What are the strategies put in place by a company of your choice to improve the bond between service deliver and business performance?

Saniter ( 2016)  alludes that service delivery is closely related to service provision and both of these concepts create a relationship with the customer. On the other hand, business performance is defined as the wide range of indicators that can focus on profitability, growth, or social performance of an organisation (Madhakani, 2012).  It is closely related to the business competencies, which help the company achieve organisational goals based on preset indicators (EU Commission, 2003).  These concepts will be discussed closely in relation to how the Grain Marketing Board (GMB) of Zimbabwe runs its organisation in order to achieve its goals.

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The GMB was established in 1931 and was formerly named Maize control board. The name was changed in 1951 after the organisation increased its portfolio to include all grains like rice, beans, rapoko etc (Chapangara, 2014). The GMB is state-owned and has a network of 84 depots giving it an edge to reach most of its customers in Zimbabwe. The GMB is in the business of commodity trading in cereals and oilseeds, the provision of logistic services to the farmers as well as the processing of products (Chapangara, 2014). The main aim of the organisation is to ensure national food security through production, procurement and management of the Strategic grain Reserve. The organisation also seeks to be a profitable entity by producing a wide range of products under the Silo and Country feeds brand (Madziwanzira,  2015).

Godana  & Hlatshwayo (1998) postulates that in 1991 the government of Zimbabwe adopted the Economic Structural Adjustment Program (ESAP), which resulted in the removal of agricultural subsidies and food commodity subsidies. This was a turning point where the monopoly of the organisation was removed and private players came in as competition. This was a strategy to reduce the burden that the government was incurring in subsidies and allow the company to stand on its own and possibly become profitable. A lot of problems resulted from this move (Godana  & Hlatshwayo, 1998).

Zimbabwe Agricultural Commodity exchange (ZIMACE), a private company became a stern competitor. ZIMACE traded in most crops except tobacco and horticultural crops. According to Madziwanzira  (2015), GMB used to operate a centralised cheque system and it took them two months for a customer to get paid.  In addition, the cheque took another two weeks to mature in the bank. This caused delays and smallholder farmers were cohered to cash in the cheques at shops where they were asked to buy goods 25% upward of the value of the cheque. Moreover, the most small scale farmers did not have the bank accounts (It’s a great achievement because of advancement in technology it is now easy for farmers to own a bank account and farmers are receiving their payouts within a week (Chikwati, 2019). This is attributed to system upgrade and the decentralisation of some of the processes involved in paying a farmer.)

Madziwanzira  (2015) adds on to say that farmers started operating below operating costs when the nation was experiencing a hyperinflation phase. As a result, the farmers struggled to buy agricultural inputs for the next season. This subsequently limited the maize being delivered to GMB and in turn, the grain reserve was also affected. ZIMACE, however, had a different system altogether where farmers were offered instant payment therefore they were able to use their money before it lost value. This resulted in most farmers delivering grain to this company.

Furthermore, Madziwanzira  (2015) continues to reveal that GMB as compared to ZIMACE, announced producer prices for a pan-season.  This type of pricing had a negative impact on the farmers as the money was easily eroded by hyperinflation even before they got it. However, the farmers were guaranteed markets and prices when they were markets induced price fluctuations. ZIMACE pricing was market-based as a result in times where the commodity was flooded in times of a bumper harvest, their price was low and farmers got little out of their produce. For example, the farming season of 1996/97 ZIMACE was trading higher than GMB except during the month of June where maize was traded at $Z1063 per tonne lower than the GMB price of $Z 1200 per tonne. The reason for this was that the market was still saturated by the commodity as most producers were selling their produce.

Furthermore, on service delivery, GMB weighing and grading systems were unfavourable to the smallholder farmers. GMB took a small sample which was used to find the grade of the whole maize, and this is the procedure even to date (Chapangara, 2014). The smallholder farmers also felt cheated by the GMB’s weighing system which accepted bag mass ranges from 89kg – 93 kg. If the mass was below the range, the farmer was penalised and when it was above, it was a loss to the farmer. This was another blow to GMB as farmers opted to sell to private companies. However, in recent times all GMB depots receiving grain have scales which accurately measure the productivity of the farmer and hence that old problem was solved. A lot of developments have happened over the years at GMB, and efforts have been made to keep up with the latest technologies which improve service delivery and possibly enhancing business These include the upgrade of the SAP system, forming a fully-fledged commercial unit, incorporating Results Based Management (RBM), partnering with banks to avail inputs for farmers and decentralising some of the processes in farmer payments (Chikwati, 2019).

GMB has been transformed from a social institution into a commercially viable company. In recent times the government has moved to divide the company into two units namely Strategic Grain Reserve (SGR) and Silo Food Industries (SFI) which became fully operational in April 2019.  This has come as a strategy to improve service delivery thereby igniting company performance.  This is reinforced by  Chitumba (2019) when he quoted the General Manager Mr Mutenha of GMB  saying that SFI was made a standalone entity in order to stabilise food staff prices on the market, so as to be a force to be reckoned with on the food market.  Splitting a company ensures that deadlines and outcomes are clear ( Davis, 2018). This ensures a smoother running of the business.

Davis  (2018) argues though that splitting comes with a lot of risks which includes duplication of every business function and an inherent effect on Finance, Tax, Treasury, Investor relations, Legal, Human resources and of course information technology.  He also adds that when a company is splitting it is critical to define the target state business model and technology landscape and execute accordingly.  

Furthermore, he alludes that splitting requires cross-functional collaboration and visibility at the strategic and execution level.  This involves establishing a separate steering committee that will spearhead the end-to-end split across HR, Organisational Design, Shared Services and Physical Location Structuring, IT, Financial Reporting, Treasury, etc. Having such a committee will ensure that the processes between the separate companies are well organized and are beneficiary for both parties.  If the split is managed well success is guaranteed as noted when Manitowoc Company successfully became two companies namely Manitowoc and Welbilt in the year 2016, hitting the publicly declared target. Over the last two years, the stock prices for both companies are more than the previous value of the combined company. This means that the strategy may give GMB a head start and possibly break the record of perennial losses over the past years. With regards to GMB though, there is no published scholarly material to ascertain the effect of the strategy of separation of the company performance.

 GMB has adopted the Result Based Management which focuses on evidence provided by the employees on whether they met their targets in service delivery. The Southern Australian Government Guide to Performance for the state highlights that there is a need to put in place guidelines to employees so that they know what is expected of them and the support that they are going to be given. The Zimbabwean Public Service Regulation of 2000 as amended in 2001 makes it compulsory for all employees to be appraised annually so as to help improve service delivery. GMB is under this regulation but no research has been done to reveal the effectiveness of this program.

Zvavahera, P. (2013) in his research looking at performance management systems on service delivery in the Zimbabwean civil service observed that 70% of the respondents did not understand the current management system. He also discovered that the majority of the respondents (80%) revealed that the performance information was partially being used to find performance gaps so as to design a training program for the employees. Most employees chose programs they liked not those discovered in the performance assessment. This shows how this management tool falls short in some of the government institutions, although many scholars reveal that this can improve organisation performance (Madhakani, 2012). It is yet to be discovered how this management tool affects GMB.

REFERENCES

1. Chikwati, E  2019, Farners get backdated GMB payments, viewed 2 June 2020

<https://www.herald.co.zw/farmers-get-backdated-gmb-payments/

2. Chitumba, M 2019, Silo Foods opens shops countrywide, viewed 2 June 2020

<https://www.herald.co.zw/silo-foods-opens-84-shops-countrywide/

3. Chapangara, P.T.(2014). The role of an effective enterprise risk management framework. A

case of the Grain Marketing Board - Zimbabwe.” Masters Degree in Business Leadership of

Bindura University of Science Education. Zimbabwe.

4. Godana, T. & Hlatshwayo, B. (1998). Public enterprise reform and privatisation in

Zimbabwe: Economic, legal and institutional aspects. (Online).

Available:http://www.archive.lib.msu.edu (Accessed 1 June 2020).

5. Davis, C 2018, Five lessons for successfully splitting a company, viewed 2 June 2020

<https://www.cio.com/article/3258770/5-lessons-for-successfully-splitting-a-company.html>

6. Madziwanzira, B. (2015).Effectiveness of Performance Management Systems in Government

Parastatals in Zimbabwe. A case of the Grain Marketing Board. Masters in Business

7. Madhakani, (2012) Implementing Results-Based Management in Zimbabwe: Context and Implications for the Public sector. International Journal of Human and Social science vol. 2 No. 8

8. Saniter, C  2016, Introduction to service delivery, viewed 2 June 2020

<https://linnk.springer.com/chapter/10.1007/978-3-319-40283-3_12>

9. Zvavahera, P. (2013). An evaluation of the effectiveness of performance management

systems on service delivery in the Zimbabwean civil service. Journal of Management and Marketing Research