Managing organizational performance in Africa

Article Type: Editorial From: African Journal of Economic and Management Studies, Volume 3, Issue 2

Management scholars generally endorse the view that organizations are embedded in social, cultural, economic and political contexts. The interplay of these contextual factors combines with the visions and values of top executives to shape the growth paths of the organizations. Thus, context matters in understanding managerial behaviours, leadership styles, communication processes and employee motivations and commitment, all of which jointly inform organizational performance (Pettigrew, 1977; Sharma, 2000; Robie et al.,2001). Thus, as African countries and organizations strive to position themselves on the global economic and political landscape during the second decade of the twenty-firsts century, they need to reflect on the contextual roots of their management practices and the manner in which their employees respond to these practices (Kuada, 2010).

All the papers in the current issue of AJEMS rest on this understanding and have made contributions to different aspects of organizational performance management. Frederik Claeyé initiates the discussion by presenting a framework for the analysis of the power dynamics that shape the emergence of hybrid management systems in sub-Sahara Africa. Drawing on the metaphors of mimicry and hybridity (Bhabha, 1994), he argues that postcolonial theory offers an avenue for investigating the power dynamics surrounding cross-cultural interactions within and between organizations. He illustrates his arguments with examples from activities of non-governmental organizations in the Eastern Cape of South Africa.

Organizational growth is driven partly by a combination of external and internal factors (Hansen and Wernerfelt, 1989). One of the key internal determinants of organizational performance is an organization’s mission statement. These statements reflect the underlying values and legitimacy of organizations, i.e. reasons for their existence. A good mission statement provides employees with focus and inspires them to set their own goals and align them to those of the organization. Leaning on this understanding, William Phanuel Kofi Darbi examines how high-performing organizations located in Ghana define their missions. He undertook a content analysis of the mission statements of 50 of the 100 Ghana Club 100 firms. The study found that high-performing Ghana-based firms define their missions to include components that are found in the contemporary management literature, i.e. identity, image,showing concern for employees and shareholders and ensuring sustained financial performance.

Leadership style is another internal determinant of organizational performance. Some leadership styles are considered to be more performance-enhancing than others. In general terms, leaders who are charismatic, inspirational and visionary are more likely to motivate employees to set higher goals and contribute substantially to the attainment of organizational goals. On the other hand, managers whose behaviours reflect irritability, non-cooperativeness, egocentrism, ruthlessness and dictatorship tend to create de-motivating organizational atmosphere for their employees(Robie et al., 2001). Thus, the management literature advises managers to rely on psychological attributes such as hope, optimism, self-efficacy and resiliency in their interactions with employees.

These understandings have informed James Baba Abugre’s paper. He writes on “How managerial interactions affect employees’ work output in Ghanaian organizations”. Using survey data collected from 120 workers from four Ghanaian organizations, he showed that regular interactions between managers and employees tended to exert positive impact on the employees’work output. He advises Ghanaian managers to involve lower level employees in their organizational activities and decision making in order to strengthen their commitment to organizational goals and tasks.

Financing and investment decisions have been repeatedly presented as major weaknesses in the growth process of African organizations. Ushad Subadar Agathee’s paper provides some additional insights into these issues. He writes on “Momentum strategies on the stock exchange of Mauritius”. The paper aims at assessing the presence of the momentum effect on the stock exchange of Mauritius (SEM) and its implications for investors. He based his analysis on data for stock trading activities of all listed companies on the SEM from 2001 through 2009 and used capital asset pricing model to estimate the risk adjusted returns for momentum portfolios. The results showed the presence of the momentum effects within the stock exchange.

The issues of finance and investment have also been taken up in Ibrahim El-Sayed Ebaid’s paper with the title “Earnings management to meet or beat earnings thresholds: evidence from the emerging capital market of Egypt”. His aim in this study was to examine whether Egyptian listed firms engage in earnings management to meet or beat earnings thresholds. The results showed some discontinuities in the distribution of reported earnings and earnings changes,suggesting that Egyptian listed firms tend to engage in earnings management to avoid reporting losses.

Economic growth depends not only on effective management of established companies. It also depends on the number and nature of new enterprises that are established in a given country. Governments and policy makers in several African countries are therefore turning to entrepreneurial career management as a growth-inducing policy instrument. This has increased academic focus on students’entrepreneurial intentions in Africa. Dugassa Tessema Gerba’s paper contributes to this stream of research by studying “Impact of entrepreneurship education on entrepreneurial intentions of business and engineering students in Ethiopia”. He surveyed the entrepreneurial intentions of 156 undergraduate students in Ethiopia. The results showed that students who studied business management (and had a course in entrepreneurship)tended to have better entrepreneurial intention than those who studied engineering and had not taken an entrepreneurship course. There were also some differences between the male and female students, with the male management students showing higher inclination to pursue entrepreneurial careers than the female students.

Together these papers draw attention to research gaps that still exist in our understanding of the processes of organizational performance management in Africa and provide pointers for future research in the field.

John Kuada