deliver as requested in record time. This arrangement is cutting down on
many overhead and storage costs, enhances quality and increases customer satisfaction. Thus, the
huge multinationals may need to revisit their strategies very soon lest they be undercut by the
new market/industry entrants. In fact, new industries are evolving which need meticulous
monitoring as well as timely response by the current industry leader incumbents. For instance,
the new companies are closer to the customer, more personal and focused on pleasing their client
far much more than the huge bureaucratic, inflexible, unresponsive and impersonal corporations
do today. Yesterday, General Motors was the unrivalled King of the Motor industry but today, it
is in deep weeds, worsened by the global economic meltdown of 2009. One hopes many other
traditional multinationals will not go down with it. For the first time in many years, bankruptcy
seems to be a sensible option. Fluidity, speed and flexibility are critical success factors today and
tomorrow. Projects will have to mutate the way they operate as well so that the deliverables are
made tangibly visible to the sponsors or else time will wipe away the project concept credibility.
Fewer technological glitches and flawless cyber space
In the early formative stages after the internet was invented way back in 1990 or so, an avalanche
of communication ideas have been developed over the years. Some are good and plausible while
others still are fraught with many problems while others have even been abandoned. Today’s
customer has many alternatives on what communication channel they can use on the internet. For
instance, there is video conferencing, You Tube, Face book, Twitter, email, Webbex, Skype,
teleconferencing, Internet chatting, fax, phone, wireless connectivity, document depository sites
and a whole range of alternatives. All a person has to do is access these mediums and connect to
the rest of the world within seconds, assuming their counterpart the other end is awake and ready
to chat. If not, they can leave a message and get on with other business unless further progress
hinges on feedback from the person so contacted. But then, despite all these technological
advances, there is much to be desired by each of them because their output quality is not always
good nor guaranteed. Admittedly, with advancement and continuous improvement, things are far
much better than years ago and will get even better. In future then, superb quality will be the
norm and one will feel much closer to their colleague across the globe as the present
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technological glitches will have been dealt with totally and finally. In fact, glitches will be the
exception rather than the norm. Customers, will feel very safe and comfortable to transact and do
business on the net rather than undertaking multinational cross global travels to attend a meeting
in Asia when it would be cheaper, better and more convenient to use other real time media. Of
course, tourism and cross cultural exchange visits will still be important and heralded but a
traveller will have more options than they presently have. Air travel will by that same token be
improved in order to attract the reluctant or more “choosy” customer.
TQM will set the pace & standards to which all shall aspire
As intimated in our opening remarks to this unit, we are fast progressing to other equally potent
quality models but TQM remains the major centre piece around which everything revolves.
Consistent with the TQM philosophy of an all pervasive companywide quality improvement,
TQM has and will set the pace but the bar will progressively get higher. If one needs to succeed
in the market place, they should not be short of the required minimum standard that will satisfy
the global customer. For instance, natural organic foods fetch a higher price than Genetically
Modified organisms/foods (GMO) because people perceive natural foods more healthy, palatable
and of better quality unlike in the past when volume was the issue. TQM still calls the shots and
will continue to for many generations to come. Anything that shall supersede it (TQM) will
merely be an improvement upon and an addition to what already obtains. That said, the standards
will be far higher than what presently obtains. We leave this assertion to a later point.
TQM is and increasingly will be a competitive advantage tool
As you will already have concluded from your studies and observations, TQM has set the centre
stage for global competition. Anything of mediocre or low standard has no chance of success in
today’s world, whether it is a product, service, process or even project outcome. Things just must
be at the highest and best levels for them to succeed. Thus, the processes will have to be even
better than was the case yesterday. ISO certification or other quality standards will assume
increasing importance and any one not adhering to some form of certification or other will
drastically diminish their competiveness as suppliers, customers and would be partners will
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demand proof of this. No one wants to risk their money or investments on what is not certain. If
things prove not genuine, recourse to court action is another laborious, inefficient and costly
affair so it is better to avoid complications from the start, thus certification will be that all
important key. Said differently, TQM will increasingly assume a competitive advantage tool
position that no one will dispute and in fact aspire after. Currently, certification is optional but
tomorrow, it will be inevitable, so the earlier an entity gets certified the better.
Quality will forbiddingly be high making today’s standards appear mediocre
TQM is the undisputed sought after gem today if the customer is going to be repeatedly and
consistently satisfied. One ignores it at their own peril. That said, we must be quick to say that
with the ever rapidly improving quality trends, things will get even better tomorrow than they are
today. What is perceived as exceptionally high quality today may not match tomorrow’s super
quality standards. In other words, quality will continue to be relative but minimum standards will
have been set beyond which entities will have to aspire after to remain buoyantly competitive.
This implies that what is qualitatively good today will appear mediocre and below standard
tomorrow. An example will do. When the Wright brothers first invented a workable plane and
flew in 1903, they were stars and the celebrities of their day. But in 2009, the same “makeshift”
plane they used is a hazard fit only for the museum! One even wonders how on earth some one
dared get into that plane! Today, we are talking about the A380 airbus, Space Shuttles, Boeing
787 and the rest of them which are somewhat highly computerised and can fly on auto pilot for
many thousands of miles without any slightest malfunction! Planes have evolved over the years
and continue to. What we are saying is that in the future, quality will be forbiddingly high and a
non-negotiable gem.
Many will build on today’s principles and concepts advanced by Gurus, past
& present
As earlier alluded to, there is nothing new under the sun except new innovations, improving on
what already exists. What we see as new today was probably inspired or triggered by something
in the creative mind of some genius. We can further say that we build on what our predecessors
have already done or laboured on. As one Puritan once correctly observed, “We shine today
because we stand on the shoulders of giants” meaning that the present “genius ideas” are
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probably a development on what already exists in some form or other. The point we are making
is that the quality initiatives started by yesterday’s quality gurus will live on and be improved
upon by future scientific cadres. Some unknowingly will adopt their principles and run with the
ideas whilst improving on them only to later discover that some earlier giant existed who
suggested those ideas albeit in a different context and form. Joseph Juran, Edwards Deming, Phil
Crosby, Douglass McArthur, Armand Feigenbaurn and Kaoru Ishikawa may not have been
viewed as legends in their day but the future will vindicate and honour them far much better than
we have hitherto done. Some recognition has admittedly been done but much more lies in the
offing. As a way of honouring them, people will work hard to build on their legacy to the point
where the original idea will scarcely be recognizable or linked to the highly developed product or
service. In fact, quality will become a basic norm akin to one boasting of having running water
flowing through the tap. To possess a cell phone was once a status symbol and affordable luxury
of only the filthy rich but not so now. What marks out some one is the quality and features a
phone has. The price gives you an idea of the quality of something. As earlier suggested, quality
will not and has not developed in a vacuum. There have been factors to be considered such as
availability of resources and correct systems. Increasingly, even other once remote factors as the
environment are now taking the centre stage. Quality will have to take care of all these
environmental concerns as we struggle to save the planet in peril.
As we come to a close of this grand quality treatise, we need to reassert that quality is indeed
free and cheap in the long run. This is for a good reason because once you eliminate defects,
produce a pleasing product or service, the returns and dividends are high, far outweighing the
initial costs. This implies cost saving, efficiency, effectiveness as well as attracting better and
higher funding if you are in the project world. If you are in the corporate world, you will have
strong staying power for decades, yea, centuries to come although some schools of thought do
not think a company can go past 200 years. With the quality weapon securely under your belt,
you will achieve far much more than you ever imagined. Your legacy will outlive you and your
product will be invincible while its time lasts. TQM is not a passing fad or management gimmick
to extort money out of people but is a companywide approach worth supporting by every
executive worth his salt. We must go further to assert that quality should begin with the
individual, much like what that phrase proposes, “Charity begins at home”. Once it is a value, it
will inevitably diffuse upwards within the system in as much as it can trickle down if there is top
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management buy in. The difference however with the upward diffusion is that quality will be
ingrained in people’s value system and will thus not be able to stomach or stand mediocre
output. This looks a tall order for now but the day will surely come when quality will be the
norm, if it is not already.
Bibliography.......................Business and the Environment (papers by various gurus)
Baird Grant, “It’s all in the stars...” Banking World, December 1989
Burnes Bernard, Managing Change, FT Prentice Hall, 4th edition, 2004
Campbell J David, Organisations and the Business Environment, Butterworth Heinnemann, 2002
Clarke Alan, e-learning Skills, Palgrave/Macmillan, 2004
Cole Robert & Mishler Lon, Credit Management, IrwinMcGraw-Hill, 1998
Comber Stan, “The decade of electronics” Banking World, December 1989
Crainer Stuart, The Jack Welch way, Magna Publishing Co. Ltd, 2003
Dresner Simon, Principles of Sustainability, Earthscan, 2007
Fortescue Seymour, “The dawn of a new age”, Banking World, December 1989
Fuller Michael, “What the Customer Demands” Banking World, December 1989
Genhardt Joan & Townsend L Patrick, How Organisations Learn, Financial World Publishing,
2001
Heller Robert, Managing Teams, Dorling Kindersley, 1998
Johansen Robert & O’Hara-Devereaux Mary, Global Work: Bridging distance, Culture & Time,
Jossey-Bass Publishers, 1994
Kakabadse Andrew & Analoui Farhad, Corporate Sabotage, Jaico Publishing House, 2004
461
Krames Jeffrey A, The Welch Way: 24 lessons from the World’s greatest CEO, TATA McGraw-
Hill, 2002
Langdon Ken & Bruce Andy, Strategic Thinking, Dorling Kindersley, 2000.
Lindsey W Ian, “The competition will become fiercer still” Banking World, December 1989
Oakland S. John & Porter Leslie, Cases in Total quality Management, Butterworth Heinnemann,
1994
Peters J Thomas & Waterman Robert, Jr, In Search of Excellence, Warner books, 1982
Pirrie David, “A Revolution in delivery”, Banking World, December 1989
Robertson D Ritchie, “The customer friendly way to deliver the services”, Banking World,
December 1989
Sleight Steve, Moving to E-business, Dorling Kindersley, 2001
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1989
Wanless Derek, “People-the key to success”, Banking World, December 1989
Case study
Shantumbu Holdings versus the Shoprite Checkers
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For many years, the shantumbu holding had reigned over the Mongu scene unrivaled. Rising
from an obscure insignificant chain of shops in the early nineteen seventies, the business empire
rose from strength to strength. Mr. Kabonda25, the proprietor proved himself a very shrewd and
seasoned business man who ensured that his businesses were far above what obtained in Mongu.
As his business prospered, he diversified into other business ventures unrivalled because his
fellow tribes’ men did not possess the right business acumen. In addition, the command economy
espoused by the state discouraged business and subtly encouraged dependence on the state.
Many people devoted themselves to public service from which they derived their livelihood
while looking down on free range entrepreneurs. However, Kabonda had a different spirit and
strongly believed in destiny self determination. He thus weathered the storm, criticism and
threats from all quarters and forged ahead. Fortunately, he was well connected to the powers that
be of the day and eventually managed to worm his way to the UK to study business management.
While he was abroad, his wife and children successfully ran his businesses though merely
scrapping through. He noted a training gap for his posterity if they were to continue expanding
his legacy. At his return after a two year master’s degree study, he came with bright business
expansion ideas which further distinguished his business from the rest. His former business rivals
from the Mbunda clan were no match for him as he espoused modern management practices,
high quality output, customer focus, competitive strategies in relation to pricing, promotion,
placing, and products. He further hired more staff while sending his heirs to work in the
corporate world and later sending them abroad to study. They were thus detached from the
business for many years. That notwithstanding, the Shantumbu enterprise blossomed in the
1980s and into the early nineties. Those were high points.
As the years rolled on, Mr. Kabonda senior (snr) became too comfortable, influential, powerful,
married many women and was generally a philanthropic man. By 1994, the man was growing
old and started recalling his well established children to return home to run his businesses while
he gave expert advices from behind the scenes. Naturally, the children, particularly the sons had
moved on, established families and were thus reluctant to return to the relatively rural Mongu.
One son (Monko) however agreed to quit his full time job and returned to take over the running
25 Not real name. Actual names withheld for security reasons except the Shoprite Checkers
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of the business while others supported from the terraces, as far away as the UK and USA. No
sooner had Monko taken over the reins than the old man died. That was a serious blow to the
business but thankfully, the old man had left a lot of money in reserve which could allow the
young mind to explore new business plans as well as expand the extant business. He straight
away got busy reshaping the business amidst family tussles over property disputes. He weathered
the wind out of the quagmires and slowly expanded the empire to its peak levels around 1997.
The business was pretty comfortable with a positive book balance, high asset base, good flawless
liquidity, highly diversified, a work force of 40, well connected to the powers that be, enjoyed
preferential treatment in contract bids and above all ran the best and only supermarket in the
whole province. No other competitor could match the business quality, availability of goods and
timely service. In a sense, all other smaller traders shrivelled into insignificance leaving the
Shantumbu holding a monopoly in the district. As a result, the enterprise staff became proud,
obstinate, boastful and cared less for customers having enjoyed government support. The
organization ceased to learn and became unresponsive although it still raked in super profits at
the end of the day. But things were about to change. The 1992 privatization act and liberalized
economic policies had begun to make inroads into the country allowing the multinationals to
have free reign into the country spreading their tentacles as they pleased.
Thus, in early 1998, the Shoprite Checkers chain store announced its intention to open up an
outlet in Mongu. At first, people were excited because this advent would mean the district would
now be regarded as a developed place and thus attract further investment. Consumers
interviewed in the marketing survey indicated a longing to have the shop set up camp as soon as
possible.
As the shop was setting up camp, something shocking happened. The first shock was that the
Shoprite received a lot of resistance from the local business community, especially the retail
traders. The second shock is that the company was denied access to land or shop premises in the
main business trading centre but were instead directed to some old dilapidated, abandoned, filthy
structures far out of town near the grave yard! The premises had formerly been a ware house for
the defunct state owned NIEC26 stores but had been idle for nearly a decade. The third shock was
the attempted arson by unknown people buttressed by warning letters from anonymous local
26 NIEC=National Import and Export Company, one of the companies allowed by the state to import or export products during the command economy.
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individuals, probably business people. On four occasions, the shop stock was saved from
destruction just in the nick of time but eventually, with intensified security, the place was
secured and finally opened its doors in mid 1998. As is the manner of curious shoppers, the place
was jammed with buyers on the first few days but business sharply declined thereafter. The chain
store had to craft another strategy to overcome this. Despite being a one stop shop, it did not
attract as many consumers as was anticipated and struggled along for a while.
The shop carried out a market research and concluded that a number of things needed to be done
to remain afloat. Among the recommendations, the following were the action points:
1. The shop was to maximize in stocking relevant product ranges such as mealie meal,
bread, soap etc
2. Closely connected to the above, the entity was to ensure that as much as possible was
available in one shop at a reasonable price.
3. The shop was to ensure the pricing was good, fair and reasonable to attract demand.
4. The shop was to maintain a high quality and clean environment. In addition, the shop was
to be careful with its product quality such as expiry dates, regular checks and proper
storage.
5. The shop was to run frequent promotions that would attract people to come over.
6. A free bus ride was to be offered to shoppers for a period of time so that the distance
factor would be narrowed.
7. The customer was to be king and highly valued. Thus, the customer would be held in
high regard and always considered right all the time.
8. Repeated training of staff was necessary to inculcate the universal organizational culture.
9. Be politically correct with the sitting Government, Traditional leadership structure (e.g.
The BRE) among many.
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These and many other innovations were diligently effected and slowly begun to pay dividends.
On the other end of town, the Shantumbu still felt safe, secure and in charge of the business. The
arrival of the Shoperite checkers raised a bit of concern to Monko and team but they were very
optimistic that the empire would weather the storm and once the “Shopy shopy” craze was over
and his loyal clients would eventually return to his super market. If that did not happen, his large
real estate investments would cushion the impact and thus allow his empire to continue unabated.
Besides, his brothers and sisters abroad would come in to the rescue if need be. Surprisingly, the
“Shopy” craze went on for far too long, his supermarket had fewer patronages, less demand and
therefore less income. His clients begun to ask things they previously never used to and were
generally unwilling to wait for him to deliver ordered goods from Lusaka and beyond. Others
just simply snubbed him or drove past his shop and never set foot there again. Consequently, he
begun to record losses, his damages increased and staff pilferage went up. Because of poor pay
or delayed remuneration, some of his best staff quit to join the Shoprite checkers. Things looked
bad but as usual, the empire was in denial. Looking across the fence to other entrepreneurs, they
were equally complaining and withering fast. The die was cast; it was time to change strategy.
To mitigate further loss, Shantumbu enterprises did the following:
1. The supermarket diversified further to include a bar in one section.
2. Real estates were improved upon to increase value so as to attract the NGOs and wealthy
individuals.
3. Monko was to explore the lucrative timber business at Senanga and beyond.
4. For a season, prices were to be slashed in a bid to win back the local customers although
the price slash was not for long lest the company went under.
5. The bakery which had been closed was to be revived but let out to some other
entrepreneur. The Shoprite bread was not very good at the time as it tasted abit odd,
rather too salty and thus that was an opportunity.
6. The customer was to be treated better than before.
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7. Mobilize more capital from kinsfolk abroad.
8. Introduce some credit sale.
The Shantumbu enterprise immediately effected these strategies with some periodic modest
success but it appears the plans came too late to win back the product loyalty.
By 2001, the Shantumbu Empire had had most of its market share eroded and was generally a
deserted place. The little that was raised could scarcely meet operational costs while the real
estate business had declined as the number of superior housing units came up from about 1992.
With time, the shop closed down, most of the real estate sold and workers laid off. That was the
end of the empire.
But the Shoprite checkers lives on today, growing from strength to strength. Will another appear
to dislodge this giant? Let us wait and see.
© Billy C Sichone 2008
Bibliography
Bower et al, Business Policy,
Burnes Bernard, Managing Change, 4th edition, FT Prentice Hall, 2004
Kotler P & Keller K L, Marketing Management, 13th edition, Pearson/Prentice Hall, 2009
Zikmund G William, Exploring Marketing Research, Thomson South-Western, 2003
Case study questions
What fatal errors did the Shantumbu enterprises make that eventually cost them?
What one factor made the Shoprite Checkers succeed in Mongu?
What would you comment about the reaction and behaviour of the local business community?
467
How best would have the local business community protected and improved their business
fortunes?
Comment on the diversification strategies of the Shoprite and Shantumbu companies.
Comment on the relevance of a strategy in a given context.
Comment on succession planning as relates to the Shantumbu enterprises and what lesson you
learn from it.
Write briefly (500 words or less) about a case you have witnessed or heard about in similar lines
to the above scenario on the Zambian scene.
What do you think caused the Shantumbu Empire to decline?
What were the success factors for the Shoprite checkers in Mongu?
What are some of the dangers any business should watch out for in a market economy?
Case study two (repeated case)
Team Work
“Teamwork is the key word” declares Vic luck, the Chairman of world-renowned Accounting
and consultancy firm-Coopers & Lybrand. Teamwork being the keyword for the successful
company of today and tomorrow, Collaboration is the Buzzword. Turn everywhere today; there
468
is a shift towards collaboration and teamwork so as to reap the best qualitative results. Vic Luck
has vast experience having worked in big companies such as Philips, Ford and Chrysler. These
are giants in their own right as they have well-established brand names. Reading the article
“Teamwork is the key word” from the CIMA Management accounting magazine, one cannot
help but notice how even the service industry is no exception in the march towards quality goods
and services.
Coopers & Lybrand is in the service industry providing consultancy services all over the world.
There is a sudden outburst of consultancy demands on the said firm everywhere, especially in
Asia. But what is the secret of this company’s success story?
The chairman gives us a number of hints, which are condensed in the following fashion:
v. Teamwork is highly emphasised. The consultancy firm has 11,000 professionals world-
wide. Only collaborative teamwork will do in such circumstances or else risk running
11,000 “stand alone consultancies!” The consultants sit together and brain storm an issue
and then come up with one answer which is the best for the purposes.
vi. Quality standards. Despite the increase in demand of services Coopers is careful to
maintain high quality standards, For it is these very high standards that put Coopers on
the map.
vii. Point system and rewards . The organisation gives points and probably rewards for
outstanding performances. This acts as an incentive to the team to work hard and attain
even higher heights. This has the effect of ensuring continuous improvement in the
services rendered to clients.
viii. Shared Knowledge . The firm has one big database to which all consultants can avail
themselves. Vic Luck has been at the helm of building this network and has done well
because this has propelled collaboration and teamwork. There is a sense of having one
“global team” in this IT* setting. Shared knowledge is another buzzword because
without information, one is doomed to failure. Capital alone is not good enough. The firm
is getting the benefits of having one big database, as information is very crucial today if
the firm is going to be strategic. The world is changing very fast, hence the need for the
right information at the right time, and that to teams! “The reliance on shared knowledge
469
rather than on the individualistic approach is one of the greatest changes in our business”,
quips Luck confidently.
Given the four reasons above, one cannot fail to see that teamwork has turboed Coopers &
Lybrands to the apex of the consultancy business. The hind experiences at Chrysler, Philips and
Ford perhaps have given the Coopers chairman the insight into gaining a competitive
advantaged position. High quality standards and continuous improvement through teamwork are
the only way forward for Coopers and Lybrands. The article ends with an aptly brisk statement
“With Luck, Coopers will probably pull it off”. This is a fine way to think of a firm and the
players therein!
* IT is Information Technology.
Source
CIMA Management Accounting magazine, January 1998
Case study questions
What do you think about Vick Luck’s assertion?
Do you think Coopers really has a competitive edge over others in the industry? Why/why not?
List some of the imaginable challenges that Coopers faces as it works with virtual teams.
How does hind some one’s hind industrial experience impact on organisational quality and
efficiency? (I.e. Often times we hear of elaborate world class profiles when CEOs have been
hired, as known quantities)
Revision exerciseWhy is TQM viewed as invincible? Comment in relation to strategy in general.
470
Write brief notes on what you perceive to be the future of Quality. Comment in relation to
project management as well (Essay total about 1,000 words).
Do you think the primary quality gurus will be venerated or discarded? Justify your answer.
Why do you think quality certification will be an increasingly competitive tool in future. Give at
least three reasons.
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475
Glossary (Adapted from various sources with some additions from author)
Activity: actions taken through which inputs (financial, human, technical, material
and time resources) are mobilised to produce specific outputs. The work of a project
or programme.
Advocacy: the use of persuasion, dialogue and reason to obtain change, rather
than the use of force. Advocacy is about changing balances of power. In the context
of World Vision’s core business advocacy is “the process of using the influence one
has by virtue of presence, expertise, size and programming to bring benefit people
in poverty.” Advocacy can be done for people, with people and by people, at the
grass roots and all levels of organised society up to international levels.
Annual Operation Plan: an operation’s plan produced annually, detailing the
activities and outputs for the following year together with relevant resource and
logistical planning. The plan would also include any specific monitoring and
evaluation activities, which would be implemented during the year.
Area Development Programme: a programming model that defines a
geographical area within which project activities will be implemented. These
activities are logically linked to overall programme impacts and a goal. Projects are
implemented in different communities within the area at different times over the life
of the programme. One of the central theses of this programming model is that the
entire area will eventually benefit from the development activities; the effects
spreading out much like the ripples across a pond. World Vision’s emphasis on area
development programming is community based and sustainable, especially focused
on the needs of children.
476
Assumption: hypotheses about necessary conditions, both internal and external,
identified in a programme or project design to ensure that the presumed cause-
effect relationships function as expected and that planned activities will produce
expected results. Assumptions which cannot be adequately addressed by the design
of a project become risks to the achievement of a project or programme. For the
most part, assumptions, and therefore risks, become more complicated for higher
level objectives of a programme or project.
Capacity building: the process of developing a person’s capacity in a particular
set of work-related or functional skills.
Caregiver: refers to the person primarily responsible for providing care to a child.
While in the majority of cases this will be a mother, this will not always be the case.
Child abuse: child abuse and maltreatment constitutes all forms of physical and/or
emotional ill treatment, sexual abuse, neglect or negligent treatment or commercial
or other exploitation, resulting in actual or potential harm to the child’s health,
survival, development or dignity in the context of a relationship of responsibility,
trust or power.
Child protection: child protection from a World Vision perspective is the process of
creating safer families and communities for children who face violence.
Child rights: the right of all children to survival, development, protection and
participation as outlined in the UN Convention on the Rights of the Child.
477
Community health worker: a health worker working within a public health
system, most commonly at a village level. A community health worker is usually a
member of the community who has been trained to deliver the front-line of health
service to their community.
Development programme: a collection of projects with the same sector, theme
or geographical area, to which a coordinated approach is adopted.
Disaster mitigation: a set of strategies and activities that are used in advance of
a disaster, with the aim of preventing or limiting risk and creating resilience, and
thereby reducing the impact of disasters.
Food security: exists when all people, at all times, have physical and economic
access to sufficient, safe and nutritious food to meet their dietary needs and food
preferences for an active and healthy life (14). See also food availability, food
accessibility, food
Impact: the long-term results of a programme or project. They are the significant
or lasting changes in peoples’ lives or a situation whether planned or unplanned,
positive or negative, directly or indirectly, that a programme or project helps to
bring about.
Objective: a generic term used to express desired results that a programme or
project seeks to achieve. There are different levels of objectives within a logical
framework, namely activities, outputs, outcomes, project goals and programme
goal. The first three relate to projects that constitute a programme and are for the
most part monitored. The last two will be evaluated at the programme level.
478
Outcome: benefits and changes (in individual or corporate behaviour/practices, or
systematic capacity) to which the outputs have contributed. The cause-effect
relation between output and outcome is usually changes in knowledge and
attitudes, which lead to changes in people’s behaviour. Outcomes are a measure of
effectiveness.
Output: the tangible products/services delivered as a consequence of
implementing one or more activities. Outputs contribute to achieving a higher-order
strategic objective and are a measure of effort expended.
Programme goal: the vision of the communities that sets the bigger picture
towards which the programme is working. The programme goal is the overall
objective, which will not be achieved by a single project but will require the
contributions of other projects, and other development actors.
Purpose: a term used in original log frame terminology that was a result combining
both outcome and impact that is between output and goal level of the log frame. It
represents the results which can be reasonably expected from a programme
provided that planned outputs are delivered, the assumptions remain valid and the
risks have not materialised.
Plan of Action: This is an organic document listing what actions and the route to
be pursed in doing an activity or set of them. This plan of action is derived from a
longer plan and may represent a particular time frame and range of activities such
as a week, month or quarter as the case may be.
Memorandum of Understanding: A document stipulating the agreed
terms of reference and responsibilities of each party to the given agreement.
This is different from a contract although it may be part of one.
479
Programme: An entity that is composed of a collection of projects integrated together with a
view to build synergy as well as collectively tackle a problem or set of problems in a given
geographical area.
Project: This is a specific undertaking by implementers derived from an agreement to handle a
particular problem or find solution to an issue in a given time farm, budget and contract
document relating to a target population, customers or sponsors.
Quality: Trait meeting specific standards, expectations, needs and desires of stakeholders and
customers.
Operations: Aspect of the entire entity that makes the organisation function according to plan
and achieve predetermined goals.
Total Quality Management: That all pervasive organisation wide management quality that
ensures that quality embedded throughout all the organisation system and process.
Index
3
360* appraisal.......................................................190
A
AIDS...............................................................57, 114Americans......................21, 22, 24, 41, 310, 443, 447Annual Operation Plan..................................116, 469appraisal109, 159, 187, 188, 189, 190, 191, 193, 194,
213, 214, 351, 433appraisals...............187, 188, 189, 190, 191, 193, 433Armand Feigenbaum.....................................3, 51, 60ASQ..................................................................13, 52Associations............................................................52attitude..................................................................142
B
Bill Gates.......................................303, 304, 306, 309BP Zambia...........................................54, 91, 92, 97
budget. 6, 93, 108, 111, 122, 133, 135, 146, 201, 224, 225, 245, 380, 386, 430, 472
bureaucracy. . . .31, 66, 70, 72, 79, 101, 172, 173, 225, 231, 276, 278, 281, 288, 308, 402, 421, 433, 434, 438, 442
business.12, 14, 15, 16, 18, 19, 22, 24, 36, 40, 42, 47, 48, 49, 54, 58, 64, 66, 67, 70, 72, 73, 74, 77, 78, 82, 86, 87, 91, 136, 147, 155, 158, 160, 166, 171, 174, 179, 181, 193, 204, 216, 217, 225, 226, 239, 254, 256, 257, 258, 260, 261, 262, 263, 265, 269, 274,鿘 282, 287, 291, 292, 295, 296, 297, 298, 300, 303, 306, 311, 313, 317, 321, 324, 341, 346, 351, 355, 364, 371, 375, 376, 378, 379, 380, 381, 382, 383, 384, 385, 386, 387, 388, 389, 391, 393, 395, 402, 405, 409, 412, 413, 421, 422, 433, 436, 439, 443, 446, 449, 450, 455, 456, 457, 459, 460, 461, 463, 466, 467, 469
Business..................................................................31
480
buzzword.....14, 21, 93, 202, 320, 427, 435, 441, 462
C
Cavendish University Zambia...................................7CEO....36, 68, 70, 104, 184, 210, 237, 255, 258, 270,
281, 305, 311, 408, 410, 411, 441, 455China.......................................................86, 402, 418coach..............................142, 143, 149, 152, 153, 443concept15, 46, 50, 51, 59, 60, 61, 72, 78, 81, 86, 107,
108, 136, 138, 204, 386, 429, 442, 450continuous improvement....18, 21, 89, 132, 240, 262,
283, 304, 306, 320, 321, 324, 433, 439, 443, 450, 462, 463
Copper belt University..................................196, 197Corporate growth....................................................91cost effective...9, 21, 41, 82, 161, 173, 216, 217, 334,
349, 354, 403Crosby..............3, 22, 47, 48, 49, 50, 61, 89, 431, 453Cross Roads...........................................64, 65, 66, 67culture............................................141, 441, 443, 445customers....18, 23, 25, 27, 40, 65, 67, 71, 72, 73, 79,
80, 81, 82, 84, 87, 91, 100, 101, 147, 176, 178, 202, 211, 250, 262, 263, 274, 277, 278, 279, 283, 298, 299, 305, 312, 314, 315, 318, 323, 324, 329, 330, 339, 363, 375, 376, 404, 410, 414, 424, 430, 431, 438, 439, 441, 442, 449, 451, 457, 459, 472
D
decisions...............................................................150Deming. . .3, 22, 39, 41, 42, 43, 44, 46, 47, 50, 51, 52,
59, 60, 62, 89, 427, 438, 453Dependence syndrome..........................................243Detailed Implementation Plan.......................116, 134differentiation..........................................88, 102, 103Direction................................................................19DIRFT.....................................................................61diverse...................................................139, 140, 152DMDT...................................................................165DME............................................7, 13, 132, 134, 155
E
effectiveness.....25, 42, 73, 78, 89, 90, 132, 164, 179, 230, 240, 273, 312, 337, 431, 453, 471
efficiency 25, 50, 89, 90, 91, 106, 154, 164, 223, 240, 331, 332, 333, 335, 354, 360, 435, 444, 453, 463
EIA............................................54, 84, 108, 240, 243
environmental analysis..............................18, 19, 376evaluate..............................9, 109, 136, 188, 193, 383evaluation17, 18, 20, 36, 89, 107, 118, 125, 126, 129,
130, 132, 134, 135, 155, 188, 189, 194, 196, 214, 341, 360, 466, 468, 469
Excellence. . . .12, 36, 52, 76, 104, 153, 177, 178, 179, 181, 182, 184, 185, 206, 214, 322, 324, 325, 440, 446, 449, 455
F
facilitate................................................................444feasibility study.............................................107, 108finance...................................................................146Finance.......16, 25, 126, 128, 201, 223, 379, 383, 388Fish bone.................................................................60focus.....................................................................438Fredrick W Taylor.................................................293
G
General Douglas McArthur.................................3, 51General Motors..................20, 41, 403, 437, 447, 450Generation X.........................................................230Generation Y.........................................................230George Elton Mayo...............................................293global economic meltdown..............16, 123, 242, 450Global Village.........................................................16
H
Harvard University................................................291hierarchical.........68, 93, 198, 199, 257, 401, 434, 442HIV..................................................57, 114, 117, 254HIV & AIDS.........................................................114Home Based Care..................................................116HRM.4, 158, 160, 161, 163, 166, 167, 169, 170, 174,
175, 183, 186, 195, 196, 259
I
IBM.......................................................303, 308, 423IHRM....................................................169, 170, 183ILO....................................................56, 75, 184, 466implementation4, 17, 19, 20, 24, 54, 56, 63, 107, 108,
109, 110, 111, 115, 116, 118, 119, 120, 123, 124, 129, 130, 133, 135, 136, 139, 142, 144, 164, 195, 216, 223, 224, 225, 241, 243, 244, 245, 246, 247, 248, 249, 251, 253, 274, 287, 323, 352, 355, 431, 433, 435
481
Indicator Tracking Table.......................................133integrated program.............................6, 216, 253, 265Integrated Program management.....................4, 215internal customer.....................................50, 277, 323international 16, 17, 21, 25, 30, 32, 40, 42, 63, 67, 68,
78, 80, 92, 97, 133, 135, 166, 169, 170, 173, 196, 218, 255, 260, 261, 265, 276, 279, 282, 286, 287, 290, 298, 301, 316, 379, 402, 403, 404, 406, 414, 415, 423, 424, 425, 438, 444, 449, 465, 469
International Standard Organisation..................52, 97internet...................6, 13, 48, 268, 321, 322, 449, 450Ishikawa diagram..............................................50, 60ISO 14000..........................................................24, 54ISO 9000....................................24, 52, 53, 54, 56, 74ISO standards...................................10, 35, 56, 74, 99IT151, 154, 320, 329, 331, 332, 334, 337, 339, 340,
344, 367, 387, 462, 463
J
Jack Welch. .25, 35, 184, 232, 408, 409, 410, 411, 454Japanese. .9, 15, 21, 23, 24, 35, 40, 42, 44, 46, 47, 50,
51, 52, 59, 60, 61, 62, 230, 286, 435, 438, 442, 447JIT...........................................................90, 226, 450Juran..3, 22, 43, 44, 45, 46, 47, 50, 51, 59, 60, 62, 89,
90, 438, 453JUSE......................................................40, 46, 50, 52
K
Kaizen..................................21, 23, 35, 325, 326, 435KAIZEN.................................................................21Kaoru Ishikawa...........................................3, 50, 453KFC......................................................................286Known quantities...................174, 262, 300, 305, 308
L
LAN..............................................................346, 347leadership...............................142, 148, 153, 437, 439Leadership......68, 122, 156, 157, 196, 198, 204, 205,
266, 272, 273, 275, 465LEAP............................................................134, 136Logframe...............................................................112
M
M & E...111, 129, 132, 135, 136, 156, 246, 249, 253, 433
Malcom Baldrige National award...........................52
management...................................141, 150, 441, 443Management. 4, 11, 12, 15, 16, 17, 35, 36, 46, 51, 53,
55, 56, 68, 69, 75, 76, 77, 78, 80, 82, 92, 99, 103, 104, 106, 124, 133, 137, 139, 140, 157, 158, 160, 161, 166, 167, 169, 176, 183, 184, 185, 188, 192, 198, 199, 213, 214, 216, 227, 254, 265, 266, 267, 272, 277,鿘 307, 315, 320, 321, 327, 330, 335, 336, 339, 342, 345, 347, 349, 352, 353, 356, 359, 362, 365, 378, 379, 382, 383, 386, 405, 423, 427, 430, 437, 438, 454, 455, 460, 462, 463, 465, 466, 467, 468, 472
Management fads..................................................428Market Research...................................................226Marketing. . .16, 17, 25, 36, 71, 87, 90, 157, 226, 227,
274, 406, 415, 460, 465, 468Marks and Spencer........................275, 277, 278, 280mentor..........................................................142, 152Microsoft......181, 240, 303, 304, 305, 306, 307, 308,
309, 310Mission statement................................................218Mitsubishi.....................................................286, 447module..................6, 7, 9, 10, 14, 22, 56, 77, 132, 226motivating.............................................................145motivator...............................................................152Multinational...........................................................23Mwanalushi...................................188, 193, 214, 466Mwendafilumba................................................68, 73
N
NASA........................................................83, 90, 217NGO......................................................................133Nokia.....................................................366, 367, 368
O
Opel...............................400, 401, 402, 403, 405, 406operational............................................................445organisation 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 25,
44, 72, 74, 79, 82, 83, 85, 87, 89, 91, 101, 103, 106, 108, 126, 141, 146, 148, 160, 161, 164, 165, 166, 167, 168, 169, 170, 171, 173, 174, 175, 179, 182, 183, 186, 187, 188, 189, 191, 192, 196, 198, 199, 200, 202, 203, 204, 205, 206, 207, 208, 209, 210, 212, 216, 219, 226, 227, 231, 232, 234, 236, 239, 259, 260, 261, 265, 272, 273, 274, 283, 287, 294, 306, 307, 312, 320, 323, 324, 327, 332, 344, 348, 349, 358, 360, 361, 362, 363, 364, 372, 379,
482
408, 409, 412, 417, 423, 425, 428, 429, 431, 432, 433, 435, 436, 437, 438, 439, 442, 443, 445, 462, 472
organism...........................................16, 25, 147, 277
P
paradigm...............................................................152Participatory Rural Appraisal................................109PDCA......................................................................59PDQA....................................................145, 199, 203people management.........93, 99, 120, 166, 167, 186Performance Appraisal..........................................188Personnel Management.................................158, 166Peter Drucker..........................................12, 166, 176PMIS.....................................................................133PRINCE 2..............................................................55PRINCE2.............................................55, 56, 74, 118Professionals.........................................................126programs24, 41, 75, 83, 106, 142, 159, 176, 181, 217,
253, 265, 292, 295, 303, 304, 305, 306, 336, 341, 344, 347, 360, 433, 467
project. 1, 3, 4, 6, 9, 15, 17, 22, 25, 38, 52, 54, 55, 56, 57, 58, 63, 65, 74, 77, 78, 79, 82, 84, 86, 87, 88, 89, 90, 91, 104, 105, 106, 108, 109, 110, 111, 112, 114, 115, 116, 117, 118, 119, 120, 122, 124, 125, 126, 127, 128, 129, 130, 131, 132, 134, 136, 137, 138, 139, 140, 145, 154, 155, 156, 158, 159, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 172, 174, 175, 183, 187, 188, 192, 193, 195, 201, 213, 214, 215, 216, 217, 218, 219, 221, 223, 224, 225, 226, 227, 228, 229, 230, 231, 232, 240, 241, 242, 243, 244, 245, 246, 247, 248, 249, 250, 251, 253, 254, 259, 265, 362, 383, 401, 422, 427, 429, 431, 432, 433, 447, 449, 450, 451, 453, 464, 469, 471, 472
project management.........................6, 9, 56, 126, 138Project Manager.....3, 56, 57, 58, 107, 119, 120, 124,
125, 126, 129, 155, 166, 176, 195, 220, 447project quality...........................................................6projects. . .6, 17, 55, 58, 84, 85, 89, 90, 106, 107, 108,
110, 115, 129, 130, 131, 132, 133, 134, 135, 136, 138, 145, 148, 156, 164, 170, 172, 176, 211, 213, 216, 217, 219, 224, 229, 231, 239, 240, 241, 254, 255, 262, 265, 322, 362, 423, 430, 432, 433, 470, 471, 472
Projects.....55, 63, 106, 108, 130, 140, 159, 217, 228, 231, 433, 450, 469
Provisional Design Document...............................110
Q
quality...144, 146, 148, 149, 438, 439, 441, 442, 444, 445, See
Quality 1, 3, 4, 7, 9, 11, 13, 14, 16, 22, 35, 36, 38, 41, 46, 47, 49, 50, 51, 52, 58, 59, 60, 61, 63, 74, 75, 76, 77, 78, 79, 80, 81, 85, 86, 87, 88, 92, 102, 103, 104, 106, 136, 186, 199, 202, 203, 254, 287, 300, 307, 314, 320, 427, 431, 436, 441, 447, 452, 453, 462, 464, 467, 472
quality culture.........................................................89quality gurus.............7, 9, 35, 47, 49, 51, 52, 453, 464
R
revolution. . .3, 38, 58, 61, 74, 275, 401, 436, 447, 449robust....................................................................444
S
Shoprite..........................455, 456, 457, 459, 460, 461skills.......................................................................144SMART.........................................................114, 156SMS......................................................................367St Micheal.............................................................275stakeholders....16, 79, 84, 85, 87, 105, 107, 109, 110,
111, 125, 128, 130, 133, 136, 176, 202, 242, 243, 244, 245, 247, 250, 251, 252, 254, 286, 408, 417, 424, 425, 434, 472
Strategic Business Units......................................408strategically...................................................149, 444strategy....9, 14, 15, 16, 19, 20, 21, 32, 66, 67, 68, 71,
72, 73, 82, 84, 101, 108, 115, 131, 144, 218, 242, 247, 257, 258, 264, 265, 277, 281, 283, 284, 285, 286, 287, 290, 294, 299, 303, 312, 318, 319, 322, 339, 340, 376, 381, 388, 397, 403, 404, 414, 415, 416, 417, 421, 431, 433, 435, 458, 459, 461, 464
Strategy..........................................15, 17, 21, 71, 465SWOT..................11, 16, 17, 118, 274, 376, 393, 414systematic..............................................................140
T
Team....................................................93, 94, 95, 232team-building model.............................................232Teams.. .4, 35, 157, 183, 184, 227, 228, 266, 454, 466
483
Teamwork. 94, 95, 147, 315, 319, 320, 441, 444, 462Tesco.....................................................391, 392, 393TOTAL QUALITY.................................................14Total Quality Management.............................14, 81Total Quality Movement.........................................23TQM. . .3, 9, 11, 14, 15, 19, 21, 22, 24, 25, 36, 38, 58,
63, 72, 74, 77, 78, 80, 81, 82, 83, 84, 85, 86, 89, 91, 92, 95, 96, 97, 98, 99, 103, 104, 117, 198, 202, 203, 204, 205, 207, 325, 415, 427, 428, 430, 431, 432, 435, 436, 440, 447, 448, 451, 452, 453, 464
traditional......................................................442, 444Transformational Development Indicator..............110
U
USAID..........................................................131, 254
V
vision....................................................................146Vision. . .7, 13, 19, 133, 134, 135, 138, 140, 141, 142,
144, 146, 147, 148, 153, 154, 163, 196, 197, 198, 199, 200, 202, 204, 205, 206, 217, 218, 219, 229, 467, 468, 469, 470
W
Wal-Mart...............................................................310World Vision..........145, 147, 196, 204, 205, 218, 468WVZ...............................................132, 197, 206, 468
Z
zero defects.........................14, 43, 48, 202, 431, 438
484