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Prosper Ndlovu Business Editor
MODERN economies require dynamic company boards and managers who are responsive to change and are quick to make strategic decisions to meet shifting consumer demands.
With surveys indicating a continued sad state of industry due to the generally difficult economy, economic analysts feel some problems bedevilling the country’s firms are a symptom of comfort with the mediocre among company executives not necessarily lack of financing.

A majority of firms have become perennial casualties, struggling to break even as they continue to extend losses year after year as evidenced by the recent financial reports for the half year.

The Confederation of Zimbabwe Industries (CZI) latest manufacturing sector survey confirms the depressing outlook of the industry, whose capacity utilisation slid deeper by three percent this year on last year’s figures.

While some companies did poorly, others made significant inroads, posting profits and declaring dividends under the same harsh economic environment.
Economic analysts say the gap between the two extremes could be attributed to several factors of which poor management is at the centre.

Bhekimpilo Mpofu, a chartered accountant based in Bulawayo, identified delayed response to change as a serious management weakness affecting most companies.

He said management responds differently to situations with those who respond quickly often making inroads towards survival.

In some instances, bureaucratic board processes are to blame for delaying implementation of key turn around strategies, said Mpofu.

As a result some companies have woken up to find themselves cornered on the brink of extinction after cutting short their life cycles through decision failure.

“Some companies have reached the peak of their lifecycle and have been overtaken by events. They now need to think differently in order to be relevant,” said Mpofu.

“The company’s spending habits should also be proportionate to the business activity in the firm and sometimes scaling down is ideal.”

He said the flooding of cheap imports into the market could also be avoided if local firms study consumer behaviour, especially in relation to price.

Mpofu said the prevailing business climate calls for diversified operations, increased synergies and sensitivity regarding pricing, which consumers are so particular about.

Lucky Mlilo, the chief executive officer for the Association of Businesses in Zimbabwe (ABUZ), said companies should invest more in effective management systems and innovation to curb leakages.

“There’s need to streamline our activities and maximise production times.

“More efficiency is required to account for every cent and ensuring existing resources are put to maximum use,” he said.

Mlilo said some companies were suffering from the burden of non-performing departments, which they should have long discarded but continue to subsidise.

Economic consultant Taurai Changwa in an article “How to turn around a struggling company”, fired a series of questions to company executives that if properly answered would give the necessary introspection and result in improved decision making by those at the top.

Among the questions advanced are: Why are we failing? How is the company spending money? How is the performance of the team? Are we marketing the business enough?

What is the market share and are we targeting the right market? Is our product or service good enough? Are we adding value to the consumer? Are we up to date with international trends? Why did we make a loss?

Changwa went on to highlight that some firms were victims of lack of realistic measurable targets, reflecting a weak human resources management.
In a competitive market economy customer care and business relations are critical while clients are increasingly becoming sensitive to bad attitudes and ethical concerns, he said.

“Some companies are now comfortable with losses and point fingers blaming the economy. Is it really the economy or bad management? How come some companies are making profits in the same economy?” said Changwa.

“Heads should roll if a company’s performance drops even by one percent. If your attitude and character is bad, people won’t want to work with you and you can simply lose good business because of that.”

While tightening management systems is critical, analysts however, say it has to be reinforced with adequate financing for requisite plant equipment, utilities, labour costs and technology.

This means financing alone is not the solution to achieve desired turnaround as long as internal managerial loopholes are not addressed.