PROBLEM FORMULATION AND RESEARCH …gsblibrary.uct.ac.za/researchreports/EMBA2/FriedrichsPR.pdf ·...

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P.R. FRIEDRICHS EMBA 2 FINAL DISSERTATION

CONTENTS

CONTENTS DISSERTATION PREFACE

A PROBLEM FORMULATION AND RESEARCH FRAMEWORK --------------------3

A.1 DEVELOPING THE QUESTION....................................................................................................................... 3 A.1.1 Background ----------------------------------------------------------------------------------------------------3 A.1.2 Introduction-----------------------------------------------------------------------------------------------------5 A.1.3 Selecting an Area of Interest and Finding a Topic---------------------------------------------------5 A.1.4 Points to be Considered when Formulating the Problem------------------------------------------7 A.1.5 Why is this Topic Important? ------------------------------------------------------------------------------9 A.1.6 The Problem------------------------------------------------------------------------------------------------- 10

A.2 DEVELOPMENT OF THE RESEARCH FRAMEWORK ...............................................................................11 A.2.1 Management Research Philosophies----------------------------------------------------------------- 11 A.2.2 Philosophical Approach Adopted for this Paper---------------------------------------------------- 12 A.2.3 Proposed Approach within Phenomenology -------------------------------------------------------- 13 A.2.4 Approaches within Action Research ------------------------------------------------------------------ 14

A.2.4.1 Participatory Action Research -------------------------------------------------------------------- 15 A.2.4.2 Action Science---------------------------------------------------------------------------------------- 15 A.2.4.3 Evaluation---------------------------------------------------------------------------------------------- 15 A.2.4.4 Soft System Methodology ------------------------------------------------------------------------- 16 A.2.4.5 System Dynamics------------------------------------------------------------------------------------ 18 A.2.4.6 Summary of expected Research Direction---------------------------------------------------- 19

A.2.5 Literature Review for Research Framework--------------------------------------------------------- 21 A.2.6 Action Research ID Comments------------------------------------------------------------------------- 21 A.2.7 Action Research CLD Story ----------------------------------------------------------------------------- 24 A.2.8 General Research Lessons CLD Story--------------------------------------------------------------- 26

A.3 PROPOSED APPROACH TO THE APPLICATION OF SOFT SYSTEMS METHODOLOGY...................27 A.3.1 Rich Picture -------------------------------------------------------------------------------------------------- 30 A.3.2 Sources of Data For Development of The Rich Picture------------------------------------------ 30 A.3.3 Expected Interview Process----------------------------------------------------------------------------- 31 A.3.4 Analysis of data --------------------------------------------------------------------------------------------- 35 A.3.5 Identification of Issues------------------------------------------------------------------------------------- 35 A.3.6 Conceptual Modeling-------------------------------------------------------------------------------------- 36 A.3.7 Ideal World: Real World Comparison to Develop an Agenda for Discussions------------- 37 A.3.8 Discussing the Agenda with the Actors--------------------------------------------------------------- 38 A.3.9 Implementing Change------------------------------------------------------------------------------------- 38

A.4 CONCLUSION FOR THE RESEARCH FRAME WORK..............................................................................39

B DATA COLLECTION & ANALYSIS-------------------------------------------------------- 40

B.1 PREAMBLE ......................................................................................................................................................40

B.2 INTRODUCTION..............................................................................................................................................40

B.3 GENERATING DATA.......................................................................................................................................43 B.3.1 Step 1: Situation Considered Problematical--------------------------------------------------------- 43 B.3.2 Step 2: The Problem Situation Expressed (Data Collection) ----------------------------------- 43

B.3.2.1 Interviewing Process -------------------------------------------------------------------------------- 46 B.3.2.2 Rich Picture Building (RPB)----------------------------------------------------------------------- 46

B.3.3 Step 3: Root Definitions----------------------------------------------------------------------------------- 50

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CONTENTS

B.3.3.1 Root Definition 1-------------------------------------------------------------------------------------- 51 B.3.3.2 Root Definition 2-------------------------------------------------------------------------------------- 51

B.3.4 Step 4: Conceptual Model ------------------------------------------------------------------------------- 51 B.3.4.1 Conceptual Model for Root Definition 1 -------------------------------------------------------- 52 B.3.4.2 Conceptual Model for Root Definition 2 -------------------------------------------------------- 53

B.3.5 Step 5: Comparison Conceptual Model to Real World ------------------------------------------- 54 B.3.6 Step 6: Agenda for Discussion and Debate --------------------------------------------------------- 55

B.3.6.1 Rich Picture Discussion ---------------------------------------------------------------------------- 55 B.3.6.2 Root Definition – Discussion ---------------------------------------------------------------------- 55 B.3.6.3 Conceptual Model – Debate ---------------------------------------------------------------------- 56

B.3.7 Step 7: Action------------------------------------------------------------------------------------------------ 56 B.4 CONCLUSION TO SSM DATA GENERATION.............................................................................................56

B.5 REFLECTION ON MY EXPERIENCES WITH CFI AND SSM......................................................................58

C LITERATURE REVIEW ------------------------------------------------------------------------ 61

C.1 KNOWLEDGE TO ACTION - KEEPING THIS PROCESS ALIVE................................................................61

C.2 MANAGEMENT OF SHAREHOLDER VALUE ..............................................................................................64 C.2.1 Introduction--------------------------------------------------------------------------------------------------- 64 C.2.2 Interrelationship Diagraph Interpretation ------------------------------------------------------------- 65 C.2.3 Causal Loop Diagram (CLD) Story -------------------------------------------------------------------- 68

C.2.3.1 Operations Cycle------------------------------------------------------------------------------------- 68 C.2.3.2 Management Cycle---------------------------------------------------------------------------------- 69 C.2.3.3 Implications Of The CLD For CFI---------------------------------------------------------------- 69

C.2.4 Leadership --------------------------------------------------------------------------------------------------- 70 C.2.5 Empowerment Of Employees--------------------------------------------------------------------------- 70 C.2.6 Loyalty & Communication-------------------------------------------------------------------------------- 71 C.2.7 Retention of Management ------------------------------------------------------------------------------- 72 C.2.8 Conclusion of Management of Shareholder Value------------------------------------------------ 73

C.3 CREATING VALUE THROUGH PEOPLE......................................................................................................75 C.3.1 Relevance to CFI of Creating Value Through People -------------------------------------------- 75

C.4 GLOBALIZATION.............................................................................................................................................76 C.4.1 Introduction--------------------------------------------------------------------------------------------------- 76 C.4.2 Globalization Affinity Diagraphs ------------------------------------------------------------------------ 77 C.4.3 Company Interrelationship Diagraph Interpretation ----------------------------------------------- 81 C.4.4 Company Causal Loop Diagram Story --------------------------------------------------------------- 85 C.4.5 Globalization Model for Companies ------------------------------------------------------------------- 88 C.4.6 Reflection of the Globalization with reference to CFI --------------------------------------------- 92

D CRITICAL THINKING AND THEORY DEVELOPMENT ----------------------------- 93

D.1 INTRODUCTION..............................................................................................................................................93

D.2 CONVERSATIONS..........................................................................................................................................94 D.2.1 Introduction--------------------------------------------------------------------------------------------------- 94 D.2.2 Methodology------------------------------------------------------------------------------------------------- 95 D.2.3 Conversations & Leadership ---------------------------------------------------------------------------- 95

D.2.3.1 Conversations & Leadership CLD 1 Explanation-------------------------------------------- 96 D.2.3.2 Conversations & Leadership CLD 2 Explanation-------------------------------------------- 99

D.2.4 Conversations & Leadership CLD 3 Explanation -------------------------------------------------101 D.2.4.1 Conversations & Leadership Conclusion-----------------------------------------------------101

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D.2.5 Conversations & Knowledge ---------------------------------------------------------------------------102 D.2.5.1 Conversations & Knowledge CLD1 Explanation -------------------------------------------103 D.2.5.2 Conversations & Knowledge CLD2 Explanation -------------------------------------------104 D.2.5.3 Conversations & Knowledge CLD3 Explanation -------------------------------------------108 D.2.5.4 Conversations & Knowledge CLD4 Explanation -------------------------------------------108 D.2.5.5 Conversations & Knowledge Conclusion-----------------------------------------------------110

D.3 INTELLECTUAL CAPITAL & THE VALUE GAP..........................................................................................111 D.3.1 Introduction--------------------------------------------------------------------------------------------------111 D.3.2 Equation to assess the value incumbent skilled staff --------------------------------------------111 D.3.3 Conclusion intellectual capital and the value gap-------------------------------------------------112

D.4 THEORY AND CONCEPT DEVELOPMENT MODEL ................................................................................114 D.4.1.1 Stage 1: Filtration -----------------------------------------------------------------------------------117 D.4.1.2 1st Level : Wording of the Question-------------------------------------------------------------117 D.4.1.3 2nd Level : Paradigm Focus ----------------------------------------------------------------------118 D.4.1.4 3rd Level : Framework------------------------------------------------------------------------------119 D.4.1.5 4th Level : Methods----------------------------------------------------------------------------------120 D.4.1.6 5th Level : Data Processing Interpretation ----------------------------------------------------120

D.4.2 Stage 2: Building Pyramids Process -----------------------------------------------------------------121 D.4.3 Systemic Insight -------------------------------------------------------------------------------------------122 D.4.4 Systemic Critique------------------------------------------------------------------------------------------125 D.4.5 Systemic Transformative Redefinition ---------------------------------------------------------------126 D.4.6 Underpinning of the Theory Building Pyramids----------------------------------------------------129 D.4.7 Conclusion to Theory Building & Systemic Insight -----------------------------------------------131 D.4.8 Reflection on Theory Building & Critical Thought -------------------------------------------------132

D.5 CONCLUSION – CRITICAL THINKING & THEORY DEVELOPMENT......................................................133

E EPILOGUE--------------------------------------------------------------------------------------- 135

F BIBLIOGRAPHY------------------------------------------------------------------------------- 137

Appendix 1: The Process Generation of a Problem ----------------------------------- 143

Appendix 2: Development of a Research Paper ---------------------------------------- 144

Appendix 3 : Research Framework Literature Search Affinity Diagram------- 145

Appendix 4 - Action Research Lessons Interrelationship Diagraph------------- 146

Appendix 5 : Timetable of Interviews ------------------------------------------------------- 147

Appendix 6 : Important points derived from interview transcripts -------------- 147

Appendix 7 : Interview Transcripts ---------------------------------------------------------- 153

Appendix 8 : Management of Shareholder Value Learning Points--------------- 169

Appendix 9 : Work Practice Revised Interrelationship Diagraph ----------------- 170

Appendix 10 : Executive MBA 2 Human Resources Assignment ---------------- 171

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CONTENTS

Appendix 11 : Literature Review Notes - Globalization------------------------------- 180

Appendix 12 : Literature Search on Dialogue & It’s Implications for an Organization ----------------------------------------------------------------------------------------- 184

Appendix 13 : Literature review points for Research Framework ---------------- 206

Appendix 14 : Intellectual Capital & the Value Gap ------------------------------------ 217

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- 1 – DISSERTATION PREFACE

DISSERTATION PREFACE

The retention and stimulation of skilled staff in a turbulent socio-economic and

political environment is a concern for most Zimbabwean companies at this time; a

problem initiated by the political and economic upheaval that was ignited in February

2000. The focus of this dissertation is assist Consolidated Farm Investments (CFI) to

find ways to manage this problem, I use the term manage as this concern has no

absolute solution, even in a harmonious political environment. In preparing this

paper, I was also presented with the opportunity to make sense of and creating

meaning to my intellectual stimulation and exposure at the Graduate School of

Business UCT over the last two years. This paper is therefore primarily focused on

the staff retention concern of CFI but in addition it is a journey of discovery for me.

Ralph Stacey in his lectures at the GSB stated, “communication in any form, is a

mere gesture and meaning is only created by a person responding to the gesture”.

This paper represents a gesture from me that will hopefully create valuable meaning

as well as being a source of knowledge creation, to the CFI management and

members of academia who may read it.

Knowledge creation is a process of generating insight by extracting information from data and the application of knowledge is the testing of these insights. Knowledge constitutes an asset that yields a stream of useful services. Its distinctive feature is that it is shared with others and retained at the same time.

Knowledge flows between people, that is, it is fluid, when it is context-free, codified and stripped of unnecessary data. When knowledge is data rich, qualitative, ambiguous and context-dependant, then it is viscous and flows hardly at all.

(Stacey, 2001, page 22)

Although this paper is focused on CFI, it is my hope that insights and knowledge will

be generated would be applicable throughout the business community in the

southern African region.

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- 2 – DISSERTATION PREFACE

Maturana and Varela in their book, The Tree of Knowledge: The Biological Roots of

Human Understanding state that the brain does not simply register stimuli but creates

patterns associated with them. They go on to conclude that the nervous system does

not simply represent a world; rather, it creates, calls forth, or enacts a world

(Maturana & Varela 1992). Through the academic exposure, the interview process

with the CFI management team as well as exposure to the confused and frightening

situation that has been unfolding in Zimbabwe over the last 2 years, my mind has

registered numerous stimuli and from this I present my enactment and perspective of

the situation that face management in a turbulent environment. Many managers and

academics my not agree with my perceptions, but I will have achieved my objective if

this paper generates debate and dialogue on the vexing topic of skills retention.

This dissertation takes the form of five separate sections-:

A. Problem Formulation and Research Framework

B. Data Collection and Analysis.

C. Literature Review.

D. Insights, Theory Building And Critical Thinking

E. Concluding Reflection.

Each section is a piece in a mosaic that creates the entirety of this work. Each

section can be viewed individually and you will gain an appreciation of a particular

area of my research. However, to see the whole picture and to gain an

understanding of the experience and insights that I have developed over the two

years of my being on this GSB course, you will need to venture down all of the

sections in order of presentation. While reading, be mindful of the fact that this is

the beginning of a dialogue that I have initiated within Consolidated Farm

Investments and this is just a “snap shot” of the process thus far.

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3 A: PROBLEM FORMULATION & RESEARCH FRAMEWORK

A PROBLEM FORMULATION AND RESEARCH FRAMEWORK

A.1 DEVELOPING THE QUESTION

A.1.1 Background

The security, economic and political situation in Zimbabwe for the second quarter of

2001 was extremely tenuous.

The Zimbabwe economy was experiencing record growth in the mid 1990's until on

18th November 1997, when it started the spiral down. The government of

Zimbabwe saw fit to tamper with one of the corner stones of a market economy;

listing privately owned agricultural land for the purpose of resettlement of peasants,

which violated the protection of property rights.

Zimbabwe “Clearly a disaster: “ Weak government institutions, poor technology and weak economic

policies make Zimbabwe the least competitive economy in the world, according to recent report compiled

by Harvard University and the World Economic Forum. The survey, which covered 75 counties, ranked

Zimbabwe, with inflation of 86% and over 60% unemployment, 75th Nigeria came 74th Finland and the

USA ranked top.” (The farmer, October 23, 2001.)

“This week's meeting of SADC ministers in Harare, ostensibly to review progress of the land

resettlement scheme, highlighted the gap between government claims and reality. A submission to

the meeting by the Commercial Farmers Union (CFU) revealed that far from allocating farms to

"land-hungry peasants", government is giving 99-year leases with an option to purchase to party

big-wigs. As a result of the land policy, the CFU added, the Soya bean crop has been cut by 60%,

and maize production will fall from 850 000 t to 220 000 t next year. Ironically, and puzzlingly, the

sense of economic crisis in Zimbabwe is less than palpable. Listed companies report turnover

growth ahead even of inflation of 98%; some house prices have trebled; consumer spending is

buoyant. Indeed, those businessmen who predicted an economic crunch before the March poll are

now having second thoughts. Informal cross-border business is booming. Shoppers who come to

Zimbabwe and change their money at the parallel market rate are finding goods cheaper than at

home. There is a substantial (immeasurable) inflow of foreign currency from expatriate

Zimbabweans, which is keeping spending afloat.

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The economic fundamentals in Zimbabwe could hardly be worse. Money supply, growing at over

100%/year, is out of control. So, too, is inflation, which is likely to breach the 100% level by the

year-end despite the imposition of price controls on basic goods. The parastatal (quasi

government) sector teeters on the brink of bankruptcy: by rolling back, or banning, rate and price

increases by local governments and parastatals, government is merely delaying a crunch that must

come after the elections. Latest official figures for mid-year show that 24,6% of all commercial bank

loans were "adversely classified". The stock exchange bubble is deflating, with equity prices -

which trebled in the first eight months of the year - down 19% in the last two. Interest rates have

hardened, with the yield on 91-day Treasury bills firming recently to around 25%; yet real rates

have become even more negative as inflation accelerates. Foreign exchange inflows dwindled to a

mere US$30m in November, less than the US$40m/month needed to finance fuel imports. The

parallel market rate for the US dollar is back to its worst levels of Z350 - a premium of more than

500% over the official rate. Commercial farmers predict a 35% slump in output next season, but the

latest official tobacco crop projection of 160m kg is only 20% lower than last season and well above

the pessimistic forecasts of 120m kg or even less. There are isolated reports of food problems and

predictions of a food crisis in the new year.” (From The Financial Mail (SA), 14 December)

The exchange rate of the Zimbabwe dollar dropped from 10.5 to 14.5 to US$

overnight. At the time it could have been argued that there was considerable

agricultural land that was not fully utilized. However, with agriculture being the

engine of the Zimbabwe economy and tobacco production being the single biggest

foreign currency earner, the scale of the intended acquisition, 50% of all privately

owned land, sent shock waves through the whole economy. The extremely poor

government track record on resettlement over a 17-year period only added to the

drop in confidence in the capacity of the Zimbabwe economy to weather this storm.

The economy took a further knock in August 1998 when 40% of the Zimbabwe

armed forces were sent to the Democratic Republic of Congo to help prop up an

un-elected government.

A third significant deterioration in the Zimbabwe situation occurred with the

government sponsored land invasion of over 1100 farms in February 2000. This

occurred prior to the June parliamentary elections, which also saw severe political

violence, erupt, perpetrated in the main by ruling party supporters.

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With the severe politicization of the Zimbabwe Republic Police, law and order has

deteriorated to a point of almost total anarchy.

A.1.2 Introduction

Having described the context within which Zimbabwe companies are functioning I

needed to focus my research in an area that was uppermost in people’s minds, -

long-term planning in a turbulent environment is extremely difficult and so managers

are concentrating on the short-term. To be relevant to a local organization I needed

to find a topic that would assist with an immediate challenge to management.

The framework I have used to identify a research problem has been derived from

the writings of Booth, Colomb and Williams “The Craft of Research” and

summarized in Appendix 1: The Process Generation of a Problem.

A.1.3 Selecting an Area of Interest and Finding a Topic

Given the severe situation of Zimbabwe society in the second quarter of 2001, it is

extremely surprising that an economy still exists and that in fact a number of

companies are performing exceptionally well.

“After more than a year of chaos that has seen the invasion of 1,700 white-owned farms by

squatters, tobacco production has fallen by 20 per cent to less than 187,000 tons.” (From The Daily

Telegraph (UK), 25 April 2001)

“The invasions have left the business community unsettled, with some of the eight South African

companies affected refusing to talk to the press for fear of reprisals. On Friday, there were

reportedly 186 companies under siege. Economic commentators said this week that if this new

threat to business were allowed to flourish unabated; it would be the final straw for Zimbabwe's

economy, already under extreme stress. Security fears caused by the farm invasions and political

violence have also seen tourist arrivals plunging over 50 percent, forcing more than 100 tourism

firms to close last year and putting about 5 000 people out of work. In an effort to woo urban voters

in the run-up to the presidential election next year, the ruling Zanu-PF has unleashed wholesale

violence against white-owned businesses on the pretext that it is looking after the welfare of

disgruntled and oppressed workers.” (From The Star (SA), 28 April 2001)

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Shareholder value in these successful companies can be mainly attributed to a stable

and effective management team. Yes, there are other factors which also contribute

to the favorable position of these companies, however most of these conditions also

apply to many competing companies in the same sector of the economy that are not

performing well at all.

My interest in the field of management of shareholder value in turbulent social and

economic times was derived from two sources. First, was from the issues, which

surfaced in a position paper on management of Shareholder value, which I

researched as one of the University of Cape Town Executive MBA Course 2

MODULE 4 assignments (See C.2 Management of Shareholder Value). The

greatest leverage point for the “management of shareholder value”, I found was

centered on the development of trust, commitment and loyalty of all stakeholders.

Secondly, having just experienced being a pawn in a company takeover, where all

negotiations were at shareholder level with no contribution by management or staff.

The management team is central to the maintenance of commitment, trust and

loyalty of suppliers, customers and staff that have been major contributing factors to

the success of Anchor Yeast Zimbabwe for the past forty-four years. Should any of

the senior management team leave the company, for what ever reason, within two

years of the deal being finalized, I believe it would be difficult to maintain the

commitment, trust and loyalty that is so important to shareholder value. The

importance of retaining the management team is high lighted by points made in Kurt

April’s book, Rethinking Leadership “What increasingly affects all of us, is not the

tangibles in life, bottom line numbers, for instance, but the intangibles: our hopes and

fears, our needs, our beliefs and dreams.” These intangibles are seriously

threatened during a company take-over and should the management team be

perceived to be breaking up a serious domino effect could ensue.

Therefore, my motivation to research management of shareholder value in turbulent

social and economic periods stems from both theoretical as well as practical roots.

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Through this project I hope to surface issues that if addressed, will assist

shareholders and company executives navigate their organizations through the

difficult eighteen month to three-year period, which lies ahead. From a personal

perspective I expect this project to identify points that I need to focus on in charting

the way forward, for myself and my family, through these turbulent times.

A.1.4 Points to be Considered when Formulating the Problem

All serious errors of management can be traced to one fundamental flaw, solving

the wrong problem precisely, or muddled thinking (Mitroff, 1998, page 9).

Considering this statement it is crucial that the problem be correctly formulated right

at the start of a research project. Indeed, far better an approximate solution to the

right problem than the exact solution to the wrong problem (Mitroff, 1998, page 16)

In an effort to frame the question correctly Mitroff’s five categories of solving the

wrong problem precisely will be revised and a remedial strategy pertinent to this

research project stated.

Table A.1-A - Five Categories of Solving the Wrong Problem Precisely

Type Description Proposed Preventative Strategy 1. Picking the

wrong

stakeholders

Involving only a small set of

stakeholders in the formulation of a

problem; ignoring other

stakeholders and especially their

reactions.

Seek out stakeholders with opposing views to challenge the purposed action thus ensure the discussion has been logically & clearly thought through.

2. Selecting too

narrow a set

of options

Selecting a limited set of problem-

solving options; not considering a

broader set of options

Iteration process of SSM utilizing the

skills of the actors involved identifying

all possible options. 3. Phrasing a

problem

incorrectly

Using a narrow set of disciplines,

business functions or variables in

which to express the basic nature

of a problem.

Iteration process of SSM should

incorporate a large cross section of

skills and disciplines.

4. Setting the

boundaries/sc

ope of a

Drawing the boundaries or scope

of a problem too narrowly; not

being inclusive enough.

SSM should surface and deficiencies

as the problem would be viewed from

many perspectives.

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problem too

narrowly

5. Failing to think

systemically

Focusing on a part of a problem

instead of the whole system;

focusing on the wrong part;

ignoring the connection between

parts and wholes.

Application systems thinking

methodology involving a holistic

approach should facilitate incorporation

of all parts.

Mitroff in his book “Smart Thinking for Crazy Times” highlights 7 important lessons,

each at different stages in his book. These lessons are listed below, as all, not only

influence the problem formulation but is extremely pertinent in the overall approach to

this project.

Lesson No.

1. Never assume that others will see the situation as you do.

2. Never assume that what is said behind closed doors will remain secret.

3. Don’t respond to stakeholders as if their actions or demands are totally

unreasonable, don’t respond to stakeholders in a way that leads them

to act even more unreasonably, always ask what you can do to

reduce, and or increase, the tension inherent in the system.

4. Listen sincerely to your opponents by opening your mind and closing

your mouth.

5. Examine carefully every formulation of a problem for the implicit ethics

threshold it contains, examined carefully how the formulation and the

solution change depending on whether the threshold is made high or

low.

6. Never believe that is sufficient to sell an idea to a single individual

(stakeholder), no matter how well placed he or she is within an

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organization. An important idea needs to be sold to the widest

possible array of stakeholders because only if it is adopted by the

whole system will it be successful.

7. If at all possible, include those who are in active opposition to one’s

policies in a strategic planning initiative; if their direct participation is not

possible, then have someone role-play their reasonable participation,

that is, what is reasonable from their point of view.

There is considerable wisdom in these lessons for day-to-day business practice, but

lesson 6 is particularly pertinent to this project. This point is highlighted because the

data required will be generated through a series of interviews. Co-operation of staff

at all levels will be crucial if the data generated is to be of the highest possible quality.

The richness of the project is dependent on conversing with as wide an array of

stakeholders as possible.

A.1.5 Why is this Topic Important?

During periods of strong national economic growth there is considerable

management latitude within which companies can thrive. During a challenging

economic period as is the situation faced by Zimbabwean companies in the second

quarter of 2001, the success and in many cases, survival of companies depend on

the often overlooked points of trust, loyalty and financial prudence. All these

management attributes stem from an effective and stable leadership structure within

an organization. It could be argued top management is the most expensive

employees of a company and this is where cuts can result in considerable reduction

in costs. This "reflex action" route is very tempting for shareholders to take.

However, the crucial elements of trust and loyalty, of not only employees but also

suppliers and customers, can quickly be destroyed by the "knee jerk reaction" of

cutting costs through reduction in the leadership of a company.

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One of the main leverage points in the successful management of shareholder value is the motivation and retention of skilled and dedicated staff. As a result of the deteriorating and persistent economic and socio-political turmoil being experienced in Zimbabwe from February 2000, there is an escalating “brain drain” from the country. The focus of this research will be on how are effective leadership skills to be retained and stimulated during periods of severe social and economic discord.

An indication of the scale of the problem is illustrated by comments of the Zimbabwe

minister of health.

“Dr. Stamps has castigated employment agents from the U.K., U.S.A. and Australia for recruiting

Zimbabwe trained health professionals to lucrative positions overseas at a time when Zimbabwe has 15

000 nursing posts that remain unfilled.” (The Herald May 14, 2001)

An indication on a personal level is the 30% decrease in pupil enrolment in the

private school where my daughters are pupils.

Because of the high cost of this education almost all the children of this school have

skilled parents; the decrease in enrolment can almost solely be attributed to parents

leaving the country.

A.1.6 The Problem

In these very difficult economic and political times, how does a Zimbabwean

company retain the skills that are needed? From this concern the research problem

will take the form

“Investigations to determine what issues, other than remuneration, are important for skilled people to remain with an organization”

This study is important in that as stated by Dave Spence “ capital and machinery

make it possible but people make it happen” (Pfeffer, 1998 page 305). Companies in

Zimbabwe need to attract the skilled people required from a rapidly diminishing

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resource, resulting from the serious hemorrhage of skilled people from Zimbabwe

due to immigration and AIDS related mortality.

Having identified the research problem a suitable method of research has to be

selected; this is the aim of the A.2 Development of the Research Framework.

A.2 DEVELOPMENT OF THE RESEARCH FRAMEWORK

A.2.1 Management Research Philosophies

The research method one uses in a study of this nature is very dependant on the

underlying philosophy of the researcher and research establishment or community

from, which he/she comes.

The two dominate schools of though - positivism and phenomenology approach the

aspects of the following from diametrically opposed positions: -

– Data required is quantitative versus qualitative.

– How the data is gathered.

– How the data is interpreted and presented.

Positivism Focuses on cause and effect, the use of large numbers of questionnaires and the

statistical analysis of the replies to these questionnaires. The methods used should

be clear in order that other researchers wishing to investigate the validity of the

published results could possibly replicate the study. The positivist would also expect

his/her research results to have a wide end general application.

Phenomenology Is focused on reality being socially constructed rather than the positivist view of

objectively determined. The phenomenologists believe that human actions arise

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from the sense that people make of different situations, rather that the direct

response from external stimuli. (Easterby –Smith, Thorpe & Lowe 1999, page 24).

With phenomenology data is gathered through interviews, which result in a relatively

small sample size which calls into question any attempts to glibly apply the results for

general situations. This results in the research being very focused, and thus should

be practically useful to participating organizations. Phenomenology advocates a

flexible approach to research, which could result in new insights to management

problems, but it has the draw back of not being replicable and thus policy makers

may not recognize the value of the results emanating from this approach.

A.2.2 Philosophical Approach Adopted for this Paper

The research problem being investigated in this paper has many facets, because the

social and economic problems facing Zimbabwe are dynamic, changing almost on a

daily basis. How valuable members of a management team perceive and react to

the changing landscape is likely to be different for each person depending on

personal responsibilities, commitments and constraints. As a result of the unstable

situation under review it is important to adopt a research approach that is flexible, to

identify a method of managing, the problem. Flexibility is required, as the interview

direction is likely to have to be altered as different issues are identified. To improve

the understanding of new issues, not anticipated, the ability to follow, a new line of

thinking and investigation would be needed in the method.

The aim is to generate discussions and ideas, as to how skills can be retained within

the organization, on least minimize the loss of valuable staff.

Considering all the above points this research will clearly fall into the

phenomenological philosophical domain. Figure A.2.4-3 - Summery of expected Research

Direction diagram

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A.2.3 Proposed Approach within Phenomenology

Within phenomenology there are a number of research disciplines from which to

decide that which will best serve the requirements of the research intended. Action

research, a discipline within Phenomenology, has a number of attributes, which

make sense to me; these are highlighted by Bob Dick in his paper “You want to do

action research Thesis?” The points he makes which attract me.

When I considered the list of pros and cons of action research, I found myself

planning strategies to circumvent the disadvantages without envisaging too great an

obstacle. Thus with ideas on how to manage the disadvantages, the advantages of

the action research approach being applied to this investigation far outweigh the

drawbacks.

☺ Action research is chosen for the rigor and economy it allows.

☺ Action research should increase understanding on the part of the researcher, or the client, or both.

☺ Action research cycles can also be regarded as a learning cycle.

☺ Systematic reflection is an effective way for a researcher to learn.

☺ A crucial feature of action research is deliberate and conscious reflection, and skeptical challenging of interpretations.

☺ Action research is usually perceptive. This implies a partnership between you and your clients.

☺ For some purposes action research may be more exceptionally relevant.

☺ There is no gap between theory, research and practice. The three can be integrated. The virtue of action research is its responsiveness. It allows you to turn unpromising beginnings to effective endings.

(Bob Dick, 2001)

Action Research in the form of Interpretive Systems Approach gives pride of place to people rather than technology, structure or organization. (Jackson, Systems Approaches to Management, 2000, page 211) What are the drawbacks of Action Research?

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Considerable increased volume of work as compared with conventional research, especially in the earlier stages of the process.

No conventional format.

Direction of literature search is dependant on the data that is collected and therefore considerably more demanding than conventional research.

Action research is much harder to report, as you have to justify what and why actions are taken at each stage. Conventional research has accepted known procedures, which require little or no justification.

Length of report in action research is likely to be considerably longer than it would normally be expected of research paper. This is due to the need to explain the methods, results and interpretation, bas well as the reason for the appropriateness of the actions taken.

(Dick 2001 pg. 6)

In the context of this paper conventional research asking questionnaires and statistical analysis would not be appropriate as: -

1. The relatively small pool of skilled staff involved would negate the value of statistical analysis.

2. A set questionnaire would limit the scope to investigate points not initially considered pertinent but which surface in the process.

3. The conventional research process does not accommodate the notion that multiple realities exist.

A.2.4 Approaches within Action Research

There are many ways to do action research. It is a research paradigm, which

subsumes a variety of research approaches (Dick 2001). The option that the project

“kicks off” with may not be used through out the process, as data collected may

dictate a change of approach. The awareness of other approaches and the ability to

change direction should the situation require is central to the success or failure of an

action-learning dissertation. Five action-learning options from Bob Dick’s paper “You

want to do Action Research?” are briefly described. These are by no means a

complete list; more appropriate options may surface as the data unfolds and more

literature is studied.

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A.2.4.1 Participatory Action Research

This is an approach that is advocated by Deakin University. This approach is

dependent on active participation methods to produce “emancipation”: The research

cycle used is plan, act, observe and reflect. The importance of participation is

highlighted by the cycle being carried out by the clients with the researcher acting

only in a facilitator capacity. This form of action research can be considered a

general starting point or a fall back position, if other more specific approaches come

“unstuck”. (Dick, 2001 page 14)

A.2.4.2 Action Science

This is an option that requires a very high level of skill on the part of the facilitator, as

central to the process, is the concept that people’s actions are strongly influenced by

unstated rules/beliefs, not by the explicit beliefs they hold. This is a very complex

method that necessitates considerable trust between researcher and client who need

to agree on a process that could surface the implicit rules/beliefs that interfere with

the honest exchange of information within a community. The communications are

normally further complicated by preventing a problem being mentioned or its

existence discussed within the group affected.

Action science is particularly suited to situations were interpersonal relationships

within a group appear to be undermined by unspoken under currents. In less serious

applications action science should provide good communication skills that would

enhance other forms of action research.

A.2.4.3 Evaluation

Evaluation encompasses a number of methodologies, from positivist in orientation to

very anti-positivist in approach.

However a form of evaluation respected by Bob Dick is a model developed by

Snyder. The essence of the Snyder Evaluation Model is best described in a diagram

form in Figure A.2.4-1 – Snyder Evaluation Model; this is a conventional systems model in

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which resources respond to inputs and activities to processes. There are three levels

of outputs, consisting of effects, targets and ideals.

Figure A.2.4-1 – Snyder Evaluation Model

(Dick, 2001)

This approach can be used for outcome evaluation, process evaluation and short

cycle evaluation, with client effective participation. Client participation in all three

types of evaluation produce positive results in a short space of time, with results

improving as the approach is used more, with the attendant increase in

understanding and confidence of the client with each cycle.

A.2.4.4 Soft System Methodology

This is a qualitative research approach that is particularly adopted to situations that

have no definitive solutions but can be better managed to alleviate the worst of the

symptoms. This approach should provide a continuously improving framework to

maintain a difficult system in a manageable state. The method revolves around the

Snyder Evaluation Model

IDEALS

TARGETS

EFFECTS

ACTIVITIES

RESOURCES

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researcher moving through three successive cycles, each cycle alternating between

two poles, one being the source of information for the development and improvement

of the second pole. The process is best illustrated in the form of Figure A.2.4-2 - Soft

Systems Methodology

Figure A.2.4-2 - Soft Systems Methodology

(Dick 2001 pg. 15)

A. In the list phase the researcher immerses himself in the operation being

researched, in doing so he should gain an intermit knowledge of the

operation. From the data he/she gathers the researcher distills out what

he/she perceives to be the core of the process. A database of the critical

components is developed by moving back and forth between the “coal face”

and data base improvement.

B. Having a clear understanding of the process being researched the aim is now

to ignore reality and develop the perfect process using the database of the

Participation and involvement in the system to gain an intimate

understanding of aims and objectives and how these are

achieved in practice. Distillation of the

critical components of process, the

core.

Proposed improvements to actual system.

DEVELOP the Perfect Process to achieve aims & objectives of

the system.

A

C B D Action

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core elements. Here the researcher moves between the core element

database and the improvement of the perfect situation.

C. Moving between utopia and the actual position on the ground (rich picture),

D. Figure B.3.2-1- Rich Picture 1 - Motivation and Figure B.3.2-2 - Rich Picture 2:

Demotivational Transformation areas of deficiency are identified and database of

possible remedial options are developed.

E. The final stage is the implementation of the options recommended. The cycle

rotates from recommendations to the actual process with the intent of slowly

transforming the actual process using the recommendations as and when

these can practically be implemented.

A.2.4.5 System Dynamics

This method translates mental models that managers normally use for decision-

making into complete models (Frohman, Morgan & Pugh, 1973). The imperfections

of the mental models are “completed” or improved upon in this process. This is a

good method to use where incomplete data of complex and interrelated problems

requires increased understanding and insight.

Once a model has been developed it can be used to simulate the sequence of

events, which should unfold once initiated, giving approximate time frames for

reactions to be expected from the time of initiation. The model is tested until the

results or simulations seem reasonable, at this stage various parameters can be

altered to gain insight into the situation under review.

For this method to be useful a number of conditions need to be present in the

problem under review:

a) A number of variables, which interact with each other. The human mind is

only capable of handling a few bits of data at a time (7 +/- 2 we are told). Thus

computer models have distinct advantages when data requires manipulation.

b) A number of alternative strategies should be available.

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A major strength of systems dynamics of this method is that a number of

computer simulations can be run to test possible solutions. Using these

simulations, leverage points in the system can be identified and various strategies

can be planned. The leverage points can also be used as debating issues that

should develop a deeper understanding of the system and a shared vision of the

challenges it posses (Frohman, Morgan & Pugh, 1973).

A.2.4.6 Summary of expected Research Direction

With each paradigm of research there are several methodologies, each drawing on a

number of methods for data collection and interpretation? A diagrammatical

summary of the process through which I have ventured to arrive at the Soft Systems

Methodology (SSM) is illustrated in Figure A.2.4-3 - Summery of expected Research Direction

diagram.

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Figure A.2.4-3 - Summery of expected Research Direction diagram

(Dick 2001, page 7)

ACTION RESEARCH

PHENOMENOLOGYPOSITIVISMOR

OR - operationalresearchSA- systems analysisSE- systemsengineeringSD - system dynamics

critical systemsheuristics

SSD- social systemdesign (churchman'sapproach)SAST- strategicassumption surfacingand testing

InteractiveplanningSYM- Softsystemsmethodology

VSD- viable systemdignosisGST- generalsystems theorySOCIO-TECH- socio-technical systemsthinkingcontingency theory

C-PComplex-Pluralist

S-CSimple-

Coercive

S-PSimple-Pluralist

C-UComplexUnitary

S-USimple-Unitary

CONVENTIONALRESEARCH

FRAMEWORK

METHODS

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When focusing on the problem of “retention of management skills in a period of

upheaval” it is apparent that definitive solutions are not possible and “damage

limitation and exercise” or a managed process framework will be needed. The soft

systems approach would appear to be the most suitable research method to

investigate/research this predicament that a number of companies are presently

facing in Zimbabwe.

A.2.5 Literature Review for Research Framework

In the process of reviewing literature, points of interest and perceived importance are

surfaced. These points are noted as the article or book is reviewed; a full list of points

gleaned thus far is shown in Appendix 13 : Literature review points for Research Framework.

Points in the full list were ranked, and only those points rated as highly pertinent to

this project, have been utilized in the "systems thinking" process below. Some of

these points may not directly relate to this project but add to general understanding of

management practices and current thinking on various aspects of business practice.

A large number of points have been generated because the preliminary literary

search has been broad in nature and not focused. From Appendix 1 a list of points

that are specifically pertinent to this project are extracted and listed in systems

thinking has been used to distil out the pertinent points raised that pertain to this

project. The highest ranked points are the data used in the Appendix 3 : Research

Framework Literature Search Affinity Diagram generating of the Appendix 4 - Action Research

Lessons Interrelationship Diagraph, the Figure A.2.6-1 - Action Research Lessons CLD, and the Figure A.2.7-1 - General Research Lessons CLD.

A.2.6 Action Research ID Comments

“System thinking is a sensibility for the subtle interconnectedness, that gives living

systems their unique character”; this point is actually the essence of systems

thinking. That systems thinking is a tool to develop an understanding of the topic

being investigated, from a holistic perspective. Appendix 4 - Action Research Lessons

Interrelationship Diagraph brings into focus the reasons for using AR for this project; point

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38 in particular, allows practitioners to achieve better research outcomes from their

practice without undermining the change their practice is intended to achieve.

Focusing on point 38 is where the greatest benefit will be derived from this method.

The value of AR is further highlighted by the prominence of the learning point "there

is no learning without action and no action without learning" (Reg Revans 1983).

“Few, if any, forces in human affairs are as powerful as shared vision” features

prominently as a leverage point in AR. When you sit back and think about it, this is

the most compelling reason for utilizing AR, as the iterant and engaging nature of the

method is very powerful in creating a “shared vision”.

“Treat agreement skeptically by seeking out exceptions” surfaces as a driver of the

ID. This is also no surprise, as AR derives a considerable rigor from this approach.

The importance of this lesson should remain prominent through out the project.

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Figure A.2.6-1 - Action Research Lessons CLD

ACTION RESEARCH LESSONS CLD

12In action research, standardization

defeats the purpose: virtue of actionresearch is its responsiveness. It iswhat allows you to, turn unpromising

beginnings into effective endings

214Reg Revans (1983) said: "there is no learningwithout action and not action without learning".One best known example of thids new cultureis Kaizen, the Japenses word for "continuous

improvement".

184System thinking is a sensibility for thesubtle interconnectedness that givesliving systems their unique character.

158The following are normally part of action research

projects: 1. A belief that the best way of learning about anorganisation or social system is through attempting to

change it. 2. The belief that those people most likely to beaffected by, or involved in implementing, these changes

should as far as possible become involved in the researchprocess itself.

22Treat agreement

scepically by seeking outexceptions.

55Most of the information comes fromthe "Deviants". This is an important

feature. It means that outlyingestimates are given more attention

than those near to an emergingconsensus.

193Few, if any, forces inhuman affairs are aspowerful as shared

vision.

42The essence of this approach to justification issimple. Acknowledge the conventional view.Explain the nature of the choice in terms of

underlying principles. Present your own choicesas fitting your methodology to the situation.

38AR in particular, allows practitionersto achieve better research outcomes

from their practice withoutundermining the change their practiceis intended to achieve. In presentingyour justification it is useful to write

about the trade-offs involved.6In action research there need

be no gap between theory,research and practice. The

three can be integrated.

31In AR the intention of theresearcher is to create a

partnership betweenherself and the client

group.

172Obtaining trust: Researcher: Discussion-Thisrequires the interviewer to be perceptive and

sensitive to events, so that lines of inquire canchanged and adapted during the interview -

interviewer - listen refrain from projecting ownopinion or feeling into the situation.

RESPONSIVE LOOP

VALIDATION LOOP

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A.2.7 Action Research CLD Story

The learning points distilled out and presented in the Appendix 4 - Action Research Lessons

Interrelationship Diagraph; further processing of this data results in the construction of the

causal loop diagram Figure A.2.6-1 - Action Research Lessons CLD. This CLD consists of

two loops, the one being the “Validation Loop” which focuses on the reasoning for

selecting Action Research a branch of which is soft systems methodology as a

method of research for this project.

Beginning with the point; systems thinking has the sensitivity to distinguish the subtle

relationships and dynamics that make systems act as if living organisms (Towler,

2000 page 4). This insight is a powerful tool in the management of such a system by

creating a shared vision to stimulate and co-ordinate effort in the same direction. In-

turn the shared vision is further stimulated by the action learning that Reg Revans

refers to (Revans, 1983). Action learning brings together theory and practice so there

is no gap between the two (Ho, 1999, page 3) which is an important concept if a

researcher is expected to influence the system under review; that is he is conducting

research with practical implications.

For action research to be effective the researcher needs to have conviction and belief

in these points of the methodology:

a) The best way of learning about an organization or social system is

through attempting to change it.

b) The belief that those people most likely to be affected by, or involved in

implementing, these changes should as far as possible become

involved in the research process itself (Easterby-Smith, Thorpe & Low

1991, page 34).

With selecting of a method of research such as SSM, it is important to justify the

approach taken while acknowledging the conventional view and explain the nature of

the choice in terms of underlying principles (Dick, 2001). One of the strong underlying

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principles is, AR allows practitioners to achieve better research outcomes from their

practice without undermining the change, their practice is intended to achieve (Dick,

2001).

The learning point 184 is also a component of the “Responsive Loop” of the CLD

Figure A.2.6-1 - Action Research Lessons CLD. This part of the CLD highlights the

responsive and flexible nature of the AR methodology. It is the responsive and

flexible attributes of AR and SSM that make these research methods suitable for

researching the, amorphous topic of “skills retention in turbulent times”.

The unstructured nature of the topic necessitates the building of a close relationship

between the researcher and the organization under review; it is only through a close

partnership that valuable insights for further development and debate will be

uncovered. Likewise, there is a crucial need for the researcher to be sensitive and

responsive to change the approach as events unfold, in so doing the important

relationship of trust will develop (Easterby-Smith, Thorpe & Low 1991, page 76). The

richness of the project will be derived from the flexibility of the method to investigate

data from the deviants so that sound arguments and models are constructed (Dick,

1990). This attention to deviants as and when they are identified, requires a non-

standardized approach that has the capacity to turn unpromising beginnings into

effective endings (Dick, 2001). This responsiveness is driven by the need to treat

agreement skeptically by seeking out exceptions (Dick, 2001).

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Figure A.2.7-1 - General Research Lessons CLD

A.2.8 General Research Lessons CLD Story

The CLD Figure A.2.7-1 - General Research Lessons CLD has emerged with two re-

enforcing loops and a balancing loop. The dominant loop, named “basic concepts”,

145Phillips and Pugh (1987) identify three

characteristics of good research,. Firstly it isbased on an open system of thought.

Secondly, one must always be prepared toexamine data critically, and request theevedence behind conclusions drawn by

others.

186The main question is how toensure that organizational

problems are considered formas wide a perspective as

possible.

253The Type III Error -

solving wrong problemprecisely. Indeed, farbetter an approximate

solution to the rightproblem than an exactsolution to the wrong

problem!



252Four steps of the

Problem-solving process1. Acknowledging/

recognizing existence ofproblem. 2. Formulatingthe problem. 3. Deriving

the solution to theproblem 4. Implementing

the solution

56A premium is thus place on judgement whichpeople hold with some confidence, and whichtend to disconfirm the emerging consensus.

267Never believe that it is

sufficient to sell an idea to asingle individual

(stakeholder), no matter howwell placed he or she iswithin an organization.

GERNERAL RESEARCH CLD

69If you seek success in the wrong places, you are likely towaste a lot of effort, focus on the wrong thing - overlook

some of the real sources of competitive leverage, the cultureand capabilities of your organization that derive from how you

manage your people. Much more difficult to imitate orunderstand capability and systems of management practicethan to copy strategy, technology, or ever global presence.

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surfaces and brings into focus the basic concepts that need to be applied in this

project to establish the initial building blocks and the foundation from which the

process can develop.

The second loop challenges the process, questioning the purpose, direction and

reason for each step, as well as the methods used. Through applying these lessons,

that encourage the question of procedures and reasoning from many different angles

the rigor of the research project will be strengthened.

The third loop, the “re-focusing loop”, re-enforces both the basic loop and the

monitoring loop. The importance of reserving judgment, giving clear reasons and

underlying principles for each step should not be overlooked at any stage in the

research process. As is the need to follow up on the views and data that challenge

the emerging consensus, one must not get carried away on a theme at any point and

in so doing wasting time and effort because you have unwittingly lost direction and

focus.

A.3 PROPOSED APPROACH TO THE APPLICATION OF SOFT SYSTEMS METHODOLOGY

Soft Systems Methodology (SSM) consists of 7 distinct steps. Within each step

iterations (Figure A.2.8-2 - Diagrammatic Representation Of The Basic Soft Systems Methodology)

could and usually do occur in an effort to refine and clarify the results required for

each step to be completed before progress to the next step is possible. The itinerant

cycle is very simple and best explained in the diagram as shown in Figure A.3.9-1 - Brief

Overview of the 7 Stages in the SSM Research Framework.

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Figure A.2.8-1 - Action Research often starts with a Fuzzy Question & cycle through over and over

(Dick, 2001 page 14)

The SSM process of 7 steps is illustrated in Figure A.2.8-2 - Diagrammatic Representation Of

The Basic Soft Systems Methodology, below. These steps are likely to be modified slightly

to suit the project as it unfolds.

LESS FUZZY METHODS

LESS FUZZY ANSWER

LESS FUZZY QUESTION

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Figure A.2.8-2 - Diagrammatic Representation Of The Basic Soft Systems Methodology

(Adapted from Checkland, 1981)

The Real World “Out There”

Start

2. Analysis

Draw Rich Picture

7. Action for Change (or not) by the Actors

6. Debate with Actors (do they agree?)

Identify issues and primary task areas

5. Comparison of conceptual Model/s with Rich Picture (to provide topics for discussion not patent solutions)

3. Name Relevant Systems and Devise Root Definitions (“a system to…”)

BE SUBTLE AND KEEP ITERATING!

4. Construct conceptual models (not practical systems)

1. Information about problem solution (a mess)

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A.3.1 Rich Picture

The rich picture is a summary of the human activity/actions under review in the

inquiry process. In the development of this summary it is important that there is no

attempt to rationalize and interpret the data at an early stage of the process. To

focus on the problem under review it is important that contextual boundaries should

not be systems boundaries as this would be a form of rationalization at too early a

stage in the whole process.

Figure B.3.2-1- Rich Picture 1 - Motivation and Figure B.3.2-2 - Rich Picture 2: Demotivational

Transformation

A.3.2 Sources of Data For Development of The Rich Picture

a) Through Ethnography, immersion in the environment under review, a

considerable volume of information can be gleaned with regard to unstated inter

personal dynamics, “the VIBE” within an organization. In this context the

understanding and interpretation of metaphors used would be very important.

Also important would be maintaining sensitivity to the relationships within an

organization, between individuals, groups or a combination of these. With

relationships it is important to try and understand the dynamics at play and

capture these different dynamics in the rich picture

b) Figure B.3.2-1- Rich Picture 1 - Motivation and Figure B.3.2-2 - Rich Picture 2: Demotivational

Transformation

c) Interviews. This is likely to be on of the most important sources of data for the

rich picture and thus considerable time and effort has to be focused on the

planning and implementation of this process.

d) Human Resources: memos and minutes of H.R. related matters from board

meetings would be extremely useful but unlikely to be made available for

confidentiality reasons.

e) Press, references to the organization within the business press and the general

public perception can be extremely useful in the development of the rich picture.

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A.3.3 Expected Interview Process

As indicated in b) above this is expected to be the main source of data for the project

and therefore a clearly defined and thought through procedure is required.

a) Who, why and how are individuals to be identified for interviewing. The initial

planning and discussions will hopefully be conducted with the Chairman or the

CEO of the organization. At the early stages of the interview planning process

it is very important to keep in mind the need for Recursion within the VAD.

Should the organization under review have a number of subsidiaries then it is

important to try and interview people at the operations level, control level and

strategic level of each of these subsidiary companies.

b) The discussion with the chairman or CEO of the organization will hopefully

lead to the introduction in person or by phone to his lieutenant, and this

introduction will hopefully bring to bear a certain degree of authority that would

be required to “Kick Start” the interview process. I say “Kick Start” as the

confidence and co-operation of each individual will be required if the data

gathered is to be of real value, but the authority of a senior person would ”get

the people to the table” initially. From this point it would be up to me to instill

confidence and take the process forward.

c) As with recommendations and plans developed with the chairman or CEO,

plans and introduction will be developed with the Managing Directors of each

of the subsidiary companies. This process of planning and introduction would

be repeated through the different levels of each company.

d) Richness of the data gathered from the interview process will be developed by

interviewing as wider a range of employees as possible. Time will be limiting

and the project is focused on the retention and stimulation of senior

management, however an understanding of the culture of the organization

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and the pressures faced by the management team can be identified if it is

possible to achieve a multiple perspective of the organization. The

discussions with the CEO would be the first stage in the modified version of a

convergent interviewing method shown in Figure A.3.3-1 - Convergent Interviewing

Process refer to a adapted method as the convergent interviewing process

described by Bob Dick’s “Rigor Without Numbers” (Dick 1990, page 17)

requires two interviewers comparing notes after each pair of interviews.

However I will be working alone and therefore, will need to modify the process

to meet my requirements.

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Figure A.3.3-1 - Convergent Interviewing Process

(Ryan, 2001)

e) The approach to the interview data gathering process will be structured in as

much as a schedule of names, dates and times will be generated. The actual

interviews will be very flexible with the person being interviewed dictating the

direction within the context management retention and management

stimulation/encouragement/incentives. I envisage my role to be that of a

Steering Committee comprising of CEO & Self

Define the general Question that will set the "ball Park" for the interview.

Identify the People to be interviewed initially.

CEO introduces me to identified people. Plan the interview time location

familiarization process.

Redesign interview process

Report back to steering committee

Interview two people at the same level within the organization

Interpret each interview from notes.

Comparison of Pair of interviews.

DESIGN O.K.

ENOUGH DATA

YES YES

NO

NO

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facilitator to the elicitation process. I am acutely aware that this method will

produce a voluminous amount of data requiring analysis, most of which not

being particularly relevant. However it is my firm belief that to gain an insight

into the underlying issues that drive the system one needs to listen carefully

and be mindful of the bias one can have with any form of questionnaire.

f) The particular setting/location of each interview will depend on the person to

be interviewed, time available as well as the experience generated as the

process of data gathering unfolds. Where possible in the initial stages I would

aim to select neutral territory such as lunch away from the business as this will

hopefully put everyone at ease and reduce the interruptions.

g) At all times the aim is to attempt to eliminate interruptions during the interview,

but this may not always be possible and the person being interviewed must

continue the interview in an environment that he/she feels most comfortable.

h) The interview would begin with a familiarization period to get the person being

interviewed to relax and to gain his trust. The importance of confidentiality

and the need for trust cannot be over emphasized. During this early stage a

very brief outline of the project will be given with a little of the interview

approach.

i) At the end of the interview a brief summary will be discussed to ensure the

salient points have been noted and nothing of importance omitted.

j) The person interviewed would be assured of being kept abreast of the

process and notified of the need for possible follow up interviews. The

importance and need of his help and advice and input on the development of

the rich picture would be mentioned. The actual mechanics of refinement and

development of the rich picture will be formulated as the data gathering

progresses.

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A.3.4 Analysis of data

The rich picture is constructed with the purpose of bringing into view all aspects of the

problem. It is a “snap shot” of the situation or mess as it is referred to in SSM,

resulting in broad picture of all the issues as perceived by the analyst, myself.

To improve the Rigor of the project, it is my intention to gain input and comment from

all the participants in the final stages of the rich picture construction, thus hopefully

developing a consensus and when vehement disagreement occurs, investigate to

accommodate the differing views in the rich picture.

A.3.5 Identification of Issues

Through the data gathering and development of the rich picture, a number of issues

or systems should surface. The naming of these issues or systems needs careful

though so as not to evoke antagonism or bias, when the rich picture is utilized later in

the method. These systems, identified by the analyst are termed the ROOT

DEFINITION.

The root definition is important as inadequate input at this point would likely cause

problems at later stages of SSM, as one could “drift off course” only to find later that

you have to effect a major correction in the direction of the process.

There are two main methods to ensure that the root definition is well tested and well

thought through.

The first is rigorously applying critical thinking as described by Ian Mitroff in his book

“Smart Thinking for Crazy Times” as well as the paper by Tom Ryan. “What is

Critical Thinking?” In essence, has the right system or issue been identified in the

root definition; answering the wrong question precisely achieves nothing, and have

the eight elements of reasoning been applied. The eight elements of reasoning to be

applied are: -

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– Purpose

– Question

– Ideas or concepts

– Assumptions

– Information

– Inferences on interpretations

– Conclusions

– Consequences and implications (Ryan 2000 page 7).

The second is to apply the mnemonic CATWOE to ensure all these elements have

been considered in the root definition. These elements are-:

C - customers and clients

A - actor’s → management and staff

T - transformation → VAD or sub sector

W - worldview relevant to the issues under review

O - owner’s → shareholder and community

E - environment of operation financial, political social etc.

The identification of the root definition should only be adequately “thrashed out” after

a number of iteration cycles.

The importance of this stage would necessitate discussions with the project

supervisor, Tom Ryan, before advancing with the investigation.

A.3.6 Conceptual Modeling

Here the perfect situation is dreamed up, “pie in the sky” stuff. One has to let go of

the reality on the ground and construct an ideal. Here to limit the complexity of the

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conceptual model only as few verbs as are deemed absolutely essential are

included.

The conceptual model once developed needs to stand up to a considerable amount

of scrutiny to ensure all angles/perspectives have been considered. Listed below are

a number of the points that Tom Ryan’s notes indicate as those requiring

consideration: -

Do the model and its root definition suggest a continuous and relevant mission?

Can performance be measured?

Is decision making actively present?

Do any of the main activities comprise of sub-systems of back-up activities?

Do the system components interact?

Does the system interact with the environment? (Finance legislation society)

Does the system have a boundary?

Can a wider system provide resources?

Can the system be sustained?

(Ryan 2001 page 183)

A.3.7 Ideal World: Real World Comparison to Develop an Agenda for Discussions

The aim of this stage is to surface the problems, the differences between the ideal

world and the real world. Tom Ryan’s notes suggest three possible ways of

introducing the differences for discussion and debate with the people involved.

Firstly the conceptual model should be used as a reference check. Questioning why

things happen in the conceptual model and not in the real world. The normal

question in the comparison of whole, how, when, where and why are applied and

these should highlight the main issues contributing to the problem.

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Secondly imagine the conceptual model in actual operation in the real world and note

all the practical implications. This should surface the miss-matches and surface

important questions.

Thirdly a template method can be used. The template developed from the rich

picture is overlaid on that of conceptual model and the differences noted.

A.3.8 Discussing the Agenda with the Actors

The main purpose of this comparison stage is to surface issues for debate. Here the

platform is set for the players to engage and thrash out solutions.

The solutions are to be developed by the players/staff and not the analyst who

should act as a facilitator only. I am certain that the participant will try to solicit my

support and contribution in developing solutions, but it is crucial that I stand back and

encourage them to produce their own answers. As implementation requires

commitment, this will only come with ownership that would be derived from the

players formulating home grown plans, and not a number of quick fixes from some

”consultant” with his “high flying ideas”.

The discussions should lead to a number of changes being agreed upon. These

proposed and agreed upon changes would be expected to fall in one of the following

categories - structural, policy or cultural. (Ryan 2001 page 187).

Should no agreement emanate from the discussion, additional root definitions can be

introduced or the process can cycle back to the rich picture and move forward again

but form a different perspective.

A.3.9 Implementing Change

The implementation of the agreed changes should take into account the capacity of

the organization to introduce the required changes.

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Implementation could demand skills that the SSM analyst does not posses, thus the

services of people with problem solving skills may need to be introduced at this point.

A.4 CONCLUSION FOR THE RESEARCH FRAME WORK

Management of shareholder value through leadership retention, and motivation in a

turbulent social, political and economic setting; is an area of research that could have

considerable impact on companies’ immersed in such an environment.

The success of the project to a large extent is dependent on:

a) Selecting an organization that is large enough, and sufficiently diverse to

present a sufficient number of candidates to be interviewed to generate the

volume of data that would be required to develop a project with the richness,

recursion, rigor and relations, to make it useful. I accept that a number of

these qualities are dependant on the methodology used and the way this is

applied, but this does not detract from the fact that one needs a good source

of data.

b) Cooperation and commitment of a considerable number of key players within

the selected organization.

c) Finding sufficient research literature, in this area, to test and challenge the

concepts and models that will result from this research.

The initial task, to “get in the door” of a successful organization and win over the key

player, is likely to prove quite challenging, as is the whole interview process required

to produce the raw material for SSM. Being sufficiently sensitive and flexible, are

attributes that are likely to be crucial in the early stages of the project.

The whole objective is to identify important areas for debate and discussion. There

are likely to be certain divisions within the organization that are more successful in

this field; the underlying reasons for this success can be “brought to the table”, thus a

certain degree of knowledge management could emerge from this research.

The position at this point is that a research problem has been identified and a

methodology to investigate the problem selected. Section B is the actual application

of the Research Framework to an operating organization.

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40 B: DATA COLLECTION & ANALYSIS

B DATA COLLECTION & ANALYSIS

B.1 PREAMBLE

Identifying an organization within Zimbabwe that could benefit from the research

on retention of skills was not particularly difficult, as this is a problem that almost

every company in the country is experiencing at the moment. The tricky hurdle for

me, was to establish my credentials with a large organization so that I could

generate sufficient and diverse data as possible for processing in my research

framework.

My initial investigation identified five suitable organizations, all were listed on the

Zimbabwe Stock Exchange and all were, from their financial results, fairly well

managed. I approached Consolidated Farm Investments (CFI) first, as I believed

it to be the most progressive organization of the five. In addition, I was reasonably

well acquainted with this group of companies through business contact with a few

of the CFI management team.

Knowing the psychological pressures management at all levels, within

Zimbabwean organizations were experiencing, I was very apprehensive as to

how my overtures to conduct research would be received. These misgivings

were misplaced, as it appeared for the very reasons of the turmoil; I was very well

received by all concerned because of the interest in the issues I could identify for

attention. I am extremely pleased to note that each and every person within CFI

that I interviewed was extremely helpful in generating the discussions that I was

hoping for, to generate the raw data that was needed in the research framework I

had planned.

B.2 INTRODUCTION

The socio-economic and political crisis in Zimbabwe continues to deteriorate at an

ever-increasing rate. This tenuous environment is forcing people to re-evaluate

their personal and family options with regard to both their financial and physical

security of remaining in this country. The people with the most options are those

with skills that are recognized internationally. These selfsame people are needed

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within organizations such as CFI if sustainable shareholder value growth is to be

maintained.

The challenge for all involved in normative governance and normative

management within CFI, is how are skills to be retained, and additional expertise

required for the expected expansion of the organization, recruited.

CFI has established governance and management structures to create an

organization that has the capacity to retain key staff as well as draw good people

from other organizations within this country. The purpose of this paper is to

develop a dialogue within the staff complement of CFI, and to leverage off the

considerable implicit knowledge that exists within the company. By implicit, I am

referring to those “gems of wisdom and understanding” that many members of an

organization hold. The people with this often very valuable insight need coaxing

and a platform on which to surface and share this data. In many instances people

are not aware of the volume and importance of what they know, the value of

which is only realized if shared with others. There are a number of instances that

senior managers do not have the humility or the will to accept that this implicit

information exists, throughout the organization.

The aim of conversation that is expected to ensue is to enhance those factors that

create the conditions, which keep people with CFI as well as ameliorate the

issues that may cause a loss of important people.

To achieve the best results from the resources available, the dialogue

generated needs to be focused, as well as driven. By this I mean we

will need to concentrate on a few issues in the iterative process that will

be directed and stimulated by an enthusiastic and knowledgeable

facilitator. This paper should impart a number of the skills, method and

tools required to develop and sustain dialogue within the CFI. I am of

the firm conviction that the “collective mind” that appears to already

exist within the organization can be developed. Wegner and his

associates suggest that group mind may take the form of cognitive

interdependence focused around memory processes. They argue that

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people in close relationships enact a single transactive memory

system, complete with differentiated responsibility for remembering

different portions of common experiences. (Weick & Roberts, 1993

page 358). The framework that I followed in the research process is

outlined in Appendix 2: Development of a Research Paper

the evidence needed for this framework was derived from the data generation and

analysis described in this section.

Figure A.3.9-1 - Brief Overview of the 7 Stages in the SSM Research Framework

1. Situation Considered

Problematica

2. Problem Situation

Expressed

7. Action to Improve the

Problem Situation

5. Comparison of Models & Real World

6. CHANGES: Systemically

Desirable Culturally Feasible

THE REAL WORLD

SYSTEMS THINKING ABOUT THE REAL WORLD

3. Root Definition of Relevant Purposeful Activity Systems

4. Conceptual Models of the Relevant Systems (holons) Named in the Root Definitions

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B.3 GENERATING DATA

B.3.1 Step 1: Situation Considered Problematical

The problem as identified and expressed in Section A of this paper is “How are effective leadership skills to be retained and stimulated by organizations during periods of severe political, social and economic discord?”

This concern is the focus around, which this paper has been developed. With this

as my question to be researched, I approached Chris Amera, the CEO of

Consolidated Farm Investments (C.F.I.), with my research proposal.

B.3.2 Step 2: The Problem Situation Expressed (Data Collection)

The process of data collection was initiated on 28th June with a telephone call to

Mr. Chris Amara, the CEO of Consolidated Farm Investments (C.I.F.), briefly

explaining my interest in conducting research on C.I.F.

I was extremely relieved when the C.E.O. was interested and kind enough to

arrange a time for me to meet with him, at 10.00am on 4th July 2001.

I presented the research question and, the process I expect to follow, to Chris

Amera on the following Tuesday. The presentation and subsequent conversation

took almost an hour.

Chris proved to be very interested in the process, and offered a considerable

amount of information and advice on what the organizational drivers were from his

perspective and who I should consider including in the interviewing process.

Chris suggested he discuss my interest in performing the research with the C.F.I.

senior management team, and that I should then contact the respective Managing

Directors personally to arrange interviews with them and their team members.

The interviews were conducted at locations and times convenient to the C.F.I.

team. Seldom was I able to complete the interview in the prescribed 45 minutes;

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this was an indication of the co-operation and enthusiasm with which I was

received. My not being an employee of C.F.I. appeared to instill a trust and

confidence that allowed people to speak freely in the interviewing process.

The promised discussions with the C.F.I. team had been mentioned

when I phoned the different Managing Directors to arrange interviews.

Having prior knowledge of my project helped considerably with

establishing my credentials with the staff to be interviewed. Using the

telephone an interview schedule was set up

Appendix 3 : Research Framework Literature Search Affinity Diagram

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12In action research, standardisation defeats the

purpose: virtue of action research is itsresponsiveness. It is what allows you to, turnunpromising beginnings into effective endings

214Reg Revans (1983) said: "there is no learningwithout action and not action without learning".One best known example of this new culture is

Kaizen, the Japanese word for "continuousimprovement".

145Phillips and Pugh (1987) identify three characteristics of goodresearch,. Firstly it is based on an open system of thought.Secondly, one must always be prepared to examine data

critically, and request the evidence behind conclusions drawn byothers.

186The main question is how to ensure

that organisational problems areconsidered from as wide a perspective

as possible.

184System thinking is a

sensibility-for the subtleinterconnectedness that gives

living systems their uniquecharacter.





22Treat agreement

sceptically by seeking outexceptions.

55Most of the information comes from the

"Deviants". This is an important feature. It meansthat outlying estimates are given more attention

than those near to an emerging consensus.

193Few, if any, forcesin human affairs

are as powerful asshared vision.

253The Type III Error - solving wrong problem precisely.Indeed, far better an approximate solution to the rightproblem than an exact solution to the wrong problem!

42The essence of this approach to justification is simple.

Acknowledge the conventional view. Explain the nature of thechoice in terms of underlying principles. Present your own

choices as fitting your methodology to the situation.

38AR in particular, allows practitioners to achieve better

research outcomes from their practice withoutundermining the change their practice is intended toachieve. In presenting your justification it is useful to

write about the trade-offs involved.

252Four steps of the Problem-solving

process 1. Acknowledging/recognizingexistence of problem. 2. Formulatingthe problem. 3. Deriving the solutionto the problem 4. Implementing the

solution

172Obtaining trust: Researcher: Discussion-This requires the interviewerto be perceptive and sensitive to events, so that lines of inquire can

changed and adapted during the interview - interviewer - listen refrainfrom projecting own opinion or feeling into the situation.

267Never believe that it is sufficient

to sell an idea to a singleindividual (stakeholder), no

matter how well placed he or sheis within an organization.

6In action research there need be no gapbetween theory, research and practice.

The three can be integrated.



group.

GENERAL RESEARCH LESSONS ACTION RESEARCH LESSONS

68In many instances, senior managers of the most successful

firms worry more about their people and about building learning,skill, and competence in their organizations than they do about

having the right strategy.

121We have observed a relationship between having vision and a sense of self-

worth and self-esteem, both at a personal and at an organizational level.Such an organization needs a good dose of passion and purpose in the norm

of a shared vision. Then it can play and dance again.The power of such avisioning process is that it hooks into fundamental individual aspirations.

Appendix 4 - Action Research Lessons Interrelationship Diagraph

Appendix 5 : Timetable of Interviews.

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B.3.2.1 Interviewing Process

The participants of the interview process were identified by the CEO initially and

then the M.D. of the different companies. In all twelve people were interviewed,

including the CEO.

A very informal and unstructured format was used in the interviews, as this was

expected to be the most conducive manner from which issues of concern could

emerge and be expanded on. From the nearly 18 hours of audiotape recorded

during the interviews, 200 points were transcribed onto data sheets for further

analysis. Each point was allocated a reference number for latter referral and

tracing, should additional investigating and analysis be required. The identity of

the participants actually surfacing the issues detailed in Appendix 7 : Interview

Transcripts has by necessity remained confidential, as this proved pivotal in getting

people to express their concerns freely. From the initial 200 points transcribed, I

perceived 90 of these to be both relevant and important to the “retention of skills”.

These points are presented in Appendix 6 : Important points derived from interview

transcripts. B.3.2.2 Rich Picture Building (RPB)

The analysis of the data resulted in a number of significant and

contentious aspects, being identified for further dialogue. These issues

are presented in the form of two rich pictures and


Transformation. These rich pictures will form the catalysts of the rich clarifying he

perceptions of the parties concerned; The C.F.I. management team (Ho &

Jackson picture building (RPB) process. RPB facilitates the process of extracting

and 1987).

Some RPB issues can also fall into the realm of critical systems thinking (CST)

and they too can be examined from a CST perspective. This view is directly

concerned with the need for human fulfillment and with the related issues of how

so set u the conditions of genuine debate (Ho & Sculli 1994 page 54). RPB and

CST attempt directly or indirectly, to prompt problem solvers into discovering more

about the problem situation under review (Ho & Sculli 1994 page 54).

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Ultimately, the RPB exercise can be regarded as a means of improving

organizational competence in dealing with problems, especially for those

problems where various parties are at odds and the situation involves “soft”

complexity (Ho & Sculli, 1994 page 56). Given that CFI has a very good track

record in retaining staff there is a possibility of complacency resulting in the

reduced sensitivity to the concerns skilled staff, especially in the junior

management positions. It is clear to me that RPB would be an extremely useful

vehicle to highlight these concerns.

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Figure B.3.2-1- Rich Picture 1 - Motivation

This Rich Picture highlights the six main issues that have attracted staff to CFI

and have considered important in maintaining their interests and services with the

company. It is important that all these points are recognized by all concerned and

are not overlooked in implementation of the strategy to retain skills.

WELL DONE, KEEP IT UP!

Wow this is a great team I am working

in

I can be myself but still part of this large

dynamic organization!

The loyalty to the C.E.O. within the organization

is very strong! We’re allowed to get on with the job!

THE LITTLE THINGS THAT MEAN A LOT!

We’re well paid!

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Figure B.3.2-2 - Rich Picture 2: Demotivational Transformation

In this Rich Picture there are seven issues that need to be considered and

clarified to stop the grumbles, and create a more harmonious working

What am I doing here? Where are the perks they offered?

Look, I’m sorry guys there’s a

couple of Admin glitches that have

not been sorted yet! Wonder if they ‘ve forgotten about that job

opportunity they offered me?……..

…..or perhaps I should move on! There are some good options!

Why am I still driving this old car??

These are the new Job classifications and Pay schedules! So get on with the job!

STRONG HUMAN

RESOURCES MANAGER REQUIRED

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environment. These are all points that would likely fall within the conversation and

dialogue revolving around a well-structured Human Resources function.

B.3.3 Step 3: Root Definitions

To be reminded of the important aspects of the Root Definition, I have repeated

below, what I think, are the pertinent points from the research framework.

A root definition should be a condensed representation of a system in its most

fundamental form. (Jackson 2000 page 254) There are a number of aspects that

need to be considered in the development of the root definition, critical thinking

needs to be applied in the process; critical thinking as described by Ian Mitroff in

his book “Smart Thinking for Crazy Times” as well as the paper by Tom Ryan,

“What is Critical Thinking”?

In essence, has the right system or issue been identified in the root definition;

answering the wrong question precisely achieves nothing, and have the eight

elements of reasoning been applied. The eight elements of reasoning to be

applied are: -

– Purpose

– Question

– Ideas or concepts

– Assumptions

– Information

– Inferences on interpretations

– Conclusions

– Consequences and implications (Ryan 2000 page 7).

Applying these points to the data the following root definitions have been

generated, with wider consultation through more iterations of the SSM

methodology, these Root Definitions may change slightly. However I consider the

two definitions here will generate the conversation within the CFI management

team that the methodology demands.

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B.3.3.1 Root Definition 1

A system, guided by the CEO, which focuses on the physical and psychological

requirements of the individual managers to develop a stable and motivated

management team needed to navigate CFI through the challenging business and

social environment.

B.3.3.2 Root Definition 2

A Manpower training, development and monitoring system, operated by the

Human Resources Director, that actively supports management in meeting

contractual obligations and career path development of all staff, thus creating

focused and dedicated team players throughout the organization.

B.3.4 Step 4: Conceptual Model

Conceptual models are aimed at establishing what would be necessary to

accomplish what has been defined in the root definitions. Conceptual models

consist of verbs to denote the actions needed for the realization of the key

transformation in each human activity system (Jackson 2001 page 87).

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B.3.4.1 Conceptual Model for Root Definition 1

Figure B.3.4-1 - Conceptual Model for Root Definition 1

Psychological & Physical Requirements of

Managers

Stable, Motivated Management

Team

Sensing affect of Socio-Political & economic

pressures on Company & Staff.

Brain Storming Staffing Levels and

appropriate remuneration.

Monitoring of Progress

Planning Feasibility & Practicality

Communication &

Consultation of the way forward

Implementation& Co-ordination

Vision for

Organization

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B.3.4.2 Conceptual Model for Root Definition 2

Figure B.3.4-2 - Conceptual Model for Root Definition 2

Contractual Obligations, Administration & Career

Path Needs

FocusedDedicated

Team Players

Determine Skills needed and Future

Requirements

Investigate Potential of

present Team

Recruitment Plan

Consultation & Communication with Staff

Investigate Contractual

Obligations to Staff Members.

Monitor Contractual Development & Advise Managers ofr Decisions Required.

Development Training Plan

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B.3.5 Step 5: Comparison Conceptual Model to Real World

Comparison between the conceptual models and what is perceived to exist in the

real world; this is comparing the conceptual models with the rich pictures.

Considering these two perspectives will create the platform for debate in STEP 6:

AGENDA FOR DISCUSSION AND DEBATE. This is the engine of the whole

process of SSM where the debate that emanates from the comparison, should

surface possible solutions to the problem. The important point being that the people

involved in the problem are developing proposals that can be resolved within the

constraints being experienced on the ground.

The aim of this stage is to surface the problems, the differences between the ideal

world and the real world. Tom Ryan’s notes suggest three possible ways of

introducing the differences for discussion and debate with the people involved.

Firstly the conceptual model should be used as a reference check. Questioning why

things happen in the conceptual model and not in the real world.

The normal question in the comparison of whole, how when, where and why are

applied and these should highlight the main issues contributing to the problem.

Secondly imagine the conceptual model in actual operation in the real world and note

all the practical implications. This should surface the miss-matches and surface

important questions.

Thirdly a template method can be used. The template developed from the rich

picture is overlaid on that of conceptual model and the differences noted.

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B.3.6 Step 6: Agenda for Discussion and Debate

B.3.6.1 Rich Picture Discussion

When considering the rich pictures there are a number of points that need to be

verified or validated with the CFI managers that participated in this research: -


Transformation. Do both of the rich pictures capture significant issues that need to be aired?

What additions need to be included in each of the rich pictures to create more

meaning to the particular issues under discussion?

Would additional iterations with new and differing issues be beneficial?

This is a creative process, so let’s take the issues raised and develop a new rich

picture from scratch. The actual participation could create a new perspective of the

issues not perceived by me.

It is important to generate participation and enthusiasm in the process at this early

stage of the discussion step, as it is with participation that differing perspectives

will be brought to bear on the issues. With participation buy-in and ownership to

the SSM methodology is developed, as ownership of the process increases so

does the capacity to succeed in resolving the issues under review.

B.3.6.2 Root Definition – Discussion

This paper presents one perspective on which activity systems bring insight into the

improvement of retaining skilled staff within CFI. However, with the creative energies

of the management team, the root definitions could be fine tuned or completely re-

written. The purpose is to develop an iterative cycle through which the root definition

is studied. Through each cycle the root definition is observed from different

perspectives and thus rigor is developed into the process.

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B.3.6.3 Conceptual Model – Debate

With this part of the debate, the transformation proposed, requires critical

examination and debate. Are the verbs used correct, and are there too many or too

few verbs. Each stage within the conceptual model should be amplified utilizing the

collective knowledge of the CFI team. Through this process of amplification

considerable insight should be generated.

In the light of the new insights achieved through the debate process, the comparison

between the “real world” and conceptual model should be reconsidered. It is at this

point the CFI managers would be in a position to make proposals to alleviate the

problem of loosing skills, or at the very least proposals to limit the impact from any

losses of skilled people that may occur. The proposals should be systemically

desirable and culturally feasible (Checkland & Scholes 1990).

B.3.7 Step 7: Action

Having considered all aspects of the problem of retaining and motivating key

members of the CFI staff compliment and resolving the differing views on the

problem; the management team will be in a position to develop a plan of action to

ameliorate the problem. However, it is important for the CFI staff to realize this is just

the end of one learning cycle and the start of another. SSM articulates a never-

ending cycle from experience to purposeful action.

B.4 CONCLUSION TO SSM DATA GENERATION

Checkland, in his book “Rational Analysis for a Problematic World” highlights the fact

that the SSM methodology option I have used, has the possible limitation of directing

attention only towards the way to improve the efficiency of the existing systems. He

suggests an alternative option of dividing the “finding out” phase into three related

sections: firstly consider the intervention itself, the role of the client, problem solvers

and problem owners; secondly one looks at the social roles, norms of behavior;

thirdly one examines the political or power dimensions (Ho & Sculli 1994 page 53). I

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can see the merits of the alternative approach, but am of the opinion that initial

approach has proved very effective in initiating the dialogue which will highlight

issues that are of concern and this second approach could create a divisiveness

especially with the inclusion of political/power aspect that could interfere with the

dialogue.

Interacting with the management team in the interviewing process was a very

powerful tool in gaining an insight into the management relationships within CFI as

well as evaluating of the mood within the team; in addition to providing data for my

research project. There were clear indications of cohesion, cooperation and mutual

support within the group. However, there was a noticeable and common thread of

tension resulting from the economic and political problems facing Zimbabwe. Almost

every participant in this process expressed concern for his or her long-term prospects

within Zimbabwe from both the political and economic standpoints.

The very small staff turnover, especially in the prevailing socio-economic and political

conditions, clearly indicates that CFI has created a conducive and stimulating

working environment for the management team. As the situation within Zimbabwe

deteriorates, as is likely in the short-term, there is a strong possibility that the tipping

point could be reached for a number of staff; losses to emigration could result,

The question arises, how can CFI manage this possible looming problem of loosing

staff to immigration and that’s clearly where the losses will be incurred as there were

almost no indications of staff be discontented and looking for other positions within

Zimbabwe.

The continuation of the dialogue, through iterations of the SSM methodology, could

act as an early warning system of the tipping point approaching, as people appeared

to be very frank and honest with me in the interview process. The discussions that

are an integral part of SSM will create a very good caucus for developing strategies

and plans to limit the impact of pending departures.

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At this point I have only completed one cycle within the SSM process, the real value

of the project will only be realized on the second and to a less extent third iteration.

All the groundwork has now been put in place for the “journey” to continue with

considerable benefits accruing to CFI should they choose to continue on this route.

This research paper has reached point where there is a research problem, a

framework for investigating the problem and the data that has been generated by

applying the research framework, what is now required to establish rigor to the

process is the theoretical foundation on this research can be based. The theory that

is required will be derived from the management literature in this field and critical

thinking and theory development, these aspects of the project follow in sections C

Literature Review and Section D Critical Thinking and Theory Development.

B.5 REFLECTION ON MY EXPERIENCES WITH CFI AND SSM

With a background of 20 years in operations and armed with four two week modules

of theory from the Graduate School of Business, UCT, I ventured out into the big

world to test SystAL (Systems Thinking with Action Research). To say I was nervous

of my abilities and how the working community would receive me, would be putting it

mildly.

This whole process of research within a “living organism”, CFI, has been a journey for

me, starting from the first tentative steps when I phoned Chris Amera, to the actual

interviews to the write up. The journey was made considerably easier by the

enthusiasm and support that I received from all the managers within CFI who I was

fortunate enough to interview.

Contemplating the journey at this point, as “God willing” it has still some way to run

yet, I believe that I was well received by all the participants in the project because I

had a very good product to sell. SysTAL and SSM are powerful tools, and the more I

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used them the more confidence I gained and the huge potential of the whole

Executive MBA process became apparent to me. As I become more involved with

CFI, I realized that I could really add value to this organization. CFI is an extremely

well managed group of companies, but the learning experience at the Graduate

School of Business, UCT has created awareness, a sensitivity or radar that can

detect possibilities for improvement to strength and robustness of the working

environment.

For me the power of the SSM methodology is that you as the researcher have the

tools to develop solutions to the problem by mobilizing the knowledge and expertise

that exists within the company. At no time are you, the researcher, perceived or need

to portray yourself as an expert, only a facilitator in a problem solving process. As a

facilitator there is numerous scope and opportunities to add value to companies with

diverse problems, as the SSM methodology draws on the expertise that already

exists within a company. However to ensure the full benefit of SSM is achieved the

CFI managers need to acquire competencies in the following aspects:

Develop the ability to step back from a specific scene, and reflect on the

various facets of the problem situation from different perspectives.

Develop a willingness to challenge and be challenged on the various

propositions underlying managerial proposals, policies, and organizational

arrangements, regardless of the hierarchical status of the persons

concerned.

Develop a willingness to share information with others and to promote the

open atmosphere within the organization.

Develop a willingness to treat people, including their subordinates, as a

total person, not just an instrument to serve the organization.

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The challenge is to convince all concerned of the benefits of acquiring these skills

that could prove quite demanding, but the pay offs from well conducted SSM

exercises can be considerable (Ho & Sculli, 1994 page 57).

The most profound insight for me is the capacity of SSM to stimulate conversations

and dialogue within CFI. ‘Dialogue” is the label given by British physicist David Bohm

(1980) to a deeper level of communication which has a serious commitment to co-

operation (April, MacDonald & Vriersendorp, 2000, page 69) The challenge is to find

small changes that can unfold in a way that creates large effects (Morgan, 1988 page

29), the development of the capacity for genuine dialogue within CFI will prove to be

one of the answers to this challenge.

In the Literature Review and Theory Building sections I will be exploring ways of

further stimulating dialogue and the implications for CFI should sustainable genuine

dialogue be achieved within the organization.

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61 C: LITERATURE REVIEW

C LITERATURE REVIEW

Contemplating the literature review required for this project on CFI was an extremely

daunting affair for me, as over the two years of study at the Graduate School of

Business UCT the volume of literature that I have been exposed to and have access

to is considerable. Due to the whole EMBA course being structured around SysTAL

(Systems Thinking with Action Learning) most of this literature can be related to CFI

and my subject of research. This brought me to the realization that in study groups as

well as in individual position paper submissions, a large proportion of the relevant

literature had been reviewed and been submitted in various group and individual

written papers. With this in mind I have reviewed most of the submissions made to

the GSB by the different groups, as well as my personal submissions. I have distilled

out those papers that are particularly applicable to my research topic and have used

these as a nucleus around which my literature review revolved. The different papers

have been expanded and modified to focus on CFI and the concern of “the retention

of skills in turbulent times”. The paper on “Conversations and Dialogue” was initiated

and developed as the result of this specific research work and could fall in this

section or where I have thought it more appropriate in the section on Theory

Development.

C.1 KNOWLEDGE TO ACTION - KEEPING THIS PROCESS ALIVE

There is a considerable potential to develop knowledge maintained within the

employees of CFI, this remains locked up and at best, underutilized. Superior

management practices within group are well known but remain unimplemented. For

instance, the Town & Country business unit has a reputation within the group for tight

stock control management and yet Agrifoods appears to have had problems in this

area of its operation.

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Agrifoods, a very successful business unit within the group, has the potential to

improve by creating systems for better stock control. The know-how to reverse the

trend is available within CFI but it is not acted on.

The concern is CFI has the expertise and know-how to improve performance but

somehow lack the key or motivation to enact the required changes.

There are a number of related questions that emanate from this concern:

What can be done to "Kick start" the CFI management teams to improve

performance by accessing the technological and managerial capacities available

within the organization that have been allowed to become dormant?

How can companies maximize management education to be transformed from

what seems to be an academic process failing to produce the expected results.

Successful companies such as Wal-Mart and The Men's Warehouse have

developed a business environment that capitalizes on unlocking the tacit

knowledge within their staff, how can this be emulated by CFI?

What needs to be done to change the psychology of companies so as to

encourage and promote the utilization of the knowledge generation

potential latent within the organization?

I my view a major contribution to the solution can be drawn from Ralph Stacey’s view

of knowledge. For Stacey, knowledge is not an “it” but a process of action. Action is

undertaken “In the living present” and is, therefore ephemeral. Knowledge, it follows,

cannot be stored nor shared simply because it is bodily action (Stacey, 2001, page

116). Knowledge is not stored anywhere and then retrieved to form the basis of

action. Rather, knowledge is continuously reproduced and transformed in relational

interaction between individuals (Stacey, 2001, page 98). From this perspective it can

be inferred that CFI has the potential to develop the latent knowledge potential of the

group by generating the capacity for genuine dialogue throughout the organization.

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The major changes resulting from restructuring that is likely to emanate from the

merger with the Crest Group need to be carefully planned to avoid disrupting

relational patterns between people, as this could seriously damage CFI’s knowledge

generating capacity. The knowledge assets of an organization lie in the pattern of

relationships between its members and are destroyed when those relational patterns

are interrupted. Also restructuring has the considerable potential to create anxiety.

When confronted with stress, managers revert to old behavioral patterns that used to

work but repeatedly fail in the new situation.

In a world where sounding smart has too often come to substitute for doing

something smart, there is a tendency to let planning and talk, substitute

implementation. Action should be stimulated and errors, if made in good faith, should

be accommodated to eliminate.

The rationale supporting the dialogue approach to improving the knowledge available

to CFI is that managers should be gaining experience and confidence by drawing on

the knowledge being generated through continual conversation with other members

of the CFI management team. Stacey’s claims that, organizational knowledge lies in

the themes continuously reproduced that pattern the experience of being together

(Stacey, 2001, page 144). Knowing by doing develops a deeper and more profound

level of knowledge and reduces the capacity for the “knowing - doing gap” to develop

within CFI.

I consider it important to highlight the need for careful planning when considering the

large-scale changes that are likely to emanate from a restructuring process. I am

concerned with staff anxiety and the resultant loss of focus and motivation; Crest staff

with considerable tacit knowledge that is likely to be invaluable to CFI could leave the

organization or withdraw within themselves. Anxiety with the staff that remain strongly

inhibits dialogue and the transformation of tacit knowledge into explicit knowledge.

Uninhibited access to the Crest staff know-how is vital, if the integration of Crest into

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CFI is to be successful and the many unexpected problems and misfortunes

(Murphy’s Law) are to be kept to a minimum.

Murphy's law is a fact of life; there are a number of unexpected problems that have a

habit of cropping up at the most inopportune moments. An approach of dialogue

across the whole organization will clearly give a company a considerable advantage

over the hierarchical company's with regard to the knowing - doing gap associated

with strategy implantation.

Through dialogue, the vision of CFI can be developed. Here I specifically use the

term developed, as it is through the development process that commitment and buy-

in of the team will be achieved. Vision is essentially about hope that a transformation

is possible. The Dutch futurist Fred Polak noted that in every instance of a flowering

culture there had been a positive image of the future at work: without a vision, the

culture died (April, McDonald, Vriesendorp, 2000, page 15).

In conclusion, Levi Mondoro mentioned, “Being in a team that is going forward is a

very powerful attraction.” Also Craig Burgess made the point “unity of purpose is a

very powerful motivator”. The insight here is that the vision and unity of purpose that

are made possible with genuine dialogue will influence key staff to remain with CFI.

C.2 MANAGEMENT OF SHAREHOLDER VALUE

C.2.1 Introduction

The investigation of a company’s audited financial results can be a useful tool in

assessing where to focus efforts to achieve greater shareholder value. The fact that

CFI is involved in diverse industries requires that benchmarking of individual

companies within CFI is needed. Financial statements should be used as one of the

tools to assess shareholder value and areas where this can be improved. However

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the concern is to establish which factors, other than financial results, have a

significant influence on the efficient management of shareholder value.

The purpose of this paper is to surface, from the information generated from module

lectures and literature research, leverage points on which focused attention would

produce improved and sustainable returns for the CFI shareholder.

A systems thinking approach will be used to distill out from the 94 points pertaining

to the management of shareholder value that I have thought important. All lessons

were scored in a 1-10 range for in three different categories; work practice (WP),

theory (T) and practice (P). The 23 highest-ranking WP lessons Appendix 8 :

Management of Shareholder Value Learning Points will be the focus of this paper, as these

can be considered to have the most direct influence on CFI.

C.2.2 Interrelationship Diagraph Interpretation

The ID Appendix 9 : Work Practice Revised Interrelationship Diagraph shows that although

financial analysis, including cash flow and the need to produce profits are greater

than the cost of capital, these are not drivers of the system, leverage points or

outcomes.

The ID indicates the main driver of the system to be “effective leadership” (EMBA 2

Accounting & Finance lecture notes) , Pivotal points or points of leverage are

identified as “trust can only be given rather that demanded” (April 2000) and” The

outcome of protected and enhanced shareholder value, are each dependent on the

business going the commitment and loyalty of the employees” (Canadian Manager,

2000)

There is one clear outcome of the work practice ID, the creation of investor

confidence in this firm’s depth and breadth of management across the business

(Eales et al, 2000). The importance of this point cannot be over emphasized during

difficult and turbulent times as we are experiencing in Zimbabwe at this time.

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Shareholder confidence and thus value is very sensitive and dependant on

strengthen and depth of the management structures (Eales et al, 2000). This is

particularly true of foreign shareholders who view emerging markets with

considerable skepticism and would move their investment very quickly should “cracks

develop” in the management structure. A secondary outcome of the ID is Jack

Welch’s remark “ The three most important things you need to measure in a business

are customer satisfaction, employee satisfaction and cash flow” (EMBA 2 Accounting

& Finance lecture notes). This point brings into focus the importance of the financial

aspects of the firm but draws in the “soft issues” (customer satisfaction and employee

satisfaction) that underpin healthy financial results.

The relationship between the more influential nine points is more evident on the Work

Practice Revised ID. In this ID the “noise” of the less important points been removed

to reveal a cleaner picture of the interrelationship of the dominating points. In this

revised ID a third leverage point surfaces. “ Even in market corrections, high levels of

executive stock ownership would still be the best long-term policy” (Compensation &

Benefits Review, January 1999).

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Figure C.2.2-1 : Causal Loop Diagram (CLD) Operations cycle & management cycle

50Effective leadership has a

key role to play both inestablishing a

performance-enhancingculture.

42As uncertaintyincreases, the

dependence on non-financial performancedata also increases.

46Demonstrating a breadth& depth of management

across the businesscreates investor

confidence in the firm'sability to execute strategy

49" the three most important things

you need to measure in a businessare customer satisfaction, employee

satisfaction & cashflow"

94Even in a market

corrections, high levelsof executive stock

ownership would still bethe best long-term

policy.

56Key Performance

Indicators (KPI's) canplay an essential part indeveloping a widespread

understanding.

83The creation of

shareholder valueis the natural &

inevitable outcomeof employeeexcellence.

82The outcome of protected& enhance shareholder

value,are each dependenton the business gainingthe commitment & loyalty

of the employees.

63Trust can only be

given by eachperson rather than

demanded.

Vision &Implementation

Stable & CondusiveWork Environment

Trust & Repect

Targets toFocus on

Committed & StableMgt Team

Commitment &Focus on Detail

Need forBuy -in

ofEmployees

EffectiveDialogue

Communication &Dialogue

Effective leadership

WORK PRACTICE CLD

OPERATIONSCYCLE

MANAGEMENTCYCLE

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C.2.3 Causal Loop Diagram (CLD) Story

C.2.3.1 Operations Cycle

As the surfaced in the ID Appendix 9 : Work Practice Revised Interrelationship Diagraph,

effective leadership drives this whole cycle in Figure C.2.2-1 : Causal Loop Diagram (CLD)

Operations cycle & management cycle effective leadership is crucial in the development of

trust between all stakeholders in the company. In Zimbabwe at this point the “trust

factor” is extremely difficult to develop and maintain because of the relentless assault

on civil society by the government that extends to the police force, which should be

the focus of trust in well-governed countries. Where long standing trust has been

developed with customers and suppliers, this factor is crucial in the development of

shareholder value; as transactions are performed swiftly without the “run about” of

bank certified cheques or cash before any movement of goods or services can occur.

Employee loyalty and commitment is very much a function of a “two way trade” in

trust between possible shareholders represented by the board of directors and all the

employees of the company including management. Loyalty of all members of staff is

particularly important in times of uncertainty when the organization is extremely

vulnerable from shareholders withdrawal of support. Negotiating and continuity of

supplies, as well as loyalty, is also important at a time when there are many calls for

limited money.

If shareholder confidence is to be maintained “through the company being able to

demonstrate its” ability to execute strategy effectively” (Eales et al, 2000) the loyalty

of employees as well as customers and suppliers, is crucial.

The creation of shareholder value is inevitable if a company’s strategic goals are met.

Employee confidence is also compounded by the achievements of the company’s

strategic goals.

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Both shareholder satisfaction and confidence combined with employee confidence

assists effective leadership of the organization.

C.2.3.2 Management Cycle

Effective leadership is instrumental in key performance indicators (KPI’s) being

achieved. These KPI’s helped align the performance of employee KP’s ensure all

staff are “pulling in the right direction”.

KPI’s motivate company managers more effectively if these managers have a stake

in the company in the form of stock ownership or stock options.

With a concrete interest in the company, company managers and executives have a

keep interest to ensure Jack Welch’s three most important points that need to be

measured in the business, customer satisfaction, employee satisfaction and cash

flow, are continuously improving.

With satisfied customers and employees, as well as a healthy cash flow, company

strategic goals should be achieved and thus investor confidence in the firm is further

improved.

Achieving strategic goals should lead to staff excellence and the inevitable

improvement of shareholder value.

This re-enforcing cycle works concurrently and is dependant on the efficient working

of the operation cycle.

C.2.3.3 Implications Of The CLD For CFI

The synthesis of the CLD development is that CFI could enhance shareholder value

by focusing on the effective, leadership and from this a number of other important

factors will develop, namely trust as well as employee loyalty.

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Under normal circumstances the focus on these leverage points with very little

attention to financial indicators, would “raise eyebrows”, but Zimbabwe is in, may I

say, “unique” situation with economic chaos and civil strife not too far away. Given

this situation we may do well to explore the leverage point of effective leadership and

its spin-offs, further.

C.2.4 Leadership

There is considerable weight of evidence to support the focus on leadership,

irrespective of the prevailing situating in Zimbabwe. Riechfield & Teal in their book,

The Hidden Force Behind Growth Profits and Lasting Value (Harvard Business

School Press, 1996), demonstrate there is enormous potential for improving a

company’s performance by increasing customer loyalty, investor loyalty and

employee loyalty! Richard Bachman, Professor of Social & Organizational

Psychology at Harvard University describes trust as the cornerstone of employee

commitment. Bachman states that CEO’s with winning records in the creation of

shareholder value are likely to be those who have built and maintained strong trust

relationships within their workforces” (Compensation & Benefits Review, January

1999). Bachman also has strong views on the empowerment through the building

communication and trust within an organization. I have had first hand experience

concerning the break down of communications and trust within an organization and

its devastating affect on shareholder value. Conversely I have had the pleasure of

developing an “open door” policy to top management by all employees, which has

developed a deep and sustained trust within the organization. This trust has proved

invaluable in maintaining shareholder value in trying and difficult circumstances.

Thus I concur with a lot of what Bachman espouses, although I have little experience

of employee empowerment.

C.2.5 Empowerment Of Employees

There are critics of the empowerment approach. Chris Argyris in his article

“empowerment. The Emperor’s New Clothes” (Harvard Business Review, May

1998) Argyris argues that in many cases employers are not ready or not willing to

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take the responsibilities that go with empowerment. I also have my doubts

concerning the empowerment approach in the Zimbabwe situation. This stems from

the experiences with AIDS and the associated lack of willingness to accept the long-

term consequences of ones actions, even in the face of overwhelming evidence that

one is “playing with ones life”. Empowerment is in essence, focusing on the future,

and when employees have scant regard for their future health, how can we convince

them of long-term commitment to the company. This is a very cynical view, but the

appalling cost in lives and considerable frustration which has emanated from trying to

tackle the AIDS pandemic, are hard issues to come to terms with.

C.2.6 Loyalty & Communication

Returning to loyalty of the employees as well as that of suppliers and customers. My

experience in this last five years has been very interesting, in that it is quite

astounding, in that even in this era of I.T. and dealing with large corporations,

individual personalities and the “Chemistry” between them in the development and

maintenance of trust is pivotal in creating shareholder value. An example, we have

two personalities within the same packaging supplier organization. With Dave

supplying us 480 000 plastic cups per month, there is a persistent problem with price,

time of delivery and quality of lids, no amount of face-to-face meetings and

meticulous written communication seems to “keep the show on the road”. By

contrast dealing with Vince supplying sachet foil, also used as a packaging material,

has seen close and effective cooperation in overcoming a number of technical

problems concerning the laminate construction. The difference in dealing with these

two characters and support structures above them in their respective divisions is very

revealing; in the case of Dave, frustration and anger. While with Vince’ there has

always been a definite air of “we are pulling in the same direction” and co-petition.

Vince and I have always been able to reach a mutually beneficial compromise on

price. Or that’s how it feels from my perspective anyway.

With regard to the dialogue within the Works Council, a forum at which management

and employees representatives sit. Their continuous air of uneasiness lack of

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progress on any matter was frustratingly slow until Temba decided to head for

greener pastures. The change in atmosphere and the pace of progress in developing

trust and effective communication was quite amazing.

These are anecdotes of a fairly small organization, but by all accounts they are a

microcosm of the wider world and thus still valid in larger organizations.

C.2.7 Retention of Management

These issues of effective leadership and its wider implications has been “touched

on”, I use this term as this is an enormous topic and way beyond the scope of this

paper to deal with, in any great depth.

Another important concern can not go without mention, that of how can the

leadership of companies be retained and motivated with the intention of creating

shareholder value. A study by Professor Moon Song of San Diego University and

Rolf Walking of Ohio State University indicated, “that managerial ownership of stock

is significantly related to above market returns of 23.4% in successful takeovers”

(Song & Walking, 1999). This is in contrast to a survey of Euro-land countries done

by Coopers & Lybrand in 1994 where “Companies in all countries by their own

assessment overpaid for acquisitions in over 20% of the cases studies”(Coopers &

Lybrand’ 2000). The term “over payment” leaves things wide open, but the new

acquisitions were not performing as expected and this could be attributed to poor

analysis prior to takeover or poor performance of the acquired companies

management teams. It is likely to be a combination o both and it could be argued

that leaf out of the big corporate in the USA such as Ford Motor Co, who expect top

executives to hold as much as “five times their salary in stock”, would have positively

influenced the shareholder values of the acquired companies. My own experience

would definitely favour the stock ownership route as without this incentive there is

little reason for senior managers to stick with a company going through the turmoil of

a takeover. There is enough uncertainty as it is with a takeover but the process can

be seriously compromised if a number of top managers leave during or within

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eighteen months to two years of the change. Alan Johnson writing in Compensation

& Benefits review takes the view that mediocre - performing managers have

received undue compensation during the recent persistent lull market experienced in

the USA(Johnson,1999) . However he does not advocate scrapping of system but a

review with emphasis being focused on Relative Shareholder Returns as opposed to

the Absolute Shareholder Returns system that predominates at the moment. Ira Kay

in his paper Growing Shareholder Value: Why Executive Stock Ownership Works

(Kay, 1999), reveals in a 1998 survey conducted by Watson Wyath Worldwide, that

high levels of stock ownership, by management is linked to high levels of financial

performance. Companies’ average total returns ranged from 27.5%, for companies

having CEO’s with above-median stock ownership, to 18% average annual return

where CEO’s had below-median stock ownership. It could be argued that the results

of this survey are seriously skewed because he refers to above and below the

median and not average, but there appears to be a statistically significant trend. Kay

also quotes other surveys are by Bud Crystal who found that large capitalization

companies, stockholders value increased at a $23 000 for each additional $1000 of

shares held by the CEO.

C.2.8 Conclusion of Management of Shareholder Value

In summary, it is my view that although financial figures are important, these are

drawn from historical information are of limited value in a highly inflationary

environment such as now exists in Zimbabwe. The financial information while

important in viewing the “snap shot” viability of CFI, is of limited use for the growth of

shareholder value because the business environment in Zimbabwe is so

unpredictable. The ability to deal with a rapidly changing economic landscape relies

on skills of CFI staff and management team.

Taking the points surfaced in the development of the CLD, effective leadership

percolating through loyalty of employees and customers, as well as the need to

develop and maintain trust between stakeholders, how do we go forward?

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As mentioned earlier in this paper, I have my doubts regarding empowerment of the

workforce but this needs further investigation to confirm my view. I am also not that

comfortable with the implementation of Circular Organization management within

CFI. But here again, contact with companies who are successfully using this

management structure in the southern African region could convince me to change

my view. As a first step to changing the management style of the company I

consider Interactive Planning (IP) to have considerable potential. This, however, will

have to be thoroughly researched and the implementation process need very careful

planning, if it is too succeed. The introduction of IP into a CFI has to be considered a

long-term project and thus results would take some time to be realized, our problem

in Zimbabwe at this point in time is short to medium term. But thinking positively, all

the planning for the implementing IP could be carried out in this period of uncertainty,

in preparation for the improved economic environment that should surface in two to

three years time.

Of considerable and immediate importance, is to focus on the top two levels of

management; those that are most likely to leave the country. Priority should be given

to formulate incentive packages that will encourage them to "hang in there” for

another two to three years. Sanity and stability will hopefully return to Zimbabwe and

business can return to focusing on expansion and development again.

To bring all the aspects presented in this paper into focus and to generate a dialogue

within the company, the Figure C.2.8-1 - Zimbabwe Model for the Sustained Management of

Shareholder Value has been developed. This model is but a starting point of a

conversation within the organization, initially involving the normative governance,

Board of Directors of CFI, but then this conversation could be spread throughout the

wider management team and then the whole staff compliment. This has the potential

to develop into a powerful tool in sustaining the management of shareholder value.

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Figure C.2.8-1 - Zimbabwe Model for the Sustained Management of Shareholder Value

C.3 CREATING VALUE THROUGH PEOPLE

C.3.1 Relevance to CFI of Creating Value Through People

A key insight derived from the first iteration of SSM within CFI was the need to

develop a strong HR function, this is highlighted in the Rich Picture Figure B.3.2-2 -

Rich Picture 2: Demotivational Transformation. Drawing from the insights derived from

Appendix 10 : Executive MBA 2 Human Resources Assignment the value Edcon derives from

a well-developed and motivated HR department , is indication the value a strategic

ShareholderValue

Aligning Peoples Performance

Strategy

Organization Management and Total Staff Commitment

Customers Suppliers

HARD ISSUES Indicators Financials Marketing

Conditions Market Share Sales Volumes Raw Material

usage

SOFT ISSUES Environmental Policy Staff Development Community Involvement Disaster Planning &

Training Auditing of Mission

Statement Against Action Needs of Key Stakeholders Staff Loyalty Employee Incentive

Schemes

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HR department within CFI could achieve. The CFI management team should take

into consideration, the need for HR function to be totally integrated into the decision

making process of the organization, with sufficient resources and high caliber

personnel to ensure this has the capacity to add considerable value to CFI. My

concern here is that HR is often viewed by management as a financial drain that

has little relevance in creating value for shareholders, and if under resourced, the

HR will have little or no chance of contributing effectively to CFI.

C.4 GLOBALIZATION

C.4.1 Introduction

What is globalization and what are the implications for CFI in Zimbabwe?

The term globalization conjures up the image of the global village and a world “rapidly

decreasing in size”, but by considering the definition of globalization to be “the

movement of resources, goods, services and skills over international boarders”

(Hough & Neuland, 2000, page 5), this is a process that has been going on from time

immemorial. Trade maintained the Roman Empire, as it has most colonization

processes through time.

Why then, if globalization is a process that has been around forever, has the term

gained such prominence since the mid 1970’s? There are two driving forces that

have made globalization a common term. Firstly, the rapid improvement in the cost

and efficiency in the transportation systems for both people and goods has created

the perception of the world becoming a smaller place; distance is no longer a reason

for isolation. Air travel to almost anywhere on the globe is now possible at affordable

rates. Containerized transport of goods by road, sea and air has allowed a revolution

in the transport of goods. Secondly, the increasing power and availability of

computers has facilitated the rapid improvement in the efficiency, cost and availability

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of information technology in its many forms, such as world wide web access, mobile

and satellite phones as well as satellite television. IT has contributed to the

perception of a borderless world, as incidents anywhere in the world are instantly

available to the rest of the world, and people are able to establish and maintain

contact easily and cheaply. Although transportation efficiency has contributed to

actual increased world trade, IT is also important in the facilitation of trade.

Although not quite as developed as the industrialized countries, transportation,

communications and IT have advanced considerably in Zimbabwe over the past 20

years. This places companies in this country in a position to take advantage of

globalization opportunities as well as prepare for new competition, take-over and the

like. This paper will surface a number of opportunities and threats that are directly

applicable to CFI.

C.4.2 Globalization Affinity Diagraphs

Is constructed from learning points noted from EMBA 2 Module 5 lectures, as well as

a literature search. All points noted are listed Appendix 10 : Executive MBA 2 Human

Resources Assignment

The trigger question that produced the context within which the systems thinking

principles were applied was-:

“What globalization points, from those picked up in the literature and lectures, directly affect CFI from firstly a microeconomic and then a macroeconomic perspective? “

It is with this question in mind, that points were extracted from the mass globalization

learning points, to synthesize the Figure C.4.2-1 - Globalization Affinity Diagraph. The

learning points in the AD fell into two board categories. Firstly, those points that

pertained to CFI as a company being involved in global trade are grouped together

Secondly, the points associated with environment within which CFI would be affected

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within international trade arena, normally associated at the level of a country or nation

(micro economic level), were grouped together.

These two broad areas into which the learning points clustered, achieved a

reasonable level of recursion that would be further enhanced by an additional

category, that of the individual. However, to generate data for this is beyond the

scope of this paper.

The learning points listed in each of the two categories of AD were used in the

development of two ID’s that in turn were required to synthesize two causal loop

diagrams (CLD’s). The ID’s and CLD’s bring into focus the relationships that exist

between the different points and how they relate to each of the other points.

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Figure C.4.2-1 - Globalization Affinity Diagraph

2Japan - Masters at setting up non-trade barriers - 4yrs to get citrus accepted and after 21 years grapesstill not accepted. But have to look beyond and find

the Japs have a fishing / grape agreement withChile.

43With no ethical, or social limitsto commerce, life itself is being

pushed to the limit.

44Flows of funds and their valuation in freefinancial markets are influenced as muchby perceptions as by objective reality - or

perhaps the more precisely, theperception is reality. THE HERD

INSTINCT IS STRONG.

48NB elements of Democracy - Propertyrights - Rule of Law - Transparency.

17Fallacious free trade argunents there are clear

gains of trade but also major costs ofadjustment.

37Ops - CHG the philosophy from QC to QA

33ISSUES FACING A GLOBAL SERVICE COMPANY - Guests -

Staff - Supply chains ( in the case of SAA Guests = ChiliansStaff=Mgt ex USA with SA workers Supply chain=Airport coys

+ catering suppliers.

55Soros's JUXTAPOSE to the slogan "moral hazard" is the slogan of"level playing ground" The playing ground of international finance isanything but level when interest rates at the periphery are so much

higher than at the centre. Perhapse under the percieved protection ofthe IMF too much money has flowed from the centre to the periphery

precipitating the '98 Asian Crisis

42Globalisation is tearing down ethicaland ecological limits on commerce.

Life has lost its sanctity as livingsystems become the new raw

material, the new site for investment,the new location for manufacture.

4Foxes & hedgehogs - Major

corporations = hedgehog = DAVOSbecause dictate the solutions to the

world. FOXES balance many optionsand become enterprenerial in

character.

53Michael Porter - WHY SOME NATIONS SUCCEED AND OTHERS FAIL GLOBALCOMPETITIVE SITUATIONS - factor endowments skilled labour, and developed

infrastructure - demand conditions the degree of health and competition &competition the firm must face in the local mkt - related & supporting industries

espcially those that are globally competitive - firm strategy, structure & rivalry - thecondition in the home that either hinder or aid the firms ability to create, organize &

manage the nature of the domestic and international rivalry

51With Global Mkting - SOURCINGis as NB as SELLING for an org in

a global context.

52Potential world production is greatly

increased with unrestricted free trade(Recardo's Theory 1817)

49Democracy has the problem of

balancing social needs with economicperformance.

INTERNATIONAL LEARNING POINTSCOMPANY LEARNING POINTS

56When the international financial playing field is naturally

uneven, creating a level field requires officialintervention. Moral hazard has become a code word for

resisting it. Soros thinks it should not be allowed todominate the discourse.

54IMF "Moral Hazard" - IMF guarantees encourage unsound

lending. Soros claims the current campaign against themoral hazard is just an excuse to resist interference with

market mechanism. This is the "false doctrine of our age",namely financial markets automatically tend towards

equilibrium, therefore there is no need for interference.

4140% of of the GLOBAL

ECONOMY is worse off than itwas 10 yrs ago.

57Creating a level playing ground should be HIGH PRIORITY because the real

systemic danger to the global capalist system is political in character. The risingtide of nationalism can be contained only by spreading the benefits of global

capitalism more evenly.

60Francisco Varela - "our language and our nervous

system combined to construct our environment. We canonly see what we talk about. Language is like a set ofeyes & hands for the nervous system, thru which we

coordinate actions with others. This is an enactive viewof knowing the world; we lay it down as we walk on its

path.

67Stategic Alliances are about

relationships in essence

76"Vocatus atque non vocatus,

Deus aderit"

61It is thru language that we create the world,because it is nothing until we describe it. To

put it another way, we do not decribe the worldwe see, but see the world we describe.

77In the last year of the twentieth century the notion that poor countries were lagging

because of wrong policies was undercut by a string of disasters in emerging marketsthat were following "exemplary" policies (Brazil Mexico ect.) whose economies

soured shortly after their leaders had been lauded by the elite for following soundeconomic fundamentals.

12Roger George - NB in globalization 1) Learn the culture 2)

Send normal architec to work with an architec from thenew country 3) Send in support staff to work with

and train the locals, threrefore NB NB intergration into thesystem not imposition of a system.

18Roger George -Sinapore - Set legal durastriction in home

country - Pick the right partner and understand hisconstructs - Partner must be in a position to properly

capitalize the company

45The Primary Mission of the IMF is preserve the

International Finance System. The task is to ensuredebtor countries wil be able to meet their international

obligations.

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Figure C.4.2-2 - Globalization - Company Interrelationship Diagraph


33ISSUES FACING A GLOBAL SERVICE

COMPANY - Guests - Staff - Supplychains ( in the case of SAA Guests =Chilians Staff=Mgt ex USA with SA

workers Supply chain=Airport coys +catering suppliers.

51With Global Mkting - SOURCING isas NB as SELLING for an org in a

global context.

GLOBALISATION - COMPANY ID

60Francisco Varela - "our language and our

nervous system combined to construct ourenvironment. We can only see what we talk

about. Language is like a set of eyes & hands forthe nervous system, thru which we coordinateactions with others. This is an enactive view of

knowing the world; we lay it down as we walk onits path.

67Stategic Alliances are about

relationships in essence

61It is thru language that we create the world,

because it is nothing until we describe it. To putit another way, we do not decribe the world we

see, but see the world we describe.

12Roger George - NB in globalization 1)

Learn the culture 2) Send normalarchitec to work with an architec from

the new country 3) Send insupport staff to work with and train thelocals, threrefore NB NB intergrationinto the system not imposition of a

system.

18Roger George -Sinapore - Set legaldurastriction in home country - Pickthe right partner and understand his

constructs - Partner must be in aposition to properly capitalize the

company

65COMPETITION IS NOT BETWEEN

COMPANIES BUT BETWEEN SUPPLY/ VALUE CHAINS

64Market Segmentation is where marketinglives - The identification of segmentation

variables has the potential to deliverpowerful competitive advantage.

62NEW MARKETING SURVIVAL SKILLS =

Manging - purchase & consumption behavior(how they choose to use a product) -

Competitive environment - Resources -Interaction ( customers we want

TRANSACTIONAL EFICIENCY ie. Fill upquickly at filling station not chatty waste of time)

Focus(get all in the coy to pull in the samedirection, incentives ect)

81Vicors - 3 types of JUDGEMENT in Mgt -

value judgement - reality judgement -instrumental judgement (implementation)

THE MAIN INFLUENCE OFMANAGEMENT IS RELATIONSHIP

MANAGEMENT.

85Revans - when you go into a PROBLEM

SITUATION - there are = those who know = thosewho care = those who can 3 PEOPLE ARE

NEEDED FOR SUSTAINABILITY OF ASUCCESSFUL SYSTEM networker = care ,

executive = power > can , linemanager / client >know or can

3 IN1 OUT

1 IN2 OUT

2 IN2 OUT

2 IN1 OUT

1 IN1 OUT

2 IN1 OUT

2 IN2 OUT

1 IN2 OUT

2 IN2 OUT

0 IN4 OUT

3 IN1 OUT

1 IN2 OUT

2 IN1 OUT

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C.4.3 Company Interrelationship Diagraph Interpretation

The ID of a company Figure C.4.2-2 - Globalization - Company Interrelationship Diagraph,

expanding globally has a clear driver; Roger George posits from his practical

experience in the global environment (Set legal jurisdiction in your home country –

Pitch the right partner and understand his constructions – Partner should have

sufficient funds to capitalize the venture sufficiently).

No clear leverage points emerged from the ID, however two points were slightly more

prominent then the rest. The main influence of management is relationship

management and, in a global market sourcing globally is as important as selling

globally.

Of note with company ID is that all the points were closely inter-related with no points

isolated and with few or no connections. Firstly, this could mean that course work in

the module was well coordinated and focused, or secondly, my constructs may have

resulted in my assimilating only similar material from the course work and literature

research. The result of a narrow focus with both these is that globalization has been

viewed from too narrow a perspective. This limited focus may lead to implementation

problems as the wider picture has been neglected.

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Figure C.4.3-1 - Globalization - Company CLD – Expansion Phase






global context.

GLOBALIZATION - COMPANY CLDOPERATIONS PHASE










the two wayflow is NB

crucial skillneeded

a change in mentalmodels helps with

marketing

a shift in mental models is NB as goods can't be

sent back easily

value chain mgtacross borders needs

intergration of nationalities

emphasis on logisticsboth incomming &

out going

OPERATIONSPHASE

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Figure C.4.3-2 - Globalization - Company Implementation Phase CLD


COMPANY - Guests - Staff - Supply chains ( inthe case of SAA Guests = Chilians Staff=Mgt exUSA with SA workers Supply chain=Airport coys

+ catering suppliers.


global context.

GLOBALIZATION - COMPANY IMPLEMENTATION CLD

60Francisco Varela - "our language and

our nervous system combined toconstruct our environment. We can onlysee what we talk about. Language is like

a set of eyes & hands for the nervoussystem, thru which we coordinate

actions with others. This is an enactiveview of knowing the world; we lay it

down as we walk on its path.




12Roger George - NB in globalization 1) Learn theculture 2) Send normal architec t to work with anarchitect from the new country 3) Send insupport staff to work with and train the locals,

threrefore NB NB intergration into the system notimposition of a system.










85Revans - when you go into a PROBLEM SITUATION -there are = those who know = those who care = those

who can 3 PEOPLE ARE NEEDED FORSUSTAINABILITY OF A SUCCESSFUL SYSTEM

networker = care , executive = power > can ,linemanager / client > know or can


thru dialogue a team is developed

emphasis on language& dialogue

To achieve a commonunderstandingof goals &

objectives listen tothe language

crucial skillneeded




out goingIMPLEMENTATION

PHASE

all these skillsare needed are

needed in a new marketing venture

problems can occurhdifferent nationalities working together

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Figure C.4.3-3 - Globalization – Complete Company CLD






global context.

GLOBALIZATION - COMPLETE COMPANY CLD

60Francisco Varela - "our language and

our nervous system combined toconstruct our environment. We can onlysee what we talk about. Language is like

a set of eyes & hands for the nervoussystem, thru which we coordinate

actions with others. This is an enactiveview of knowing the world; we lay it

down as we walk on its path.

67Stategic Alliances

are aboutrelationships in

essence




12Roger George - NB in globalization 1)

Learn the culture 2) Send normalarchitec to work with an architec from

the new country 3) Send insupport staff to work with and train thelocals, threrefore NB NB intergrationinto the system not imposition of a

system.

18Roger George -Sinapore - Set legaldurastriction in home country - Pickthe right partner and understand his

constructs - Partner must be in aposition to properly capitalize the

company










81Vicors - 3 types of JUDGEMENT in Mgt -

value judgement - reality judgement -instrumental judgement (implementation)

THE MAIN INFLUENCE OFMANAGEMENT IS RELATIONSHIP

MANAGEMENT.

85Revans - when you go into a PROBLEM

SITUATION - there are = those who know = thosewho care = those who can 3 PEOPLE ARE

NEEDED FOR SUSTAINABILITY OF ASUCCESSFUL SYSTEM networker = care ,

executive = power > can , linemanager / client >know or can

need to workwithin the system


a good team canexpand further

thru dialogue a team is developed

emphasis on language& dialogue

To achieve a commonunderstandingof goals &

objectives listen tothe language

To set up in a new country aneffective local mgt is needed

crucial skillneeded

"stepping stone" tosetting up a strategic

alliance

a change in mentalmodels helps with

marketing

a shift in mental models is NB as goods can't be

sent back easily




out going

EXPANSIONPHASE

OPERATIONSPHASE

all these skillsare needed are

needed in a new marketing venture

problems can occurwithdifferent nationalities

working together

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C.4.4 Company Causal Loop Diagram Story

Three main loops emerged with the synthesis of the CLD of the points form the

company ID. These three loops were closely connected as would be expected from

an ID that has numerous links.

The first loop is that of the EXPANSION PHASE Figure C.4.3-1 - Globalization - Company

CLD – Expansion Phase. The EXPANSION phase revolves around people and the

need for CFI to develop a mobile team for deployment into the country to which

expansion is planned. Initially 3 people are required for the sustainability of a

successful system, a person who knows, a person who cares and a person who

can.

With this team, CFI is in a good position to expand. The team would select a

country to expand into and then find a suitable partner whose constructs are well

understood and who has sufficient financial resources to capitalize the new venture

sufficiently.

Once the right person has been identified and contacted the next step is to build an

alliance, which in essence is the development of a relationship, the foundation on

which alliance can be constructed. The better this initial laying of the foundation the

more enduring and successful will be the alliance. The considerable effort and

focus, which is needed, in this early stage of expansion across borders, cannot be

over emphasized.

The alliance partner would be expected to manage relationships within the

company as well as with suppliers, customers and other possible stakeholders.

The CFI pioneering team would need to learn the culture of the new country to

understand the functioning of the alliance with all the possible advantages as well

as pit falls. The greatest leverage point in understanding a culture is to understand

the language, as language is like the eyes and hands of the nervous system,

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through which we co-ordinate actions with others. Emphasizing this point regarding

language “we do not describe the world we see, but see the world we describe”.

(Jaworski, 1994 page 108)

It is through dialogue that the initial team of three can strengthen the alliance.

The second loop of the company CLD is that of Figure C.4.3-1 - Globalization - Company

CLD – Expansion Phase. Using this causal loop as a template, CFI is in a position to

plan a decisive implementation strategy for expansion into a specific new regional

market or country.

The third loop of the company CLD is that of Figure C.4.3-1 This causal loop draws

attention to areas that need focusing on if the initial venture of CFI into a new

market is to be sustainable. This loop is connected to Figure C.4.3-1 at two points,

those of three-member team (those who know, those who care and those who can)

and the need to learn the culture; both these areas are not “one-off” processes that

once put in place can be forgotten. Both needed to be viewed as continuously

requiring regular attention. From the three-member team one develops the New

Marketing Survival Skills of

a) Purchase and consumption behavior,

b) Competitive environment,

c) Resources,

d) Interaction

This leads to market segmentation and the understanding there of. An important

aspect of operating in a global environment is the knowledge of how and where to

procure the resources required for the project. This leads to the important

understanding that competition is not between companies but between supply/value

chains. Thus in operations, those who establish and maintain efficient and reliable

supply and value chains are those that will flourish.

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In a service organization, this integration of the supply and value chain can be very

complicated because there is a strong chance that supplies, management and clients

could all be from different continents and different cultures.

Because greater distances are involved in global sourcing and selling increasing the

complexity and cost of returning or recovering of defective goods, a change in

philosophy from Quality Control to Quality Assurance is crucial. This change in

approach to quality also strengthens the marketing position of the company.

All three phases, the Expansion Phase, the Implementation Phase and the Operation

Phase loops of the CLD would be expected to run concurrently and re-enforce each

other until the target counting is totally colonized and then the operational loop would

persist on its own Figure C.4.3-3 - Globalization – Complete Company CLD . The complete

CLD shows that CFI can achieve the greatest leverage by focusing on-:

• Revans – “when you go into a PROBLEM SITUATION - there are = those who

know = those who care = those who can. 3 PEOPLE ARE NEEDED FOR

SUSTAINABILITY OF A SUCCESSFUL SYSTEM networker = care, executive =

power > can, line manager / client > know or can”

• NEW MARKETING SURVIVAL SKILLS = Managing - purchase & consumption

behavior (how they choose to use a product) - Competitive environment -

Resources - Interaction (customers we want TRANSACTIONAL EFFICIENCY i.e.

Fill up quickly at filling station not chatty waste of time) Focus (get all in the coy to

pull in the same direction, incentives etc.)

• ISSUES FACING A GLOBAL SERVICE COMPANY - Guests - Staff - Supply

chains (in the case of SAA Guests = Chilians Staff=Mgt ex USA with SA workers

Supply chain=Airport coys + catering suppliers.

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• (12) Roger George - NB in globalization 1) Learn the culture 2) Send normal

architect to work with an architect from the new country 3) Send in support staff to

work with and train the locals, therefore NB integration into the system not

imposition of a system.

C.4.5 Globalization Model for Companies

The Model of Business in Global Expansion, which could be used by CFI, is an

adaptation of a marketing model including considerations of a global context. All the

aspects of marketing need to be followed when expanding into foreign markets but

there are additional considerations that need to be brought into play. These are

highlighted in bold print in and originate from the company CLD.

This modified model would be a sound “launch pad” for venturing into foreign

markets from an established home base manufacturing facility.

The model for the establishment of a manufacturing facility in a foreign country would

incorporate the modified marketing model but be considerably more complex to take

into account the more complex tasks of manufacture. The development of such a

model is beyond the scope of this paper.

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Figure C.4.5-1 - A Model of Business in Global Expansion

Adaptation from (Burgess 1998 page79)

Environmental influences:Cultural Economic Legal Physical Political Technological

Individual influences: Perceived role Personality and values Attitudes Motivation and involvement Demographics Resources Relative buying centre influence Individual influence on group Knowledge

Stimuli: Marketer dominated Other

Exposure

Attention

Comprehension

Acceptance

Retention

External search

Information

Storage

Dissatisfaction

Divestment

Satisfaction

Post-purchase alternative evaluation

Buying centre

Need recognition

Task type

Search

Formation of Individual & Organizational

Preferences

Consumption

Purchase

INTERNATIONAL SOURCING

KNOWLEDGE MANAGEMENT

INTERNATIONAL STANDARDS & KNOWLEDGE

RELATIONSHIP MANAGEMENT

LOCAL KNOWLEDGE THREE-ALLIANCE DEVELOPMENT

DIALOGUE RELATIONSHIP MANAGEMENT

Also Those who know Those who care Those who can

QA

LEARNING THE LANGUAGE AND

CULTURE

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C.4.6 Reflection of the Globalization with reference to CFI

There are two perspectives to CFI driving for an international presence. The first, is

the most obvious - financial with the aim of earning hard currency and spreading risk.

The second, is less obvious, but for me is considerably more important; this is the

international exposure of the CFI management team. There are a number of

intangible results that could flow from the international exposure on the management

team: removal of the feeling of isolation; confidence from operating in a different

environment; security from the ability to generate hard currency. The last aspect of

being able to generate hard currency is difficult to describe to people - the liberating

feeling of having access to currency that is internationally acceptable. Earning

Zimbabwe dollars and not being able to freely and legally convert your earnings into

an internationally accepted currency makes people feel they are prisoners in the

country and this feeling creates considerable uncertainty with regard to tertiary

education of children and medical care. Should CFI develop the capacity to clear the

obstacle of access to hard currency, it does not have to be a huge amount, and the

key staff within the company will become a lot more content. I speak from experience

on this matter, having had a small component of my salary as a hard currency

allowance and having had this removed with the change in shareholders has had a

profound affect on my view of working for the company and more importantly working

in Zimbabwe.

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93 D: CRITICAL THINKING & THEORY DEVELOPMENT

D CRITICAL THINKING AND THEORY DEVELOPMENT

D.1 INTRODUCTION

The aim of this section of the dissertation is to reflect critically on the whole process.

The literature indicates that this critical reflection consists of three key elements that

are:

Insight

Critique

Transformative redefinition

Michael Jackson eloquently describes my interpretation of the combined result of

these three elements:

We act in the world according to how we see it and different viewpoint produce very

different effects in terms of the “Problem” we define. The “solutions” we offer, and the way

in which we deal with the new experiences and learning. However once we begin to

formally “think about thinking”’ we can open up and with practice, use different ways of

thinking for different purposes (Jackson 2000 page 11).

Therefore, to critically reflect on the project thus far requires that I seek to “find

different ways of thinking for different purposes”. In the context of my research

project, I have arrived at a point where the “problem” has been identified, the method

of investigation been formulated, data collected, correlated and interpretations made

according to this plan. I now need to take the process forward, to create value for the

people who invited me to do the research, the academic community, and society at

large.

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Through critical thinking and theory development I aim to surface issues that may not

initially appear apparent. I also aim to come to grips with the situation by gaining

deeper insights and understanding of why staff remain or move on.

Initially, I present what I consider the most profound insight which I have gained in

completing this work, “the flapping of a butterfly wing in Hong Kong that causes

hurricanes in Miami” a change in approach and mental model that can have profound

benefits for CFI or any organization which can focus on developing conversations to

the deeper level of dialogue.

The second of the insights I offer is a different perspective on creating awareness of

the cost of loosing a skilled member of staff. This model aims to develop a common

language which the different disciplines within management can use to view the

issues surrounding staff losses.

Finally, I aim to develop a model which can generate the capacity to “deliver theories

and concepts” in the context of different perspectives of the ”problem” which have

been surfaced through the application of Soft Systems Methodology and Action

Research. The insights and theories that have been generated by the research I

have conducted have been refined utilizing the model Figure D.5: 1- Theory and Concept

Development .

D.2 CONVERSATIONS

D.2.1 Introduction

The concept of conversations and the impact of these on an organization,

developed from Ralph Stacey’s views on knowledge and complex responsive

processes.

Knowledge, therefore, is not an “it” but a process of action. Action is undertaken in the living present and is, therefore ephemeral. Knowledge, it followed, cannot be stored nor shared simply because it is bodily action. In symbolic terms that bodily action has many aspects,

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taking the simultaneous form of proto, significant and reified symbols. (Stacey, 2001 page 116)

Organizational policies that disrupt relational patterns between people, however, could seriously damage its knowledge generating capacity. The knowledge assets of an organization lie in the pattern of relationships between its members and are destroyed when those relational patterns are destroyed. This begins to suggest very different ways of thinking about what it might mean to “manage” knowledge in an organization. (Stacey, 2001 page 98)

This statement is somewhat in conflict with the notion of “Intellectual Capital and the

Value Gap” but I will deal with that in the applicable section. In the context of loosing

key members of staff from an organization such as CFI; these two thoughts of

Stacey’s have serious implications. When one considers the potential losses to CFI

from this perspective it is crucial to develop a capacity to manage the situation.

With “Conversations” I aim to convince the CFI management of the need to develop

the capacity for dialogue through out the length and breadth of the organization.

D.2.2 Methodology

In researching conversations and dialogue and the implications of this process on

an organization a number of points were noted from the literature. These points are

listed in Appendix 12 : Literature Search on Dialogue & It’s Implications for an Organization. A

systems thinking approach was applied to these points using the trigger question,”

What are the implications of dialogue for an organization?”

The points listed were segregated into two general themes resulting from

Conversations are, Leadership and Knowledge. For each theme a causal loop

diagram (CLD) has been developed. With the use of these CLD’s an understanding

of the implications of initiating dialogue within CFI will be realized.

D.2.3 Conversations & Leadership

With investigating the interrelationship of issues associated with conversations and

leadership, I aim to highlight the impact of authentic dialogue on leadership within

CFI. I also aim to surface the leverage points were the dialogue process can be

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initiated and maintained through focusing on the particular points surfaced through

the application of systems thinking methods.

Figure D.2.3-1 - Conversations & Leadership CLD 1

D.2.3.1 Conversations & Leadership CLD 1 Explanation

Starting with point C5, metaphors assist CFI to view leadership and dialogue from

differing perspectives; they also help in developing a common language and mind

set (mental model) which is so important in genuine dialogue.

E293 emanates from a culture metaphor and is important in the form of leadership

that has teamwork and dialogue central to its philosophy. With the staff in the

organization feeling good about their employer, from the language and actions

which focus on staff as being the most important aspect of CFI, an enabling

environment for dialogue and shared meaning is created and this is the focus of

C141.

CLD 1

C5Metaphor gives us the opportunity to stretch ourthinking and deepen our understanding therebyallowing us to see things in new ways and to act

in new ways

C141Leaders and manager see how their successhinges on the creation of shared meaning -since the 1980's, there has been a growingrealization that the fundamental task facing

leaders and mangers rests in creatingappropriate systems of shared meaning that

can mobilize the efforts of people in pursuit ofdesired aims and objectives - Two key words

here are "appropriate" and "shared".

with people be aware of their importance creates an enabiling environment for shared meaning to develop

metaphores can help develop the righr language & mind set

the use ofmetaphores can

help to focus on people

the creation of hope is normally people focused

common thought& shared meaninggenerates vision

B15Vision is essentially about hope that atransformation is possible. The Dutchfuturist Fred Polak noted that in every

instance of a flowering culture there hadbeen a positive image of the future at work:

without a vision, the culture died.

E5It is my observation that in manyinstances, senior managers of

the most successful firms worrymore about their people and

about building learning, skill, andcompetence in their originationsthan they do about having the

right strategy.

E293WHAT DOES IT MEAN TO PUT PEOPLE

FIRST?- Publicly and repeatedly stating the primacy and

importance of people organization success(Richard Branson) - the customers second and

the shareholder third.

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Common thought (shared meaning) allows for the CFI vision to be collectively

generated and accepted. With this vision comes the “hope” that Polak alludes to in

B15. Hope is powerful rallying and motivation point in any social group or

organization.

Pfiffer’s observation, E5 that success can often be attributed to concentrating more

on staff training and advancement than on having the right strategy, reinforces the

concept of reaping the benefits of an environment conducive for dialogue. With the

metaphors different aspects of staff advancement and training can be explored.

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Figure 0-1 - Conversations & Leadership CLD 1 & CLD 2



about building learning, skill, andcompetence in their originationthan they do about having the

right strategy.


in new ways

C141Leaders and manager see how their successhinges on the creation of shared meaning -since the 1980's, there has been a growingrealisation that the fundamental task facing


can mobilise the efforts of people in pursuit ofdesired aims and objectives - Two key words


F27When we forget the generative powerof language, we quickly confuse ourmaps for the territory. We develop alevel of certainty that robs us of the

capacity for wonder, which stifles ourability to see new interpretations and

new possibilities for action.

B71Dialogue is a difficult and uncomfortable concept

as it is about insight as the source of action.Dialogue requires that leaders reveal their logicand hold up and reveal their assumptions and

beliefs, rather than their arguments, for scrutiny.

A98Organisational policies that disrupt relational patternsbetween people, however, could seriously damage its

knowledge generating capacity. The knowledge assets ofan organization, the, lie in the pattern of relationshipsbetween its members and are destroyed when those

relational patterns are destroyed. This begins to suggestvery different ways of thinking about what it might mean to

"manage" knowledge in an organization.

metaphores can help to view the situation from other

perspectives and assist ingetting things back on track

E224But for whatever

reasons, managersshould ignore the

many blandishmentsand temptations to try

and solve most oftheir organisational

problems through pay.

metaphors allow for different perspectives tobe considered other than

the obvious of pay

E294 Many firms proclaim the importance of their people but do not manage

in ways consistent with this claim. Second - Putting people first means fixing the firms language to

ensure consistent use of terminology that does not covey disrespect ordisdain of it people.

Third - leaders and organisations who believe that putting their peoplefirst is important actually act one that belief in numerous ways. One ofthe simplest but also most important is providing everyone access to

the organisations leaders..

languaging / dialogueis the main method of

communicating to the peopletheir value to the firm

attention to psychologicalaswell as phyical (pay) needs of people need to be considered

the NB of dialoguerequires constant attentionnew policies can disrupt

this inadvertantly

"take your eye off the ball" and things only get worse

CLD 1

CLD 2





FIRST?- Publicly and repeatedly stating the primacy

and importance of people organizationsuccess (Richard Branson) - the customers

second and the shareholder third.

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D.2.3.2 Conversations & Leadership CLD 2 Explanation

Metaphors C5 will help to explore differing perspectives, other than remuneration

only, of attracting skilled and valuable employees to CFI. As Pfiffer points out E224,

CFI management should avoid the temptation of trying to solve most of their staffing

requirements through increased remuneration. CFI needs to consider, culture,

structure and work social atmosphere together with the remuneration package

when developing an organization that will attract good staff. E294 highlights a

number points that require attention if CFI is to enhance it’s favoured employer

status. It is through dialogue that all these issues can be surfaced and integrated

into a unique employment perception of CFI in the employment market. However,

dialogue will make difficult demands on the CFI management as is highlighted in

B71. Expressing one’s logic, beliefs and assumptions in an effort to generate

insight into the reasoning regarding decisions could be difficult for some of the

management team at CFI.

To ensure dialogue persists within CFI, all changes in policy, the introduction of new

staff structures or the changes in personalities, need to be closely monitored so as

to ensure the knowledge generating capacity of the organization is not affected

A98. As Stacey states, “the knowledge assets of an organization lie in the pattern of

relationships between the members and are destroyed when these are destroyed”

(Stacey, 2001 page 98) CFI needs to continually nurture these relationships to

maintain the dialogue that facilitates knowledge generation. Central to dialogue is

the power of language and this must always be uppermost in the minds of the CFI

team F27. It is through the power of language that metaphors create better insights

and understanding within CFI C5.

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Figure 0-2 - Conversations & Leadership CLD 1, CLD 2 & CLD 3



about building learning, skill, andcompetence in their originationsthan they do about having the

right strategy.


in new ways

C141Leaders and manager see how their successhinges on the creation of shared meaning -since the 1980's, there has been a growingrealization that the fundamental task facing


can mobilize the efforts of people in pursuit ofdesired aims and objectives - Two key words


F27When we forget the generative powerof language, we quickly confuse ourmaps for the territory. We develop alevel of certainty that robs us of the

capacity for wonder, which stifles ourability to see new interpretations and


C142You are what you are seen and experienced as

being, not what you think you are or what your jobtitle or job description say you are. This obliges theleader and manager to understand their roles and

significance in terms of actual impacts on the realityconstruction process - can no longer hid behind

formal structures.

B71Dialogue is a difficult and uncomfortable concept

as it is about insight as the source of action.Dialogue requires that leaders reveal their logicand hold up and reveal their assumptions and

beliefs, rather than their arguments, for scrutiny.

B82Leaders need to foster experiences that allow individuals to

coalesce around issues of shared concern and moveforward to successful resolutions of these concerns. Wetherefore propose that leaders hoping to be successful in

an ever changing and chaotic world need to createopportunities in which others can find, for themselves,

balance meaning and fulfillment.

A98Organizational policies that disrupt relational patternsbetween people, however, could seriously damage its

knowledge generating capacity. The knowledge assets ofan organization, the, lie in the pattern of relationshipsbetween its members and are destroyed when those

relational patterns are destroyed. This begins to suggestvery different ways of thinking about what it might mean to

"manage" knowledge in an organization.

B123No work can be sustained without attention to

the relationships that support it. In fact,nurturing those relationships is the real work,

Intuitively we know this, but sizing the relationalaspect of leadership is a central theme for anyorganization functioning in the new paradigm.

thru being honest& open leaders

can develop trust

with the wrong attitude wrong policies are likely to follow

metaphores are NB in gainingthe right perspctive

using metaphorescan help focus on

keepinf relationships alive

re-evaluate policiesthat could be disrupting

knowledge flows

dialogue is thelifeblood of relationships

E224But for whatever

reasons, managersshould ignore the

many blandishmentsand temptations to try

and solve most oftheir organizational


E294 Many firms proclaim the importance of their people but do not manage

in ways consistent with this claim. Second - Putting people first means fixing the firms language to

ensure consistent use of terminology that does not covey disrespect ordisdain of it people.

Third - leaders and organizations who believe that putting their peoplefirst is important actually act one that belief in numerous ways. One ofthe simplest but also most important is providing everyone access to

the organizations leaders..

CLD 1

CLD 2

CLD 3





FIRST?- Publicly and repeatedly stating the primacy and

importance of people organization success(Richard Branson) - the customers second and

the shareholder third.

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D.2.4 Conversations & Leadership CLD 3 Explanation

Metaphors C5, are valuable in seeking the right perspective to view the role of

leadership, and consider the cultural and social aspect of leadership “you are what

you are seen and experienced as being, not what you think you are or what your job

title or job description say you are” (Morgan 1998 page 142) To establish and

maintain authentic dialogue within CFI it is important for the management team to

ponder on C142 when interacting with staff at all levels of the organization.

Management of CFI should always be aware of the implications of leadership style

on disrupting relationship patterns between people and the consequential affect on

knowledge generation within the organization A98. There is a role for managers to

play in developing policies that improve relationship patterns between people and

also allow individuals to coalesce around issues of shared concern and move

forward to successful resolutions of these concerns (April et al 2000 page 82).

Dialogue will ensue and issues will be resolved B82. With a milieu conducive to

legitimate dialogue and with openness and honesty B82 on the part of the CFI

management, the sustainability of relationships that underpin the organization can

be maintained B123. Metaphors such as the “lifeblood” of relationships is largely

dependent on honesty and dialogue, and is an important focal point for

management.

D.2.4.1 Conversations & Leadership Conclusion

Metaphors are a leverage point in the implementation of leadership through

conversations and dialogue. The leverage point is that area, which if focused on

and improved upon, will have the greatest impact in the implementation of

leadership through dialogue. Metaphors would be powerful tools for the CFI

management in developing the capacity for authentic dialogue within the

organization. Any one situation can be viewed from so many different perspectives

using metaphors such as mechanical, cultural, political, brain-like, organism-like.

As additional metaphors are used to investigate a situation, so better insights and

understanding are developed and decisions made, become more robust.

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Other leverage points A98 and B71, both focus on relationship development and

the anxiety that may be felt by some members of the management team with regard

to being more open and explaining the reasoning and logic used in making certain

decisions. This is particularly difficult when changing from a hierarchical

management structure that is fairly prevalent in Zimbabwe, to a more open

participative structure with dialogue as the driver. I speak from experience, as I felt

very uneasy when trying to deal with the concept of pension with a workforce that

consists of people with a wide range literacy levels. But through the use of

metaphors, to generate a common understanding, and being at great pains to

explain the reasons and logic behind the various aspects of pensions, I was

absolutely amazed at how easily longstanding issues concerning pensions were

resolved.

To conclude, from personal experience and from the literature, there is mounting

evidence for the need to focus on integrating conversations and dialogue into the CFI

management system.

D.2.5 Conversations & Knowledge

The development of knowledge within CFI is pivotal to maintaining the success of

this organization, as is the capacity to distribute this knowledge throughout the

company. Leadership and knowledge generation are closely linked and neither can

exist without the other. With the use of systems thinking, I will highlight the important

aspects of knowledge creation through conversations and genuine dialogue within an

organization such as CFI.

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Figure D.2.5-1 -CONVERSATIONS & KNOWLEDGE CLD 1

D.2.5.1 Conversations & Knowledge CLD1 Explanation

Managing in the midst of complexity C226 is the leverage point of the four causal

loop diagrams and it is on this aspect that the CFI team needs to focus initially. This

insight has enormous implications for modern management, giving rise to at least five

key ideas for guiding the management of change. In a nutshell, they suggest that it is

important to:

- Rethink what we mean by organization, especially the nature of hierarchy and

control,

- Learn the art of managing and changing contexts,

- Learn how to use small changes to create large effects,

- Live with continuous transformation and emergent order as a natural state of

affairs, and

- Be open to new metaphors that can facilitate processes of self-organization.

(Morgan 1998 page 226)

E159Smart people and organization do dumb things

because a profound gulf exists between knowingwhat to do and knowing how to do it and between

knowing how and actually doing things moreeffectively. Turning performance knowledge into

organizational action and, as a consequence,superior organizational results, is a challenge.

E14Success frequently entails implementation

rather than coming up with great ideas,simply because in the current world,

implementation is much more difficult.C77When we pick up an object from a table we

typically assume that our hands, guided by oureyes, move directly towards the object.

Cybernetics suggests not. This action occursthrough a process of error elimination.

Negative feedback: more leads to less and lesstoo more.

C226MANAGEMENT IN THE MIDST OF COMPLEXITY

This insight have enormous implications for modern management, givingrise to at least five key ideas for guiding the management of change. In a

nutshell, they suggest that it is important to:-rethink what we mean byorganization, especially the nature of hierarchy and control.-learn the art of

managing and changing contexts.-learn how to use small changes tocreate large effects.-live with continuous transformation and emergentorder as a natural state of affairs.- be open to new metaphors that can

facilitate processes of self-organization.

B91Chris Argyris (1990; 1993) created a wonderful tool, the ladder of

inference, to describe this way of thinking.The first represents unfiltered data - the nearly infinite amount of

sensory information we are subject to at any moment.Two - represents the way in which we filter it. -

Next rung number three - adding meaning to the data we haveselected

Rug four - After we add meaning we make assumptionsFinal rung - we act.

Clear thinkingprocesses help

implementation can be troublesome

Being smart with clear thinking is not enough Complexity can

stand in the way ofsuccess

Feed back loops allow for continious

correction

CLD1

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The biggest concern with dealing with complexity is how can effective implementation

be achieved, because success stems from action not just great ideas E14. The

knowing-doing gap has huge implications for an organization such as CFI, and

turning performance knowledge into organizational action E159, is a persistent and

major challenge. A very useful tool in the development of dialogue that can lead to

action is the “ladder of inference” B29, as this can be used to focus the conversation

on the issues at hand. Cybernetics C77, negative feed back processes, are

important in the implementation of projects within CFI and the efficacy of these

cybernetic processes are directly linked to the quality of dialogue. It is also through

effective cybernetics that complexity can be successfully managed and this

completes CLD 1 back at C226.


The second causal loop diagram begins at the leverage point of C226 and focuses

on complexity. This complexity increases proportionally as the number of people

involved in an organization increase, and this is the result of the multiplying effect of

putting more and more human beings together who are complex as individuals, let

alone as a group. However, there is considerable opportunity to generate

knowledge from a group if the conditions for genuine dialogue are created. CFI can

leverage the energy and wisdom as each additional and new person is successfully

integrated into the conversation of the organization B123. Considering Stacey’s

ideas on knowledge, dialogue is crucial in keeping knowledge available and useful to

the organization A116.

The notion that focusing on salary structures alone will solve employment problems,

can be demonstrated to have serious limitations, when the complex issue of

developing an environment conducive for dialogue to occur, as this is a prerequisite

for knowledge to be of use to CFI; money is only a small part of the equation in the

motivation of people E252.

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It would be very useful for management to view the organization and the people

within it from a number of different perspectives; a change in mind set may be

beneficial E229. This altered thinking of the organization and its people only adds to

the complexity referred to in C226.

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Figure D.2.5-2 - CONVERSATIONS & KNOWLEDGE CLD 1 & CLD2 E159

Smart people and organization do dumb thingsbecause a profound gulf exists between knowingwhat to do and knowing how to do it and between



















E229The Key to managing people in

ways that lead to profit,productivity, innovation, and real

organizational learningultimately lies in how you thinkabout your organization and its

people. It lies in mind set aperspective.

E252Believing that pay and the associated

measurement systems used to implement paywill solve all productivity problems is almost

certainly a prescription for ruin.

A98Knowledge is not stored anywhere and thenretrieved to form the basis of action. Rather,knowledge is continuously reproduced and

transformed in relational interaction betweenindividuals.

A116Knowledge, therefore, is not an "it" but a process of action.Action is undertaken In the living present and is, therefore

ephemeral. Knowledge, it followed, cannot be stored nor sharedsimply because it is bodily action. In symbolic terms that bodilyaction has many aspects, taking the simultaneous form of proto,

significant and reified symbols.

B123As more and more people come into contact with each other inorganizations, more and new relationships are formed, and newfields of energy are created. Unrestricted information and wide

participation will allow the wisdom of each person, eachdivision, to blend and to create new information, new stories,

new visions.

Perceptions & language

are NB

Percetions, people& lanuage increasethe complexity ofmanaging an org.

Views on productivityare often

miss guided

More interaction improves the flow

of knowledge

comple xity is i ncre as ed

with m

o re par ticip ant s

Conversations are NB to keep knowledge

alive

CLD 2

CLD1

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Figure D.2.5-3 - CONVERSATIONS & KNOWLEDGE CLD 1, CLD 2 & CLD 3























organizational learningultimately lies in how you thinkabout your organization and its










B123As more and more people come into contact with each other inorganizations, more and new relationships are formed, and newfields of energy are created. Unrestricted information and wide


new visions.

E124Three principles appear common to most of the successful transformations tohigh performance work practices that I have observer:-Build trust.-Encourage

change.-Measure the right thing and align incentive systems with new practices.

B69'Dialogue" is the label given by

British physicist David Bohm (1980)to a deeper level of communicationwhich has a serious commitment toco-operation and behavior congruentwith the constructive thinking stylesidentified by Clay Lafferty in his Life

Styles Inventory.

B70Genuine dialogue requires1.Suspending judgment

2.Identifying assumptions3.Listening 4.Inquiring

and reflecting

dialogue has considerablefacilitation potential

the greater the No. of people

the more effort is needed to

acheve genuine dialogue

the "butterflyflapping effect"

could be generatedthru dialogue

thes

e 3

prin

cipl

esen

hanc

e th

e ca

paci

ty to

leve

rage

off

com

plex

ity

CLD 3

CLD 2

CLD1

complexity is increased

with m

ore participants

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Starting with C226,” Management in the Midst of Complexity” and increasing the

complexity with the inclusion of more new relationships B123, then moving to a

number of requirements that need to be accommodated by participants i.e.

suspending judgment, identifying assumptions, listening, inquiring and reflecting,

(April et al 2000 page 70) the incorporation of genuine dialogue as expressed by

David Bohm, achieving a deeper level of communication B69 within CFI is likely to

be the small change that has a profound positive effect on the organization.

Dialogue would facilitate successful transformation as indicated in E124, as trust

and encouragement of change, and alignment to a new system, all require a deep

understanding between the people concerned. Trust, encouragement of change,

and the ability to realign to a new order all contribute to assisting management in

the midst of complexity C226.


Starting with B70 four requirements are necessary for authentic dialogue to occur,

and create an environment for a deeper level of communication B69. It is through

authentic dialogue that other people’s perspectives can be appreciated and

understood D61, which is a profound insight of game theory and a very useful tool

for application within CFI. This approach of understanding other people’s

perspective of CFI can be profound in managing profit, productivity and motivation

by changing how people think of the organization E229. A positive attitude of the

organization by all the staff will generate an energy and wisdom, as more

relationships are developed, and this could prove to be a considerable source of

innovation and creativity within the CFI, B123. This additional creativity, energy

and wisdom would further drive genuine dialogue, B70.

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Figure D.2.5-4 Conversations & Knowledge CLD1, CLD2, CLD3 & CLD4




organisational action and, as a consequence,superior organisational results, is a challenge.



implementation is much more difficult.

CONVERSATIONS & KNOWLEDGE CLD1, CLD2, CLD3 & CLD4

C77When we pick up an object from a table we
















organisational learningultimately lies in how you thinkabout your organization and its










B123As more and more people come into contact with each other inorganisations, more and new relationships are formed, and newfields of energy are created. Unrestricted information and wide


new visions.

E124Three principles appear common to most of the successful transformations tohigh performance work practices that I have observer:-Build trust.-Encourage

change.-Measure the right thing and align incentive systems with new practices.

B69'Dialogue" is the label given by

British physicist David Bohm (1980)to a deeper level of communicationwhich has a serious commitment to

co-operation and behaviourcongruent with the constructivethinking styles identified by Clay

Lafferty in his Life Styles Inventory.

B70Genuine dialogue requires1.Suspending judgement2.Identifying assumptions

3.Listening 4.Inquiringand reflecting

the "butterfly flapping effect"could be generated thru dialogue

E229The Key to managing people in ways

that lead to profit, productivity,innovation, and real organisationallearning ultimately lies in how you

think about your organization and itspeople. It lies in mind set a

perspective.

D61In sum: the fact that other people view the world differently does not make them irrational. Mor

important is remembering to look at a game from multiple perspective - your own and that of eveother player. This simple-sounding idea is possibly the most profound insight of game theory - t

insight of game theory is the importance of focusing on other - namely allocentrism.

B123As more and more people

come into contact with eachother in organisations, moreand new relationships areformed, and new fields of

energy are created.Unrestricted information

and wide participation willallow the wisdom of eachperson, each division, toblend and to create newinformation, new stories,

new visions.

allo

cent

rism

faci

litat

es a

robu

st m

inut

es &

pers

pect

ive

of th

eC

o.

dialogue leadsto tolerance

a go

od a

t titu

de w

ithin

the

Co.

all o

ws

crea

t ivit y

to fl

o uri s

h

for the interactions tobe creative & productive

genuine dialogue is needed

CLD 4

CLD 3 CLD 2

CLD1

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D.2.5.5 Conversations & Knowledge Conclusion

As illustrated by the literature and the four CLD’s, the impact on authentic

conversations and dialogue throughout CFI is likely to be profound. However, the

implementation of this requires careful planning which could focus on the

“Implementation Framework” developed from Julian Day’s work concerning

conversations.

Figure D.2.5-5 Implementation Conversation

The use of this framework to generate conversations and dialogue in CFI concerning

any problems being experienced within the company, is likely to be profound. The

more complex the problem, the more applicable this framework will be in developing

solutions or managing the problem, drawing from the energy, wisdom and knowledge

available, but latent within the organization.

DESIGN

ACTIVITY

TEAM

CONTROL

ImplementationConversation

sub frame-work

THE CENTRALQUESTION

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D.3 INTELLECTUAL CAPITAL & THE VALUE GAP

D.3.1 Introduction

The situation within CFI is that the skills base is still sufficient for an efficiently functioning organization. The concern is the

realistic intrinsic value of individual skilled people need to be assessed before remuneration packages can be adequately

calculated. Part of the concern can be address with the application of the equation below that has been derived from Appendix

14 : Intellectual Capital & the Value Gap, a paper presented by EMBA2 Group 3.

D.3.2 Equation to assess the value incumbent skilled staff

DIVERSITY + COST OF EMOTIONAL

CAPITALSUCCESSION COST

+ VALUE GAP

+ REPLACEMENT COST

= RETENTION COST

-need to attend to ratios of employees

- loyalty - drive - dedication

double employment for transfer period

Difference from sustained growth to new level

- recruitment - translocation

Determine degree of investment that would be required for training

This equation clearly illustrates to the management team and shareholders of CFI, the costs of loosing skilled staff and allows

for calculations to be made on remuneration packages which may be required in order to keep key people from looking else

where in the world to live. However, should a member of staff indicate that he has plans to move, this formula highlights the

critical importance of creating an environment, conducive to facilitate the most effective manner in which intellectual capital can

be transferred with the smallest possible Value Gap Figure D.3.2-1 : The Value Gap resulting from the person leaving. This insight

was derived from the paper presented in Appendix 14 : Intellectual Capital & the Value Gap; it graphically illustrates the effects of skilled

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staff losses to the company. The red line indicates that there is no loss of personnel,

the blue line indicates the change is well managed and the black line illustrates the

value gap in a poorly managed replacement of a skilled member of staff.

Ralph Stacey argues that “knowledge cannot be managed, and there is no need to

manage it, because knowledge is participative and self-organizing processes pattern

themselves in a coherent ways” (Stacey, 2001 page 5). There is considerable wisdom

in this view, although I believe, Stacey should view the term “managing” in a broader

context, to incorporate the development and creation of an enabling environment for

knowledge transfer through mentoring. If the out going skilled staff member can be

persuaded to effectively mentor his or her replacement the value gap will be greatly

reduced. This in essence, is what the EMBA2 Group 3 team that compiled this

presentation is advocating.

Figure D.3.2-1 : The Value Gap

Val

ue

Time

Value Gap

D.3.3 Conclusion intellectual capital and the value gap

The insight gained from viewing the value of individual skilled staff members from the

perspective of the value gap equation and the graphical representation, will assist the

CFI management team generating the conversation and dialogue. Using the equation

issues such as diversity, with all that it embraces, as well as the emotional or

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psychological aspects of loosing key staff, such as loyalty, drive and dedication,

implications are all brought into the dialogue of skilled staff retention.

Incorporating the concepts developed in the Intellectual Capital and Value Gap paper

into the CFI approach to managing the problem of skills retention should give a new

dimensio0n and robustness to the process.

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D.4 THEORY AND CONCEPT DEVELOPMENT MODEL

There will be three different stages to this process to generate the capacity to

“develop theories and concepts”. Firstly, (stage 1) a model to sift out the different

viewpoints will be developed. Secondly, (stage 2) will be the development of a model

for “thinking about thinking”, through which data from stage 1 will be digested. Thirdly,

(stage 3) the method of developing theories from the output of the “think about

thinking” model will be presented.

This triumvirate of Systemic Insight, Systemic critique and Systemic Transformative

redefinition, from each of the levels in the filter will be synthesized into theory through

the use of a systems thinking.

The theory and concept, development process is illustrated in Figure D.5: 1- Theory and

Concept Development . The intricate workings of each stage of the process will be

explained, with the aim of creating a clear picture of the whole process.

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Figure D.5: 1- Theory and Concept Development Model

RAW DATA REQUIRING ADDITIONAL PROCESSING

ISSUES & POINTS OF NOTE GENERATEDTHROUGH

SCRUTINY AT EACH LEVEL

FILTER MEDIUM

+

Synthesis ofTheories

through use ofSystems

Approach toProblemSolving.

PROJECT DIRECTIONALFLOW THROUGH FILTER

Theories thatonce Validatedwill Contribute

to Wider Body ofKnowledge

MORECOHERENTMODIFIED

RESEARCHPROJECTREPORT

OUT PUT

VALUE TOCOMMISSIONINGSTAKEHOLDER &

ACADEMICCOMMUNITY

THEORY BUILDING PYRIMIDS

PARADIGM

FRAMEWORK

METHODS

DATA PROCESSING

HOW

WHYWHAT

WHO

STAGE 1

STAGE 2THEORY & CONCEPT

SYNTHESIS

STAGE 3

Question vs. DataConcruence

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D.4.1.1 Stage 1: Filtration

In this stage, the research project is reviewed with the intention of surfacing points

and issues of note that could be valuable in the development of theories and

concepts.

D.4.1.2 1st Level : Wording of the Question

The initial level of integration of the project is to test the level of concurrence

between the wording of question, the data actually collected, and the interpretation

of this data.

At this point, you may ask a number of questions that you consider need to be

brought into focus and close scrutiny regarding the wording of the question: -

The first question that strikes you is, does the available data relate to the question,

specifically, generally or not at all? In the case of this paper I am confident that the

data generated from the interview process relates directly to the question of “skills

retention”. Those issues raised in the conversation with the participants that do not

relate to the question have been filtered out. I have only presented the data that I

perceived to be directly related to the question, but have a transcript of the complete

interview to refer back to should additional issues be considered in subsequent

iterations with the CFI management team

The second is, could refinement of the wording of the question improve the fit of the

questions to the data? Focusing specifically on the data question relationship I am

not sure any further refinement is possible. Different wording of the question can

always be tinkered with, but in essence I am sure ideas will be conveyed.

The third, is additional data required improving the connection between the data

and the questions? Here I strongly believe with each iteration of the SSM process

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the connection between the question will improve, as there has only been one cycle

of the process at this point improvement is definitely possible.

The reasoning for this re-evaluation is that I was aiming at surfacing, what was the

correlation, why was there correlation / no-correlation and how can this concurrence

be improved or corrected? The close correlation of the question to the data, as

mentioned earlier, was a result of the interviews being conducted with a focus on

the problem; this has further been refined with irrelevant data being excluded

through editing. This rethink, has certainly highlighted the fact that additional cycles

of SSM will considerably improve the convergence between the data and the

question.

D.4.1.3 2nd Level : Paradigm Focus

With the paradigm focus, I would be comparing the paradigm that seemed most

appropriate when the question was developed and what paradigm appears to be

more applicable now that data has been generated. ,There are two concerns

regarding positivism or phenomenological paradigms Figure A.2.4-3 - Summery of

expected Research Direction diagram. Firstly, did the research process strictly adhere to

the paradigm as indicated in the question? The whole project process has

remained squarely in the phenomenological paradigm. It has focused on social

constructions and interpretations and at no time has cause and effect, the positivist

perspective been used, even inadvertently.

Secondly, is the paradigm that was indicated in the question still considered to be

the most appropriate? At no point, that I can recollect, did I contemplate using the

positivism paradigm or feel that I had “got it wrong” in the research framework

design. The data gathering process through interviewing participants was very

effective and this is a strictly phenomenological approach.

This gives rise to the question, how can the fit between the paradigm indicated in

the question and the data generated, be corrected or improved? With this concern,

I feel there is a perfect fit, and therefore, further improvement is impossible. This is a

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strong statement. However the whole project revolves around perceptions and the

social environment within CFI, and this is unlikely to be adequately addressed using

a positivist approach because there are so many different perspectives of the social

situation and as a result any cause and effect relationships would be difficult to

identify.

The results from this integration would have highlighted any anomalies that may

have materialized with regard to the paradigm to data generation, fit. However,

investigating the positivism – phenomenological fit has given me a better

understanding of the research process as it applies to management challenges in

the retention of staff.

D.4.1.4 3rd Level : Framework

Action Research differs from traditional research, which focuses on the ability to

replicate the research and apply findings generally, because it is neither possible

nor desirable to aim for replication or generalization. With Action Research the aim

is to understand rather than to predict, to liberate rather than control (Ryan, 2001,

page 1).

The problem that may emanate from the Action Research approach, is that my

research report could draw severe criticism from those academics who have their

roots in traditional research and are unaccustomed to this different approach to

research. With the “Traditionalist” in mind, my report has been structured in such a

manner as to withstand challenge from these skeptics. I am confident that the

research framework can stand the scrutiny of “Traditionalists” as this is a people

problem being researched. Michael Jackson presents a good argument for thi, “the

more we study the major problems of our time, the more we come to realize that

they can not be understood in isolation. They are systemic problems, which means

they are interconnected and interdependent” (Jackson, 2000 page 5). Traditional

research has difficulty in processing these systemic problems, and thus I remain

confident of the research framework.

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D.4.1.5 4th Level : Methods

Action Research can be performed using a number of different methods. Each

method views the research problem form a different perspective and has a different

process of generating and interpreting data. Bob Dick summarized as follows-:

– Operational Research investigating simple unitary situations.

– Value Systems Design observing complex unitary problems.

– Social Systems Design monitoring a simple pluralist social concern.

– Soft Systems Methodology operating in a complex pluralistic social

system.

– Critical Systems Heuristics addressing a simple coercive social

environment.

(Dick, 2000, page 7)

The use of the most appropriate method in line with ethnographic, hermeneutic and

interpretive goals of the project is, therefore, crucial. Having completed the first

iteration of SSM with CFI, I am still confident that the most effective method has been

selected, as the “retention of skills” problem involves people with very different tasks

and responsibilities and with very different world-views. Thus, in this environmen, the

situation is complex and a large number views and requirements need to be

accommodated.

I accept that there are different views on which method to use in this situation.

These may become apparent to me with additional iterations and I grapple with the

problem further. Focus on this aspect of the whole research process will produce

valuable information for “Theory Building” and the rigor of the project will improve with

each cycle of the SSM methodology.

D.4.1.6 5th Level : Data Processing Interpretation

SSM provided the broad framework of how the data which has been generated

would be processed. The methodology allows a certain degree of flexibility; the

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choices made will be critically examined as I gain experience. The data processing

stage is likely to amplify shortcomings or strengths of the research methodology. It

is at this point you begin to focus on results and what meaning and usefulness these

results will produce for various stakeholders.

The points surfaced through reflection at this stage will be extremely valuable in

further development of theories as well as giving direction to future research of this

problem.

D.4.2 Stage 2: Building Pyramids Process

Issues will be highlighted at each level in the filter as I cycle through the Theory

Building Process with the CFI management team. These issues will form the raw

data that require additional analysis, and could form the platform for additional

dialogue. This raises the concern of how I can draw all the diverse points/raw data

into focused theories and concepts?

The raw data will need to be “aligned” and this will be achieved by passing the data

through the Theory Building Pyramids. Using the term aligned, in this context, I aim

at viewing each point and issue from a multitude of different perspectives, produce a

commonality as well as develop a language that can be used to communicate the

association and glue that draws all these important points together. In so doing

generate clear and novel insights of the problem. As Boisot posits, “knowledge

creation is a process of generating insight by extracting information from data and the

application of knowledge, is testing these insights” (Stacey 2001, page 22).

The method I plan to use in the generation of insight, referred to by Boisot, is using

the Figure D.5: 2 - Theory Building Pyramids. In the dialogue with the CFI management

team this Theory Building Pyramid will form a platform to generate additional insight

into managing the “retention of skills” concern. I am acutely aware that the value of

this process is totally dependant on the buy-in and participation of the CFI

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management team, as a result, one on one dialogue with the participants will be

needed, before I bring the group together for a round table debate.

Figure D.5: 2 - Theory Building Pyramids

By cycling the point and issues surfaced through filtration over the points of the

pyramid systemic insight, systemic critique and systemic transfer redefinition will be

generated.

The inner working of the Theory Building Pyramids are best explained using the

causal loop diagrams (CLD’s) I have developed, to separate the points of the

pyramids, but at the same time link the points. Each of these three aspects of the

“Theory Building Pyramid”, systemic insight, systemic critique and systemic

transformative redefinition, will be explained separately. Thereafter, the linkages

between the three different causal loop diagrams will be discussed.

D.4.3 Systemic Insight

Alvesson and Deetz posit, the insight task demonstrates our commitment to the

hermeneutic, interpretive and ethnographic goals of local understanding closely

connected to and appreciative of the lives of real people in real situations.

(Alvesson and Deetz, 2000 page 17)

HOW

WHYWHAT

WHO

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Figure D.5: 3 – Systemic Insight CLD

My concept of systemic insight focuses on bringing a number of questions and

perspectives to bear on a particular point. How all this comes together is best

described by explaining the rational underpinning the Systemic Insight CLD .

ETHNOGRAPHICGOAL

LOCAL UNDERSTANDING

SYSTEMIC CRITIQUE

DATA COLLECTION OR DATA GENERATION

THINK ABOUTTHINKING

OPTION ORCHOICES

INSIGHT

KNOWING WHATDATA TO COLLECT

KNOWING HOW THEDATA FITS TOGETHER

SYSTEMIC TRANFORMATIVEREDEFINITION

INCREASEDUNDERSTANDING OF

THE KNOWLEDGEEMBEDDED IN THE

ORGANIZATION

WHAT DOES THISMEAN FOR THE

COMPANY

WHO IS INVOLVED ORAFFECTED BY THIS

IMPROVED KNOWLEDGE OFTHE COMPANY

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Beginning with “ Local Understanding”, the context, incorporating the socio and socio

economic environment, is important when addressing the “problem” being

researched, and interpreting the data that has been generated. This local

understanding will influence the ethnographic, as well as hermeneutic goals of the

process. These goals will influence, if not dictate, what data is required and method

of collection and generation of this data. A local understanding combined with the

goals of the process, will influence how the data will “fit together”.

With data now available the two questions -:

1) What does this mean for the company?

2) Who is involved or affected by this improved knowledge of the company?

need to be addressed. The answers from the How and the Who will present options

or choices.

a) Find more data and at this point you have a better understanding of what

data you are seeking.

b) A greater insight has been gained.

This will enable stimulation of what Mike Jackson refers to as “Think about Thinking

that will open up different ways of thinking for different purposes” (Jackson 2001

page 11)

With a different way of thinking or perspective of the topic coupled with local

understanding another iteration can begin.

The insight and thinking that has been provoked increased understanding of the knowledge embedded in the organization will be a catalyst in driving the Systemic Critique CLD and Systemic Transfomative Redefinition CLD as well as providing material for

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Critical Systems Thinking stage (stage 3) of the theory and concept building process, illustrated in

Figure D.5: 5 - Systemic Transformative Redefinition CLD

D.4.4 Systemic Critique

Through use of Systemic Critique I aim to surface why a situation occurs. To do this I

need to increase my understanding of the influence of overt and subtle power

underlying the socio structures. “Power is a network of relations and discourses that

capture advantaged and disadvantaged alike in its web” (Palmer & Hardy, 2000 page

272). This will develop an increased insight into the relationship between the three

dimensions of management

• Management Development

• Management Theory

• Management Practice

With this insight into the management of the company, I should be able to work out

why the social structures maintain their integrity. An understanding of the customs

and traditions of the organization is also important. This aspect is crucial, as history

and tradition are likely to have a considerable influence on the source of the power

structures in the organization, as well as how and when this power is used.

With the knowledge of sources and influence of power, the norms on which the

culture of the organization is built can more readily be unearthed. With a clear idea of

the culture, I can work out the influence this culture has on the ideas, goals and

ideology of the company. The knowledge of the company -:

• History

• Power

• Culture

• Goals, ideas and ideology

• Language and conversation

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will assist understanding the language and the way conversations are produced by

the people within the company. These are integral components of why a social

situation presents itself as it does.

This understanding of why will develop insights into relationships between

management development, management theory and management practices. This

knowledge and insight into the influences of power underlying the social structure, is

a prerequisite for transformative redefinition to occur.

Figure D.5: 4 - Systemic Critique CLD

D.4.5 Systemic Transformative Redefinition

Insight and critique, individually, or together, are of academic value only, and offer

very little to practical management. For insight and critique to be animated for use

INSIGHT INTORELATIONSHIPS BETWEEN

Mgt DEVELOPMENT, MgtAND Mgt PRCACTICE

UNDERSTANDING OFTHE INFLUENCE OF

POWER UNDERLYINGSOCIAL STRUCTURES

UNDERSTANDING OFTHE HISTORY AND

TRADITIONS OF THEORGANIZATION

SURFACING OF THEINFLUENCE OF CULTURE ONGOALS , IDEAS & IDEOLOGIES

ON THE COMPANY

SURFACING THE NORMSTHAT UNDERPIN THE

CULTURE OF THEORGANIZATION

RECOGNIZING THESOURCE &

INFLUENCE OFPOWER STRUCTURES

UNDERSTANDINGWHY THE SITUATION

PRESENTS ITSELFAS IT DOES

"COME TO GRIPS WITH" THELANGUAGE & THE WAY

CONVERSATIONS ARE PRODUCEDBY THE PEOPLE WITHIN THE

COMPANY

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by practicing managers a third leg to the trivet (three-legged stool) needs to be

added; this leg being “transformative redefinition”. Alvesson and Deetz have a

view that the task of transformative redefinition is to demonstrate our commitment

to the more pragmatic aspects of critical thought, recognizing that insight and

critique without support for social action leaves research detached and sterile

(Alvesson and Deetz, 2000 page 17).

Transformative redefinition should provide the management relevant knowledge

and understanding that underpins the capacity to facilitate change and provide

skills for new ways of operation (Alvesson & Deetz, page 19). In a sense

transformative redefinition is converting the outputs of systemic insight and

systemic critique and integrating these to a plan, “the how”, for this knowledge to

used to move the company in a positive direction.

To give some sense of understanding of systemic transformative redefinition, I will

explain the story behind the causal loop diagram

Figure D.5: 5 - Systemic Transformative Redefinition. Beginning with languaging and

encoding the situation. Here, it is the ability to describe and communicate the

situation, because without this capacity to clearly communicate you are not in a

position to share the new knowledge and plans with colleagues and staff within the

company, or be in a position to determine what data needs to be collected.

Interpreting the circumstances from the language and encoding of the situation will

assist with determining what data needs to be generated. Reflection on the

meaning of this interpretation is very important in drawing all the relevant

theoretical and practical data that would be useful in planning how the situation is

to be moved in a positive direction. A useful tool in determining how to act for a

positive shift is to assess the situation using “Lewin’s Force field Model” (Ryan,

2001, page 3).

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With a clear understanding of the situation and with the data that has been

collected in response to interpreting the situation, as well as the knowledge

generated through the use of Lewin’s Force Field Model, you are well set to model

and conceptualize a plan to move the project along in the right direction.

These concepts and models that have been developed need to be validated, that

is discussed, with those who would be involved in the implementation as well as

the academia, to ensure the plan has the capacity to facilitate movement of the

company in a positive direction. This procedure of cross checking the models and

concepts with the various stakeholders is termed “validation” of the models and

concepts.

Once validation has been completed you have an excellent understanding of how

the “status quo” can be shifted in a positive direction. This whole process will

develop strong insights and give management relevant knowledge that would be

required to integrate the different aspects of the management of the company, to

drive positive change.

Figure D.5: 5 - Systemic Transformative Redefinition CLD

INSIGHT INTOFACILITATION OF

POSSITIVE CHANGE

SYSTEMIC TRANFORMATIVE REDEFINITION CLD

MANAGEMENTRELAVENT KNOWLEDGE

& PRACTICLEUNDERSTANDING TOFACILITATE CHANGE

LANGUADING &ENCODING THE

SITUATION

MODELING ORCONCEPTUALIZATION OF

INTERGRATION

REFLECTING ONMEANING OF THEINTERPRETATION

INTERPRETING THECIRCUMSTANCES &DATA COLLECTED

UNDERSTANDINGHOW THE STATUS

QUO CAN BESHIFTED IN A +ve

DIRECTIONVALIDATION OF CONCEPTS

LEWIN'S FORCE FIELDMODEL ASSESSMENT

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D.4.6 Underpinning of the Theory Building Pyramids

The theory building pyramids will produce an output, theory, model or concept, that

is the result processing through all three causal loop diagrams, insight, critique and

transformative redefinition as well as a combination of all three as illustrated in Figure

D.5: 6 – Underpinning of Theory building Pyramids.

The bold arrows in Figure D.5: 6 illustrate the capacity of the theory building pyramids

to develop a momentum in the creation of knowledge and improved understanding

of social situations. As a greater understanding is developed, so the data can be

recycled through the whole process with a differing perspective each time the cycle

is made. With each iteration, within the triumvirate of CLD’s, a greater and greater

understanding emerges. As Albert Einstein once noted, it is the theory through

which we observe a situation that decides what we can observe. Thus, the more

you can cycle through the three CLD’s the more theories which will develop and the

more angles or perspectives of the situation which will be gained, with the level of

understanding growing accordingly.

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Figure D.5: 6 – Underpinning of Theory building Pyramids

ETHNOGRAPHICGOAL

LOCAL UNDERSTANDING

DATA COLLECTION OR DATA GENERATION

THINK ABOUTTHINKING

WHAT DOES THISADD TO THE

KNOWLEDGE OFTHE COMPANY

OPTION ORCHOICES

INSIGHT

WHO IS INVOLVED ORAFFECTED BY THIS

IMPROVED KNOWLEDGE OFTHE COMPANY

INCREASEDUNDERSTANDING OF

THE KNOWLEDGEEMBEDDED IN THE

ORGANIZATIONKNOWING WHATDATA TO COLLECT

KNOWING HOW THEDATA FITS TOGETHER

INSIGHT INTORELATIONSHIPS BETWEEN

Mgt DEVELOPMENT, MgtAND Mgt PRCACTICE

UNDERSTANDING OFTHE INFLUENCE OF

UNDERLYING SOCIALSTRUCTURES

UNDERSTANDING OF THEHISTORY AND TRADITIONS

OF THE ORGANIZATION

SURFACING OF THEINFLUENCE OF CULTURE ONGOALS , IDEAS & IDEOLOGIES

ON THE COMPANY

SURFACING THE NORMSTHAT UNDERPIN THE

CULTURE OF THEORGANIZATION

RECOGNIZING THESOURCE & INFLUENCE

OF POWERSTRUCTURES

UNDERSTANDINGWHY THE SITUATION

PRESENTS ITSELFAS IT DOES"COME TO GRIPS WITH" THE LANGUAGE &

THE WAY CONVERSATIONS AREPRODUCEDBY THE PEOPLE WITHIN THE

COMPANY

INSIGHT INTOFACILITATION OF

POSSITIVE CHANGEMANAGEMENTRELAVENT KNOWLEDGE

& PRACTICLEUNDERSTANDING TOFACILITATE CHANGE

LANGUADING &ENCODING THE

SITUATION

MODELING ORCONCEPTUALIZATION OF

INTERGRATION

REFLECTING ONMEANING OF THEINTERPRETATION

INTERPRETING THECIRCUMSTANCES &DATA COLLECTED

UNDERSTANDINGHOW THE STATUS

QUO CAN BESHIFTED IN A +ve

DIRECTIONVALIDATION OF

CONCEPTS

LEWIN'S FORCE FIELDMODEL ASSESSMENT

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Stage 3: Synthesis of Theories & Concepts

A systems approach will be used to integrate and synthesize theories from the

results of the theory building pyramids. This method is particularly useful in this

application because of it holistic basis as well as the importance that is place on

inter relationships and identifying points of leverage. The key stages of this type of

methodology can be summarized as aiming to-:

• Identify the problem, and identify and test possible responses

• Evaluate the analysis

• Implement the best possible responses

• Evaluate the effectiveness of this implementation

(Jackson, 2001, page 26)

This methodology is focused on providing practical solutions to real life problems. In

essence, this will create value for practicing managers. This creation of value for

practicing managers is the main aim of my project.

D.4.7 Conclusion to Theory Building & Systemic Insight

The purpose of this Section was to develop a lens or model through which to view

my dissertation, with the intention of creating concepts and theories that would add

value to the commissioning company and academia at the same time. To achieve

these goals I needed to develop a model that would assist me, to “burrow below the

surface”, to look deeper than the superficial and discover the underlying reasons the

social situation that is prevalent.

“We build up our world-view over time in a combination of formal and

informal learning, but this world-view then becomes a baseline and

unconscious filter for our future thinking and model-building, such that the

total set of mental tools we eventually hold is always consistent with our

world-view. This unconscious world-view acts as a block to learning and

one of the most effective ways to break away from our own habits of

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thinking is to hear about other people’s points of view “(Jackson, 2001,

page 11).

The process described in this paper has the capacity to help me “break away from

my old habits” and see other views and perspectives of the social situation I have

been investigating.

Studying management means studying asymmetrical relations of power, including

dependencies. An important aspect of this dissertation is the need for me to provide

the tools to shift the company in a positive direction; in a social environment this

means political competence. Simons posits that political competence in modern

society means, “not just access to information but also access to the entire range of

skills required to decode, encode, interpret, reflect upon, appraise, contextualize,

integrate and arrive at decisions respecting that information (Simons, 1989, page

198). I suggest that the complete theory building process as illustrate in Figure D.5: 6 –

Underpinning of Theory building Pyramids integrates and develops the capacity for creating

the political competence that Simons refers to.

D.4.8 Reflection on Theory Building & Critical Thought

The words of Michael Jackson ”it is difficult to learn from trial and error”, it seems,

can be costly. Reasoned intervention based on theory can help us learn and can

reduce the costs (Jackson, 1995, page 38) took on a new meaning, as this is what

my dissertation was deficient in, “theories”.

This whole process of developing a “lens” to view my dissertation has brought the

project as a whole back into focus and I believe I can generate considerable value

for CFI, with the direction and impetus this theory Building has given me. I now feel

I am on firm ground and can now return to CFI and continue with the project.

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D.5 CONCLUSION – CRITICAL THINKING & THEORY DEVELOPMENT

The goal of Critical Thinking and Theory Development is to create a theoretical

framework from which the problem of retention of sills can be approached.

Dialogue, The Value Gap with associated equation, as well as the THEORY and

Concept Development Model are different perspectives from which to view the skills

retention problem.

As noted in the introduction to this paper, the skills retention problem has no absolute

solution, it is a social problem that needs to be managed, and as the socio-economic

and political climate in Zimbabwe deteriorates, so the focus on this aspect of C.F.I.

will require greater attention.

The concern of the C.F.I. management team is possible accelerated skills loss, as

the Zimbabwe political and economic crises worsens. The question is how can C.F.I.

develop a robust approach to a persistent problem that is continuously changing in

response to the deteriorating external environment.

The triangulation of Dialogue, Value Gap and Research Figure D.5: 1- Theory and

Concept Development Model should create a strong theoretical foundation, from

which a flexible and robust approach to various problems can be developed.

The rational for triangulation centred on, is that a robust approach can only be

achieved if multiple viewpoints are considered in managing the problem of skills

retention. In respect of a turbulent environment this process becomes more

important as peoples priorities alter, as the external environment changes, and the

C.F.I. management team need to adjust their approach to accommodate these

altering staff priorities. These changing priorities are often not outwardly apparent,

and it is only through a vigorous application of this triangulation process, that these

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innate requirements are surface, and addressed, and in so doing critical skills

retained.

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135 E: EPILOGUE

E EPILOGUE

The potential for this project to create considerable value for CFI is now clear to

me, but the dialogue that I have initiated has to not only be maintained, but must

also develop and gain momentum. In periods of economic and social turbulence,

as is being experienced by most companies in Zimbabwe at this time, the value

and need for authentic dialogue is phenomenally important, as it is through

dialogue that the knowledge of what key players need in the form of psychological,

social and financial support from CFI, will be generated. Thus, as there should be

a direct relationship between the level of turmoil and the quality of the dialogue,

the worse the predicament, the better the dialogue needs to be.

My experience at the Graduate School of Business and with researching CFI has

formed a sound grounding to further develop my understanding and management

of organizations. In organizations capital and machinery make it possible, but

people make it happen – (People animate the assets, it’s not only the money that

makes they stay.)

If there is one thing that I take from this whole experience it is the phrase

“People animate the assets”

No matter how good the business plan or the market share held and potential

profits that can be made, without good, dedicated and loyal staff, success is likely

to be a mere illusion. The more difficult the circumstance, socio-political, economic

or otherwise, the more important this phrase becomes. Also, of importance is the

realization that it requires far more than big salaries to motivate people and

engender loyalty. Leadership is required at all levels and therefore “the retention

of skills”, the management team, by CFI is crucial to the successful growth of

shareholder value as well as the good fortunes of all the other stakeholders. All

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136 E: EPILOGUE

companies need to utilize every available tool and thereby surface issues other

than monitory to keep people with them.

A sixth section, developing a synthesis of the whole paper would draw the

research process together, is still needed to bring closure to the paper. This

additional section would add rigor to the dissertation, even though I expect the

dialogue within CFI to continue, and thus completion of could be months away.

Social issues in essence, have no beginning or no end, but are in persistent flux

and change. There could never be a convenient point to conclude a research

paper such as this, and it will always be a “snap shot”.

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143 APPENDICES

Appendix 1: The Process Generation of a Problem

SO WHAT? Select an area of interest

Find a topic in this area

Potential Claim

Question the topic from different points

of view

WHO? WHAT?WHEN?WHERE

HOW? WHY?

Define the rationale for your

project

In order to understand How? Why or Whether?

Research Problems Practical Problems

Name your topic

State your indirect question

Develop a question into a problem and communicate its

significance

Say why it is important

TOPIC

What are you writing about?

QUESTION

RATIONALE

What you don’t know about it?

Why you want to know about it?

Understanding Discovering

Explaining and Convincing Showing

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144 APPENDICES

Appendix 2: Development of a Research Paper

WARRANT Relevance of

evidence to the claim.

CLAIM What you want your readers to

believe

EVIDENCE Argument reason

for people to believe your

claim

QUALIFICATIONConditions under which the claim is likely to apply. Limits within which the claim is applicable. CLAIM

The Claim must be: Contestable Specific Substantive Explicit

ADDRESS OBJECTIONS a) Acknowledge possible objections state reasons & arguments to c) Stipulate conditions that quality evidence or limit application of warrant d) Stipulate the degree of certainty of evidence, warrant & claim.

EVIDENCE a) Accuracy b) Preciseness c) Sufficiency d) Authoritative Sources e) Current Literature f) Anticipate evidence reader will accept / reject g) Representative h) Preciseness I) Perspicuity – explain relationship btwn evidence and claim.

WARRANT a) Explicit – points that are often tacit b) Even when claim is clear & significant & evidence is reliable – reader could still reject argument as she could perceive warrant to be false. c) Anticipate readers will bulk regardless of significance of claim, sound evidence & true warrant.

QUALIFICATIONS a) Rebut mistaken objects to yr evidence & warrants. b) Concede objections that u can’t rebut. c) Stipulate conditions that qualify evidence or limit application of warrant d) Stipulate degree of certainty of evidence, warrant & claim.

IMPORTANT CONSIDERATION Every argument depends on three appeals:-

1. LOGOS –logic 2.PATHOS –emotional quality – how much personal conviction is evident. 3. ETHOS – the writer’s perceived character.

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145 APPENDICES

Appendix 3 : Research Framework Literature Search Affinity Diagram

12In action research, standardisation defeats the

purpose: virtue of action research is itsresponsiveness. It is what allows you to, turnunpromising beginnings into effective endings

214Reg Revans (1983) said: "there is no learningwithout action and not action without learning".One best known example of this new culture is

Kaizen, the Japanese word for "continuousimprovement".

145Phillips and Pugh (1987) identify three characteristics of goodresearch,. Firstly it is based on an open system of thought.Secondly, one must always be prepared to examine data

critically, and request the evidence behind conclusions drawn byothers.

186The main question is how to ensure

that organisational problems areconsidered from as wide a perspective

as possible.

184System thinking is a

sensibility-for the subtleinterconnectedness that gives

living systems their uniquecharacter.





22Treat agreement

sceptically by seeking outexceptions.

55Most of the information comes from the

"Deviants". This is an important feature. It meansthat outlying estimates are given more attention

than those near to an emerging consensus.

193Few, if any, forcesin human affairs

are as powerful asshared vision.

253The Type III Error - solving wrong problem precisely.Indeed, far better an approximate solution to the rightproblem than an exact solution to the wrong problem!

42The essence of this approach to justification is simple.

Acknowledge the conventional view. Explain the nature of thechoice in terms of underlying principles. Present your own

choices as fitting your methodology to the situation.

38AR in particular, allows practitioners to achieve better

research outcomes from their practice withoutundermining the change their practice is intended toachieve. In presenting your justification it is useful to

write about the trade-offs involved.

252Four steps of the Problem-solving

process 1. Acknowledging/recognizingexistence of problem. 2. Formulatingthe problem. 3. Deriving the solutionto the problem 4. Implementing the

solution

172Obtaining trust: Researcher: Discussion-This requires the interviewerto be perceptive and sensitive to events, so that lines of inquire can

changed and adapted during the interview - interviewer - listen refrainfrom projecting own opinion or feeling into the situation.

267Never believe that it is sufficient

to sell an idea to a singleindividual (stakeholder), no

matter how well placed he or sheis within an organization.

6In action research there need be no gapbetween theory, research and practice.

The three can be integrated.



group.

GENERAL RESEARCH LESSONS ACTION RESEARCH LESSONS

68In many instances, senior managers of the most successful

firms worry more about their people and about building learning,skill, and competence in their organizations than they do about

having the right strategy.

121We have observed a relationship between having vision and a sense of self-

worth and self-esteem, both at a personal and at an organizational level.Such an organization needs a good dose of passion and purpose in the norm

of a shared vision. Then it can play and dance again.The power of such avisioning process is that it hooks into fundamental individual aspirations.

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146 APPENDICES

Appendix 4 - Action Research Lessons Interrelationship Diagraph

12In action research, standardization

defeats the purpose: virtue of actionresearch is its responsiveness. It iswhat allows you to, turn unpromising

beginnings into effective endings

214Reg Revans (1983) said: "there is no learningwithout action and not action without learning".One best known example of thids new cultureis Kaizen, the Japenses word for "continuous

improvement".

184System thinking is a sensibility-for thesubtle interconnectedness that givesliving systems their unique character.





22Treat agreement

scepically by seeking outexceptions.

55Most of the information comes fromthe "Deviants". This is an important

feature. It means that outlyingestimates are given more attention

than those near to an emergingconsensus.

193Few, if any, forces inhuman affairs are aspowerful as shared

vision.



38AR in particular, allows practitionersto achieve better research outcomes

from their practice withoutundermining the change their practiceis intended to achieve. In presentingyour justification it is useful to write

about the trade-offs involved.

6In action research there need

be no gap between theory,research and practice. The

three can be integrated.



group.

1 IN2 OUT

2 IN2 OUT

1 IN3 OUT

0 IN2 OUT

2 IN1 OUT

1 IN2 OUT

1 IN1 OUT

1 IN1 OUT

1 IN1 OUT

3 IN1 OUT

5 IN1 OUT

ACTION RESEARCH LESSONS ID

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147 APPENDICES

Appendix 5 : Timetable of Interviews

NAME OF INTERVIEWEE

COMPANY POSITION LOCATION OF ACTUAL INTERVIEW

DATE TIME

STEVE ELLIOT AGRI FOODS Managing

Director

AgriFoods Factory

Harare

11.07.01 10.00 am

ROB WEBSTER VICTORIA

FOODS

Managing

Director

Arnaldo’s

Restaurant

Harare

16.07.01 12.30 pm

GREG SMITH VETCO Managing

Director

Vetco Offices Harare 16.07.01 4.00 pm

GEOFF ARMAND AGRIFOODS Manufacturing

Director

Agrifoods Factory

Harare

18.07.01 1.51 pm

MARK VICORY FARM & CITY Managing

Director

Farm & City (HO)

Harare

18.07.01 12.30 pm

LINDA RADLOF VETCO Financial Director Vetco Offices Harare 27.07.01 9.00 am

CRAIG BURGESS AGRI FOODS Financial Director Agrifoods Factory

Harare

27.07.01 11.00 am

LEVI MONDORO AGRI FOODS Regional

Manager South

Anchor Yeast Offices

Gweru

30.07.01 11.30 am

MICK GAMMON AGRI FOODS Head Of

Research

Anchor Yeast Offices

Gweru

30.07.01 12.10 pm

MIKE SMITH FARM & CITY Regional

Manager South

Farm & City Regional

Office Gweru

02.08.01 8.00 am

DI EDMUNDS FARM & CITY Gweru Stores

Manager

Farm & City Hardware

Office Gweru

03.08.01 4.45 pm

Appendix 6 : Important points derived from interview transcripts

Pertinent Observation Noted from Interviews

A2 Change is part of the philosophy of the organization.

A3 Flexibility and ability to capitalize on opportunities is very important.

A5 Monday morning meeting with MD's to keep communication lines open.

A8 Love the words WHAT FOR AND WHY.

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A9 The drivers for each of the companies are within CFI: - logistics getting the customer a

variety as quickly and as cheap as possible. Agrifoods - capacity utilization. Dore & Pit -

Water.

B2 Lost 2 managers in 6 yrs - Bob Dunkly gone farming & Lynsey Bloemiers immigrating

B4 The challenges at Agrifoods have been a major stabilizing force. 3 years association

with Meadows a major challenge & learning experience.

B5 Philosophy - bring people around with similar outlook - A lot of time spent at work

therefore need to have fun - Not afraid of change - Create environment where people

are happy - Develop people to be marketable anywhere in the world.

B7 Share options stimulating and a challenge to drive share value.

B12 Chris has developed a good team of MD's that enjoy working with each other.

B13 Challenging stimulating environment for the MD team has been important

B14 Enjoy Agrifoods mgt. team and realize have to be well looked after / people now

looking for semi expat terms / even though they are expensive they pay their way.

B15 Share options holds people in.

C3 Financially feels that he has been looked after.

C4 Given the responsibility and allowed to get on with the job

C5 Enjoys the people he works with.

C6 Recognition of his achievements

C8 Chris gives you the responsibility and allows you to get on with it.

C9 Good team at Vetco - no staff turn-over

C11 Small teams therefore can maintain identity.

C12 Paradox of being part of a bigger team but at the same time maintaining individuality.

C15 The motivational course "Wheel of life" was very good, as it was balanced; work with

the 5 other parts of your life.

C17 People need to feel included, need contact with all levels. Brings the staff in for a drink

on Fridays.

C20 Share options very attractive but the 53% income tax is a problem thus the incentive is

not as big as it would first appear.

D8 Content with my job - varied and challenged

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D9 Was not the money initially - may not have stayed had not had other financial

interests to augment income in early yrs. Not any better than other companies.

D10 Directorship - Financial situation is adequate

D11 Job satisfaction is MAIN REASON for staying

D12 Meadows involvement 4yrs back - Technology agreement - LEARNED A LOT - "big

challenge"

D14 Team at Agrifoods excellent.

E1 What keeps me there -VERY COMPETITIVE SALARY MONTHLY- VARY

ATTRACTIVE YEAR END BONUS - SHARE OPTIONS

E6 My Challenge is to continue to out perform everyone else in my company. Can

achieve this by directing all energies in this direction - spending time with my customers

giving them the products they want and being clever with them. By doing this I can give

the company what they want.

E7 Enjoy the challenge of choosing the right customers. Also the "game is changing" with

National Foods, the brand leader, experiencing problems. There are opportunities that I

need to capitalize on.

E8 It's a nice business to be in. It's a nice company to be in.

E11 Being part of CFI has its irritations

E12 Good team, nice bunch of guys working in the company.

E16 A small amount of movement within CFI. High profile position advertises within the

group. On production side no movement as poaching can occur.

E17 Politics can be an irritation. Don't consult consistently on changes.

E20 Expect that his staff members are held by very good PACKAGES, but on reflection the

work environment has an important part. E.g. Allan Mc Donald MD of Duly's same

position and salary as RW set off to Australia at drop of a hat.

E21 People not landing good positions in Australia etc. And being unemployed for a year

are a distinct deterrent to move.

G2 Acknowledgement and recognition.

G3 Salary package is good

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G10 Have felt great sense of achievement in the development of the accounting team. The

commitment of the staff is also very rewarding.

G11 The whole organization is going to change but not sure how, but change is on the way.

H2 Unsettled about the Zimbabwe situation, but who isn't?

H6 CFI flexible and fleet of foot and the Crest deal is indicative of the agility.

H7 Very difficult to say yes I'm comfortable with package

H10 Feel not getting back what he is putting in.

H14 Director is a title without the classical responsibilities.

H15 Unity of purpose of the group is very powerful motivator.

I5 Has seen where Agrifoods has come from and wants to see where it is GOING

I6 The possessiveness of Chris is a very powerful motivator and it keeps you in it.

I7 With Chris you feel you are going forward all the time.

I10 South African Feeds involved from start in April 2000. Didn't expect the offer of there

but it was a big boost. 600 ton to 2000 now and aiming at 3000 tons/mth by end 2001.

I13 Irritation when there is no response to operational problems like supplier threatening to

cut off.

I14 Communication breakdown used to happen but not that common as have raised it as it

has happened.

I15 Training of new board members. Autocratic Chairman removes the motivation to take

ownership and requirement of the vision.

I18 Lost opportunities in not having time to maintain contact with environment external to

the company. People have pulled back. Not going to CFU meetings on a regular basis.

I19 Need to see more and more communication with the outside.

I20 What is lacking in CFI is a training policy; it is virtually not there. Been to two good

courses in Chris's time that were very beneficial. But nothing since.

I21 Not enough attention to people side. No HR structure in place to monitor and maintain

people policy.

I22 Training budgets that monitors and control this, how are senior managers catered for in

this. Is the progress of people monitored and is there a training plan for rising stars.

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I25 No employment terms are written down and monitored - HR is vital. Mick has a letter of

appointment saying after 5 yrs leave should increase but not actioned & no one wants

to listen.

I26 You are in a team that is going forward is very powerful attraction.

I27 Marketing and continuity such as Botswana - penetrate the market and then neglect

because small but this could grow and continue to grow until critical mass.

I28 Develop factories in the region and leverage off the expertise from and pay small

amounts of consultancy fees from these operations to bolster salary packages.

I29 A friend went to visit his son in the USA and found a small job to keep him busy, found

that he was considerably better off financially with his small job in the USA than as a

manager in Zimbabwe - result wrote a letter back saying don't expect me back,

J9 Communication not good because no personnel person. No clear lines of

communication.

J10 Training - ad hock no follow through

J11 HR administration is not good - leave allocations not altered as in the contract. Vehicle

J13 Not capitalizing on the implicit knowledge held within the organization. Knowledge

management system needs consideration.

J14 A lot depends on characters such as Chris and Paddy. Autocratic system that could be

too dependent on personalities.

J15 Strength in that there is capable men at the top but big hole if they leave.

J17 Link magazine does disseminate information.

J19 Rep level down struggling with cost of living. Directors appear well paid but the rest

J20 Vehicles for the reps who need the car for work not replaced, but extravagant allocation

to Directors.

K4 Look forward to coming to work every day, there are great challenges.

K5 The uniformity of the management team good relationship of team above and below.

K6 Remuneration is good as are the perks and bonus plan.

K8 A great bunch of guys - if you mess up, so be it don't do it again. But if you do well YOU

ARE RECOGNIZED FOR IT.

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K9 Definitely it is the ability to work with good people, that’s the main attraction of working

with F&C

K10 Marketing verses Finance friction within F&C.

K12 Very happy with the way information is disseminated to senior managers. Chris calls all

in from different divisions and briefs them.

K14 To draw me away, it would have to be a significant improvement in position and with a

substantial company. Loyalty to F & C is NB to me

K19 Knowledge management in F&C is best stock control from one area presented to all

others and other areas likewise. No cross-pollination between divisions.

K27 Implicit knowledge is not being made explicit to the whole group. Senior people may

not have been exposed to the coalface therefore need sensitivity to being educated

from below.

L4 Have a training department within Farm & City but the facility does not appear to be

operational.

L5 Feel good support from the senior management.

L6 Allowed to make mistakes and learn from them.

L7 Recognition and incentive schemes have been excellent through the years. A very big

improvement from the previous job.

L11 Branch managers won't stand up and challenge directives and changes because of

fear of victimization.

L13 Don't have much to do with Head Office even HR. HR office seem only to pay salaries

no other support.

L14 Lack of consultation with people on the ground left considerable implicit knowledge

locked up.

L15 No records are written down and filed regards the changes in the conditions of service.

L16 No record to track and history for new senior managers can pick up the strings

L17 No official notification of increases in salaries.

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Appendix 7 : Interview Transcripts

Transcript - A - Chris Amera – CEO Consolidated Farm Investments (CFI)

Point

No.

Issue of note from interview recording.

A1 Young vibrant management team employed.

A2 Change is part of the philosophy of the organization.

A3 Flexibility and ability to capitalize on opportunities is very important.

A4 Small CFI office - units run independent companies but consolidation into

divisions is on the cards.

A5 Monday morning meeting with MD's to keep communication lines open.

A6 Monthly board meetings bring together directors from all the CFI

companies to facilitate inter company communications.

A7 Young Presidents organize high value conferences.

A8 Love the words WHAT FOR AND WHY.

A9 What are the drivers for each of the companies? F&C - logistics getting the

customer a variety as quickly and as cheap as possible. Agrifoods -

capacity utilization. Dore & Pit - Water.

Transcript – B - Steve Elliot – MD Agrifoods

Point

No.


B1 Team of 6 makes management team. FD - Craig Burgess / Mkt D - Dave

Hayden / Purchasing D - Lynsey Blumiers / Opps D - Geoff Armand /

Southern Region Mgr - Levi Mondoro / Research & Development Mgr -

Mick Gammon

B2 Lost 2 managers in 6 yrs - Bob Dunkly gone farming & Lynsey Bloemers

immigrating

B3 CSC Assistant GM Marketing then 4 years with Colcom / Ranching 4

years / Joined Agrifoods in 1995

B4 The challenges at Agrifoods have been a major stabilizing force. 3 years

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association with Meadows a major challenge & learning experience.

B5 Philosophy - bring people around with similar outlook - A lot of time spent

at work therefore need to have fun - Not afraid of change - Create

environment where people are happy - Develop people to be marketable

anywhere in the world.

B6 Stimulated by training and development of staff.

B7 Share options stimulating and a challenge to drive share value.

B8 The prospects of Crest incorporation a major challenge.

B9 Australia a plan B as well as a way of affordably educating children

through university.

B10 Partnership on a Ranching enterprise as interest and friendship proposal.

B11 Skills Visa to Australia - Stamp Visas in August - A lot of pressure off

now.

B12 Chris has developed a good team of MD's that enjoy working with each

other.

B13 Challenging stimulating environment for the MD team has been important

B14 Enjoy Agrifoods mgt team and realize have to be well looked after /

people now looking for semi expat terms now / even though they are

expensive they pay their way.

B15 Share options holds people in.

B16 National Foods is the enemy - Aim is to have competitive edge over

them. Keep an eye on the market and move fast like securing urea

needs. - Have a big advantage in having only 6 people to discuss plan

with and not 150 as with NF.

B17 Taking advantage of cash flow problems at NF by buying raws off them.

Transcript - C - Greg Smith – MD Vetco

Point No.


C1 Started at Agrifoods as a sales rep after university and worked way up to

Marketing Director. Then offered MD of Vetco

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C2 Stayed thru loyalty to the company and in particular to Chris Amera.

C3 Financially feels that he has been looked after.

C4 Given the responsibility and allowed to get on with the job

C5 Enjoys the people he works with.

C6 Recognition of his achievements

C7 Left Agrifoods as he felt that he was pulling in a different direction to the

team that has been set up by Steve. Chris offered Greg the position of MD

Vetco

C8 Chris gives you the responsibility and allows you to get on with it.

C9 Good team at Vetco - no staff turn-over

C10 Achieved budget this his first yr with the company

C11 Small teams therefore can maintain identity.

C12 Paradox of being part of a bigger team but at the same time maintaining

individuality.

C13 Priorities can change at the moment satisfied with challenge but this may

change and finances may take precedence.

C14 Difficult to determine what keeps a person with CFI as cannot determine as

don't know what my reaction would be if something was removed or

depleted.

C15 The motivational course "Wheel of life" was very good as it was balanced;

work with the 5 other parts of your life.

C16 Priority to send his selected members of the Motivation Course.

C17 People need to feel included need contact with all levels. Brings the staff in

for a drink on Fridays.

C18 IP paper to Greg & circular organization.

C19 Crest with Barringtons inclusion is a challenge.

C20 Share options very attractive but the 53% income tax is a problem thus the

incentive is not as big as it would first appear.

Transcript - D - Geoff Armand – Operations Director Agrifoods

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Point No.


D1 Officer in Grey Scouts '75-'80

D2 Farming - Dairy 2 yrs - then in partnership in Mazowe

D3 Early '90s joined UK firm drilling boreholes for NGO's but away from home

5-6 months per year.

D4 Mgt consultancy 1991

D5 1992 applied to Agrifoods in BYO on operations mgr - "

D6 1997 - Transferred to Harare as opps mgr

D7 2001 - Promoted to Opps director

D8 Content with my job - varied and challenged

D9 Was not the money initially - may not have stayed had not had other

financial interests to augment income in early yrs. Not any better than other

companies.

D10 Directorship - Financial situation is adequate

D11 Job satisfaction is MAIN REASON for staying

D12 Meadows involvement 4yrs back - Technology agreement - LEARNED A

LOT - "big challenge"

D13 Implantation of KEY RESULT AREAS MONITORING very big challenge.

D13 Team at Agrifoods excellent.

D15 Steve Elliot MD - Richard Dennison Nutritionist - Dave Hayden Marketing -

Linzy Blumiers Procurement - Craig Burgess FD + IT + Personnel - Geoff

Operations - Levi Mondoro Senior Mger southern region.

D16 Shallow management structure.

D17 Very interested in results and what others

D18 Strikes - No loss of business thru stay-aways. Very rewarding to have staff

come to work when all other millers are having problems

D19 The enemy is NF. Challenge is to stay ahead. Transcript - E - Rob Webster – MD Victoria Milling

Point Issue of note from interview recording.

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No. E1 What keeps me there -VERY COMPETITIVE SALARY MONTHLY- VARY

ATTRACTIVE YEAR END BONUS - SHARE OPTIONS

E2 Very Mercenary - its about money - need educate kids thus need huge

amount of Z$ for tertiary education.

E3 Incremental bonus scheme coming off a low base this is paying very well

at this time but how it performs in the future depends to a large extent on

how the economy goes. But no reason up to now to complain concerning

the bonus.

E4 Not renewable contract - Letter of Employment is it until the company

wants to replace me then it is the standard 3 months salary in terms of the

legislation.

E5 Not interested in external or additional challenges to the efficient

functioning of Midlands Milling.

E6 My Challenge is to continue to out perform everyone else in my company.

Can achieve this by directing all energies in this direction - spending time

with my customers giving them the products they want and being clever

with them. By doing this I can give the company what they want.

E7 Enjoy the challenge of choosing the right customers. Also the "game is

changing" with National Foods, the brand leader, experiencing problems.

There are opportunities that I need to capitalize on.

E8 It's a nice business to be in. It's a nice company to be in.

E9 Nice company means NICE AND SMALL AND NEAT. There are 8 people

in the Victoria mgt team so decision-making is quick and easy. NF has 120

mgrs therefore for them to communicate change is very difficult by contrast

Victoria is very light and therefore can move fast.

E10 In the competitive maize meal market - opportunity to capitalize on the high

value super refined end with modifications to the plant. At the moment only

13% of the meal is super refined 13% bran and the rest normal roller meal.

With mods 35-40 % S-refined. Selling price increase from 14K - 25K.

E11 Being part of CFI has its irritations

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E12 Good team, nice bunch of guys working in the company.

E13 Team half and half new and old FD Kevin de Silver - Chris Scoe Mkt -

Gary Cooper Prod - Rob MD.

E14 Half & Half appointed by RW and half to who was there.

E15 Big difference between Directors and senior manager in terms of salary

structure and responsibility.

E16 A small amount of movement within CFI. High profile position advertises

within the group. On production side no movement as poaching can occur.

E17 Politics can be an irritation. Don't consult consistently on changes.

E18 One day per month Board Meetings are not a problem.

E19 Monday mornings MD's have a cup of coffee together but this is very

informal and not a problem.

E20 Expect that his staff are held by PACKAGE but on reflection the work

environment has an important part. E.g. Allan Mc Donald MD of Duly's

same position and salary as RW set off to Australia at drop of a hat.

E21 People not landing good positions in Australia etc. And being unemployed

for a year are a distinct deterrent to move.

Transcript - F - Mark Vicory – MD Farm & City

Point No.


F1 BA Durban - SmithKline Animal Health

F2 Needed a change - Chris offered a position with VETCO 1994

F3 Included in the CFI floatation team

F4 1995 Offered MD of retail arm with mandate to revitalize the business

F5 What Keeps me here is the quality of the people at the top - Chris Steve

Rob Paddy

F6 "It's a learning organization, the whole time w are learning"

F7 Varied life - Animal feed then fertilizer & seed then supermarkets

F8 Financially - That is very NB anyone who says he is not working for the

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money is lying. Taxation a problem - Driving up SHARE VALUE has

rewarded staying thru 4 yrs of $1 - $2 now driven up to $13 with the new

developments.

F9 Driving the share up is now not just for the share holders

F10 THE CARROT - Take your wife to X is also NB

F11 Being in the Boardroom and playing a major role in decision-making is also

NB. As Chief Exec no messing around you male decisions and get on with

it. "Breath of fresh air" after working for a US corporate where had to refer

to the States before making any move.

F12 Changing the culture of the organization has been a challenge. From run

by farmers and farmer based to fully commercial and focused on small

sector as well as commercial farmers. 70% of the old mgt left as had to

change time to start work. No Wednesday afternoons

F13 Farm & City structure- MD - FD - Mkt.D - HRD - Procurement D - Super

Mkt D - Hardware D - Buying Services D - Distribution

F14 Developed the Super Markets by bringing in Spar to teach - Now

developed Town & Country distribution network & imports etc. A LOT OF

POTENTIAL.

F15 Windmill used to sell direct to farmers but now has seen the strength of T &

C with the small scale sector and have started to sell to Commercial sector

thru T & C who are developing a new niche for Comm. farmers offering

other services phone etc to add value

F16 Very excited about the Hail Insurance building green field stores for use by

T & C. Also Public Offering to raise cash needed to develop

F17 Crest inclusion opens up a number of new opportunities like growing

veggies on Glenara. HUGE CHALLENGES THAT HOLD MARK IN WITH

CFI.

F18 Have to develop the company capacity to earn US $ to help hold in staff

F19 Strength of the Group including 15% in Windmill Fertilizers and now Crest

Chickens - Gives ambitious staff development and promotion opportunities

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F20 Trying to develop a LEARNING ORGANIZATION" where everyone is

imparting knowledge and is made to feel important to the organization and

not a minion in a big corporate body.

F21 BRAIN STORMING SESSIONS once a month. If only 1% is useful the

process has succeeded as people have had a platform to participate. The

small amount of relevant and often extremely valuable contributions is

incidental to the value of the process.

F22 Australian senior executives don’t appear to have a good quality of life

work late then a long drive home. Here you are "one wood & a putter" from

home and there are generous leave conditions.

Transcript - G - Linda Radloff – FD Vetco

Point No.


G1 5 yrs with Vetco previously 2 yrs with Bass Transport - 2 yrs was like the

limit before Vetco.

G2 Acknowledgement and recognition.

G3 Salary package is good

G4 Recognition right from the start was important - Alistair Johnson was the

MD after Mark Vicory who was only there for a short time before moving to

Farm & City.

G5 5 branches to 17 now big expansions.

G6 Enjoyed working under different MD's who have allowed space to operate.

Do your own thing.

G7 Thought of going to UK and would have been there by January this year

but Dad had a major heart attack. But relieved, as the decision to move

was daunting. Position at Vetco made it more difficult to move.

G8 Very good from the salary point of view.

G9 Enjoy the recruitment of staff.

G10 Have felt great sense of achievement in the development of the accounting

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team. The commitment of the staff is also very rewarding.

G11 The whole organization is going to change but not sure how, but change is

on the way.

G12 Enjoy a small organization - more personal.

Transcript -H - Craig Burgess – FD Agrifoods

Point No.


H1 B comm. Then joined Anglo American for 2 yrs then American Bank in

London then came back to Radar then approached by Steve but only

joined when Steve took over Agrifoods.

H2 Unsettled about the Zimbabwe situation, but who isn't?

H3 Very challenging especially the association with Meadows who had links to

a Dutch feed company.

H4 Ability to take what was needed and leave what was not needed.

H5 Cemented good relations with Meadows.

H6 CFI flexible and fleet of foot and the Crest deal is indicative of the agility.

H7 Very difficult to say yes I'm comfortable with package.

H8 Offered a job with forex content and talked out of it by Geoff Wright MD of

Meadows and Chris offered big future.

H9 MD of Vetco came up and passed over with no discussions from Steve or

Chris, heard from a secretary

H10 Feel not getting back what he is putting in.

H11 Kevin James has a fleet of foot street fighter.

H12 Papers in for Australia as insurance plan.

H13 Legitimate way of earning additional and win win is thru training i.e. MBA

H14 Director is a title without the classical responsibilities.

H15 Unity of purpose of the group is very powerful motivator.

Transcript - I - Levi Mondoro – GM Agrifoods Southern Region

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Point No.


I1 Joined 1st December 1985. Prior to that CSC Ranches & Livestock

Manager.

I2 Started as dispatch manager and worked thru to Southern Region

Manager.

I3 Offers from CSC good position GM? Offer from Cairns.

I4 Stayed because CSC has problems there and therefore no job security.

Cairns offered 25% bigger package but not in his field of knowledge.

I5 Has seen where Agrifoods has come from and wants to see where it is

going.

I6 The possessiveness of Chris is a very powerful motivator and it keeps you

in it.

I7 With Chris you feel you are going forward all the time.

I8 Very good team in Byo Keep positive. Mick & Ian employee by Chris &

Bert.

I9 Mick although national duty but very important in keeping the team

together. South African Feeds involved from start in April 2000. Didn't

expect the offer of there but it was a big boost. 600 ton to 2000 now and

aiming at 3000 tons/month by end 2001.

I10 South African Feeds involved from start in April 2000. Didn't expect the

offer of there but it was a big boost. 600 ton to 2000 now and aiming at

3000 tons/month by end 2001.

I11 Excited about Game feeding possibilities in Louis Trichard. Also proximity

to the poultry market.

I12 SA Feeds should leverage off support for the local producers and men

from the area, discussion groups and advisory role. Big companies tend to

neglect the area because it is small and not focused there.

I13 Irritation when there is no response to opp problems like supplier

threatening to cut off.

I14 Communication breakdown used to happen but not that common as have

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raised it as it has happened.

I15 Training of new board members. Autocratic Chairman removes the

motivation to take ownership and requirement of the vision.

I16 Chris was an autocrat but 90% he was right and it worked. But now Chris

consults and this has come about in the last 2 yrs.

I17 Agrifoods has a strong team that could keep the operation running even if

the MD "hit by a bus"

I18 Lost opportunities in not having time to maintain contact with environment

external to the company. People have pulled back. Not going to CFU

meetings on a regular basis.

I19 Need to see more and more communication with the outside.

I20 What is lacking in CFI is a training policy; it is virtually not there. Been to

two good courses in Chris's time that were very beneficial. But nothing

since.

I21 Not enough attention to people side. No HR structure in place to monitor

and maintain people policy.

I22 Training budgets that monitors and control this, how are senior managers

catered for in this. Is the progress of people monitored and is there a

training plan for rising stars.

I23 Directors at Harare Factory and involved in day-to-day mgt therefore

Bulawayo feels them and us. If Bulawayo has a whole cotton shortage and

phones Harare and Steve will say "I also have a whole cotton problem".

I24 Management structures need discussions.

I25 No employment terms are written down or minuted and monitored - HR is

vital. Mick has a letter of appointment saying after 5 yrs leave should

increase but not actioned & no one wants to listen.

I26 You are in a team that is going forward is very powerful attraction.

I27 Marketing and continuity such as Botswana - penetrate the market and

then neglect because small but this could grow and continue to grow until

critical mass.

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I28 Develop factories in the region and leverage off the expertise from and pay

small amounts of consultancy fees from these opps to bolster salary

packages.

I29 A friend went to visit his son in the USA and found a small job to keep him

busy, found that he was considerably better off financially with his small job

in the USA than as a manager in Zimbabwe - result wrote a letter back

saying don't expect me back,

Transcript - J - Mick Gammon – Technical Support Feed Specialist Agrifoods

Point No.


J1 With Agrifoods since 1990. Before that Irene SA 5 yrs, before that 2 yrs

with NF prior to that Research & Specialist Services

J2 Offers to do consultancy but lot of traveling - small scale beef production.

J3 Reasonably well off therefore not forced to chase the $.

J4 Agrifoods more professional than NF. This is because in NF stock foods is

a sideline and with Agrifoods is main line.

J5 Involvement in Benco Feeds Trichard as consultant to farmers.

J6 Most of effort in Bulawayo but available to whole country.

J7 Research & Development Manager official designation. Use research as a

way of getting in to a market by offering to do research on premises of user

buying from others.

J8 When 1st came was part of senior management. Dropped from the annual

strategic planning meeting soon after Steve took over, no explanation

given.

J9 Communication not good because no personnel person. No clear lines of

communication.

J10 Training - ad hock no follow through

J11 HR administration is not good - leave allocations not altered as in the

contract. Vehicle

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J12 Tax problem 13 memos and two years to correct a problem that was in the

Agrifoods system.

J13 Not capitalizing on the implicit knowledge held within the organization.

Knowledge management system needs consideration.

J14 A lot depends on characters such as Chris and Paddy. Autocratic system

that could be too dependent on personalities.

J15 Strength in that there are capable men at the top but big hole if they leave.

J16 Dave Haden - should have exposure to the farmers so as a marketing

director he would have an understanding and have the right language.

J17 Link magazine does disseminate information.

J18 Monthly meeting Steve not available to listen to minor problems.

J19 Rep level down struggling with cost of living. Directors appear well paid but

the rest

J20 Vehicles for the reps who need the car for work not replaced, but

extravagant allocation to Directors.

Transcript – K - Mike Smith – Regional Manager Southern Region Farm & City

Point No.


K1 Apprenticeship, Sales at Foseco, Farming and enjoyed but employer's

wheels came off, Bata enjoyed and was then offered a job as Assistant

Manager F&C Gweru. Transferred to Chipinge for 2 yrs and returned to

Gweru as Regional Mgr and that was 4 yrs ago

K2 Developed a team that the guys will do anything for Mark. He is an

esteemed leader. Leads by his charisma.

K3 Two years no change in the regional mgt team. Try and engender the

same loyalty that Mark has developed.

K4 Look forward to coming to work every day, there are great challenges.

K5 The uniformity of the management team good relationship of team above

and below.

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166 APPENDICES

K6 Remuneration is good as are the perks and bonus plan.

K7 Put remuneration aside - I have learned a hell of a lot - about business

about everything and continue to learn every day.

K8 A great bunch of guys - if you mess up, so be it don't do it again. But if you

do well YOU ARE RECOGNIZED FOR IT.

K9 Definitely it is the ability to work with good people, that’s the main attraction

of working with F&C.

K10 Safety of a big company, that you are somewhere there in a great

company that you are proud of.

K11 Great respect for superiors and those have moved on.

K12 Marketing verses Finance friction within F&C.

K13 4 Regional GM's - GM HR - GM Internal controls - GM Procurement THUS

7 + 3 Directors

K14 Very happy with the way information is disseminated to senior managers.

Chris calls all in from different divisions and briefs them.

K15 On very friendly terms with Directors - Very strong ties.

K16 Very strong ties with regional mgt team spirit.

K17 Inter regional mgt teams 45-46 of them gets together once or twice a year

for a sports day to get to know each other. Good bonds formed at these

get together. Awards and prize giving are handed out at these occasions.

K18 F & C strength in the unity although there was a strike by finance guys in

HQ but they could not draw in staff from the regions.

K19 To draw me away, it would have to be a significant improvement in position

and with a substantial company. Loyalty to F & C is NB to me.

K20 Don't have corporate fights that you hear of elsewhere.

K21 Closer relationship with Vetco autonomous but should not be totally on

their own.

K22 Vetco everything on a plate - I'll want to open up in Chegutu - take over F &

C stock and hi-jack one of the staff to run it and they are away.

K23 The synergies between F&C need to be explored. Not good comms and

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167 APPENDICES

recognition for the role the F&C team do.

K24 Knowledge management within F&C is very good but these strengths are

not spread through the group.

K25 What should happen is maybe having a CFI regional manager linking all 4

of the divisions and developing and managing the synergies on the

marketing side. A ONE-STOP SHOP SCENARIO.

K26 Take abuse for problems customers experience in other divisions and am

unable to resolve the problems.

K27 Knowledge management in F&C is best stock control from one area

presented to all others and other areas likewise. No cross-pollination

between divisions.

K28 Implicit knowledge is not being made explicit to the whole group. Senior

people may not have been exposed to the coalface therefore need

sensitivity to being educated from below.

Transcript - L - Di Edmunds – Branch Manager Farm & City

Point

No.


L1 22 Yrs with the bank, but after restructuring and moved to a large branch

with considerable bad debt decided to move. Joined Farmers -Coop at a

considerable drop in salary.

L2 Joined Farmers Coop in August 1996.

L3 Good administration skills brought from the bank have been very useful.

L4 Have a training department within Farm & City but the facility does not

appear to be operational.

L5 Feel good support from the senior management.

L6 Allowed to make mistakes and learn from them.

L7 Recognition and incentive schemes have been excellent through the

years. A very big improvement from the previous job.

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168 APPENDICES

L8 Vetco - Farm & City. Bad service reflects on F&C - told a good customer of

F&C to wait.

L9 2% purchasing department levy on Fertilizers & Chemicals with no

consultation or visible benefits to the retail department. Reduces

competitiveness and incentives at the branch level.

L10 Small order of Fertilizer made $22 000 out of me and for what, I still do all

the paperwork - Central Buying is making money out of the branch.

L11 Branch managers won't stand up and challenge directives and changes

because of fear of victimization.

L1 No incentive to stock up with fertilizer early

L13 Don't have much to do with Head Office even HR. HR office seem only to

pay salaries no other support.

L14 HR regarding exercise for everyone. No consultation prior to

implementation. Disastrous implementation of the new system. Told

through workers committee that it has been scrapped no direct information.

L15 Lack of consultation with people on the ground left considerable implicit

knowledge locked up.

L16 No records are written down and filed regards the changes in the

conditions of service. No record to track and history for new senior

managers can pick up the strings.

L17 No official notification of increases in salaries

L18 Lucky to have good support in the form of a good assistant manager.

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169 APPENDICES

Appendix 8 : Management of Shareholder Value Learning Points

S c o r eW P

1 S S M - m a n a g e m e n t o f a c o m p le x p ro b le m o n a c o n t in u o u s b a s is , le a rn in g a t th e s a m e t im e 1 0

2 S u s p e n d ju d g m e n t in d a ta c o l le c t io n c o n c e rn in g a c o m p le x p ro b le m b e c a u s e c a n o v e r lo o k d if fe r in g p e rs p e c t iv e s o f a s i tu a t io n .

1 0

3 S S M - C A T W O E 1 0

8 C a s h F lo w is c r i t ic a l fo r c o m p a n ie s in a ra p id g ro w th p h a s e 1 02 0 F in a n c ia l A n a ly s is fo c u s e s o n fo u r m a in a re a s - P ro f i ta b i l i t y , A s s e t M a n a g e m e n t , G e a r in g a n d

L iq u id it y . T h is g iv e s a g o o d S N A P S H O T o f th e f i rm1 0

2 1 W o rk in g C a p ita l M a n a g e m e n t is c r i t ic a l e s p e c ia l ly in a ra p id ly e x p a n d in g c o m p a n y . A c le a r p o l ic y o n W .C . is n e e d e d w ith re s p e c t to d e b to rs & c re d ito rs - T h is n e e d s c lo s e m o n ito r in g .

1 0

3 9 V a lu a t io n s th ru d is c o u n t in g e x p e c te d c / f lo w s a t a s in g le r is k -a d ju s te d ra te a s s u m e s a l l f u tu re c / f lo w s a t t ra c t th e s a m e d e g re e o f r is k , i r re s p e c t iv e o f m a n a g e m e n t 's a b i l i t y to m a n a g e p o te n t ia l o p t io n s a n d r is k in th e fu tu re .

1 0 3

4 2 E & Y s tu d y in U K o f 6 0 0 s e l l-s id e a n a ly s ts & b u y -s id e re p s , re v e a le d th a t a s u n c e r ta in ty in c re a s e s , th e d e p e n d e n c e o n n o n - f in a n c ia l p e r fo rm a n c e d a ta a ls o in c re a s e s .

1 0 6

6 1 D ia lo g u e (m e a n in g f lo w in g th ro u g h ) a s o p p o s e d to d is c u s s io n ( to b e a t d o w n ) , is c r i t ic a l to e f fe c t iv e c o m m u n ic a t io n s .

1 0 2 5

6 2 D ia lo g u e c o n s is ts o f 4 s k i l ls - S u s p e n d in g J u d g m e n t - Id e n t i f y in g A s s u m p t io n s - L is te n in g - In q u ir in g a n d R e f le c t io n .

1 0 2 6

3 0 F in a n c ia l A c c o u n ts h a v e a n u m b e r o f l im ita t io n s - H is to r ic & n o t fo rw a rd lo o k in g - A l lo c a t io n o f c o s ts , la b o u r is a c tu a l ly a f ix e d c o s t b u t s h o w n a s a v a r ia b le c o a t - R a w m a ts n o t v e ry v a r ia b le b e c a u s e o f m in im u m o rd e rs - W in d o w d re s s in g - S m o o th in g u s in g re s e rv e s - A c c p o l ic ie s o f d e p re c ia t io n a n d w h e n to re v a lu e - Y e a r e n d is s u e s a c t .

9

4 6 D e m o n s t ra t in g a b re a d th & d e p th o f m a n a g e m e n t a c ro s s th e b u s in e s s c re a te s in v e s to r c o n f id e n c e in th e f i rm 's a b i l i t y to e x e c u te

9 1 0

4 9 J a c k W e lc h o f G E re m a rk e d , " th e th re e m o s t im p o r ta n t th in g s y o u n e e d to m e a s u re in a b u s in e s s a re c u s to m e r s a t is fa c t io n , e m p lo y e e s a t is fa c t io n & c a s h f lo w "

9 1 3

5 0 E f fe c t iv e le a d e rs h ip h a s a k e y ro le to p la y b o th in e s ta b l is h in g a p e r fo rm a n c e -e n h a n c in g c u ltu re & in o rg a n iz in g w a y s th a t m e e t a n d a n t ic ip a te c u s to m e rs n e e d s .

9 1 4

5 6 K e y P e r fo rm a n c e In d ic a to rs (K P I 's ) c a n p la y a n e s s e n t ia l p a r t in d e v e lo p in g a w id e s p re a d u n d e rs ta n d in g o f h o w th e v a r io u s p a r ts o f th e b u s in e s s o p e ra te to g e th e r .

9 2 0

5 7 In th e tu rb u le n t w o r ld o f c h a o s , c o m p le x it y a n d c h a n g e th e o n ly t ru e c o m p a s s o u r le a d e rs w i l l h a v e w i l l b e a c le a r s e n s e o f th e ir o w n v a lu e s .

9 2 1

6 3 T ru s t c a n o n ly b e g iv e n b y e a c h p e rs o n ra th e r th a n d e m a n d s . 9 2 7

6 4 T h e 2 1 s t c e n tu ry w o r ld o f b u s in e s s h a s a n e m b e d d e d c o n s ta n t - c o n t in u o u s c h a n g e . C h a n g e w il l b e p e rc e iv e d a s in te r fe r in g w ith o u r s e n s e o f a d o p t io n b y a p p e a r in g to o v e rw h e lm o u r s t ru c tu re s o f in te l le c tu a l th o u g h t w h ic h m a k e s s e n s e o f th e w o r ld .

9 2 8

6 5 A d a p t in g to c h a n g e ta k e s t im e , b e c a u s e i t is n o t ju s t a ra t io n a l p ro c e s s , b u t i t in v o lv e s a d e g re e o f e m o t io n a l a n d s p ir i t u a l a c c e p ta n c e o n th e p a r t o f th o s e a f fe c te d .

9 2 9

8 2 A re v ie w o f le a d in g -e d g e l i t e ra tu re , o n th e is s u s e o f lo y a lt y a f fe c ts , s u g g e s ts th a t c u s to m e r lo y a lt y , th e o u tc o m e o f s u p e r io r c u s to m e r s e rv ic e , a n d in v e s to r lo y a lt y , th e o u tc o m e o f p ro te c te d & e n h a n c e s h a re h o ld e r v a lu e ,a re e a c h d e p e n d e n t o n th e b u s in e s s g a in in g th e c o m m itm e n t & lo y a lt y o f th e e m p lo y e e s .

9 4 5

8 3 T h e c re a t io n o f s h a re h o ld e r v a lu e is th e n a tu ra l & in e v ita b le o u tc o m e o f e m p lo y e e e x c e l le n c e . 9 4 6

8 9 U n t i l a b u s in e s s u n it re tu rn s a p ro f i t t h a t is g re a te r th a n th e c o s t o f c a p ita l , i t o p e ra te s a t a lo s s . 9 5 2

9 4 E v e n in a m a rk e t c o r re c t io n s , h ig h le v e ls o f e x e c u t iv e s to c k o w n e rs h ip w o u ld s t i l l b e th e b e s t lo n g - te rm p o l ic y fo r b o a rd s , th e s h a re h o ld e rs a n d a l l e m p lo y e e s a n d th e e x e c u t iv e s th e m s e lv e s , s in c e i t d ire c t ly t ie s th e in te re s ts o f th e e x e c u t iv e s to th e c o m p a n ie s th e y m a n a g e .

9 5 7

Ref

eren

ce

L e s s o n n o L e s s o n

W o r k P r a c t ic e

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Appendix 9 : Work Practice Revised Interrelationship Diagraph

50Effective leadership has a

key role to play both inestablishing a

performance-enhancingculture.

42As uncertaintyincreases, the

dependence on non-financial performancedata also increases.

46Demonstrating a breadth& depth of management

across the businesscreates investor

confidence in the firm'sability to execute strategy

49" the three most important things

you need to measure in a businessare customer satisfaction, employee

satisfaction & cashflow"

94Even in a market

corrections, high levelsof executive stock

ownership would still bethe best long-term

policy.

56Key Performance

Indicators (KPI's) canplay an essential part indeveloping a widespread

understanding.

83The creation of

shareholder valueis the natural &

inevitable outcomeof employeeexcellence.

82The outcome of protected& enhance shareholder

value,are each dependenton the business gainingthe commitment & loyalty

of the employees.

63Trust can only be

given by eachperson rather than

demanded.2 IN

4 OUT

3 IN3 OUT

2 IN1 OUT

2 IN4 OUT3 IN

1 OUT

3 IN1 OUT

2 IN5 OUT

1 IN3 OUT

5 IN1 OUT

WORK PRACTICE REVISED ID

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Appendix 10 : Executive MBA 2 Human Resources Assignment

Prepared by:

Eileen De Wet,

Keith Hutton,

Stanley Katzao,

Kerry Motherwell,

Nickki Ramkissoon,

Leo Slootmans,

Andy Southwood

Gary Stanley

Introduction

One of the ways companies generally understand value creation, is the conversion of

a strategic resource into a revenue-generating product through the leverage of its

distinctive competencies. In this regard, careful attention is paid to financial

planning, financial resources, raw materials and other capital assets.

Often ignored, is value that people bring to the Added Value Domain, and the

opportunities that companies have to enhance this resource, thereby strengthening

overall company value.

In assessing value, we distinguish between value and profit, where profit is a short-

term objective, and value is the sustainable longer-term growth as measured by, for

example, EVA.

This paper will examine some of the opportunities that exist for companies to

enhance shareholder value through strategic human resource management, and in

particular the success factors for attracting, motivating and retaining talent in the

company.

General concepts to be examined relate to hiring the right people, ensuring that their

skills remain current, and catering to their psychological “sense of significance.”

Strategic Human Resource

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We consider the Strategic Human Resource function to be based on shared values

throughout the organization, as depicted below:

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Figure D.4.8-1 – 7-S’s Framework as a HR Context for this Organization

TM EVA (Economic Value Added) is a registered trademark of the Stern Stewart Company.

In order to ground this deliverable in terms of Action Research Learning (ARL), the

group decided to use a group member’s organization as the basis for this study. The

Edcon Group was subsequently chosen, as the study group felt that this

organization, under the leadership of CEO Steve Ross, practiced the “critical success

factors” required to:

attract,

motivate,

retain talented knowledge workers.

SKILLS

STRATEGY

SHARED

VALUES

SYSTEMS

STRUCTURES

STAFFING

Managing relationships

Self Control

Service Value

Employee Participation

Profit Incentives Right Levels

Planning and organizing / development

Take ‘Ownership’ of

SBU

‘Thickened’ value chain

Info sharing

Responsibility Recruitment

Holistic Training

Source Value

Work Flexibility

SBU

STYLES

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An example of Edcon’s progressive HR policy is exemplified by the “Edcon Vibe1”, - a

monthly in-house publication for the group, significantly subtitled ‘Keeping the Family

Briefed”. This magazine highlights what is happening in the Organization,

emphasizing the vitally essential communication which is the nature of the “nature

of the “Physical Contact”, between the organization ant its 15 000 employees, known

as “associates”, listening to and reflecting both the Group’s and the employees views

and opinions.

Figure D.4.8-2 - The Transformational Process below portrays the Transformation Process –

essentially a re-iterative process in the continual search for business excellence. The

exhibit is an adaptation of an exhibit that appears in The New Portable MBA. Figure D.4.8-2 - The Transformational Process

Edcon describes itself as being “in transition, on the way to providing its associates

with a world class HR Service that is designed to support the business needs of the

Transformational Leadership - a HR Function [ An Adaptation]

OLD WAY - NEW WAY

The Transformation

OLD WAY -MACHINE AGE

• Hierarchical• Control Focussed• Bureaucratic

NEW WAY -INFO AGE

• Networks• Loose / flexible• Knowledge creation•Knowledge sharing

A process requiredto attract , motivateand retain talentedknowledge workers

in the NewEconomy

Cross the GAP by:

Competitive Advantage by Competitive Advantage by

Economies of scale Top down Specialization

• Developing trust

• EMPOWERING ALL LEVELS

• Eliminating unnecessary work

• Architecting a NEW WAY - new systems

Speed-return on time Learning Middle up-down leadership Economies of scaleLeveraging knowledgeMulti-skills

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Group. At the same time the Group is providing individuals in the organization with

the platform to take hold of the opportunities that will present themselves in Edcon’s

turnaround.”

“When the group was decentralized, the Edcon HR fraternity was also affected. The

decentralization strategy resulted in immense duplication of effort, but more

importantly, great HR interventions were happening in isolated parts of the business,

- the benefits of which were not being shared throughout the Group.”

“Whilst Edcon’s various businesses serve different customers in different locations,

the competencies required to buy apparel, merchandise it stores and sell to

customers, remain largely the same. This also applies to the HR function. Through

a recent decision taken to centralize its function, HR has been able to consolidate its

processes and skills and become a more efficient and effective partner in the

business. More importantly, centralization has been able to provide Edcon

employees equal access to, and a non-disparate service from, the HR division.”

Edcon has split its HR into practitioner categories, - Generalists and Specialists. The

essence of the HR Generalist’s role is to support the Business Values and Vision of

the respective SBU’s.

This is to be done through the development of an integrated Competency based HR

Management system, which will underpin the work Managers do with regard to:

Recruitment and Selection

Reward and Recognition

Performance Management Careers/Succession Planning.

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The HR division must also ensure that the systems are aligned to the principles of the

National Qualifications framework, the Skills Development Act, the Employment

Equity Act and the Labour Relations Act.

Figure C.2: 3 below describes the key elements defined in our Module 3 Strategic

Human Resources lectures and course notes.

Figure D.4.8-3 - Key Elements of Strategic Human Resources Function

Edcon’s compliance with these elements is quoted from the ‘Edcon Vibe’ issues February – July 2000.

Recruitment and selection is governed by a clearly defined employment equity

strategy, which has been agreed with all relevant stakeholders. This and other

specific affirmative action programs are aimed at liberating the full potential of

HR PRACTICES Recruitment and Selection Induction Performance Management Rewards Training and Development Managerial Support Communication, consultation listening to employees

and customers Work Design: Job satisfaction Customer

satisfaction Contingency approaches to service excellence

Service Culture

Leadership

Organizational

Design

Service / Product Quality

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previously disadvantaged personnel, while at the same time meeting all legislated

requirements. The employment equity committee manages this process.

Once employment begins, all employees take part in an induction program,

designed to introduce the Group’s values and mission clearly to the employees.

Edcon CEO Steve Ross1 was reported to have introduced a share option and

incentive scheme for all associates. Furthermore, he was quoted as saying that,

“This year has been declared The Year of the Employee. The fruits of this are

already beginning to take shape.”

The idea of this incentive scheme is to secure the commitment of all employees to

Edcon’s business strategy through the correct mix of financial and non-financial

rewards. In order to achieve this, an employee’s remuneration is to be made up of

two parts:

Guaranteed, or basic pay – refers to basic salary and benefits, paid for doing his

job.

Variable pay – incentive or bonus and share schemes - Variable pay will

encourage employees to exceed performance standards. The degree of

variable pay will be determined by a combination of performance related behavior

and the profitability of the strategic business unit (SBU) concerned.

The share option scheme offering will be an annual activity awarded to employees at

the beginning of each financial year. Those eligible will receive a predetermined

value of shares based on a percentage of their annual salary package. The

percentage actually allocated will be determined by performance rating

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Edcon provide bursaries to employees and their families in order to attend training

and educational institution courses.

In addition, the Adult Basic Education & Literacy Program (ABET) has been

introduced throughout the Group. This program should be addressed in conjunction

with other development needs that may exist, and has been launched with the aim

of: Providing associates with Outcomes Based Education (specific measured skills),

which will enable them to enter different educational levels. Developing a strong foundation for retail skills training, in order to afford associates the opportunity for personal growth and a sound understanding of the principles of running a business.

Equipping associates with required skills to meet recruitment criteria i.e.

communication an literacy.

Equipping associates with life skills that would assist and benefit them in their daily

living.

At the other end of the educational spectrum, Edcon have sponsored an employee

on both the EMBA 1 and EMBA 2, in addition to a candidate for EMBA3.

Conclusions to Creating Value Through People

This discussion, not comprehensive in its brevity, has illustrated value-enhancing

opportunities for companies; through attention to the nature of the “Psychological

Contract” (participative selection and maintenance of the resource) that Edcon has

with its employees and their consequent collaborative contribution (deployment of the

resource).

The Edcon example illustrates that companies that have successfully adopted such

HR practices are realizing benefits for their stakeholders. Edcon Management

attributes a good portion of their recent headline earnings growth to the Strategic HR

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activity. (The current profit warning recently issued has resulted from booking credit

losses. These losses have, however, been diluted by the contributions arising from

implementation of strategic HR program.)

While recognizing the HR value-contribution that has been made, some criticism may

be attached to management failure to fully implement certain strategies identified

during strategic review. Pre-conditions for optimal success of the HR strategies will

be the long - term sustainability of projects, which in turn will use the output as a

launch pad for a continual improvement program. In this regard, addressing

systemic problems is measured by rate of improvement, rather than by absolute

change. This is indicative of additional value arising from the “learning process.”

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Appendix 11 : Literature Review Notes - Globalization

Note No.

Point of note from literature reviewed pertinent to globalization Reference PageNo.

2 Japan - Masters at setting up non-trade barriers - 4 yrs to get citrus

accepted and after 21 years grapes still not accepted. But have to look

beyond and find the Japanese have a fishing / grape agreement with Chile.

4 Foxes & hedgehogs - Major corporations = hedgehog = DAVOS because

dictate the solutions to the world. FOXES balance many options and

become entrepreneurial in character.

6 CONTROL - ABSENCE OF CONTROL UNCERTAINTY - CERTAINTY

Fatalists - existentialists - fence sitters - control freaks

21 As an entrepreneur DO NOT try and copy other successes but find

uniqueness and strength within your own organization to capitalize on and

to develop.

22 As an entrepreneur - Remain flexible - DO NOT have a fixed or set

destination because you EXCLUDE opportunities if you are focused on a

set destination and may try to go thru a brick wall instead of changing

direction and taking other opportunities

30 Managers faced with D.T. should a) Give responsibility for D.T. to orgs

whose customers need them so that resources flow to DT development b)

Set up separate orgs small enough to get excited about small gains. C) Plan

for failure don't bet all your resources on being right the 1st time. Make

revisions as you gather data. d) Don't count on break thru's move ahead

early and find mkts for current attributes of the tech. The break thru is likely

to be outside the mainstream mkt.

33 ISSUES FACING A GLOBAL SERVICE COMPANY - Guests - Staff -

Supply chains ( in the case of SAA Guests = Chilians Staff=Mgt ex USA

with SA workers Supply chain=Airport coys + catering suppliers.

41 ISSUES FACING A GLOBAL SERVICE COMPANY - Guests - Staff -

Supply chains ( in the case of SAA Guests = Chilians Staff=Mgt ex USA

with SA workers Supply chain=Airport coys + catering suppliers.

42 Globalization is tearing down ethical and ecological limits on commerce. Life

has lost its sanctity, as living systems become the new raw material, the

new site for investment, and the new location for manufacture.

5A 128

43 With no ethical, or social limits to commerce, life itself is being pushed to the 5A 129

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limit.

44 Flows of funds and their valuation in free financial markets are influenced as

much by perceptions as by objective reality - or perhaps the more precisely,

the perception is reality. THE HERD INSTINCT IS STRONG

5A 78

48 NB elements of Democracy - Property rights - Rule of Law - Transparency.

49 Democracy has the problem of balancing social needs with economic

performance.

51 With Global Mkting - SOURCING is as NB as SELLING for an org in a

global context.

52 Potential world production is greatly increased with unrestricted free trade

(Recardo's Theory 1817)

5B 33

53 Michael Porter - WHY SOME NATIONS SUCCEED AND OTHERS FAIL

GLOBAL COMPETITIVE SITUATIONS - factor endowments skilled labour,

and developed infrastructure - demand conditions the degree of health and

competition & competition the firm must face in the local mkt - related &

supporting industries especially those that are globally competitive - firm

strategy, structure & rivalry - the condition in the home that either hinder or

aid the firms ability to create, organize & manage the nature of the domestic

and international rivalry

Note No.

Point of note from literature reviewed pertinent to globalization Reference PageNo.

54 IMF "Moral Hazard" - IMF guarantees encourage unsound lending. Soros

claims the current campaign against the moral hazard is just an excuse to

resist interference with market mechanism. This is the "false doctrine of our

age", namely financial markets automatically tend towards equilibrium, and

therefore there is no need for interference.

55 Soros's JUXTAPOSE to the slogan "moral hazard” is the slogan of "level

playing ground" The playing ground of international finance is anything but

level when interest rates at the periphery are so much higher than at the

centre. Perhaps under the perceived protection of the IMF too much money

has flowed from the centre to the periphery precipitating the '98 Asian Crisis.

5A 91

56 When the international financial playing field is naturally uneven, creating a

level field requires official intervention. Moral hazard has become a code

word for resisting it. Soros thinks it should not be allowed to dominate the

discourse.

5A 92

57 Creating a level playing ground should be HIGH PRIORITY because the

real systemic danger to the global capitalists system is political in character.

5A 92

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The rising tide of nationalism can be contained only by spreading the

benefits of global capitalism more evenly.

60 Francisco Varela - "our language and our nervous system combined to

construct our environment. We can only see what we talk about. Language

is like a set of eyes & hands for the nervous system, thru which we

coordinate actions with others. This is an enactive view of knowing the

world; we lay it down as we walk on its path.

5C 177

61 It is thru language that we create the world, because it is nothing until we

describe it. To put it another way, we do not describe the world we see, but

see the world we describe.

5C 178

67 Strategic Alliances are about relationships in essence

76 "Vocatus atque non vocatus, Deus aderit" - 'Invoked or not invoked, God is

present' - NUMINOUS

5D

77 In 1960 income differential top execs in USA to workers 39:1. By 1997 this

had changed to 254 to 1.

5A 94

78 In the last year of the twentieth century the notion that poor countries were

lagging because of wrong policies was undercut by a string of disasters in

emerging markets that were following "exemplary" policies (Brazil Mexico

etc.) whose economies soured shortly after their leaders had been lauded

by the elite for following sound economic fundamentals.

5A 94

79 DIALECTIC THESIS AND ANTI THESIS in a cycle that synthesizes a

"solution"

80 Organizations only learn when they change their most cherished views

3 Social Responsibility - A number of South African organizations are driven

by a social responsibility to rescue "the forgotten continent" thus proving to

other investors that they have confidence in their own future.

12 Roger George - NB in globalization 1) Learn the culture 2) Send normal

architect to work with an architect from the new country 3) Send in

support staff to work with and train the locals, therefore NB integration into

the system not imposition of a system.

16 Fallacious free trade augments OPTIMAL TARIFFS -USA can impose large

tariff on textiles and steel therefore drive down demand and price thus

because big consumer drive down INTERNATIONAL prices so can

purchase more from goods exported from USA

17 Fallacious free trade augments there are clear gains of trade but also major

costs of adjustment.

Note Point of note from literature reviewed pertinent to globalization Reference Page

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No. No.

18 Roger George -Singapore - Set legal jurisdiction in home country - Pick the

right partner and understand his constructs - Partner must be in a position to

properly capitalize the company.

23 As an entrepreneur - Avoid Financing your way out of trouble. (I.e. filling the

tank with more money to hide the rocks) because there will be more trouble

around the corner and you get into a vicious cycle.

24 As an entrepreneur - you need ARTISTIC FLAIR but also you need project

management that keeps you focused and stops you from changing direction

because of boredom. Project mgt keeps up the momentum.

26 Christianson-"you can't do market research in a market that is yet to exist".

People have to be educated in the new technology, but once taught /

learning is over this market takes over.

32 WEYOWACI - (What ever you want to call it) - Continuous improvement -

Elimination of waste - Elimination of uncertainty - Using everybody - "Right

First Time" via problem solving.

37 Ops - CHG the philosophy from QC to QA

38 IT IS NOT WHAT YOU DO BUT HOW YOU DO IT that results in success.

Our education focuses on "what to do".

45 The Primary Mission of the IMF is preserving the International Finance

System. The task is to ensure debtor countries will be able to meet their

international obligations.

5A 87

59 Scenario Planning, is not about making plans, but is the process whereby

mgt teams change their mental models of the business environment and the

world. In the Shell Group, scenario planning is the trigger to institutional

learning.

5C 140

64 Market Segmentation is where marketing lives - The identification of

segmentation variables has the potential to deliver powerful competitive

advantage.

5D 101

65 COMPETITION IS NOT BETWEEN COMPANIES BUT BETWEEN

SUPPLY / VALUE CHAINS

68 The NB mkting advantage of an alliance is local knowledge for international

coys

73 POST-MODERNITY = Shadow cast by war holocaust, genocide and social

engineering = technology out of control - Nothing can be known with

certainty as knowledge has been shown to be un-reliable - There is no elite

who can know how the world should run

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74 Adam Smiths notion that that if everyone pursues their own interests the

common good is also served is fallacious as THE TRAGEDY OF THE

COMMONS set in i.e. Population & pollution.

75 The Corporate Executive should act out of a sense of care for the world. Or

does he act without care & with impunity (do the mines go deeper with

greater risk to life or does the mine close putting people out on the street)

The EXEC including Unions & all stakeholders need to formulate an

answer.

81 Vicors - 3 types of JUDGMENT in Mgt - value judgment - reality judgment -

instrumental judgment (implementation) THE MAIN INFLUENCE OF

MANAGEMENT IS RELATIONSHIP MANAGEMENT.

REFERENCING FOR GLOBALIZATION POINTS OF NOTE:

5A) Hutton and Giddens - “Global Capitalism”; The New Press, New York; 2000

5B) Hough and Neuland - “Global Business Environments and Strategies, Managing

for Global Competitive Advantage”; Oxford University Press; 2000

5C) Burgess - “The new Marketing, Building strong marketing strategies in South

Africa today”; Zebra Press; 1998

5D) Jaworski - “Synchronicity”; Oxford University Press; 1994

Appendix 12 : Literature Search on Dialogue & It’s Implications for an Organization

REFERENCE / Point of note from literature reviewed pertinent to dialogue. Ref. Page

No.

COMPLEX RESPONSIVE PROCESSES IN ORGANIZATIONS – R. Stacey - 2001 – Routledge

A

Knowledge arises in complex responsive processes of relating between A 5

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human bodies, that knowledge itself is continuously reproduced and

potentially transformed. Knowledge is not a “thing” or a system, but an

ephemeral (lasting for a very short time), active process of relating.

Knowledge cannot be managed, and there is no need to manage it,

because knowledge is participative self-organizing processes patterning

themselves in coherent ways.

It is also assumed that it is possible for humans to transmit mental contents

to each other so that they can be shared as the basis of organization –

Structuration theory is built on the assumption that the individual and the

social are on level of explanation.

A 64

Knowledge is not stored anywhere and then retrieved to form the basis of

action. Rather, knowledge is continuously reproduced and transformed in

relational interaction between individuals.

A 98

Organizational policies that disrupt relational patterns between people,

however, could seriously damage its knowledge generating capacity. The

knowledge assets of an organization, the, lie in the pattern of relationships

between its members and are destroyed when those relational patterns are

destroyed. This begins to suggest very different ways of thinking about

what it might mean to “manage” knowledge in an organization.

A 98

Knowledge, therefore, is not an “it” but a process of action. Action is

undertaken In the living present and is, therefore ephemeral. Knowledge, it

followed, cannot be stored nor shared simply because it is bodily action. In

symbolic terms that bodily action has many aspects, taking the

simultaneous form of proto, significant and reified symbols.

A 116

In human communication – it focuses attention on the negotiated nature of

turn taking and turn making in conversation and on the intrinsic properties of

responsive communicative action to produce coherence and novelty that

arises in the variations.

A 144

Organizational knowledge lies instead in the themes continuously

reproduced that pattern the experience of being together.

A 144

Communicative action cannot be understood without addressing the A 145

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question of power.

In practical terms, taking the perspective I am suggesting focuses one’s

attention in a particular way when one engages in communicative

interactions in an organization.

A 188

What important informal –unconscious-shadow themes seem to be evident

and how are they engaging with the institutionalized themes? What power

relations are being sustained and undermined? How is anxiety being dealt

with? My participation is then influenced by my conjectures as I ask

questions and draw attention to this or that theme. Participating in this way

has a different impact on the conversational life of an organization to

participation that focuses simply on the tools of communication.

A 188

Only one kind of symbol can be stored, namely, reified symbols stored in

written and other artifacts but they have no meaning until they are used as

tools in the process of communicative interaction. The other kinds, of

symbol, proto symbols and significant symbols are continuously reproduced

in bodily interaction and so cannot be stored. It is in the ordinary, everyday

detail of such interaction in the living present that people are constructing

the future of their organization, enabled and constrained by the

communication tools they and others have constructed. In their

communicative interaction with each other people use the tools of

technology, artifacts and systems, all being some form of extension of their

bodies – they are only tools.

A 188

Such evolution is possible only when the dynamics of communicative

interaction are fluid enough, when there is diversity, tension and conflict in

the thematic patterning of communicative interaction, analogues to the

“edge of chaos.”

A 189

Knowledge is, therefore the thematic patterns organizing the experience of

being together – identify, both individual and collective, evolves and

communicative interactions, learning and knowledge creation are

essentially the same processes as the evolution of identity. This

perspective suggests that the conversational life of people in an n

A 189

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organization is of primary importance.

For Bohm and Senge, dialogue is a special kind of collaborative

conversation, quite distinct from discussion, which is primarily competitive.

Senge says that when we do rarely experience dialogue nowadays, it is a

chance product of circumstance. Thus, he calls for systematic effort and

disciplined practice of the art of dialogue, which we need to rediscover to

satisfy a deep longing. If we do it right we will all win. In order to do it right,

people have to participate in a particular way: They must regard each other

as colleague’s ad friends; and there should be a facilitator present who

holds the context. Resistance and defensive routines are then reduced and

dialogue can take place. Bohm claims that in these circumstances people

can become observers of their own thinking and that once they see the

participative nature of their thought they separate themselves from it.

Conflict becomes conflict between thoughts and not conflict between

people. Dialogue becomes a new tool and a prescription for management

behavior (Isaacs, 1999), although Bohm himself thought dialogue was

virtually impossible in hierarchical organizations

A 216

It is quite impossible to measure “intellectual capital” simply because it does

not exist in measurable, or any other reified form. If knowledge itself is a

continuously reproduced and transformed process of acting, if it is not

stored anywhere, if people do not “share” it because one cannot share

actions, only perform them, then putting the words “intellectual” and “capital”

together makes no sense. Indeed, the whole notion that an organization

can own this “intellectual capital,” that is, can own the attitudes, competence

and intellectual agility of individuals is not only dubious but, form me

anyway, deeply repugnant. How can anyone or anything own a

relationship? – Kind of shift in power relations – patterns or “intellectual

property” – reified symbols.

A 220

Concerned with people leaving an organization and taking their implicit

knowledge with them. – The complex responsive process perspective, on

A 221

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the other hand, holds that tacit and explicit knowing are facets of the same

communicative process ad therefore that it makes no sense to talk about

them separately or to believe that one is converted into the other –

Furthermore knowledge is not simply located in individual minds, nor is it

stored in any straightforward sense – knowledge is continuously replicated

and potentially transformed in the communicative interaction between

people.

From the perspective I am suggesting, one would want to explore how the

consequent stress, frustration and anxiety impacts on the process of human

relating in an organization upon which the generation of knowledge so

crucially depends – is this prescription of hiring and retaining a professional

elite really an effective way of creating knowledge in organizations?

A 224

RETHINKING LEADERSHIP – APRIL, MCDONALD, VRIESENDORP –

2000 – UNIVERSITY OF CAPE TOWN PRESS

B

Metacongnition can be defined as an individual’s awareness of his or her

own cognitive processes, and his or her ability to control these processes

by organizing, monitoring and modifying them as a function of

environmental factors “(Silver, 1993)”. Metaskills are the skills that we need

to examine ourselves, the secondary processes, the irrational or

subconscious processes that influence our feelings and behavior, and our

connections to each other and the rest of the universe. According to

Mindell – the development of metaskills allows us to go beyond mere

coping with our environment and reacting to it, to a point where we have “a

feeling sense” and something called “second” attention, a term used by

Carlos Casteneda’s teacher Don Jaun, which refers to an enduring and

heightened sense of awareness: “One can feel with the eyes, when the

eyes are not looking right into things” “(Brocman, 1998)- we will define the

metaskills of a leader as the skills needed to step back and look at

ourselves in our awareness, consciousness and understanding of who we

are, why we are here, how we operate and how that affects others and our

B 2

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environment

Metaskills Are not that tangible or easy to recognize. Market Wheatley

(1992 – 1999) talks about walking with soft eyes, that is, seeing what’s

around us without focusing on any particular spot. Chris Argyris (1990;

1994) talks about left and right columns, an imagined or real dialogue

written up on the left side of the page, with the unsaid or undiscussable

thoughts or feelings on the right side.

1 – Awareness of paradoxes

2 – Awareness of self and others

3 – Awareness of our vision

4 – Awareness of power and group dynamics

B 3

At an intuitive level most of us know that in times of extreme motion and flux

(an avalanche, a maelstrom, a strong wind or current), our changes of

survival increase if we stop thrashing, trying to swim, and come up for air –

rather, the most important thing becomes the act of engaging I conversation

and dialogue with others and creating the vision.

B 7

If one cannot sit still for one hour and listen in silence, one will thus not

receive any illumination. Similarly, our intuition is of no use if we do not

listen to what it has to say. But the moment we withdraw from the visual

and aural clutter around us, by closing our eyes, by preying, by walking in

the woods, or, for some, by dreaming, we will find a all that we need at or

disposal. – Only if we slow down and take time out can we find the time to

increase our awareness of ourselves where we come from where we are

heading and how we impact on the people around us.

B 8

I select certain data from all that happens around me; I add meaning to this

subset of data; make assumptions based on the meaning I added; I draw

conclusions which then inform my action. Thus we believe that:

What we think is the truth

The truth is obvious

Our beliefs are based on objective and solid data

The data we selected are the only data (Ross in Senge et al, 1995

B 11

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page 242)

Next time you attend a staff meeting jot down the assumptions, beliefs,

opinions, convictions, generalizations about human behavior made during

discussion by the participants – some of these will be explicitly stated. Most

will be implicit but fairly easily inferred. It will not make much difference

whether the problem is human, financial or technical.

B 12

What happens in Rwanda affect us all – Nonzero-sum games have

completely different strategic implications than zero-sum games, the most

important one is transparency if you know what I am trying to accomplish,

we can search together for common gains.

B 13

Vision is essentially about hope that a transformation is possible. The

Dutch futurist Fred Polak noted that in every instance of a flowering culture

there had been a positive image of the future at work: without a vision, the

culture died.

B 15

Good management is largely a matter of love, because proper

management involves caring for people, not manipulating them. Wheatley

and Kellner-Rogers 1996 say that love is a potent source of power,

because we inhabit a quantum universe that knows nothing of itself,

independent of its relationships. This capacity for love is what creates a

“field” around a person, a field that propels oneself towards greater action, a

mission, a cause greater than oneself, that transcends individual and selfish

needs

B 19

What scares people most about groups is the potential for conflict and the

degree to which they bring out irrational and unwanted behavior in oneself

and create discomfort, or worse, embarrassment.

B 22

Two of the early researchers in this field, defined organizational learning as

“the detection and correction of error”. Foil and Lyles (1985 page 803)

define learning as “the process of improving actions through better

knowledge and understanding:”

B 48

Leaders do not expect results on demand, but rather they create the

interactive processes by which improved performance can be realized.

B 64

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‘Dialogue” is the label given by British physicist David Bohm (1980) to a

deeper level of communication which has a serious commitment to co-

operation and behavior. Suspending judgment – Identifying assumptions –

Listening – inquiring and reflecting

B 69

Dialogue is a difficult and uncomfortable concept as it is about insight as the

source of action. Dialogue requires that leaders reveal their logic and hold

up and reveal their assumptions and beliefs, rather than their arguments, for

scrutiny.

B 71

Conversations and dialogue forces one, in a sense, to make explicit the

things we could not previously talk about, the things that hinder true and

real friendship.

B 82

Leaders need to foster experiences that allow individuals to coalesce

around issues of shared concern and move forward to successful

resolutions of these concerns. We therefore propose that leaders hoping to

be successful in an ever changing and chaotic world need to create

opportunities in which others can find, for themselves, balance meaning

and fulfillment.

B 82

Personal scenarios – What increasingly affects all of us, whether

professional planners or individuals preparing for a better future, is not the

tangibles in life – bottom-line numbers, for instance – but moving form being

tacit to explicit through dialogue and conversation, only stories and our

ability to visualize different kinds of futures (Personal scenarios) adequately

capture these intangibles. – Conversation and dialogue forces one, in a

sense, to make explicit the things we could not previously talk about, the

things that hindered true and real friendships. – Leaders need to foster

experiences that allow individuals to coalesce around issues of shared

concern and move forward to successful resolution of those issues. We

therefore propose that leaders, hoping to be successful in an ever-changing

and chaotic world, need to create opportunities in which others and find, for

themselves, balance, meaning and fulfillment.

B 79

Chris Argyris (1990; 1993) created a wonderful tool, the ladder of inference, B 91

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to describe this way of thinking.

The first represents unfiltered data – the nearly infinite amount of sensory

information we are subject to at any moment.

Two - represents the way in which we filter it. –

Next rung number three - adding meaning to the data we have selected

Rug four - After we add meaning we make assumptions

Final rung - we act.

As more and more people come into contact with each other in

organizations, more and new relationships are formed, and new fields of

energy are created. Unrestricted information and wide participation will

allow the wisdom of each person, each division, to blend and to create new

information, new stories, new visions. Information has the tendency to

amplify when shared, allowing different interpretations to interact, add new

slant, reveal as well as create increasing complexity. This and other flows

of information allow organizational knowledge to be organized into ever

changing, expanding and contracting forms.

B 123

No work can be sustained without attention to the relationships that support

it. In fact, nurturing those relationships is the real work, Intuitively we know

this, but sizing the relational aspect of leadership is a central theme for any

organization functioning in the new paradigm.

B 123

IMAGES OF ORGANIZATION – G. MORGAN – 1998 – Berrett-Koehler

Publishers inc.

C

Metaphor gives us the opportunity to stretch our thinking and deepen our

understanding thereby allowing us to see things in new ways and to act in

new ways

C 5

Thinking “Structure” and you’ll see structure. Think “culture” and you’ll see

all kinds of cultural dimensions. Think “politics” and you’ll politics. Think in

terms of system patterns and loops and you’ll find a whole range of the. –

This is the manager’s dilemma: we tend to find and realize what we are

looking for. This does not mean that there is no real basis to what we find.

Rather, it is just that reality has a tendency to reveal itself in accordance

C 8

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with the perspectives through which it is approached. As Albert Einstein

once noted, it is the theory through which we observe a satiation that

decides what we can observe.

Some theories and perspectives may prove weak or irrelevant, having little

evocative or substantial power: Scientists have generated powerful insights

by studding light as a wave or a particle, but not as a grapefruit! In a similar

way, managers face the challenge of finding or creating powerful metaphors

that can help them understand and shape their organizations.

C 9

One of the most basic problems of modern management is that the

mechanical way of thinking is so ingrained in our everyday conceptions of

organization that it is often very difficult to organize in any other way.

Chapter 4 – brains

Chapter 5 – organizations are cultures

Chapter 6 – Political metaphor

Chapter 7 – More abstract metaphor – psychic prisons

Chapter 8 – Flux and transformation – “logics of change”

Chapter 9 – instruments of domination

Chapter 10 – brings all the ideas together

Chapter 11 – “using Metaphor to Manage in a Turbulent World”

But at no Point will you find that view being brought down to advocacy of a

single perspective. There are no right or wrong theories in management in

an absolute sense, for every theory illuminates and hides.

C 10

Work in most parts of the world has shown that in designed or managing

any kind o social system, whether it is a small group, an organization, or a

society, the interdependence of technical and human needs must be kept

firmly in mind.

C 4

Management by objectives (MBO); planning, programming, budgeting

systems (PPBS)

C 6

The studies are now famous for identifying the importance of social needs

in the workplace and the fact that workgroups can satisfy these needs by

restricting output and engaging in other unplanned activities. In identifying

C 7

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that an: informal organization” based on friendship groups and unplanned

interactions can exist alongside the formal organization documented in the

“blueprints” designed by management, the studies showed that work

activities are influenced as much by the nature of human beings as by

formal design, and that we must pay close attention to this human side of

organization.

What is the nature of the organizations environment? –

What kind of strategy is being employed?

What kind of technology (Mechanical and nonmechanical) is being used?

What kinds of people are employed, and what is the dominant culture or

ethos within the organization?

How is the organization structured, and what are the dominant managerial

philosophies?

C 53

When we pick up an object from a table we typically assume that our

hands, guided by our eyes, move directly towards the object. Cybernetics

suggests not. This action occurs through a process of error elimination,

whereby deviations between hands and object are reduced at each and

every stage of the process, so that in the end no error remains. This is

negative feedback: more leads to less and less too more. So to self-

regulate, learning systems must be able to

1 – Sense, monitor, and scan significant aspects of their environment

2 – Relate this information to the operating norms that guide system

behavior,

3 - Detect significant deviations from these norms, and

4 – Initiate corrective action when discrepancies are detected.

C 77

Conceived as a challenge of creating “learning organizations,” and

popularized by the work of Peter Senge in the United States and

independently through Reg Raves’s concept of “action learning” in Europe,

the idea of developing capacities for individual and organizational learning

has established itself as a key priority in designing and managing

organizations that can deal with the challenges of a turbulent world. Many

C 79

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organizations have become proficient at single-loop developing an ability to

scan the environment, set objectives, and monitor the general performance

of the system in relation these objectives. – Designed to keep the

organization “on course”:

1 - Budget and other management controls maintain single loop learning,

double loop learning however require institutionalizing systems that review

and challenge basic paradigms and operating norms.

2. – Bureaucratization trends to create fragmented patterns of thought and

action.

3- Progresses of bureaucratic accountability and other systems for

rewarding or punishing employees may threaten employees and activate

defensive behaviors.

Double loop learning depends on what is sometimes described as the art of

framing and reframing, which is crucial for the kind of self-reflective practice

that that underpins intelligent action. In concrete terms, it means that

organizational members must be skilled in understanding the paradigms,

metaphors, mindsets, or mental models that underpin how the organization

operates.

C 84

In American view, objectives should be hard and fast and clearly stated for

all to see. In Japanese view, objectives emerge from a more fundamental

process of exploring and understanding the values through which a firm is

or should be operating

C 87

Principle 4: The principle of minimum specs suggests that managers should

define no more than is absolute necessary to launch a particular initiative or

activity on its way. They have to avoid the role of “grand designer” in favour

of one that focuses on facilitation, orchestration, and boundary

management, creating “enabling conditions.

C 105

Although presented as design principles, they don’t offer a blueprint or

recipe. Rather, they define a mindset and approach through which we can

mobilize key insights about the holographic qualities of the Brian in

C 106

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organizational contexts.

Given their opposed “ core beliefs,” no proper argument or dialogue was

possible, only an exchange of slogans or abuse. It is a score that is

replicated at negotiating tables as well as dinner tables

C 119

Modern organizations are sustained by belief systems that emphasize the

importance of rationality, and their legitimacy in the public eye usually the

importance of rationality, and their legitimacy in the public eye usually

depends on their ability to demonstrate rationality and objectivity in action –

rationality as the myth of modern society, for, like primitive myth, it provides

us with a comprehensive frame of reference or, structure of belief, through

which we can negotiate day to day experience and help to make it

intelligible – The myth of rationality helps us see certain patterns of action

as legitimate, credible and normal. It helps us avoid the wrangling and

debate that would arise if we were to recognize the basic uncertainty and

ambiguity underlying many of our values and the situation with which we

have to deal.

C 140

Leaders and manager see how their success hinges on the creation of

shared meaning – since the 1980’s, there has been a growing realization

that the fundamental task facing leaders and mangers rests in creating

appropriate systems of shared meaning that can mobilize the efforts of

people in pursuit of desired aims and objectives – Two key words here are

“appropriate” and “shared”.

C 141

The challenge of change is enormous because corporate culture is not a

simple phenomenon. It is not something that can be mandated, designed,

or made. It is a living, evolving, self-organizing reality that can be shaped

and reshaped but not in an absolute way. But a broad understanding of the

nature of the metaphor can offer important insights in approach in this task.

C 141

You are what you are seen and experienced as being, not what you think

you are or what your job title or job description say you are. This obliges

the leader and manager to understand their roles and significance in terms

of actual impacts on the reality construction process – can no longer hid

C 142

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behind formal structures.

We see that organizations and their environments are enacted domains –

Organizations are a social enactment; their relations with the environment

are also socially constructed. The people who bring organizations to life

choose and structure internal and external relationships through a host of

interpretive decisions that are extensions of corporate culture – We choose

and operate in environmental domains according to how we construct

conceptions of what we are and what we are trying to do – and we act in

relation to these domains through the definitions that we impose on them. –

Firms in an industry typically develop a language for making sense of their

market, technology, and relations with other segments of the economy.

Environments are enacted by hosts of individuals and organizations each

acting on the basis of their interpretations of a world that is in effect mutually

defined. Visions of recession produce recession – The beliefs and ideas

that organizations hold about whom they are, what they are trying to do,

and what their environment is like have a much great tendency to realize

themselves than is usually believed.

C 142

Effective change also depends on changing the images and values that are

to guide action. The message of the culture metaphor is that change

programs must give attention to the kind of corporate ethos required in the

new situation and find how this can be developed. Since organizations

ultimately reside in the heads of the people involved, effective

organizational change always implies cultural change. Changes in

technology, rules, systems, procedures, and policies are just not enough

C 25

MANAGEMENT IN THE MIDST OF COMPLEXITY

This insight has enormous implications for modern management, giving rise

to at least five key ideas for guiding the management of change. In a

nutshell, they suggest that it is important to:

Rethink what we mean by organization, especially the nature of hierarchy

and control,

- Learn the art of managing and changing contexts,

C 226

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- Learn how to use small changes to create large effects,

- Live with continuous transformation and emergent order as a natural state

of affairs, and

- Be open to new metaphors that can facilitate processes of self-

organization.

But the message of chaos and complexity theory is what while some kind of

ordering is always likely to be a feature of complex systems, structure and

hierarchy can have no fixed form, hence cannot function as predetermined

modes of control. Patterns have to emerge. They cannot be composed.

C 227

Potential new futures always create oppositions with the status quo. This

dialectical principle gets played out in many forms:

Innovate Avoid mistakes

Think long term Deliver results now

Cut Costs Increase morale

Reduce Staff Improve teamwork

Be flexible Respect the rules

Collaborate Compete

Decentralise Retain control

Specialise Be opportunistic

Low costs High Quality

These are just a few examples of how new initiatives or directions get mired

in paradoxical tensions that undermine the desire change.

C 249

1 – in recognition that both dimensions of the contradictions that

accompany change usually have merit. – Kurt Lewin, who suggested that

any potential change is resisted by forces working in the opposite direction.

The idea is similar to the dialectical principle that everything generates its

opposite – “unfreezing” an established equilibrium by enhancing the forces

driving change, or by reducing or removing the resisting forces and the

“refreezing” in a new equilibrium state.

2 – find ways of creating contexts that can mobilize and retain desirable

C 29

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qualities on both sides while minimizing the negative dimensions – the

challenge is to find small changes that can unfold in a way that creates

large effects that deliver on both sides of the paradox at the same time. –

Paradox is one of the major forces stalling change at all levels of an

organization.

1 – Autopsies suggest that the way we see and manage change is

ultimately a product of how we see and think about ourselves and

consequently how we enact relationships with the environment. – The

theory of autropoiesis suggests that because of their capacities for self-

reflection, organizations, like individuals, have an opportunity to enact new,

more systemic identities that break the ridged boundaries between

organization and environment, opening the way to more systemic patterns

of evolution.

2 – Chaos and complexity teach us that organization and this relationships

with the environment are part of an attractor patter – the managerial

challenge rests in nudging systems into desired paths by initiating small

changes that can produce large effects

3 – Mutual causality encourage us to understand attractor patterns and the

processes of change in terms of the positive and negative feedback.

4 – Dialectal analysis offers yet another perspective of pattern and how it

evolves. This time, the emphasis is placed on understanding the

paradoxes and tensions that are created whenever elements of a system

try to push in a particular direction.

Hindsight is always 20/20. Rules and patterns can always be found in

nature and in history. The problem is, can we find rules that will predict the

emergence of a patter before it becomes a reality?

C 250

REFERENCE / Point of note from literature reviewed pertinent to dialogue. Ref. Pag

e

No.

CO-OPTION – Brandenburger m & Nalebuff B – 1996 – Currency

Doubleday

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Friend and Foe – there are both win-win and win-lose elements in

relationships with

Customers

Suppliers

Complementors

Competitor

D 39

In sum: the fact that other people view the world differently does not make

them irrational. In fact, if you try to impose your rationality on others, who’s

the one who is really being irrational? – To us, the issue of whether people

are rational or irrational is largely beside the point. More important is

remembering to look at a game from multiple perspective – your own and

that of every other player. This simple-sounding idea is possibly the most

profound insight of game theory – the insight of game theory is the

importance of focusing on other – namely allocentrism.

D 61

YOUR ADDED VALUE – The size of the pie when you are in the game

minus the size of the pie when you are out of the game

D 45

YOUR ADDED VALUE – The size of the pie when you are in the game

minus the size of the pie when you are out of the game

D 106

Engineering Added Value –

Trade Offs

Raise the amount customer is willing to pay by more than the incremental

cost.

Reduce cost without reducing willingness to pay by as much

Trade-on’s

Lower costs in a way that helps you deliver a better product

Deliver a better product in a way that helps you lower costs.

D 113

Bringing in competitors –

Licence your technology both to make money and to avoid complacency

Create second sources to encourage buyers to adopt your technology

Do it yourself: promote internal competition across teams.

D 106

NINE TIPS ON SAYING THANK YOU D 143

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Say them you in kind, not cash

Save the best thank-you for your best customers

Say thank you in a way that builds your business

Don’t say thank you too quickly, or too slowly

Say you’re going to say thank you.

Recognize that you may have to compete for loyalty

Allow your competitors to have loyal customers too

Don’t forget to say thank you even if you have a monopoly

Say thank you to your suppliers as well as to your customers

Rebate Programme

Pros

Allow you to charge your own customers low prices without threatening

your rival’s customer base

Encourage customers – even price shoppers – to become loyal

Cons

In regarding loyalty in cash rather than kind, doesn’t raise your added value.

Is ineffective on small-ticket items.

D 192

Going Long

If you have the power, use it to require your suppliers (or customers) to

compete for long-term contracts with you.

Pros

Since they only have one chance suppliers (or customers) will compete

more aggressively.

You have the power – this is the time to use it and lock it in

Con

Long-term contracts can be hard to write and hard to enforce.

D 249

They’ve devised some ingenious rules that enable people to behave

reasonably without having their lunch eaten. They call their negotiation

method "“settlement escrows."” Settlement escrows allow people to

negotiate from behind a veil. Ordinarily, when you make a demand, you

D 216

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reveal your hand. Settlement escrows preserve the fog. You can say what

you really need without giving away much information.

HUMAN EQUATION – Pfiffer J – 1998 – Harvard Business School Press E

The returns from managing people in ways that build high commitment,

involvement, and learning and organization competence are typically on the

order of 30 – 50 percent, substantial by any measure – it is more important

to manage your business right than to be in the “right” business. Success

comes form being able to effectively implement a competitive strategy, not

merely from having one.

E xvi

What organizational leaders should do is to cultivate the wisdom,

knowledge, and courage to figure out the basis of competitive success and

to implement that knowledge, regardless of what others are doing or saying

– what provides long-term advantage are those thinks that are core to the

firm and not readily duplicated by competitors – and purchases on the open

market cannot be sources of unique or distinct capabilities

E xviii

It is my observation that in many instances, senior managers of the most

successful firms worry more about their people and about building learning,

skill, and competence in their originations than they do about having the

right strategy.

E 5

Success frequently entails implementation rather than coming up with great

ideas, simply because in the current world, implementation is much more

difficult.

E 14

The positive effects of high commitment management practices derive from

a set of predictable and understandable principles. In part, performance

increases because people work harder – greater involvement and

commitment that comes form having more control over the work

environment, with contingent compensation that provides an economic

payoff form higher organizational performance, and with the peer pressure

activated in self-managing teams, effort increases But account of little of the

substantial improvement observe - individuals “working smarter”

E 60

Three principles appear common to most of the successful transformations E 124

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to high performance work practices that I have observer:

Build trust

Encourage change

Measure the right thing and align incentive systems with new practices

First and most fundamental principle – and I might add the most often

violated – is to build trust. The essence of high performance work

arrangements is reliance on all organizational members for their ideas,

intelligence, and commitment to making the organization successful. Such

efforts will not be forthcoming in the absence of trust.

Smart people and organization do dumb things because a profound gulf

exists between knowing what to do and knowing how to do it and between

knowing how and actually doing things more effectively. In may

organizations and for many executives, this gap, often a quite significant

one, exists between knowing and doing. – Executives and, for that matter,

researchers on business and other organizations would be, it seem, well

served to consider the links between knowing what, knowing how, and

actually doing things differently – turning performance knowledge into

organizational action and, as a consequence, superior organizational

results.

E 159

Little systematic evaluation of the consequences of contingent work

arrangements even on the part of large forms concerned about labour force

issues, and a very narrow, cost based evaluation process for the most part

when evaluation is done at all.

E 165

How can I talk about employment security in the current economic

environment, given the prevalence of downsizing? – It is empirical fact than

a high commitment work systems frequently include some form of

employment security, - employment security relates logically to other

elements of high performance work arrangement, process when they need

not fear loosing their own or their co-worker’s jobs. – As peter Hartz, the

senior personnel executive at Volkswagen, reminds us, the competitive

environment defines the requirements, but each company can define the

E 223

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solutions. In fact, the job of leadership is precisely the crafting of creative

responses to competitive conditions that build competence, capability, and

commitment in people and avoid destroying organizational memory,

wisdom and loyalty.

What I am going to argue may shock you but I hope to convince you of

three things:

Pay rates are much less important than most manager think, and even

lower labour costs may not be the basis for competitive success

Individual merit pa and even piecework, although growing in popularity,

have numerous problems, and the research evidence suggests that they

are frequently ineffective

Believing that pay and the associated measurement systems used to

implement pay will solve all productivity problems is almost certainly a

prescription for ruin.

E 252

Organizational incentive systems send important messages about how and

what the organization thinks of its members – A system that is reasonably

complicated and comprehensive, rewarding myriad micro behaviors, send

the message that management believes people won’t do what is necessary

unless they are rewarded for every little thing – Individuals incentive

schemes erode teamwork and trust and set people against one another in a

competition for requires Such systems do not promote sharing knowledge.

Why should I teach you if we are competing for a fixed pool of salary

raises? Such systems also don’t do much to promote concern about

organizational well-being. Climbing the corporate rank or salary ladder

becomes a more important objective than ensuring the organization’s

overall success, particularly if job security is limited and the real goal is to

get ready for a move to the next job, Building a track record through a

salary history and not by actual accomplishments.

E 223

But for whatever reasons, managers should ignore the many

blandishments and temptations to try and solve most of their organizational


E 224

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The Key to managing people in ways that lead to profit, productivity,

innovation, and real organizational learning ultimately lies in how you think

about your organization and its people. It lies in mind set a perspective.

When you look at your people do you see cots to be reduced? Or do you

see intelligent motivated, trustworthy individuals – the most critical and

valuable strategic assets your organization can have?

E 292

WHAT DOES IT MEAN TO PUT PEOPLE FIRST?

Publicly and repeatedly stating the primacy and importance of people

organization success (Richard Branson) – the customers second and the

shareholder third.

E 293

Such public statements, by themselves, are obviously not sufficient. Many

firms proclaim the importance of their people but do not manage in ways

consistent with this claim – talk as they say is cheap, but without the

organizations affirmation through its senior leadership of the importance of

people little else will happen. It may not be a sufficient condition, but is

probably a necessary one. Second Putting people firs means fixing the

firms language to ensure consistent use of terminology that does not covey

disrespect or disdain of it people – Third leaders and organizations who

believe that putting their people first is important actually act one that belief

in numerous ways. One of the simplest but also most important is providing

everyone access to the organizations leaders.

Another way organizations signal their commitment to their people is

through their training expenditures. In may organizations, training is viewed

as discretionary expense, something that cab be readily cut or even

eliminated in times of economic distress or poor profits – but other

companies take a different view, because they have a different perspective

on their people and on the role of raining in building organizati8onal

capabi8lity as well as signaling to people that they are truly valued by and

valuable to the firm.

E 294

Dave spence – “ capital and machinery make it possible – people make it

happen.” - “ I took the position that I’ve worked at other places before, and I

E 305

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may have to again. I’ve always believed you have to do you job like you

are independently wealthy; then you can do the right things all the time”

THE FIFTH DISCIPLINE FIELD BOOK – SENGE, ROSS SMITH

ROBERTS & KLEINER - 1999 – NICHOLAS BREALEY PUBLICATIONS -

LONDON

F

When we forget the generative power of language, we quickly confuse our

maps for the territory. We develop a level of certainty that robs us of the

capacity for wonder, which stifles our ability to see new interpretations and


F 27

Appendix 13 : Literature review points for Research Framework

Note

No.

Points of note pertaining to Research Framework Ref. Page

No.

18 Whole purpose of action research is to determine simultaneously an

understanding of the social system and the best opportunities for

change. The question arises from the study.

A 8

19 One of the key principles of acting research is: let the data decide.

At each step, use information so far available to determine the next

step.

A 9

20 Second, at all times try to work with multiple information sources,

preferable independent or partly independent. There are ways in

which you can use the similarities and differences between data

sources to increase the accuracy of your information.

A 9

21 Any two or more sources of information can serve your purpose of

creating a dialect.

A 9

22 What I suggest you do is follow these two ground rules, and explain

them clearly in your thesis.

A 10

162 Formal theory about power and organisational rituals. Two main F 36

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criteria for evaluating the quality of a theory: 1. It should be

sufficiently analytic to enable some generalisation 2. It should be

possible for people to relate the theory to their own experiences,

thus sensitizing their own perceptions

138 1. A statement of the focus of the research and the main questions

to be investigated; 2. An explanation of how it relates to, builds on

or differs from pervious working the field; 3. A description of how

data will be interpreted and how this will relate back to the initial

questions posed; 5. comments on the practical value of the

research, and any problems that may be encountered in it’s

conduct. The document should not normally exceed 3,000 words

although the amount of detail required will depend on the scale of

the project and the time available. Like wise the emphasis and

structure of the proposal will vary.

E 80

139 Adapting to change takes time, because it is not just a rational

process, but will always involve a degree of emotional acceptance

on the part of those affected.

E 80

140 Conversation and dialogue forces one, in a sense, to make explicit

the things we could not previously talk about, the things that hinder

true and real friendships. It is our experience that, once you are

real, you cannot be non-real again. The challenge for leaders is to

find and meet the energy and, hence, the meaning in peoples lives,

by constantly digging and naming what they find in their

commutations and dialogue with others. As we know, not

everybody will like and be happy with what has been dug up, but

leaders need to foster experiences that allow individuals to coalesce

around issues of shared concern and move forward to successful

resolution of those issues. We there fore propose that leaders,

hoping to be successful in an ever-changing and chaotic world,

need to create opportunities in which others can find, for

themselves, balance, meaning and fulfillment. Essentially, this can

E 82

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only be achieved through the leaders and their followers being in an

ongoing state of connectedness. Technology has allowed

connectivity to become a buzzword for the twenty-first century. In

keeping with it’s meaning, connectivity too, will be a key aspect of

leadership in the new millennium.

135 Dialogue is a difficult and uncomfortable concept as it is about

insight as the source of action. Dialogue requires that leaders

reveal their logic and hold up and source of action. Dialogue

requires that leaders reveal their logic and hold up and reveal their

assumptions and beliefs, rather than their arguments, for scrutiny.

E 71

132 Leaders do not expect results on demand, but rather they create

the interactive processes by which improved performance can be

realized.

E 64

128 The challenge is to live authentically - be real. "Find out what you

really care about, then live a life that shows it." This is the task. It

requires us to do more of all those things we have dropped along

the way as we are rushing to our destination: live by example, tell

the truth, keep our promises, be fair, respect each other, encourage

curiosity, sit down, listen, watch, learn, be open to the messages

from the universe, let go of tightly defined outcomes, embrace error,

relax, hand over the stick, believe in others, ask, and finally, NEVER

MAKE IT ROUGH ON PEOPLE, LIFE IS ROUGH ENOUGH! Our

academic or business education may not have prepared us for

these simple precepts. We know how to lecture, initiate, interrupt

others, talk down, and discuss. All of these words come from a

paradigm that is beginning to lose its usefulness.

E 23

129 Two of the early researchers in this field, defined organizational

learning as "the detection and correction or error “ Foil and Lyles

(1985:803) defined learning as "the process of improving actions

through better knowledge and understanding".

E 48

130 Watkins and Marsick (1993) research large American companies E 52

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that have made collective learning central to their work ethos, and

found that these companies share a number of features. The

companies tended to have the following: 1. Leaders who model

calculated risk taking and experimentation; 2. Decentralized

decision-making and employee empowerment; 3. Skill inventories

and audits of learning capacity; 4. Systems for sharing learning and

using it in the business; 5. Rewards and structures for employee

initiative; 6. Consideration of long-term consequences and impact

on the work of other; 7. Frequent use of cross -functional teams; 8.

Opportunities to learn from experience on a daily basis; 9. A culture

of feedback and disclosure.

121 We have observed a relationship between having vision and a

sense of self-worth and self-esteem, both at a personal and at an

organizational level. Such an organization needs a good does of

passion and purpose in the norm of a shared vision. Then it can

play and dance again.

E 18

122 The power of such a visioning process is that it hooks into

fundamental individual aspirations.

E 18

123 From common ground to common purpose. "Interdependence is

the operative word. Our biggest job is to find common ground and

then look for the ideas to break through whatever barrier we have

imposed on ourselves.

E 19

117 The same forces are at work at an organizational level. If a

company does not have vision, and the marketplace or some other

outside force determines where the company is going, there may

not be a company left.

E 16

118 Sometimes we fool ourselves into thinking that we do have a vision.

We call it a negative vision: we know what we do not want.

However, framing a goal as the absence of something is not very

inspiring or motivating.

E 17

115 Vision is essentially about hope that a transformation is possible. E 15

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The Dutch Futurist Fred Polak noted.

114 Knowing where you want to go. Thus, the "how do we get there"

question is unanswerable as long as the "there" is not defined.

E 15

108 Knowing where you want to go. Thus, the "how do we get there"

question is unanswerable as long as the "there" is not defined.

E 10

103 If one cannot sit still for one hour and listen in silence, one will thus

not receive any illumination. Similarly, our intuition is of no use if we

do not listen to what it has to say. But the moment we withdraw

from the visual and aural clutter around us, by closing our eyes, by

praying, by walking in the woods, or for some, by dreaming, we will

find all that we need at our disposal. Only if we slow down and take

time out can we find the time to increase our awareness s of

ourselves, where we come from, where we are heading and how

we impact on the people around us.

E 8

97 Equilibrium and order, or the absence of stimulation and stresses,

are not the conditions for optimal growth and development in the

natural world.

E 5

98 It is turbulence, being out of equilibrium, which makes the system

robust, and which makes for growth and strength. When are the

times for our biggest personal growth? When did we learn the most

significant things? Usually we can trace these occurrences back to

times of turbulence in our lives, and learning was usually

accompanied by periods of significant physical or psychological

discomfort.

E 5

99 Order and control spawn dependency, complacency. They kill

initiative, inventiveness, resourcefulness, and creativity. They

depress morale and take the you out of work and living, Joel

Henning, in his forward to Peter Block’s book Stewardship, liken

American corporations to authoritarian religious organizations,

governed by three basic principles: compliance, watching (checking

on compliance), and trying harder in the face of breakdown or

E 6

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failure (Block, 1993: vix). Non of this does much for the human

spirit. So, in the belief of improving clarity, we fine-tune job

descriptions, establish lines of control and tell people exactly what

we want.

100 So the challenge for leaders is to hold this paradox: letting go of the

actual architecture of the result without letting go of what we really

care about, the values, the vision that under gird the result.

E 6

101 At an intuitive level most of us know that in times of extreme motion

and flux (an avalanche, a maelstrom, a strong wind or current), our

chances of survival increase if we stop thrashing, trying to swim and

come up of are

E 7

95 1.AWARENESS OF PARADOXES 2. AWARENESS OF SELF

AND OTHERS 3. AWARENESS OF OUR VISIONS 4.

AWARENESS OF POWER AND GROUP DYNAMICS

E 3

93 What is killing us is the illusion of control: that things con be

predictably, consistent and forever under control. What is also

killing us is that followers require their leaders to be in control, on

top of things, and to take the blame when things go wrong.

E 1

92 Third, and perhaps most importantly, by substituting peer for

hierarchical control, teams permit removal of layers of hierarchy and

absorption of administrative tasks previously performed by

specialists, avoiding the enormous costs of having people whose

sole job it to watch people watch people who watch other people do

the work.

D 77

89 Organizing people into self-managed teams is a critical component

of virtually all-high performance management systems.

D

87 The study found "a strong link between investing in employees and

stock market performance. Companies which placed workers at

the core of their strategies produce higher long-term returns to

shareholders than their industry peers." The research also found

that companies that focused on their people not only delivered

D

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superior returns to their stockholders but also created more jobs, an

important result given the high unemployment rate in much of

Europe.

85 The industries in which high performance management has been

shown to have significant economic benefit range from relatively

low technology settings such as apparel manufacturing to very high

technology manufacturing processes such as semiconductor water

fabrication.

D

82 Drawing from studies of the five-year survival rates of initial public

offering; studies of profitability and stock price in large samples of

companies from multiple industries; and detailed research on the

automobile, apparel, semi-conductor, steel manufacturing, oil

refining, and service industries - is this: Substantial gins, on the

order of 40 percent or so in most of the studies reviewed, can be

obtained by implementing high performance management

practices.

D

83 These findings indicate that simply demonstrating the connection

between how people are managed and the results achieved is

insufficient to invariably produce change. These tremendous gains

come about because high commitment management approaches

provide a number of important sources for enhanced organizational

performance

D 32

84 1. People work harder, because of the increased involvement and

commitment that comes from having more control over and say in

their work. 2. People work smarter; high performance management

practices encourage the building of skills and competence and, as

importantly, facilitate the efforts of people in actually applying their

wisdom and energy to enhancing organizational performance. 3.

High commitment management practices, by placing more

responsibility in the hands o people farther down in the

organization, save on administrative overheads as w

D 33

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75 People are the strategy. Managers are always well advised to

solve the real problem - not the one it would prefer to solve or are

able to solve. This obvious recommendation is, unfortunately, all

too often violated in practice.

D 18

271 In short - The first step in preparing to do research is to understand

your role in a "scene"

5k 15

273 The most important differences are among those who read for

diversion, those who want a solution to a practical problem and

those who are dedicated to the pursuit of pure knowledge and

understanding.

5k 16

274 Intensely concerned with the intellectual quality of their

conversation: they expect one another to be objective, rigorously

logical, faithful to the evidence, able to see every question from all

sides, regardless of where the inquiry leads or how long it takes.

5k 17

275 Three kinds of readers - solve different kinds of problems: to

entertain them, to help them solve some problem in the world, or

simply to help them understand something better.

5k 18

276 Think about where they stand and where you stand in regard to the

question you are answering

5k 19

278 You will discover that only after you have found an answer that

helps you understand better the question you want to pose and

your readers to consider. Even, then, your best reader may be

yourself.

5k 23

280 First, be aware of those uncertainties that you will inevitably

experience.

5k 24

330 Readers Questions: What is your point? Your answers: I claim

that ….. - What evidence do you have? I offer as evidence ….

Why do you think your evidence supports your claim? I offer this

general principle …. - But how about these reservations? I can

answer them. First .... - Are you entirely sure? Only if ... and as

long as .... - No reservations here at all? I must concede that ....

5k 89

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Then just how strong is your claim? I limit it .....

332 Warrants - You warrant answers questions not about whether your

evidence is accurate but about whether it is relevant to your claim;

or, to put the other way around, whether your claim can be inferred

from your evidence

5k 90

334 Telling a story - Servant Leadership by Robert K. Green leaf - most

important choice a leader makes is the choice to serve, without

which one's capacity to lead is profoundly limited. That choice is

not an action in the normal sense - it's not something you do, but an

expression of your being.

5c 1

335 Leadership exists when people are no longer victims of

circumstances but participate in creating new circumstances. When

people operate in this domain of generative leadership, day by day,

they come to a deepening understanding of, "how the universe

actually works” Leadership is about creating a domain in which

human beings continually deepen their understanding of reality and

become more capable of participating in the unfolding of the world.

Ultimately, leadership is about creating new realities

5c 3

337 Over the years we had come to use the term "alignment" to

describe what happens when people in a group actually start to

function as a whole.

5c 6

338 We are seeking greater insight into these remarkable times, when

there is so much cause for both despair and hope. Even though

our political and institutional leadership is losing respect and

credibility, and core societal crises fester, we are gaining a greater

understanding of how the universe works.

5c 9

340 It's about a shift from seeing a world made up of things to seeing a

world that's open and primarily made up of relationships.

5c 10

348 If your' focused on your course rather than your destination, you're

in big trouble. If you were to be blown off course, you would never

simply return to the course you were on. No one would sail that

5c 124

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way. Rather, you would focus on the destination and set a new

course. But that's the way we live our lives. We get attached to our

assumptions about how things should get done, and we lose sight

of what we're trying to create. This notion of focusing on the results

is a fundamental premise of the leadership and mastery course.

230 We found that high ideals - a core ideology - often existed in the

visionary companies not just when they were successful, but also

when they were struggling just to survive. Consider the following

two examples: Sony at it's founding and Ford during the 1983

turnaround crisis.

5j 49

231 If you're at the early stages in the development of a company and

have been putting off articulating a corporate ideology until you've

attained business success, you might pause to consider the Sony

example. We found that Ibuka's ideology laid down so early in the

company's history played an important role in guiding the

company's evolution.

5j 51

232 "Our plan is to lead the market with new products, rather than ask

them what kind of products they want .. Instead of doing a lot of

market research, we. Defined a product .. And try to create a

market for it by educating and communicating with the public."

5j 51

233 Sony made crude heating pads and sweetened bean-paste soup to

keep itself alive (pragmatism), but it always dreamed and pushed

toward making pioneering contributions (idealism).

5j 53

234 It is better to sell a large number of cars at a reasonably small proffit

.. I hold this because it enables a larger number of people to buy

and enjoy the use of a care and because it gives a larger number of

men employment at good wages. Those are the two aims I have in

life.

5j 53

235 Reducing prices by 58% from 1908 to 1916, at the time Ford had

more orders than it could fill and could have raised prices.

5j 53

236 Like the fundamental ideals of a great nation, church, school, or any 5j 54

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other enduring institution, core ideology in a visionary company is a

set of basic precepts that plant a fixed stake in the ground " This is

who we are; this is what we stand for; this is what we're all about."

core ideology is so fundamental to the institution that it changes

seldom, if ever.

255 The drive for drive for progress enables the core ideology, for

without continual change and forward movement, the company -

the carrier of the core -will fall behind in an ever-changing world and

cease to be strong, or perhaps even to exist.

5j 88

256 A BHAG engages people - it reaches out and grabs them in the gut.

It is tangible, energizing, highly focused. People "get it" right away;

it takes little or no explanation.

5j 95

257 A BHAG only helps an organization as long as it has not yet been

achieved. Ford suffered from what we call the "we've arrived"

syndrome

5j 97

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217 APPENDICES

Appendix 14 : Intellectual Capital & the Value Gap

EMBA 2 - GROUP 3 INTELLECTUAL CAPITAL PAPER

Presented by-: Alex Blackie, Phil Burton,

Eileen de Wet, Paul Friedrichs, Ettienne Goutier,

Gary Stanley , Jaro Zemjar.

Introduction Considering the premise that an organization’s assets are animated, and brought to

life, by people; it follows, that people are the driving force behind growth in

shareholder value. This is no more clearly illustrated than by the example of

Service Master, a company in the business of providing cleaning and other services,

such as facilities management, to hospitals, schools and companies. Service

Master earned an average return on shareholders’ equity of almost 82% between

1987 and 1995 (Pfeffer, 1998 page 7).

When people leave the employ of an organization they take with them a

considerable amount of knowledge, in a number of different forms; technical

knowledge, contacts/net working, as well as communication and dialoguing within

the stakeholder community as a whole, trust and loyalty. This is all encapsulated in

the term Intellectual Capital (IC). There is an intrinsic value to Intellectual Capital

that is often overlooked by shareholders and managers. The purpose of this paper

is to initiate debate around the notion of Intellectual Capital and effective

management of it.

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218 APPENDICES

Key Concepts Definitions Picture Figure C.3: 1. Strategy can be seen as the bridge, building between the

current and the emerging, or between the current relationships between all relevant

elements and the envisaged / new / emerging, unique relationships between the

relevant element. Instead of listing our definitions, the group decided to explain it in

the form of a rich here, are all the entities and individuals, tools, programs, etc. that

form part of the transactional and contextual environments of the organisation.

Figure D.4.8-4 – Rich Picture of Definitions

Ensure Sustainable

Value CreationMotive

Current Relationships between obejects

Envisage / new/ emerging unique relationships between objects

Strategy

Between resources

Competitive Advantage

Business Idea

Value

Environment

Diversity

Lever

Leadership Systemic Intervention

The Value Gap This graph Figure D.4.8-5 -- The Value Gap explain the nature of the situation for

the different options open to the shareholders. The red line shows how the value of

the company should unfold under normal, sustained growth. The black line indicates

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219 APPENDICES

what will happen to the value of the company if no interventions take place. That, is

if current management is to leave the company without any transfer of intellectual

capital. It indicates how the value of the company will decrease at the point where

management leaves and how, even given the best situation where the shareholders

might find capable management, the value of the company, in the highly inflationary

environment of Zimbabwe, will never be able to grow to the red line again (with the

current accelerating brain drain, predictions of finding capable management is not at

all good).

If however, the shareholders are able to see the benefit from a well-managed

intellectual capital transfer, the process of transferring can be started as soon as a

person has applied to resign. If the person leaving is well accommodated to assist

him with his/her proposed move and a replacement is drafted in at the earliest

opportunity; with good cooperation and support from the person leaving the

replacement will have improved conditions mentor type learning. The value would

only decrease according to the blue line, or better, depending on how well the

transfer is planned and managed.

Figure D.4.8-5 -- The Value Gap

Val

ue

Time

Value Gap

Human Capital

Labour

Vision

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220 APPENDICES

Relationships

Experiential learning

Loyalty

Trust

Customer Capital Brand strength can be synonymous with the individuals that support the brand,

Distribution efficiency is a function of the quality of communication between the

customer and supplier / manufacturer; existing relationships are an important

constituent of customer capital.

Contact Capital Generally accepted there can be considerable financial gain derived from the value

of the contacts (net works), internal and external, through which an understanding

and trust has been developed. These network relationships result in considerable

transactional savings that will filter through to financial savings.

Structural Capital Processes

Intellectual wisdom and energy

“Knowledge” through established relationships with all stakeholders.

Focusing Question How do the management team limit the exposure the exposure of CFI to the Value

Gap?

Assumptions Through mentoring, IC is transferable. It cannot be duplicated, but over a period of

time it can be transferred through the dialogue the with the new individuals or

teams and with the willing assistance of the person leaving. The dialogue cannot

be exactly replicated, as with a change in personalities, there are different

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221 APPENDICES

relationships and therefore a different dialogue. However, the dialogue starts at a

different level with the willing and active participation of the outgoing team member.

Mental Model Through a period of mentoring the new incumbent can understand the mental

models used by the person departing. This would be very helpful from the

perspective of rationalizing the manner in which issues were resolved. With this

perspective of the past, the new person would be in a far better position to resolve

new problems as they are presented even though the approach is likely to have

changed from the out going person.

Leadership Contribution If all stakeholders are committed to reducing the Value Gap, the contribution by

leadership, to this effort, can be greatly enhanced as the management team can

focus on the transfer and not be distracted by ancillary issues.

Transformation Intervention Figure D.4.8-6 - Intervention

HC SC

CC FC

R

As mentioned above, the shareholders’ view is that Financial Capital and Human

Capital can be purchased on the market, with no transfer of Intellectual Capital

necessary (pointed out by the red arrow in the diagram above).

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222 APPENDICES

For reducing the value gap to a minimum, the length of time needed for mentoring,

development and training, would depend on the level of complexity and responsibility

of the position to be filled. During the mentoring / training period the FC, SC and CC

could be transferred (indicated by the green arrows on the diagram above). To initiate

this process of transfer of IC, an agreement needs to be negotiated between the

parties on expected time and financial arrangements. The new shareholders need to

become aware of the IC implicitly held in the current management. A win-win

environment needs to be developed between the parties involved. Describing the

CLD above, FC in the form of generally accepted FC plus the cost of servicing

Intellectual Capital, CC and SC in the forms mentioned above, needs to be

transferred along the green lines, entering the normal loop at HC and following the

black arrows from thereon.

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223 APPENDICES

Conclusion to Intellectual Capital The synthesis of the whole process described in this document has produced the equationError! Reference source not

found..

Table D.5-A Retention Cost Equation

DIVERSITY + COST OF EMOTIONAL CAPITAL

SUCCESSION COST

+ VALUE GAP

+ REPLACEMENT COST

= RETENTION COST

-need to attend to ratios of employees

- loyalty - drive - dedication

double employment for transfer period

Difference from sustained growth to new level

- recruitment - translocation

Determine degree of investment that would be required for training

This equation clearly illustrates to the management team and shareholders of CFI, the costs of loosing skilled staff and allows

for calculations to be made on remuneration packages which may be required in order to keep key people from looking else

where in the world to live. However, should a member of staff indicate that he has plans to move, this formula highlights the

critical importance of creating an environment, conducive to facilitate the most effective manner in which intellectual capital can

be transferred with the smallest possible Value Gap resulting from the person leaving. Ralph Stacey argues that “knowledge

cannot be managed, and there is no need to manage it, because knowledge is participative and self-organizing processes

pattern themselves in a coherent ways” (Stacey, 2001 page 5). There is considerable wisdom in this view, although I believe

Stacey should view term managing in a broader context to incorporate the development and creation of an enabling

environment, which in essence is being advocated by the team that compiled this presentation

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