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Tom
Peters, in his best selling book, Liberation Management,
claims all firms are becoming professional service firms.
Today, he argues that 75pc to 95pc of a typical
manufacturing firm’s payroll is knowledge employees, this
best describes the successful manufacturing firm. This was
the reality a decade ago in the West. You can imagine the
importance of knowledge based management systems in today’s
more competitive global markets.
What
percent of our employees are skilled? How much of our
managers have the requisite managerial skills and knowledge?
The
Ethiopian Management Professionals Association (EMPA) was
one of the active associations that promoted the management
profession in Ethiopia through organizing various workshops
and panel discussions in collaboration with the Department
of Management at the Addis Ababa University as well as the
Ethiopia Management Institute. However, the Association was
not functioning as such for the last nine years, due mainly
to the lack of proper leadership. As most management writers
agree, when I say leadership problem, I mean leadership is a
function of the leader, the followers, and of the situation.
The
Executive Committee of the Association should take the prime
responsibility, for whatever the reason might be, for
failing to live up to its objectives. The members of EMPA,
as followers and supporters, should be blamed for failing to
actively participate and take initiatives to help the
leadership. After all, any organization is as good as its
membership. The issue becomes difficult when it comes to
such associations like EMPA where members and leaders are
expected to work on a voluntary basis with no monetary
incentives.
Nevertheless, there are strong associations such as the
Ethiopian Economics Association (EEA) that compel us to ask
what could go wrong with the one that bring management
professionals together. I was promoted to raise this issue
after attending a conference held at the UNECA Conference
Hall, where Prime Minister, Meles Zenawi, presented his
“Democratic Developmental State” thesis. I found the
diversity of the participants, and the active participation
of the members, to be indeed incredible.
I felt
depressed while thinking about our management professionals
and scholars, with the exception of some of the committed
professionals in our midst, such as the late Asheber Abera,
Costantinos Berhe (PhD), and Ayalew Zegeya among others.
These are professionals who have dedicated their time and
resources to seeing that their desire of EMPA’s noble causes
are realized.
P.F.
Drucker, a famous Management guru, once argued, “There are
no underdeveloped nations as such, but under managed ones.”
In a country where a great deal of its people are living in
absolute poverty, and many firms are not yet liberated from
poorly, and at times, untrained owner-managers, the
importance of professional managers becomes more critical
than ever before.
Ethiopia certainly will face severe shortages of able
managers who can run their organizations competitively in
regional and global markets. This was glaringly true in its
participation in regional trade blocs such as COMESA, and
during its bid to join the World Trade Organization (WTO).
When our markets are open as a result of accession to the
WTO, and other regional trade blocs, how ready are our firms
to compete and survive in business is a question that haunts
me.
Firms
can buy machinery or the technology they can afford to run
their businesses. But the extent to which they are they
investing in their human capital in order to mitigate the
prevailing management problems are an issue of concern to
many of us in the discipline.
We know
there are some efforts going on in “Branding Ethiopia”,
which is a good initiative in any respect. But the challenge
remains in determining what competitive advantages for
Ethiopia are there, say compared to Kenya or Sudan, for
branding is all about creating meaningful differentiation.
To be
frank, perhaps the only sources of competitive advantages
for the country are its people and land, although Michael
Porter, an American academic who focuses on management and
economics, argues that the traditional theory of comparative
advantage based on factor endowments has become less
relevant over time. However, industries and nations can
become successful even with limited factor endowments if
they pursue appropriate policies and develop expertise in
particular sectors, Porter believes.
Competitiveness at the national level has to be defined in
terms of the ability to maintain high and rising
productivity through the diamond of the four inter-related
determinants Porter defined.
Factor
Conditions include the availability, quality, and cost of
production, that are labour, capital, natural resources,
infrastructure, and “knowledge resources”; while Demand
Conditions are large domestic markets for goods with
quality-sensitive consumers who help to enhance
competitiveness which provides the motivation for industries
to continually improve quality, service, and value, as well
as preparing them for competition in the world market. There
are also related and Supporting Industries Factors that deal
with the competitiveness of a sector, which depends on the
existence of firms in related industries to provide support
services, capital goods, inputs, and information. Lastly, we
find Firm Strategy, Structure, and Rivalry, which deal with
the competitiveness of firms that exists among themselves
and creates incentives for continual improvement,
particularly when the competition is for quality and service
rather than mere price competition.
The
business culture, prevailing norms, and the regulatory
environment affect the vigour with which firms compete
against each other.
All
these factors demands orchestrated efforts by the
government, business companies, professionals in the field
of Business Administration and Management in order to bring
meaningful changes to the economy. If we just measure our
competitiveness in terms of the above two factors - the
factor conditions which include, interalia, labour and
knowledge resources, and firms’ strategy, structure and
rivalry that are relevant for the prevailing discussions on
management - we may conclude that the nation is in a weak
competitive position.
Are our
people trained and do they have the right culture? I mean,
are they well trained in major and key fields, particularly
in the field of management? Do we have a number of
well-trained and seasoned managers who can lead by example
and shape the future course of actions of their businesses
for better results and success?
Scarcity of skilled managers, coupled with a less productive
labour force, has become more of a liability than an asset.
The efforts currently undertaken by the government to create
an enabling business environment and increase the number of
trained labour force by expanding universities is quite
commendable. However, the quality of graduates is still
questionable. I also find it surprising to see the
increasing number of expatriate professionals besides their
limited number. Professional associations such as EMPA would
definitely play an important role in increasing the
management skills and narrowing the knowledge gaps of firms,
thus ensuring their competitiveness in the market.
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