THE IMPACT OF STRATEGY IMPLEMENTATION AS
THE IMPACT OF STRATEGY IMPLEMENTATION AS A SOLUTION
FOR DEALING WITH CORPORATE GOVERNACE ISSUES IN
ZIMBAMWE
Michael Chamunorwa Tigere and Research scholar SimbaraheMasamba
Holder of Masters in strategic and corporate governance
Email: [email protected]
Email: [email protected]
ABSTRACT
This research was done to explore the impact of strategy implementation as a solution for
corporate governance issues in Zimbabwe. The research introduced the global perspective issues
related to strategy implementation as a solution for corporate governance. The objectives of the
study were to assess the effect of strategy implementation on fairness, to assess the effect of
strategy implementation on accountability, to assess the effect of strategy implementation on
transparency and to assess the effect of strategy implementation on independence assurance.
Research methodology of this study used mixed approach and data collection instruments
included interviews and questionnaires. Data analysis was done using Stata 11 statistical
package. The findings indicated a correlation between study variables and this was shown by ‘t’tests that were above two and ‘p’-values that were below 5%. The research was concluded with
recommendations on what companies in Zimbabwe need to do to improve on performance and
ensuring that good corporate governance practices are maintained and area of further research
was established.
Keywords: Strategy implementation and corporate governance
1.0 Introduction
Several firms from around the world are operating in a stiff competitive environment and
requires strategic implementation and good corporate governance. Past researches have been
done on the impact of corporate governance issues on performance and non on strategic
implementation. Therefore, this paper seeks to assess the impact of strategy implementation as a
solution for dealing with corporate governance issues in Zimbabwe. The paper will be arranged
in the following sections, background or conceptual and theoretical framework, objectives,
hypothesis testing, significant of the study as well as need for the study, literature review,
research methodology, data presentation and analysis, recommendation and the paper will be
concluded by area of further research.
1.2 Conceptual and Theoretical framework
According to Hugrieves et al (2011), several firms from around the world are operating in a
complexity environment that is associated by business issues that need to be addressed and are
affecting operations. In support of the above Wein and Gibbs (2013), hypothesized that most of
the problems that are affecting business operation are as a result of poor corporate governance
practices within companies. Aaron (2012), in the same school of thought elaborated that for such
firms, to deal with such issues require strategy implementation and practical implementation of
different strategies in resolving corporate problems as way of enhancement of competitive
advantage.
In Europe, there is a company known as Enron which was in the energy sector, the company was
audited and passed and the company went on to liquidate as a result of poor corporate
governance issues.Mark et al (2012), cited that most of these companies are not putting in
practice co-pillar of corporate governance pillars for instance fairness, transparency,
accountability and independence assurance. According to James (2013), companies in Europe
that have been affected by poor corporate governance have since adopted turnaround strategies
that include management turnaround, financial turnaround and operational turnaround. Such
control measure has helped such companies to excel and their performance have improved
drastically.
In Africa, most companies have since adopted the concept of strategy implementation as the key
solution of solving corporate governance issues. According to Ngugi et al (2012), in Ghana
several companies in the telecommunication industry have adopted the concept of strategy
implementation and the market share has increased by15,6% and profitability by 12,4%.In
support of the above Donald (2013), elaborated that strategy implementation has helped several
countries in Africa to develop control measures in dealing with corporate governance issues and
in South Africa, tollgates and monitoring cameras have been put in place as a way of resolving
poor corporate governance.
Strategy implementation has proven not to be effective in dealing with corporate governance
issues as companies like Air Zimbabwe, ZETDC, National railways of Zimbabwe, PSMAS,
Zimbabwe broadcasting corporation, ENG and many more only to mention but a few have been
affected by poor corporate governance practices . According to Mlambo (2014, The Sunday
mail), companies in Zimbabwe have been affected by poor corporate governance seeing many
companies liquidated, placed under schemes of arrangement for instance Shabani mine in
Zvishavane , some have lost subscribers for instance PSMAS has lost more than 6 000 000
health subscribers due to poor governance issues caused by Cuthbert Dube the company CEO,
ZBC has been affected by these issues when Happison Muchechetere who frauded
approximately $1 000 000 from a broadcasting vehicle that he claimed that it costed $200 000,
Recently Prof Jonathan Moyo frauded the government $500 000 that he bought bicycles for
people in Tsholotsholo and Air Zimbabwe bosses stole engines for airplanes leading to the
company facing financial crisis and failed to settle its debts and retrenched more than 50
employees in 2015.
1.2 Statement of the problem
Corporate governance has become a major concern on performance of organization and it is still
not clear on whether strategic implementation will be effective on sound corporate governance
practices. Several studies have been done on poor corporate governance practices in Europe
especially with regards to fraud and none has been done to Zimbabwe focusing on corruption
and embezzlement of funds. This is the reason that motivated the researcher to carry out the
impact of strategy implementation as a solution for dealing with corporate governance issues in
Zimbabwe
1.3 Objective
1.
2.
3.
4.
To assess the effect of strategy implementation on fairness.
To assess the effect of strategy implementation on accountability.
To assess the effect of strategy implementation on transparency
To assess the effect of strategy implementation on Independence assurance.
1.4 Hypothesis Testing
H1 There is a relationship between strategy implementation and fairness.
H0 There is no relationship between strategy implementation and fairness.
H2 There is a relationship between strategy implementation and accountability.
H0 There is no relationship between strategy implementation and accountability.
H3There is a relationship between strategy implementation and transparency.
H0 There is no relationship between strategy implementation and transparency.
H4There is a relationship between strategy implementation and independence assurance.
H0 There is norelationship between strategy implementation and independence assurance.
Source: Raw data
1.6 Need for the study
The study will be of great importance to the researcher on expanding the body of knowledge and
the nation of Zimbabwe at large in coming up with strategies that can be adopted and
implemented to improve corporate governance practices in Zimbabwe
1.7 Operational Definition
Strategic implementation is the process that puts plans and strategies into action to reach goals
Corporate governance refers to the mechanisms, processes and relations by which corporations
are controlled and directed
1.8 Review of Literature
According Smith and Harrison (2014), to Strategy implementation is the translation of chosen
strategy into organizational action so as to achieve strategic goals and objectives. Strategy
implementation is also defined as the manner in which an organization should develop, utilize,
and amalgamate organizational structure, control systems, and culture to follow strategies that
lead to competitive advantage and a better performance as also supported by (Joseph et al 2013
and Gibbs 2011:12).
1.8.1 Effect of strategy implementation on fairness.
According to Ellis et al (2013), fairness means “treating all stakeholders s including minorities,
reasonably, equitably and provide effective redress for violations. Establishing effective
communication mechanism is important in ensure just and timely protection of resource sand
people asset as well correcting of wrongs as also supported by (James 2012 and Grace et al
2012).In the same manner Baaij et al (2012), supported that there is a positive relationship
between strategy implementation and fairness as both promote a positive impact in promoting
organisational performance. However regardless of the implementation of strategies as a way of
assuring good corporate governance practices, Zimbabwe is facing a lot of challenges in
addressing such issues as corruption and embezzlement of fund is at pick and still there is no
clue on what can be done to deal with the issue as supported by Mashava 2015, (The
standard).Furthermore, Fairness in Zimbabwe exists only in theory as there is inconsistence
policy changing and abuse of citizens as the nation is not practicing democracy and strategies
that are in place currently are in favor of those with political muscle as hypothesized by the
Julious 2015, (Newsday).
1.8.2 Effect of strategy implementation on accountability.
Accountability embraces ownership of strategy and task required to attain organisational goals as
stated by Jones and Abel (2013). This also means owing reward and risk in clear context of
predetermined value proposition. In support of the above, Steve alluded that when the idea of
accountability is approached with this positive outlook, people will be more open to it as a means
to improve their performance. This applies from the staff all the way up to top leadership
embracing Risk management within defined formal appetite for risk. According to Henry et al
(2014. According to Berchicci et al (2012), this also include fostering culture of compliance to
create real and perceived believe that the entity is operation within internal and external
boundaries and to achieve this, organisation’s in Zimbabwe must ensure that strategies are put in
place to ensure that good culture and ethics are molded in vision and mission of entities.
Furthermore, Carney et al (2011), cited that strategy implementation is still lacking in Zimbabwe
as many authors elaborate that it is the main key to ensure accountability of employees in
promoting good corporate governance practices. However Stone and Joshua (2012), argued that
in Zimbabwe accountability is maintained in most companies as corruption is at its pick.
1.8.3 Effect of strategy implementation on transparency
According to Jansen et al (2012), transparency “means having nothing to hide” that allows its
processes and transactions observable to outsiders. It also makes necessary disclosures, informs
everyone affected about its decisions. Transparency is a critical component of corporate
governance because it ensures that all of entity’s actions can be checked at any given time by an
outside observer. This makes its processes and transactions verifiable, so if a question does come
up about a step, the company can provide a clear answer. Donald and Keith (2012), postulated
that strategy implementation is lacking in most and if not all companies in Zimbabwe in ensuring
that transparency is practiced in entities. However, Harvard institution in 2016, cited that strategy
implementation in Zimbabwean companies can be achieved when companies practice rotation of
employees to ensure that employees do not familiarize with the systems as well as with the
people they work with as also supported by (Nadolsk et al 2014).
1.8.4 Effect of strategy implementation on independence assurance.
According to Volberda et al (2012), in progressing transparency it is important for non-direct
actors to obtain confidence that that executive actors are leading the entity towards pre-defined
intent and not using it for self and obtain expert advisory on how applied approached can be
improved. Assurance services provide independent and professional opinions that reduce the
information risk (risk that comes from incorrect information) as supported by (Wellington and
Spencer 2012). Independent assurance is the verification by a third party (not directly responsible
for QA and acceptance of the product/deliverable and/or the reliability of test results obtained
from quality control and acceptance testing. This independent assurance insures that (1) the
representation or acceptance test results are accurate and provide a fair and equitable basis for
construction acceptance and (2) quality control testing is accurate and thus will properly indicate
process quality. Furthermore, Lillian et al (2014), stated that companies in Zimbabwe should
ensure that entities should have board of directors that are both from within and outside the
organisation as well as external auditors that are independent. Wijen et al (2014), supported the
above school of thought citing that these members are independent on judgement and in most
cases do not accept bribes therefore enhancing good corporate governance practices.
1.8.5 Theoretical perspectives
The study will make use corporate governance theories for instance sabarnise Oxley and agency
theory since the theories covered strategic implementation and good corporate governance
practices
1.9 Methodology
The purpose of the study is to explore the impact of strategy implementation as a solution for
corporate governance issues in Zimbabwe. This researched used a mixed approach that is both
qualitative and quantitative techniques. According to Kumar et al (2015), states that
there many philosophies namely ontology, epistemology, constructivism,
naturalism, positivism and pragmatism. The researcher choose pragmatism
for this study because there is possibility of a predictive or generalizable
knowledge and will therefore proceed with a pragmatic position of what
constitutes science and the possibility of knowing the world
1.10 Research design
Positivism depends on quantifiable observations that lead themselves to statistical analysis. It has
been noted that “as a philosophy, positivism is in accordance with the empiricist view that
knowledge stems from human experience. It has an atomistic, ontological view of the world as
comprising discrete, observable elements and events that interact in an observable, determined
and regular manner” (Steve et al 2013).
1.11 The ResearchPopulation:
The population of this research study included a selected number of firms in Zimbabwe for
instance Air Zimbabwe, PSMAS, ZBC and ZETDC. The population can be in two categories, the
target and the study population. (Creswell 2012). The target population is the actual population to
which the researcher would really like to generalize. The target population in this study is the
populationconsisted the management and employees of selected firms. A total of 8 managers and
12 employees was used totaling to 20 participants
1.11.1 Selection of Sample Size:
According to Kumar (2014) sample size refers to the sampling portion that is drawn from the
target population. According to Donald et al (2012), when target population is small, the whole
population can be used as sample size. Therefore, the sample size for this study is 20 in line with
Donald model of sample size.
.
1.11.2 Sampling procedures:
The researcher adopted stratified random sampling as it is probability sampling technique and
ensures the grouping of variables in an orderly manner to assess the relationship. Trish et al
(2013) conducted their research similar to the researcher’s topic and used stratified random
sampling. The author argued that the advantages of this sampling technique are the capacity to
catch key populace attributes, it frequently requires a smaller sample which gives a more
prominent precision, consequently minimizing costs, and fundamentally it guarantees that
specific groups in a research population are sufficiently represented in the sample and enhances
effectiveness by increasing more control on the composition of the sample.
1.12 Research instruments:
1.12.1 Closed ended questionnaire
In order to attained adequate, appropriate and reliable information, the research work uses
mainly 5-minute telephone interviews and a questionnaire mainly because these two methods
were the most appropriate
1.12.2 Interviews
The researcher conducted face to face interviews as part of data collecting instruments and they
helped to cover the weaknesses of questionnaires. Interviews resulted by respondents resulted in
obtaining accurate information. In contrast to some reports in the literature, Obilor (2013) used
interviews in support of the questionnaires.
1.13 Methods of Data Collection:
Questionnaires will be designed by the aid of 5-point likert scaling and they will be in the form
of closed ended questionnaire to reduce further clarification. To ensure validity, the
questionnaires will be supported by planned face to face interview. A pilot test will be done to
few selected captains of industries to test for reliability.
Ordinal least squares model
Where: α+β1X1+β2X2+β3X3+β4X4+ε
Fairness = іα + β 1іE+ SI і + іϵ
Transparency = іα + β 2іT+ SI і + іϵ
Independence assurance= іα + β 3іA+ SI і + іϵ
Accountability = іα + β 1іR+ SI і + іϵ
1.13 Analysis of Data:
The researcher coded the companies using letters in order to protect the reputation and privacy of
the companies. The researcher used deductive approach to analyze quantitative data and
inductive approach to analyze qualitative approach. The researcher also used STATA11 and. If
the probability value is less than 0.05 we conclude that the variable is significant. The researcher
rejects any value that is greater than 0.05
Analysis and presentation:
Table???: Response Rate on questionnaires and interviews
Category
Administered
Returned
Total %
Employees
12
12
100
Management
8
8
100
Total
20
20
100
Source: Primary Data
Table 1.1
above shows the questionnaires that were distributed to both employees and manager
and from the 20 that were distributed only 20 were successful giving an overall response rate of
100%.The overall response rate is deemed favorable as it will yield reliability and validity as
supported by (Kumar et al 2013).
1.14 Findings and presentation
Table
;Correlation between strategy implementation and fairness
. reg si fr
Source
SS
df
MS
Model
Residual
1.37142857
3.42857143
1
18
1.37142857
.19047619
Total
4.8
19
.252631579
si
Coef.
fr
_cons
.5714286
3.428571
Number of obs
F( 1,
18)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
20
7.20
0.0152
0.2857
0.2460
.43644
Std. Err.
t
P>|t|
[95% Conf. Interval]
.2129589
.3749528
2.68
9.14
0.015
0.000
.1240186
2.640825
1.018839
4.216318
The findings from table …above indicated that there is a positive relationship between the
dependent and independent variables. According to Chen et al (2012), the relationship between
study variables is indicated by a ‘t’-value that is above 2 and a ‘p’-value that is below 5%.There
is a positive correlation between strategy implementation and fairness as indicated by a ‘t’-value
of 2,68 that is above 2 and a ‘p’-value of 0,015 that is below 0,05.Therefore an increase in
strategy implementation by 1-unit will lead to an increase on the corresponding variable by 57%
level of coefficient.
Correlation between strategy implementation and transparency
. reg si tr
Source
SS
df
MS
Model
Residual
1.56521739
3.23478261
1
18
1.56521739
.179710145
Total
4.8
19
.252631579
si
Coef.
tr
_cons
.5217391
3.486957
Std. Err.
.1767878
.3235749
t
2.95
10.78
Number of obs
F( 1,
18)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
20
8.71
0.0085
0.3261
0.2886
.42392
P>|t|
[95% Conf. Interval]
0.009
0.000
.1503217
2.807151
.8931566
4.166762
The findings above indicated that there is a positive relationship between the dependent and
independent variables. According to Chen et al (2012), the relationship between study variables
is indicated by a ‘t’-value that is above 2 and a ‘p’-value that is below 5%. There is a positive
correlation between strategy implementation and transparency as indicated by a ‘t’-value of 2,95
that is above 2 and a ‘p’-value of 0,009 that is below 0,05.Therefore an increase in strategy
implementation by 1-unit will lead to an increase on the corresponding variable by 52% level of
coefficient.
Correlation between strategy implementation and independence assurance
. reg si ri
Source
SS
df
MS
Model
Residual
1.8
3
1
18
1.8
.166666667
Total
4.8
19
.252631579
si
Coef.
ri
_cons
.5
3.5
Std. Err.
.1521452
.2886751
t
3.29
12.12
Number of obs
F( 1,
18)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
20
10.80
0.0041
0.3750
0.3403
.40825
P>|t|
[95% Conf. Interval]
0.004
0.000
.1803549
2.893516
.8196451
4.106484
The findings above indicated that there is a positive relationship between the dependent and
independent variables. According to Chen et al (2012), the relationship between study variables
is indicated by a ‘t’-value that is above 2 and a ‘p’-value that is below 5%. There is a positive
correlation between strategy implementation and independence assurance as indicated by a ‘t’value of 3,29 that is above 2 and a ‘p’-value of 0,004 that is below 0,05.Therefore an increase in
strategy implementation by 1-unit will lead to an increase on the corresponding variable by 15%
level of coefficient.
Correlation between strategy implementation and accountability
. reg si acc
Source
SS
df
MS
Model
Residual
1.56335878
3.23664122
1
18
1.56335878
.179813401
Total
4.8
19
.252631579
si
Coef.
acc
_cons
.4885496
3.496183
Std. Err.
.1656877
.3208529
t
2.95
10.90
Number of obs
F( 1,
18)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
20
8.69
0.0086
0.3257
0.2882
.42404
P>|t|
[95% Conf. Interval]
0.009
0.000
.1404526
2.822096
.8366466
4.17027
The findings above indicated that there is a positive relationship between the dependent and
independent variables. According to Chen et al (2012), the relationship between study variables
is indicated by a ‘t’-value that is above 2 and a ‘p’-value that is below 5%.There is a positive
correlation between strategy implementation and accountability as indicated by a ‘t’-value of
2,95 that is above 2 and a ‘p’-value of 0,009 that is below 0,05.Therefore, an increase in strategy
implementation by 1-unit will lead to an increase on the corresponding variable by 49% level of
coefficient.
1.15 Conclusions
To conclude the study has proven a positive relationship between strategic implementation and
corporate governance as deduced by t-values above 2 and p-values that are significant at 5%
1.16 Implications
The main aim of this study was to address the impact of strategic implementation as a solution
for corporate governance in Zimbabwe. The paper have been done so by the help of regression
analysis to test correlation of study variables.
1.17 Recommendations
Companies in Zimbabwe should put in place strategic policies that are consistent and
these promote organizational performance and in return this will promote investor
confidence.
Companies should also put in place control measures that reduce pilferages and fraud for
instance the installation of CCTV and make use of software packages that are reduces
fraudulent for instance accounting packages like pastel and serge.
The parliament of Zimbabwe must put in place still laws that attach stiff penalties that
restrict members of political parties from embezzlement of funds and they must raise
number of years to be saved by people involved in poor corporate governance issues.
Organizations in Zimbabwe must mound a culture that restrict people from corruption
and accepting bribes and organization should practice internal recruitment to maintain
good culture within the organization.
Paying civil servants well, whether civil servants are appropriately compensated or
grossly underpaid will clearly affect motivation and incentives. If public sector wages are
too low, employees may find themselves under pressure to supplement their incomes in
“unofficial” ways. Van Rijckeghem and Weder (2001) did some empirical work showing
that in a sample of less developed countries, there is an inverse relationship between the
level of public sector wages and the incidence of corruption.
Creating transparency and openness in government spending, Subsidies, tax exemptions,
public procurement of goods and services, soft credits, extra-budgetary funds under the
control of politicians all are elements of the various ways in which governments manage
public resources. Governments collect taxes, tap the capital markets to raise money,
receive foreign aid and develop mechanisms to allocate these resources to satisfy a
multiplicity of needs. Some countries do this in ways that are relatively transparent and
make efforts to ensure that resources will be used in the public interest. The more open
and transparent the process, the less opportunity it will provide for malfeasance and
abuse. Collier (2007) provides persuasive evidence on the negative impact of ineffective
systems of budget control. Countries where citizens are able to scrutinize government
activities and debate the merits of various public policies also makes a difference. In this
respect, press freedoms and levels of literacy will, likewise, shape in important ways the
context for reforms. Whether the country has an active civil society, with a culture of
participation could be an important ingredient supporting various strategies aimed at
reducing corruption.
Cutting red tape, the high correlation between the incidence of corruption and the extent
of bureaucratic red tape as captured, for instance, by the Doing Business indicators
suggests the desirability of eliminating as many needless regulations while safeguarding
the essential regulatory functions of the state. The sorts of regulations that are on the
books of many countries—to open up a new business, to register property, to engage in
international trade, and a plethora of other certifications and licenses—are sometimes not
only extremely burdensome but governments have often not paused to examine whether
the purpose for which they were introduced is at all relevant to the needs of the present.
Rose-Ackerman (1998) suggests that “the most obvious approach is simply to eliminate
laws and programs that breed corruption.”
Replacing regressive and distorting subsidies with targeted cash transfers, subsidies are
another example of how government policy can distort incentives and create
opportunities for corruption. According to an IMF study (2013), consumer subsidies for
energy products amount to some $1.9 trillion per year, equivalent to about 2.5 percent of
global GDP or 8 percent of government revenues.
1.17.1 Area of further research
The next researcher should now focus on the effectiveness of strategic human resources
management on enhancing financial performance on companies listed on the Zimbabwe stock
exchange.
1.18 Limitations
The paper could have covered all companies in Zimbabwe but due to limited resources
and the size of the country, a fewer companies were selected.
The researcher conducted the researcher will a limited number of researcher and some
key aspect of this paper could have been ignored.
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FOR DEALING WITH CORPORATE GOVERNACE ISSUES IN
ZIMBAMWE
Michael Chamunorwa Tigere and Research scholar SimbaraheMasamba
Holder of Masters in strategic and corporate governance
Email: [email protected]
Email: [email protected]
ABSTRACT
This research was done to explore the impact of strategy implementation as a solution for
corporate governance issues in Zimbabwe. The research introduced the global perspective issues
related to strategy implementation as a solution for corporate governance. The objectives of the
study were to assess the effect of strategy implementation on fairness, to assess the effect of
strategy implementation on accountability, to assess the effect of strategy implementation on
transparency and to assess the effect of strategy implementation on independence assurance.
Research methodology of this study used mixed approach and data collection instruments
included interviews and questionnaires. Data analysis was done using Stata 11 statistical
package. The findings indicated a correlation between study variables and this was shown by ‘t’tests that were above two and ‘p’-values that were below 5%. The research was concluded with
recommendations on what companies in Zimbabwe need to do to improve on performance and
ensuring that good corporate governance practices are maintained and area of further research
was established.
Keywords: Strategy implementation and corporate governance
1.0 Introduction
Several firms from around the world are operating in a stiff competitive environment and
requires strategic implementation and good corporate governance. Past researches have been
done on the impact of corporate governance issues on performance and non on strategic
implementation. Therefore, this paper seeks to assess the impact of strategy implementation as a
solution for dealing with corporate governance issues in Zimbabwe. The paper will be arranged
in the following sections, background or conceptual and theoretical framework, objectives,
hypothesis testing, significant of the study as well as need for the study, literature review,
research methodology, data presentation and analysis, recommendation and the paper will be
concluded by area of further research.
1.2 Conceptual and Theoretical framework
According to Hugrieves et al (2011), several firms from around the world are operating in a
complexity environment that is associated by business issues that need to be addressed and are
affecting operations. In support of the above Wein and Gibbs (2013), hypothesized that most of
the problems that are affecting business operation are as a result of poor corporate governance
practices within companies. Aaron (2012), in the same school of thought elaborated that for such
firms, to deal with such issues require strategy implementation and practical implementation of
different strategies in resolving corporate problems as way of enhancement of competitive
advantage.
In Europe, there is a company known as Enron which was in the energy sector, the company was
audited and passed and the company went on to liquidate as a result of poor corporate
governance issues.Mark et al (2012), cited that most of these companies are not putting in
practice co-pillar of corporate governance pillars for instance fairness, transparency,
accountability and independence assurance. According to James (2013), companies in Europe
that have been affected by poor corporate governance have since adopted turnaround strategies
that include management turnaround, financial turnaround and operational turnaround. Such
control measure has helped such companies to excel and their performance have improved
drastically.
In Africa, most companies have since adopted the concept of strategy implementation as the key
solution of solving corporate governance issues. According to Ngugi et al (2012), in Ghana
several companies in the telecommunication industry have adopted the concept of strategy
implementation and the market share has increased by15,6% and profitability by 12,4%.In
support of the above Donald (2013), elaborated that strategy implementation has helped several
countries in Africa to develop control measures in dealing with corporate governance issues and
in South Africa, tollgates and monitoring cameras have been put in place as a way of resolving
poor corporate governance.
Strategy implementation has proven not to be effective in dealing with corporate governance
issues as companies like Air Zimbabwe, ZETDC, National railways of Zimbabwe, PSMAS,
Zimbabwe broadcasting corporation, ENG and many more only to mention but a few have been
affected by poor corporate governance practices . According to Mlambo (2014, The Sunday
mail), companies in Zimbabwe have been affected by poor corporate governance seeing many
companies liquidated, placed under schemes of arrangement for instance Shabani mine in
Zvishavane , some have lost subscribers for instance PSMAS has lost more than 6 000 000
health subscribers due to poor governance issues caused by Cuthbert Dube the company CEO,
ZBC has been affected by these issues when Happison Muchechetere who frauded
approximately $1 000 000 from a broadcasting vehicle that he claimed that it costed $200 000,
Recently Prof Jonathan Moyo frauded the government $500 000 that he bought bicycles for
people in Tsholotsholo and Air Zimbabwe bosses stole engines for airplanes leading to the
company facing financial crisis and failed to settle its debts and retrenched more than 50
employees in 2015.
1.2 Statement of the problem
Corporate governance has become a major concern on performance of organization and it is still
not clear on whether strategic implementation will be effective on sound corporate governance
practices. Several studies have been done on poor corporate governance practices in Europe
especially with regards to fraud and none has been done to Zimbabwe focusing on corruption
and embezzlement of funds. This is the reason that motivated the researcher to carry out the
impact of strategy implementation as a solution for dealing with corporate governance issues in
Zimbabwe
1.3 Objective
1.
2.
3.
4.
To assess the effect of strategy implementation on fairness.
To assess the effect of strategy implementation on accountability.
To assess the effect of strategy implementation on transparency
To assess the effect of strategy implementation on Independence assurance.
1.4 Hypothesis Testing
H1 There is a relationship between strategy implementation and fairness.
H0 There is no relationship between strategy implementation and fairness.
H2 There is a relationship between strategy implementation and accountability.
H0 There is no relationship between strategy implementation and accountability.
H3There is a relationship between strategy implementation and transparency.
H0 There is no relationship between strategy implementation and transparency.
H4There is a relationship between strategy implementation and independence assurance.
H0 There is norelationship between strategy implementation and independence assurance.
Source: Raw data
1.6 Need for the study
The study will be of great importance to the researcher on expanding the body of knowledge and
the nation of Zimbabwe at large in coming up with strategies that can be adopted and
implemented to improve corporate governance practices in Zimbabwe
1.7 Operational Definition
Strategic implementation is the process that puts plans and strategies into action to reach goals
Corporate governance refers to the mechanisms, processes and relations by which corporations
are controlled and directed
1.8 Review of Literature
According Smith and Harrison (2014), to Strategy implementation is the translation of chosen
strategy into organizational action so as to achieve strategic goals and objectives. Strategy
implementation is also defined as the manner in which an organization should develop, utilize,
and amalgamate organizational structure, control systems, and culture to follow strategies that
lead to competitive advantage and a better performance as also supported by (Joseph et al 2013
and Gibbs 2011:12).
1.8.1 Effect of strategy implementation on fairness.
According to Ellis et al (2013), fairness means “treating all stakeholders s including minorities,
reasonably, equitably and provide effective redress for violations. Establishing effective
communication mechanism is important in ensure just and timely protection of resource sand
people asset as well correcting of wrongs as also supported by (James 2012 and Grace et al
2012).In the same manner Baaij et al (2012), supported that there is a positive relationship
between strategy implementation and fairness as both promote a positive impact in promoting
organisational performance. However regardless of the implementation of strategies as a way of
assuring good corporate governance practices, Zimbabwe is facing a lot of challenges in
addressing such issues as corruption and embezzlement of fund is at pick and still there is no
clue on what can be done to deal with the issue as supported by Mashava 2015, (The
standard).Furthermore, Fairness in Zimbabwe exists only in theory as there is inconsistence
policy changing and abuse of citizens as the nation is not practicing democracy and strategies
that are in place currently are in favor of those with political muscle as hypothesized by the
Julious 2015, (Newsday).
1.8.2 Effect of strategy implementation on accountability.
Accountability embraces ownership of strategy and task required to attain organisational goals as
stated by Jones and Abel (2013). This also means owing reward and risk in clear context of
predetermined value proposition. In support of the above, Steve alluded that when the idea of
accountability is approached with this positive outlook, people will be more open to it as a means
to improve their performance. This applies from the staff all the way up to top leadership
embracing Risk management within defined formal appetite for risk. According to Henry et al
(2014. According to Berchicci et al (2012), this also include fostering culture of compliance to
create real and perceived believe that the entity is operation within internal and external
boundaries and to achieve this, organisation’s in Zimbabwe must ensure that strategies are put in
place to ensure that good culture and ethics are molded in vision and mission of entities.
Furthermore, Carney et al (2011), cited that strategy implementation is still lacking in Zimbabwe
as many authors elaborate that it is the main key to ensure accountability of employees in
promoting good corporate governance practices. However Stone and Joshua (2012), argued that
in Zimbabwe accountability is maintained in most companies as corruption is at its pick.
1.8.3 Effect of strategy implementation on transparency
According to Jansen et al (2012), transparency “means having nothing to hide” that allows its
processes and transactions observable to outsiders. It also makes necessary disclosures, informs
everyone affected about its decisions. Transparency is a critical component of corporate
governance because it ensures that all of entity’s actions can be checked at any given time by an
outside observer. This makes its processes and transactions verifiable, so if a question does come
up about a step, the company can provide a clear answer. Donald and Keith (2012), postulated
that strategy implementation is lacking in most and if not all companies in Zimbabwe in ensuring
that transparency is practiced in entities. However, Harvard institution in 2016, cited that strategy
implementation in Zimbabwean companies can be achieved when companies practice rotation of
employees to ensure that employees do not familiarize with the systems as well as with the
people they work with as also supported by (Nadolsk et al 2014).
1.8.4 Effect of strategy implementation on independence assurance.
According to Volberda et al (2012), in progressing transparency it is important for non-direct
actors to obtain confidence that that executive actors are leading the entity towards pre-defined
intent and not using it for self and obtain expert advisory on how applied approached can be
improved. Assurance services provide independent and professional opinions that reduce the
information risk (risk that comes from incorrect information) as supported by (Wellington and
Spencer 2012). Independent assurance is the verification by a third party (not directly responsible
for QA and acceptance of the product/deliverable and/or the reliability of test results obtained
from quality control and acceptance testing. This independent assurance insures that (1) the
representation or acceptance test results are accurate and provide a fair and equitable basis for
construction acceptance and (2) quality control testing is accurate and thus will properly indicate
process quality. Furthermore, Lillian et al (2014), stated that companies in Zimbabwe should
ensure that entities should have board of directors that are both from within and outside the
organisation as well as external auditors that are independent. Wijen et al (2014), supported the
above school of thought citing that these members are independent on judgement and in most
cases do not accept bribes therefore enhancing good corporate governance practices.
1.8.5 Theoretical perspectives
The study will make use corporate governance theories for instance sabarnise Oxley and agency
theory since the theories covered strategic implementation and good corporate governance
practices
1.9 Methodology
The purpose of the study is to explore the impact of strategy implementation as a solution for
corporate governance issues in Zimbabwe. This researched used a mixed approach that is both
qualitative and quantitative techniques. According to Kumar et al (2015), states that
there many philosophies namely ontology, epistemology, constructivism,
naturalism, positivism and pragmatism. The researcher choose pragmatism
for this study because there is possibility of a predictive or generalizable
knowledge and will therefore proceed with a pragmatic position of what
constitutes science and the possibility of knowing the world
1.10 Research design
Positivism depends on quantifiable observations that lead themselves to statistical analysis. It has
been noted that “as a philosophy, positivism is in accordance with the empiricist view that
knowledge stems from human experience. It has an atomistic, ontological view of the world as
comprising discrete, observable elements and events that interact in an observable, determined
and regular manner” (Steve et al 2013).
1.11 The ResearchPopulation:
The population of this research study included a selected number of firms in Zimbabwe for
instance Air Zimbabwe, PSMAS, ZBC and ZETDC. The population can be in two categories, the
target and the study population. (Creswell 2012). The target population is the actual population to
which the researcher would really like to generalize. The target population in this study is the
populationconsisted the management and employees of selected firms. A total of 8 managers and
12 employees was used totaling to 20 participants
1.11.1 Selection of Sample Size:
According to Kumar (2014) sample size refers to the sampling portion that is drawn from the
target population. According to Donald et al (2012), when target population is small, the whole
population can be used as sample size. Therefore, the sample size for this study is 20 in line with
Donald model of sample size.
.
1.11.2 Sampling procedures:
The researcher adopted stratified random sampling as it is probability sampling technique and
ensures the grouping of variables in an orderly manner to assess the relationship. Trish et al
(2013) conducted their research similar to the researcher’s topic and used stratified random
sampling. The author argued that the advantages of this sampling technique are the capacity to
catch key populace attributes, it frequently requires a smaller sample which gives a more
prominent precision, consequently minimizing costs, and fundamentally it guarantees that
specific groups in a research population are sufficiently represented in the sample and enhances
effectiveness by increasing more control on the composition of the sample.
1.12 Research instruments:
1.12.1 Closed ended questionnaire
In order to attained adequate, appropriate and reliable information, the research work uses
mainly 5-minute telephone interviews and a questionnaire mainly because these two methods
were the most appropriate
1.12.2 Interviews
The researcher conducted face to face interviews as part of data collecting instruments and they
helped to cover the weaknesses of questionnaires. Interviews resulted by respondents resulted in
obtaining accurate information. In contrast to some reports in the literature, Obilor (2013) used
interviews in support of the questionnaires.
1.13 Methods of Data Collection:
Questionnaires will be designed by the aid of 5-point likert scaling and they will be in the form
of closed ended questionnaire to reduce further clarification. To ensure validity, the
questionnaires will be supported by planned face to face interview. A pilot test will be done to
few selected captains of industries to test for reliability.
Ordinal least squares model
Where: α+β1X1+β2X2+β3X3+β4X4+ε
Fairness = іα + β 1іE+ SI і + іϵ
Transparency = іα + β 2іT+ SI і + іϵ
Independence assurance= іα + β 3іA+ SI і + іϵ
Accountability = іα + β 1іR+ SI і + іϵ
1.13 Analysis of Data:
The researcher coded the companies using letters in order to protect the reputation and privacy of
the companies. The researcher used deductive approach to analyze quantitative data and
inductive approach to analyze qualitative approach. The researcher also used STATA11 and. If
the probability value is less than 0.05 we conclude that the variable is significant. The researcher
rejects any value that is greater than 0.05
Analysis and presentation:
Table???: Response Rate on questionnaires and interviews
Category
Administered
Returned
Total %
Employees
12
12
100
Management
8
8
100
Total
20
20
100
Source: Primary Data
Table 1.1
above shows the questionnaires that were distributed to both employees and manager
and from the 20 that were distributed only 20 were successful giving an overall response rate of
100%.The overall response rate is deemed favorable as it will yield reliability and validity as
supported by (Kumar et al 2013).
1.14 Findings and presentation
Table
;Correlation between strategy implementation and fairness
. reg si fr
Source
SS
df
MS
Model
Residual
1.37142857
3.42857143
1
18
1.37142857
.19047619
Total
4.8
19
.252631579
si
Coef.
fr
_cons
.5714286
3.428571
Number of obs
F( 1,
18)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
20
7.20
0.0152
0.2857
0.2460
.43644
Std. Err.
t
P>|t|
[95% Conf. Interval]
.2129589
.3749528
2.68
9.14
0.015
0.000
.1240186
2.640825
1.018839
4.216318
The findings from table …above indicated that there is a positive relationship between the
dependent and independent variables. According to Chen et al (2012), the relationship between
study variables is indicated by a ‘t’-value that is above 2 and a ‘p’-value that is below 5%.There
is a positive correlation between strategy implementation and fairness as indicated by a ‘t’-value
of 2,68 that is above 2 and a ‘p’-value of 0,015 that is below 0,05.Therefore an increase in
strategy implementation by 1-unit will lead to an increase on the corresponding variable by 57%
level of coefficient.
Correlation between strategy implementation and transparency
. reg si tr
Source
SS
df
MS
Model
Residual
1.56521739
3.23478261
1
18
1.56521739
.179710145
Total
4.8
19
.252631579
si
Coef.
tr
_cons
.5217391
3.486957
Std. Err.
.1767878
.3235749
t
2.95
10.78
Number of obs
F( 1,
18)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
20
8.71
0.0085
0.3261
0.2886
.42392
P>|t|
[95% Conf. Interval]
0.009
0.000
.1503217
2.807151
.8931566
4.166762
The findings above indicated that there is a positive relationship between the dependent and
independent variables. According to Chen et al (2012), the relationship between study variables
is indicated by a ‘t’-value that is above 2 and a ‘p’-value that is below 5%. There is a positive
correlation between strategy implementation and transparency as indicated by a ‘t’-value of 2,95
that is above 2 and a ‘p’-value of 0,009 that is below 0,05.Therefore an increase in strategy
implementation by 1-unit will lead to an increase on the corresponding variable by 52% level of
coefficient.
Correlation between strategy implementation and independence assurance
. reg si ri
Source
SS
df
MS
Model
Residual
1.8
3
1
18
1.8
.166666667
Total
4.8
19
.252631579
si
Coef.
ri
_cons
.5
3.5
Std. Err.
.1521452
.2886751
t
3.29
12.12
Number of obs
F( 1,
18)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
20
10.80
0.0041
0.3750
0.3403
.40825
P>|t|
[95% Conf. Interval]
0.004
0.000
.1803549
2.893516
.8196451
4.106484
The findings above indicated that there is a positive relationship between the dependent and
independent variables. According to Chen et al (2012), the relationship between study variables
is indicated by a ‘t’-value that is above 2 and a ‘p’-value that is below 5%. There is a positive
correlation between strategy implementation and independence assurance as indicated by a ‘t’value of 3,29 that is above 2 and a ‘p’-value of 0,004 that is below 0,05.Therefore an increase in
strategy implementation by 1-unit will lead to an increase on the corresponding variable by 15%
level of coefficient.
Correlation between strategy implementation and accountability
. reg si acc
Source
SS
df
MS
Model
Residual
1.56335878
3.23664122
1
18
1.56335878
.179813401
Total
4.8
19
.252631579
si
Coef.
acc
_cons
.4885496
3.496183
Std. Err.
.1656877
.3208529
t
2.95
10.90
Number of obs
F( 1,
18)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
20
8.69
0.0086
0.3257
0.2882
.42404
P>|t|
[95% Conf. Interval]
0.009
0.000
.1404526
2.822096
.8366466
4.17027
The findings above indicated that there is a positive relationship between the dependent and
independent variables. According to Chen et al (2012), the relationship between study variables
is indicated by a ‘t’-value that is above 2 and a ‘p’-value that is below 5%.There is a positive
correlation between strategy implementation and accountability as indicated by a ‘t’-value of
2,95 that is above 2 and a ‘p’-value of 0,009 that is below 0,05.Therefore, an increase in strategy
implementation by 1-unit will lead to an increase on the corresponding variable by 49% level of
coefficient.
1.15 Conclusions
To conclude the study has proven a positive relationship between strategic implementation and
corporate governance as deduced by t-values above 2 and p-values that are significant at 5%
1.16 Implications
The main aim of this study was to address the impact of strategic implementation as a solution
for corporate governance in Zimbabwe. The paper have been done so by the help of regression
analysis to test correlation of study variables.
1.17 Recommendations
Companies in Zimbabwe should put in place strategic policies that are consistent and
these promote organizational performance and in return this will promote investor
confidence.
Companies should also put in place control measures that reduce pilferages and fraud for
instance the installation of CCTV and make use of software packages that are reduces
fraudulent for instance accounting packages like pastel and serge.
The parliament of Zimbabwe must put in place still laws that attach stiff penalties that
restrict members of political parties from embezzlement of funds and they must raise
number of years to be saved by people involved in poor corporate governance issues.
Organizations in Zimbabwe must mound a culture that restrict people from corruption
and accepting bribes and organization should practice internal recruitment to maintain
good culture within the organization.
Paying civil servants well, whether civil servants are appropriately compensated or
grossly underpaid will clearly affect motivation and incentives. If public sector wages are
too low, employees may find themselves under pressure to supplement their incomes in
“unofficial” ways. Van Rijckeghem and Weder (2001) did some empirical work showing
that in a sample of less developed countries, there is an inverse relationship between the
level of public sector wages and the incidence of corruption.
Creating transparency and openness in government spending, Subsidies, tax exemptions,
public procurement of goods and services, soft credits, extra-budgetary funds under the
control of politicians all are elements of the various ways in which governments manage
public resources. Governments collect taxes, tap the capital markets to raise money,
receive foreign aid and develop mechanisms to allocate these resources to satisfy a
multiplicity of needs. Some countries do this in ways that are relatively transparent and
make efforts to ensure that resources will be used in the public interest. The more open
and transparent the process, the less opportunity it will provide for malfeasance and
abuse. Collier (2007) provides persuasive evidence on the negative impact of ineffective
systems of budget control. Countries where citizens are able to scrutinize government
activities and debate the merits of various public policies also makes a difference. In this
respect, press freedoms and levels of literacy will, likewise, shape in important ways the
context for reforms. Whether the country has an active civil society, with a culture of
participation could be an important ingredient supporting various strategies aimed at
reducing corruption.
Cutting red tape, the high correlation between the incidence of corruption and the extent
of bureaucratic red tape as captured, for instance, by the Doing Business indicators
suggests the desirability of eliminating as many needless regulations while safeguarding
the essential regulatory functions of the state. The sorts of regulations that are on the
books of many countries—to open up a new business, to register property, to engage in
international trade, and a plethora of other certifications and licenses—are sometimes not
only extremely burdensome but governments have often not paused to examine whether
the purpose for which they were introduced is at all relevant to the needs of the present.
Rose-Ackerman (1998) suggests that “the most obvious approach is simply to eliminate
laws and programs that breed corruption.”
Replacing regressive and distorting subsidies with targeted cash transfers, subsidies are
another example of how government policy can distort incentives and create
opportunities for corruption. According to an IMF study (2013), consumer subsidies for
energy products amount to some $1.9 trillion per year, equivalent to about 2.5 percent of
global GDP or 8 percent of government revenues.
1.17.1 Area of further research
The next researcher should now focus on the effectiveness of strategic human resources
management on enhancing financial performance on companies listed on the Zimbabwe stock
exchange.
1.18 Limitations
The paper could have covered all companies in Zimbabwe but due to limited resources
and the size of the country, a fewer companies were selected.
The researcher conducted the researcher will a limited number of researcher and some
key aspect of this paper could have been ignored.
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