Mcknsey 7s Framework- NISSAN VIRIMAYI CHINYAMA, NGONI KURUMBA

1.1 Using supporting evidence from the case, discuss how Mr. Carlos

Ghosn applied the Mckinseys’ 7 S framework to turn around the

fortunes of Nissan. (25 Marks)

Strategy

Strategy basically entails the appropriate course of action to take in order to meet

organizational goals and objectives. Mr Ghosn applied strategy and revamped Nissan in

the following ways;

Strategic alliances.

Mr Goshen applied strategy to turn around Nissan as he accommodated and also

facilitated strategic alliances between Nissan and Renault. This strategic alliance was

vital to the success of Nissan as it helped get rid of the short term troubles that had

accumulated. This alliance also helped Nissan adopt Renault’s competencies such as

sophisticated manufacturing. These strategic alliances made them profitable in the long

run and helped them adopt the efficiencies of Renault. This can be seen by the below

quotation;

“Triggering the alliance was Nissan’s strength in product designs and sophisticated

manufacturing that blended well with the engineering quality at Renault. For Renault, the

alliance would help in international expansions in the long-term while for Nissan; it was

to get rid of its short-term troubles that had accumulated. “

Cost Cutting and improving profits through strategies such as Divestments (NRP Stage 1)

Mr Goshen also applied the strategy in the 7s model and implemented cost cutting

measures with inurn would cut down losses. This included divestments from subsidiaries

to reduce debts. Furthermore to cut the costs, Mr Goshen closed five plants which

included both assembly plants and power train plants. This can be seen by the quotation

below;

“The first major step Carlos Ghosn undertook was divestments from subsidiaries to

reduce the debt”

Low Cost strategy.

This included new supplier acquisition by providing a platform for any supplier to supply

Nissan. This in turn reduced the bargaining power of suppliers and therefore ensured that

the supplies brought to Nissan were at a low costs. The quote below attests to this,

. “As part of the revival plan, suppliers were forced to offer discounts to the tune of 20-

30%and the number of suppliers was brought down to 600 from 1145 while the

purchasing costs were reduced by 20%”

International Market Penetration and expansion (compettive strategy)

Mr Ghosn also brought about a strategy for market penetration and expansion as he

ensured that Nissan opened a new plant in North America where it had been receiving

intense competition from competition, primarily competition from Japanese car

manufacturers. This was a strategy to fend of competition as it would allow them to tailor

make cars in that region with the specific need of customer belonging to that region. This

also would bring about international presence and brand recognition in North America.

The quote below highlights the strategy;

“A new plant was set up in Canton, the first in North America where Nissan was facing

challenges from other Japanese automakers, Toyota and Honda”

Cost reduction strategy in manufacturing

Mr Ghosn also crafted a strategy to counter the shortage of steel. Nissan closed its plants

for 5 days, which generated more savings than losses ($9.7 billion). This was a short term

strategy meant to address the temporary shortage of steel in China. The quote below

highlights the benefit of the strategy;

“Ghosn defended himself saying that the savings achieved during that phase

were far more [$9.7 billion] than the losses incurred due to loss of sales. “

Increase in sales and improving the top line growth

This was the second stage of NRP, which involved increasing the number of cars sold

and dropping non performing products from its portfolio. This brought about the need for

innovation and differentiation, which they achieved by introducing the Nissan Z coupe,

which was new product and line which they had never ventured into but was relatively

successful. This can be supported by the quote below;

“Carlos Ghosn stressed on selling more cars, improving the top line growth as well.

Dropping non-performing products from its portfolio, the company introduced trendy

new models in SUVs and minivans category. An updated Z sports coupe was

reintroduced in the market. The phase two increased sales by one million and debt was

brought down to zero”

StructureThe structure best describes how the organization is organized. In this case it would be

how Mr Ghosn realigned and revamped the organizational structure of Nissan to help it

achieve its objectives and attain profitability.

Cross functional integration and teamwork

Mr Ghosn revamped the structure by facilitating the integration of employees with

different expertise to work together across functions. Employees became more involved

in the revival process. This also made employees look beyond their lines of

responsibilities and allowed them to appreciate and acquire knowledge of what happens

in other departments. The quote below highlights the structure change;

“Cross-functional teams were formed and employees were involved in the revival

process....Through these cross-functional teams, employees were made to look beyond

their line of responsibilities, understanding the nitty- gritties of the other departments as

well”

Workers assumed responsibility and accountability

The after effect of cross-functional teams was that employees owned up responsibility

whenever something went wrong. Initially nobody wanted to take responsibility when

results where unfavorable. Accountability and responsibility brings clarity and

coordination within the organization.

“After the cross-functional teams were in place, people owned up responsibility

whenever something went wrong”

Clear Objectives , roles and tasks

Teams were asked to submit plans on how they would achieve objectives that would

bring out the maximum output and the decision making process was cut down to just one

week for the execution of those plans. This brought about a clear clarification of roles and

tasks, goals and objectives. This also eliminates confusion within the organization and

ensured that objectives are tackled in a timely way as everyone will be aware of what

they must be doing and why they are doing it . The below quotation attests to this;

“He establishes high yet attainable goals; makes everything clear to all roles and levels of

responsibility, works with speed; checks on progress; and appraises results based on fact”

Decentralization

Mr Ghosn revamped the structure by facilitating the participation of employees thereby

allowing them to make their own decisions. Moreover, the fact that the functional teams

where required to make their own plans and implement decisions within the week

pertaining to those plans, this highlights that tactical decisions were now decentralized

“Listening to the employees and facilitating their participation in the decision-making

process, was key aspect of Carlos Ghosn's leadership.”

SystemsThis basically looks at the business and technical infrastructure that employees use on a

day to day basis to accomplish their aims and goals.

Regular meetings put in place to overcome resistance to change.

This ensures that employees and design engineers would adopt the technology that was

brought about from the alliance, in this particular case, Renault. Also regular functional

team meetings would constantly keep them in line with organizational goals.

“ To overcome resistance, regular meetings were conducted among the Nissan and

Renault employees”

Implementing a 100 key word dictionary to be used throughout the

organization.

Cultural clashes where minimized by making English the common language within the

organization. This ensured that employees understood each other and put their cultural

differences aside. Some of the words included 'commitment', 'transparency', 'objectives',

and 'targets', and this kept all employees on one page.

“To ensure that the Japanese staff understands what the French managers spoke, English

was made the common language in the company”

Quality control team

With the declining quality and standards, complaints were now being made by customers

concerning the defects. Sales also plunged. Mr Ghosn introduced quality control teams

that analyzed each and every part of the product line and improved the production

process. The quality control team was a system put in place to ensure that products

remain high quality and with minimum defects. The quote below highlights the quality

control team;

“To counter the situation, in May 2004, he sent a quality control team of 220 engineers to

the Nissan plant in Smyrna (Tennessee) and every part of the assembly line went through

a detailed scrutiny”

Implementation of the Nissan Revival Plan (NRP)

This was a system that addressed timing, plan schedules, commitment as well as targets.

This would make it easier to conduct progress checks and easy monitoring of activities.

Plan schedules in their own right are a system for apportionment of planned work and

activities. Targets keep employees in line with meeting organizational objectives.

“The outcome was the Nissan Revival Plan (NRP). After the NRP was announced, every

aspect from the timing, the plan schedules and the commitments as well as targets were

clearly stated”

Shared ValuesThis is entails the set of traits, behaviours and characteristics that the organization

believes in. This also includes the organizations mission and vision.

Identify the needs of stakeholders

Mr Ghosn brought about transparency within Nissan as he invited the input of every

influential individual including suppliers, ex-employees and dealers.

Translating an English speaking culture within the organization

Mr Ghosn managed to turn around Nissan through the implementation of one common

language that intended to address the cultural disparities of the different employee

backgrounds within the organization. This also in turn ensured that cultural conflicts were

eliminated. It placed the employees in one accord to focus on reviving Nissan with the

using of common words such as 'commitment', 'transparency', 'objectives', and 'targets'.

“A dictionary of 100 key words used by them –management- was prepared to solve the

differences in the way each work was interpreted by French as well as Japanese. The

words included 'commitment', 'transparency', 'objectives', and 'targets'

Introducing the NRP ‘ through the whole organization

He put forward the NRP as an ‘organizations collective effort’ involving thousands of

employees at every managerial level. This ensured that all employees work with a

common vision and goal of reviving Nissan. The NRP brought about clarity of objectives

that would lead to the achievement of the vision. Each stage of the NRP had an objective

and mission to meet. This can be highlighted by the quotation below;

“He called the NRP, an 'organization's collective effort' involving thousands of

employees at every managerial level”

“The first phase of NRP focused on cutting the costs and improving profits”

Staff Staff refers to the number and types of personnel within the organization and how companies

develop employees and shape basic values. It also refers to the company's people resources and

how they are developed, trained, and motivated.

Introduction of a Performance based and merit based system

This allowed Nissan to identify the competent employees and to reward them .The motivated

employees as it as they would feel recognized and appreciate by their hard work. This would

guarantee commitment and effort from the employees. The old system that gave merit to elders

disregarded the other employees that would work hard but were not old enough. However, this

system was removed and replaced with a more contemporary one.

“The seniority-based promotion that was entrenched in the Japanese firm was replaced by

a performance based and merit-based incentive system”

Layoff through retirements, pre-retirements and golden handshakes

Instead of sacking people which was against the Japanese way, layoff were done through

retirements and golden handshakes. Golden handshakes highlight that employees were

recognized for their services to Nissan and where given a retirement package. This also

made sure that cost cutting was achieved by staff layoffs however, retirement packages

and payments would also act as insurance to those employees left behind who were not

laid off. This would ensure their commitment to the organization. This can be supported

by the quote below;

“Instead of sacking people, which was against the culture in Japan, 21,000 jobs were cut

through retirements, pre-retirements and golden handshakes out of which 16500 were in

Japan alone”

Empowerment and motivation

Mr Ghosn constantly endeavored to motivate and empower employees. Motivation would

bring about high employee commitment, high productivity and achievement of goals. By

maintaining a level of interest by the employee within the organization, it would translate

the fact that employees would be posed with new challenges and constantly keep them

thinking of where the business will go. Empowering them would allow them to make

their own decisions which also gave them room to stretch their mental capabilities. This

would develop the employees.

“His management style is woven around two attributes- 'value and motivation'. He

believed in motivating employees and demanding performance by empowering them.”

Participation

Mr Ghosn facilitated the participation of Employees by allowing them to make their own

plans and to articulate their viewpoints to him if the felt to do. The employees would feel

recognized and appreciated thereby increasing their morale and motivation. Participation

also brings about an improvement of processes.

“Carlos Ghosn had to repeatedly explain to the employees that he needed their

viewpoints and would not mind if they speak out”

“Listening to the employees and facilitating their participation in the decision-making process,

was key aspect of Carlos Ghosn's leadership”

Style This highlights the culture of the organization, consisting of two components namely

organizational Culture and management style.

Transformational leader

Mr Ghosn managed to change the old production processes of Nissan by bringing about

the engineering quality of Renault to Nissan. Furthermore, Mr Ghosn also brought about

new models in SUV and Vans. He also change the organizational culture to one culture

governed by English. He also combined team work across functions, and brought about

process changes through alliances with companies such as Mitsubishi. This ensured the

revival of Nissan One quotation in the text highlights that;

“Some others called him 'an ambassador of change'

Democratic Leadership Style

Mr Ghosn had a democratic leadership style that allowed employees to participate and

articulate their thoughts to him. This would improve processes as it eradicated

bureaucracy and would help the employee develop themselves in decision making and

thinking.

“Listening to the employees and facilitating their participation in the decision-making process,

was key aspect of Carlos Ghosn's leadership”

Facilitating teamwork across functions within the organization.

Cross functional teams where put in place that brought about the involvement in the process of

reviving Nissan. This brought about unity, coordination and harmony within the organization as

employees would appreciate what different functions do.

“Through these cross-functional teams, employees were made to look beyond their line

of responsibilities, understanding the nitty- gritties of the other departments as well”

Other qualities of leadership that he possessed where;

Open mindedness- As he was willing to learn from others that is, hearing the thoughts of

employees. The helped him revamp Nissan as employees would work with the feeling of

being recognized, hence they would put in more effort.

Innovative- He brought about new processes and products, such as Vans and a remake of

the Nissan Z. This would help Nissan achieve brand awareness within the market and

differentiate themselves from competition.

Approachable and welcoming- He allowed employees to speak to him and would

accommodate their ideas. This would help Nissan maintain a high productivity as the

employees would feel recognized and motivated, which will ensure their productiveness

Fairness and Transparency- The removal of rewards according to age and the

introduction of performance based rewards proved to be fair and transparent.

Skills This basically highlights the capabilities and competencies that exist within the

company. What it does best.

The skills that were used in Nissan to revamp it was;

Cross functional skills amongst engineers and financial people. The entailed that

both functions appreciated and new something about the other function.

Use of design engineers to differentiate products “While at the same time, Carlos

Ghosn began to recruit more designers from Japan to design new models”

A quality control team of 220 engineers. This helped them address the issue of

defects, improve the production processes and improve the quality.

Innovation and development. This can be seen by the fact that Nissan came up

with new models and Mini vans. This helped them achieve a sales increase and

competitive advantage.

Conclusion.

The Mckinseys’ 7s frame work can be used in any type of organization to turn

inefficiencies into efficiencies. It covers all the aspects of the organization and if applied

properly can turn a struggling organization into a successful organization. This can be

seen in the case of Nissan, as it managed to revamp it.

Question 1.2

Discuss the behavioral attributes that enable a leader to become effective in a work

organization (15 Marks)

The performance of any organization is intertwined to the type of leadership it has. In the

case study, Carlos Ghosn is a typical revolutionary leader who managed to turn around

Nissan’s sinking ship when all other prospective partners abandoned the alliance given its

high debts and losses. Following is the analysis of the behavioral attributes that research

has universally discovered to be essential for organization’s based on the success story of

Carlos Ghosn leadership. Usually there is a thin line between skill and behavior where

the former can be developed and learnt, whilst the latter encompasses the virtues and

values that form part of the person’s character.

Willpower and Determination

This is willingness to accept responsibility of leadership (Tozer J. etal, 1997) and every

successful leader must have the determination to “take the bull by its horns”. Carlos was

very determined to take the Nissan challenge from the initial stage, where he consciously

decided not to learn about Japan prior but to discover by himself when he got there.

Indeed, he gave himself time to discover Japanese culture at Nissan and language and he

was coined a polyglot (multi-linguist) and a cosmopolitan (multi-culturist) by analysts.

Carlos was determined to restore Nissan viability through his unpopular non-Japanese

unconventional regimes. He worked against initial resistance for the employees and

transformed them into a hub of solutions, he went to an extent of connecting with Nissan

ex-employees and influential suppliers in a bid to gather knowledge. He worked 24/7

because of his determination to work and solved problems that he was not even

responsible for.

Inspirational and Motivational

These attributes require high levels of energy and enthusiasm of the leader which is

passed onto employees and unlocks additional effort and performance of employees

towards target achievement (Folkman et al, 2010). Mr. Carlos was a charismatic leader

who was committed to employee motivation as he encouraged employee participation in

decision making, a difficult task since the Japanese are generally unforthcoming with

their ideas. As he constantly explained the value of their view-points, they became

initiators of great ideologies. He even became a model to leaders of other companies in

Japan who began to implement his leadership style, the “Foreigner’s.

Driving for results and walking-the-talk

Leaders who do not stick to their word lose the employee trust and integrity and this

impacts negatively on the performance of the employees towards the organization. They

must do what they expect their subordinates to do (Folkman et al, 2010). If there is clarity

of direction, then it makes employees see the results of their extra efforts leading to a

ripple effect of organizational citizen behavior (OCB). Colleagues were impressed by

Carlos’ hard work with himself going round the clock to achieve the objectives, this

became infectious throughout his team and they had a collective mind in achieving the

targets. Someone noted that he can be ruthless to those that are not results-oriented. He

formed the Nissan Revival Program (NRP) which was a vehicle of implementing his

strategies through setting clear high but attainable, times lines, responsibilities and

followed up religiously on outcomes. He would personally make a follow-up on issues

for checking progress, also he set short-term goals so that speedy results would be

realized.

Strategic perspective

Successful leaders set effective strategic plans through intellect and “clarity of thought”

attributes which is the ability to reduce challenging tasks into simple formats and focuses

on that till results are achieved (Folkman Z, 2010). Carlos was able to stratify the main

challenges of restoring profitability and debt management into workable tasks through

the formation of NRP at all managerial levels involving thousands of employees which

he coined a “organization collective effort”. The main strategies revolved around cost

cutting measures which alone led to huge inrods to bottom-line restoration. The policies

for purchasing and investment were all changed as a measure of cutting down costs. He

also strategically shut down five subsidiaries which were making losses and embarked on

an extensive job cut. This brought about an impressive turn-around of Nissan. The

alliance with Renault took advantage of exististing infrastructure which gave them

economies of scale,

Collaboration

Research has discovered that leadership that promotes collaboration or cohesion among

work groups inculcate unity of purpose in the organization which is the very essence of

success. This is creates an enjoyable experience and positive work environment for

employees which makes them highly productive (Folkman et al, 2010). Carlos formed

cross functional groups among the Nissan management team, which received serious

resistance since their culture was sectionalism. However, through persistence Carlos

managed to win then over by explaining the benefits these groups have. This was the

inception of NRP groups which became key to strategy plan execution that bore excellent

results of reduced costs, thereby improving the bottom line. The benefits lie in that the

fact that employees get to understand other departments better and develop concern and

eventually assist in cross function problem solving. The groups also worked in Carlos

favour as they became an ingredient of his acceptance by the employees.

Trust

Mutual trust in any organisation gives positive results since it allows autonomy in the

group, this has a naturally effective impact for execution of tasks. Carlos listened

carefully to his employees and respected their individuality whilst promoting

participative involvement, this led to employees trusting leadership and by delivering

because Japanese are usually not forth-coming with their ideologies. On the other hand,

Carlos showed trust for the team as be always said that solutions to Nissan problems lie

within and can only be solved by the employees. He also managed to re-gain trust from

the community when made sure that he attended their special events after being

considered disrespectful the first time he failed to attend.

Moral courage

This is boldness to take challenging decisons because it is right, correct and necessary

despite being unpopular (Tozer etal, 1997). Satisfied leaders take problems head on and

not shy away from conflicts but solve them as soon as they arise (Folkman et al, 2010).

The very first step of accepting the job from a sinking company was very courageous

since his counterparts from other companies could not stand the challenge. Again Carlos

was younger than most of his management team, this did not intimidate him or impede

him from giving instructions.

When Carlos discovered that some subsidiaries were unprofitable, he shut them down

and this created hatred towards him by stakeholders in the five companies to an extent

that he had to use a body guard when going around. He was very decisive and tactful in

handling the issue to prevent premature abortion of the plan as some board members were

strongly resistant. Again he instigated for job cuts through prime and prior retirements

plus golden handshakes, all in the aim of cutting down expenses which was very

necessary. Again, the merging of the platforms from Renault and Nissan brought in

cultural conflicts between the French and Japanese in the aim of reducing the overall

platform levels to sustainable levels. He went out of his way to make the arrangement

work and introduced a “most commonly used” 100 English words to ease the

communication barrier between the two national groups, it worked quite well.

Highly confident and positive

Employees prefer to follow a positive and confident leader as they would be certain of

achievement to results. Carlos was so sure of the effectiveness of his unconventional and

non- Japanese methods until he even vowed that it they fail he is ready to leave together

with his team. When he was faced with quality challenges and performance dropped

dismally, he confidently assured people that he will fix it and he did!

Develops and supports others

Employees who develop new skills become highly productive and promotable (Folkman

et al, 2010). Carlos did a great deal of developing the Japanese at Nissan through

transformation from their poor problem solving to a very effective team of problem

solvers. They did not accept responsibility and would rather live with the problems, this

is toxic to any organisation. To promote competence amongst employees, he changed the

culture of promotion by seniority to promotion by performance, this would motivate

employees to strive for excellence. Carlos promoted individualism as a strategy for

Japanese as he noted that they are not easily come forth with their ideas compared to the

French at Renault where team work was prominent. He also was able to harness the two

team’s strength i.e. Japanese’s love for manufacturing and the skillful designs that the

French could make.

List of references

Folkman S, Kupst MJ, Butt Z, Stoney CM, Griffith JW, Salsman JM, , Cella D. Assessment of

stress and self-efficacy for the NIH Toolbox for Neurological and Behavioral Function. Anxiety

Stress Coping. 2010; 28(5):531-44. PMID: 25577948; PMCID

Citing relevant examples, critically examine the organizational behavior

issues confronting Zimbabwean business managers.

Introduction

Managers are a key resource within the organization. They facilitate the success of the

organization by planning, leading, organizing, controlling and staffing the human and non

human resources within the organization. According to Golembiewski (2001) highlighted

that the success of managers is greatly determined by their ability to manage

organizational behavior issues using their functions. Golembiewski (2001) further

highlights that organizational behavior runs across groups, individuals, structure and the

environment. To add on, managers have to use their functions to manage organizational

behavior effectively in order to help the organization achieve its goals and objectives.

However, these organizational behavior components encapsulate the platform in which

the organizations operate. They are the skeleton that helps define the organization. With

this in mind, this essay will critically examine how these organizational behavior issues

are confronting Zimbabwean business managers using relevant examples.

Definition of key terms

Robbins and Judge (2007) defines organizational behavior as a field of study that

analysis the impact of how individuals, groups and structure affect the behavior within

the organization for the purpose of using this knowledge towards improving the

organization’s effectiveness. However, to refine the definition, organizational behavior

can be defined as the detailed examination of how the environment , groups, individuals,

and structure affects the performance of the organization, with the systematic view that

the environment is divided into both the internal and external environment.

Body

The main organizational behavior issues confronting Zimbabwean business managers are

groups, individuals, structure and the environment.

Individuals

Attitudes, attitudes, personality traits and values

The individual forms a substantial part of organisational behavior. It is the individual that

goes on to form groups and structures within the organization. Within Zimbabwe, issues

such as job attitudes, personality traits and values as well as stress and motivation

always confront business managers in Zimbabwe. Masara (2016) highlighted that

workers at Hwange fainted at work due to hunger and stress as they had a 10 month

salary back log. The workers committee chairperson of Hwange went to highlight that

stress related to being a bread winner who does not bring anything home coupled with

hunger had caused fainting and death of workers. With stress being prevalent within the

organization, job dissatisfaction becomes very high and there were medical

consequences such as death.

Moreover, the fact that workers are not being paid translates that basic needs such as the

need for shelter and basic needs such as food, clothing and health are not being met. The

motivation of employees will most likely be low. Business managers in Zimbabwe will

end up having to deal with absenteeism, poor productivity by employees and resignations

by employees. With this in mind, Zimbabwean managers are faced with the need to

motivate their subordinates. They can apply job enrichment and job enlargement

among other job design processes indoor to increase the motivation of their employees.

Mswazie (2015) highlighted that sixteen thousand Tongaat Huelet workers in Chiredzi

went on strike with the intention of amassing a salary increase. According to Hertzberg

two factor theory, hygiene factors such as remuneration do not give positive satisfaction

or motivation but their absence causes dissatisfaction. In this case the individual

“Tongaat Huelet worker” felt that he/she was not getting paid enough and the absence of

the desired remuneration caused dissatisfaction thereby causing strikes, which in turn

lower productivity as they where no longer going to work. This can be underlined as one

of the organizational behavioral issues affecting Zimbabwean managers. In this case

managers have to ensure the motivation and satisfaction of their employees.

Personality, emotions and moods

The individual is also governed by personality which is also encompassed by emotions

and moods. This also is an organizational behavioral issue confronting Zimbabwean

managers. Nguwi (2014) articulated that most managers lack the emotional intelligence

to handle people at an emotional level. The lack of such skills has led to so much

disillusionment in many organizations. The article further goes on to say “In Zimbabwe

you rarely come across employees who say their managers look at the emotional side of

the business”. Nguwi (2014:1). This leads to low employee engagement which in turn

affects the level of employee productivity.

Groups

Zimbabwean business managers are also confronted by groups as part of organizational

behavior issues. According to Golembiewski (2001) groups can either be formal or

informal and if managed well, groups can help the organization meet its objectives and

goals. If high group coerciveness is achieved, performing becomes inevitable within the

organization. An example is how a few doctors at the Borrowdale Medical centre formed

a group to fundraise money for the daily running of the medical center when it extended

its hands to the public. According to the Suburban (2016, 3) the doctors had once

common cause, which was to fundraise for the running costs if Borrowdale Medical

Center. Their amalgamation helped them use one of the Doctors yard ‘ Dave Sheehan’ to

beam a movie called Blind sight which saw hundreds of people come and support the

BMC fundraising. With this in mind, they managed to achieve a goal which was to

establish daily operations of Borrowdale Medical Center to serve the public. It should be

noted that groups are formed within the organizations and Zimbabwean business

managers must lead groups and steer groups efficiently in order to achieve organizational

goals.

Leadership

In addition to groups and individuals being organizational behavioral issues in

Zimbabwe, the type of leadership exerted to both the groups and individuals daily

confronts business managers within Zimbabwe. An example is how Air Zimbabwe, CSC,

and national railways were run down due to poor leadership. Gutu (2016) alluded to the

fact that Air Rhodesia had at least 14 aircrafts, but 36 years later the now called Air

Zimbabwe now has less than 4 functional aircrafts and is in a debt of three hundred

million United States Dollars. Poor leadership can be seen here as it reflects lack of

integrity, lack of vision and an absence of accountability. However, good leadership is

also confronting business managers in Zimbabwe. New Zimbabwe (2015) articulated that

Dr Lance Mambodiani (Steward Bank Chief Executive Officer) has been a key player in

the implementation of the banks tech based strategy and the development of several new

products and services which has transformed Steward bank into one of the country’s most

innovative banks where other banks appear to be struggling’’. This highlights a leader

who is visionary, innovative and creative and as well as transformational.

Power and organizational politics.

Moreover, issues such as power and organizational politics regularly confront managers

in Zimbabwe. An example is how the NRZ CEO was appointed by the president, giving

him legitimate power to steer the organization, however, the CEO being of a military

background had no expert power in railway matters. This is a dominant issue in

Zimbabwean business environment, whereby individuals are placed to head parastatals in

areas that they do not have expert power in. This confronts managers as they are led by

people who have no background or knowledge of the business that they are heading.

Structure

Organizational Structure also poses as one of the organizational behavioral issues

confronting managers in Zimbabwe. In the Zimbabwean business environment, they are

circumstances in which the organizational structure is poor due to inefficiencies such as a

wide span of control, an ambiguous and not so clear chain of command, misuse of

authority and misallocation and abuse of resources among other inefficiencies.

Authority and allocation of resources.

An example can be seen in the Herald newspaper within an article written by Razemba

(2016) on how senior CMED officials where implicated in a scenario whereby they

where accused of collecting fuel from the national oil infrastructure company reportedly

for government business, only to divert it to private service stations for resale,

prejudicing the state of millions of dollars in revenue. This highlights the abuse of

functional authority by management, and intentionally misallocating resources for their

personal benefit. However, in some circumstances, Zimbabwean business managers use

authority properly and allocate resources well. An example is how Econet implemented

its cost cutting mechanism by selling the bulk of their fleet to staff and also moving

employees from buildings where they where renting to buildings which they own. This

allowed them to cut down rental costs and move the money that could have been used to

pay rentals to other business ventures. The Financial Gazette (2015)

Conflicts

Organizational behavioral issues such as conflicts also confront Zimbabwean business

managers. Conflicts can be a result of poor organizational structure or change in

organizational culture. Conflicts are inevitable, however, its how they are resolved that is

important and whether or not they are actually resolved. According to Robbins (2012)

there are 3 types of conflicts within organizations, namely conflict with the boss, conflict

with a workmate and conflicts among team mates. The article goes on to articulate that

conflict is inevitable in organizations as individuals are molded from different

backgrounds and have different values, cultures and perceptions. With this in mind

Zimbabwean managers are confronted by conflicts and it is their duty to address them.

They can take either a traditional or contemporary approach. The latter being the most

favorable.

Organizational Culture

Culture is one of the fundamental instruments of organizational behavior that always

confronts Zimbabwean business managers. It basically stipulates the way things are

done in organizations. This eventually becomes a blue print within the organization. An

example of Culture is how Econet has a culture of pioneering. This has also translated to

their subsidiary Steward bank who now has a culture of being pioneers in the banking

sector of Zimbabwe. According to Chulu (2012), Econet’s corporate social responsibility

culture is well-known. The company recently launched the green kiosks, a venture that

ties business with corporate social responsibility. Econet’s innovation and pioneering

culture is also consistent.

Managers in Zimbabwe have to help establish a culture that compliments the

organizations values and mission.

Environment

The environment poses as a confronting issue to Zimbabwean managers. The

environment is divided into two, namely, the market environment and the general

environment. The market environment includes competitors, suppliers, customers and

financiers.

Competitors

An example that brings out the effect of the market environment entails how the local

companies were being affected by imports. According to Kachembere (2014), local

industries were crying foul over the influx of cheap imported commodities into the

Zimbabwean market. This affected the performance of organizations as they could not

compete with imported goods as they where relatively cheaper than locally produced

goods. To curb this, the government implemented an import ban with the rationale of

protecting local industries. The Daily news further goes on to say the import ban has

created opportunities for the local manufacturing industries to boost their production

capacity.

Customers and Suppliers

The customers largely affect the business environment and confront Zimbabwean

business managers. Customers can choose to buy or not to buy the organizations

products. Manatsa (2015) perpetuates that customers had been boycotting Alpha Omega

products for political reasons. Moreover customers can also determine the price of

products.

The suppliers as part of the environment confront Zimbabwean businesses on a daily

basis. They determine the availability of products and services within organizations. If

the suppliers are not happy with the price, they can withhold their products/inputs.

Financiers

This entails supporting arms to business such as banks and financial institutions.

Business managers are daily confronted by the financiers as they affect the availability

of funds and capital to organizations. According to the financial Gazette (2016)

businesses have slowed down for local companies as they are not able to access liquid

cash from banks. The banks have put daily limits to as little as two hundred dollars for

cooperates. This will in turn affect the organizations performance as the cash crisis can

limit their activities,

General Environment

The general environment also forms part of the organizational behavioral issues that

confront Zimbabwean managers daily. The general environment is characterized by the

political, economic, social and technological environment.

Political environment

The political environment directly affects the performance of the organization and its

behavior. Political instability in Zimbabwe has made the business environment to be

unstable. Polices such as Indigenization policy has demeaned probability of businesses to

receive funding via investors from abroad. Chigada (2016) articulates that if Zimbabwe

wishes its banks to have access to adequate international lines of credit for, and loans to,

its banks, it has to ensure complete investor and lender confidence, and hence the

mandatory indigenization threshold in the financial sector should not be greater than

25%.

Economic environment

The Economic environment as an organizational behavior issue also confronts business

managers in Zimbabwe. The state of the economy determines the success of businesses.

If the economy is progressing, businesses are most likely to thrive and the opposite is

true.

An example is the Liquidity issues being experienced in Zimbabwe. According

Karombo (2016), cash shortages in Zimbabwe have also forced Delta to delay the

commissioning of two new plants in Kwekwe and Masvingo as outbound remittances

from Zimbabwe take longer to effect.  The lager beer volumes declined by 7 percent for

the quarter period and were also down 11 percent on the half yearly basis on the back of

depressed consumer spending patterns as the consumers cannot access their solid funds at

free will in the amounts that they choose. This is one of the issues confronting

Zimbabwean business managers in relation to organizational behavior.

The Economic environment is characterized by inflation rate, interest rates, liquidity

issues, fiscal or monetary policies induced by the government .These will affect the

performance of organizations and will confront business managers in Zimbabwe.

Social environment

The social environment is characterized by issues such as demography, social media,

sex, literacy level etc.

A recent example is how the pressure from social groups such as Tajamuka, Pastor Evan

via social media (Hash tag# shutdown Zimbabwe) affected businesses a few months ago.

Zhangazha (2016), articulates that the shutdown called on July 6 2016 by the pressure

groups was the largest strike experienced since the year 2007. Businesses where shut

down including banks and retail shops. Managers could not go against the call to stay

away, as it was considered to be a national vendetta.

Technology

Technology as part of organizational behavior issues regularly confronts Zimbabwean

managers on a day to day basis. Technology entails innovation, internet, inventions

and shifts in the production processes. In Zimbabwe, the installation of fiber optic

cables nationwide has brought about fast, reliable and efficient internet nationwide.

Companies such as Telone, Steward bank and TM-PicknPay have harnessed benefits

from this. Managers such as Dr lance Mambondiani (Steward Bank CEO), have caressed

technology advantages and have used this to transform both their organization and

employees through innovation.

ConclusionZimbabwean business Managers are constantly confronted by organizational behavioral

issues such as the individual, groups, organizational structure and the environment on a

daily basis. They should use their functions, skills and knowledge to manipulate these

issues to bring out favorable results within the businesses that they operate.

List of references

Chulu B, ‘Strategic HR vs current share prices’ Zimbabwe Independent, 12 October 2012, Accessed 23 October 2016:https://www.theindependent.co.zw/2012/10/12/strategic-hr-vs-current-share-prices/

‘Econet cost cutting measures lead to US $ 70 million savings’ The Financial Gazette, 24 August 2015, Accessed 22 October 2016:http://www.financialgazette.co.zw/econet-cost-cutting-measures-lead-to-us70-million-savings/

Golembiewski R, ed.  2nd. Ed. (2001). Handbook of     Organizational Behavior , (KSL Core Ref. HD 58.7.H355)

Gutu O,’Corruption, greed drive Zim to the cleaners’ NewsDay, 7 October 2016, Accessed 22 October 2016:https://www.newsday.co.zw/2016/10/07/corruption-greed-drive-zim-cleaners/

‘HUNGRY HWANGE WORKERS FAINT AT WORK ‘NewsdzeZimbabwe, 14 May 2016, Accessed 21 October 2016:http://www.newsdzezimbabwe.co.uk/2016/05/hungry-hwange-workers-faint-at-work.html

Kachembere C, ‘Cheap imports choke local industry’ Daily News, 19 May 2014, Accessed 23 October 2016:https://www.dailynews.co.zw/articles/2014/05/19/cheap-imports-choke-local-industry

Karombo T, ‘Zimbabwe’s flat economy hits beer sales’ IOL, 18 October 2016, Accessed 23 October 2016:http://www.iol.co.za/business/news/zimbabwes-flat-economy-hits-beer-sales-2080820Mswazie W, ’16,000 Tongaat Hulett workers strike’ Chronicle. 1 December 2015, Accessed 21 October: http://www.chronicle.co.zw/16000-tongaat-hulett-workers-strike/

Nguwi M, ‘Lack of soft skills: Biggest challenge to Zimbabwe’s economic recovery’ The Financial Gazette, 15 May 2014, Accessed 21 October:http://www.financialgazette.co.zw/lack-of-soft-skills-biggest-challenge-to-zimbabwes-economic-recovery/

‘Steward Bank appoints Mambondiani as substantive CEO ‘New Zimbabwe, 6 August 2015, Accessed 22 October

2016:http://www.newzimbabwe.com/business-24141-Mambondiani+confirmed+Steward+Bank+CEO/business.aspx

Razemba F, ‘Fresh fuel scam rocks CMED’ The Herald, 22 August 2016. Accessed 22 October 2016:http://www.herald.co.zw/fresh-fuel-scam-rocks-cmed/

ROBBINS, S. P., & JUDGE, T. (2007). Organizational behavior. Upper Saddle River, N.J., Pearson/Prentice Hall.

Zhangazha T, ‘July 6 Stay away: Enter WhatsApp+ Mediating Zimbabwe’s New Consciousness’, Nehanda Radio.18 July 2016. Accessed 23 October 2016 :http://nehandaradio.com/2016/07/18/july-6-stay-away-enter-whatsapp-mediating-zimbabwes-new-consciousness/

Great Zimbabwe University

MHUMUMUTAPA SCHOOL OF COMMERCEDEPARTMENT OF MANAGEMENT STUDIES.

GROUP ASSIGNMENT

Student Name: Ngonidzashe Kurumba M168406

Student Name: Virimayi Chinyama M168417

Student Name: Godfrey Mugabe M165130

Student Name: Consolata Nkobi M168396

Student Name Samson Chibaya M168396

Degree: MCom Strategic Management.

2016 / Part 1 Semester 1

Course : Management of Organizational BehaviourCourse Code: MSM505

Lecturer: Mr Makumbe