Maravi

(HERALD) Parastatals under fire

Parastatals under fire
By Tawanda Musarurwa recently in Nyanga

LOCAL parastatals have the worst approach with regards to management and implementation of corporate strategies, a Zimbabwe Institute of Management conference heard last week.

This was said at The Zimbabwe Institute of Management’s 9th Annual International Management conference in Nyanga, which was held under the theme ‘Unraveling Pathways to Corporate Success in The Midst of Domestic, Regional and Global Reforms’.

In his keynote address, ZIM past president Dr Ray Folcarelli said that parastatals had largely failed to respond to the consistently shifting operating environment.

"According to a study of 150 managers in the country, the majority of parastatals emerged as the worst in strategy implementation, although some of the strategies were good in theory," he said.

However, a few parastatals such as the Peoples Own Savings Bank and the Zimbabwe National Water Authority (ZINWA) were found to be poor in terms of both strategy formulation and implementation.

"Around 62 percent of Zimbabwean corporate can be categorised as having formulated good strategies, but fall significantly short on implementation. Only 14 percent have implemented effective strategies," he said.

The proposed restructuring of Zimbabwe’s parastatals has taken time yet the majority were buckling under the weight of bloated management and workforce structures that are inflating operating costs.

The problem of poor strategy also applies to private sector companies in the country, which are generally uncompetitive on an international comparative basis and in view of new global reforms.

For instance, according to a research by local firm Industrial Psychology Consultants Zimbabwean banks’ staff costs were on average higher at 31 percent compared to the international norms of 28 percent.

This has adversely affected the industry as highlighted by that sector’s high levels of headcount reduction.

Dr Folcarelli reiterated the need for corporates to strategically realign to changes in the macro-economic environment.

"Zimbabwean corporations, suffer from a problem to the extent of a risk-averse culture, they are simply too conservative. Parastatals especially, are constrained by the fact that they consider every economic decision as simultaneously a social one.

"There is need for balance. For instance, businesses in industrialised countries have developed a trend to focus almost exclusively on the economic aspects, while ignoring the social effects, a factor that contributed considerably to the global financial crisis.

"In view of rapid changes in the wider operating environment, there is need for organisations to quickly respond by way of unlearning old paradigms. Key to realignment is to approach management in terms of strategic thinking not just strategic planning," he said.

The business macro-operating environment has seen several reforms including, among others, the regional integration of trade practices and protocols, the adoption of regional single currencies, the integration of capital markets, as well as the integration of labour practices and laws at regional and international levels aimed at easing the movement of labour.

Labels: PARASTATALS

posted by MrK @ 9:09 AM