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For The Leadership Of Kenya Inc., It Is Important
That All The Stake Holders Are Not Antagonised?

Coastweek -- Kachumbari announced to a few of his friends recently that he was making major changes in the management of a company he was running, writes Teti Kamugunda.

Since all the friends were also shareholders and interested they asked that he call a meeting to discuss as the actions seemed rather odd and the timing also wrong as the company was about to go to market to raise funds for further expansion.

The organisation was a bus company that was operating mainly in a European country and sought to expand into the rest of Europe over a few years.

At the meeting, Kachumbari explained that the changes were necessitated by the need to go public on happenings at the company that might influence the decision of investors.

It was also a requirement that a listed company has to announce when there was material information that could affect the public perception of the company and also the value of its shares.

In the months prior to the meeting called by the shareholders to discuss the changes, the company had been hit by a series of scandals that had made it into the press.

They were not significant enough to make the headlines which were dominated by Brexit and Trump news but were sufficient to make it into the business columns of several national papers.

The first scandal to hit the bus company was when its mechanics decided to stage a go slow in protest about their pay.

They had seen the leadership of the company and some of the other unionisable and non unionisable staff as well as the directors get pay rises that widened the differential in salaries between them other employees.

This was despite the fact that they had been promised pay rises over the years and none of them awarded on the ruse that they were not rising to the productivity levels expected.

This lack of application meant that the assets of the company were performing sub-optimally and affecting the profitability.

The counter to this was their complaint that they were not being given the full compliment of tools and support needed for them to operate as expected.

In addition, the company had started outsourcing some of the work and therefore accountability for output could not be apportioned appropriately.

There were issues in output and the leadership of the company could not hold the unionisable staff accountable.

During the period of the go slow, the head of the human resources department decided that she would let manager in charge of the department handle the problem much to the distress of the manger who felt that the issue was a human resource issue which should be handled by that department.

This stand off between the two managers was in part responsible for the escalation of the go slow to the extent that it started to affect profitability.

As this go-slow was playing out, another issue was also simmering between the operations team and the procurement department.

The company needed new low emission buses in order to comply with emerging legislation in the country.

The operations team had prepared the specification of the type of bus they required and had technically qualified several suppliers in the bidding process.

The procurement process was such that the requesting department together with the procurement team would assess the technical bids and once these were equalised and the non conforming bids disqualified, the commercial proposals would be opened and awarded to the lowest bidder unless there were serious extenuating circumstances.

In this case there were a few and they were sorted out so technically, the lowest bidder should have been awarded.

However, the manager in charge of procurement decided to award the contract to the second lowest bidder as the lowest bidder was under investigation for integrity issues for supply of buses to a Kazakhstani transport company under a deal financed by one of the international development financing agencies.

The lowest bidder contested this decision and they decided to hit the press in order to force the company to reconsider its action.

The funding being sourced was in order to fund the purchase of the buses.

The shareholder meeting was informed that as a result of this, Kachumbari had proposed to shift the leadership team around internally in order to restore confidence in the company and also to help minimise the impact of the issues of the company’s funding process.

His explanation went to further advise that letting go of the staff concerned, who were highly respected in their individual disciplines would send the wrong signals at this time and also get their professional colleagues to work against the company in support of their colleagues!

Sound familiar?

It is happening in Kenya Inc.

We have a major event about to take place in the country and the stakes are high.

The country has challenges in many areas – employment, procurement, policy, education, health and so forth which all challenge the public (shareholder’s) confidence in Kenya Inc.

For the leadership of Kenya Inc., it is important that all the stakeholders are not antagonised especially if any drastic action will mean one or several of the key stakeholders are antagonised and not participate in the share offering.

The “silly season” is about to start and I am rushing out to the supermarket to buy my corn and soda so I can pop the corn, open the soda can and sit back and enjoy the movies.

We will have some really interesting happenings over the next four months that could easily create several fiction and factual best sellers.

How I wish I was able to pen stories out of real life issues.

I would be a millionaire several times over every time our country approaches elections.

As Kachumbari says, the entertainment season is here!

Remember: you read it first at coastweek.com !


 

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