Tag: resource management

  • Accountable Supervision

    Accountable Supervision

    Leadership values are not only confined to the running of a political campaign, party, or country for that matter, however, like in any venture that has an objective and deals with human beings – it forms the backbone of a successful business.

    Consequently, what leaders such as CEO of Tesla Elon Musk, for example, say or does, have a positive or, in the recent unfortunate case, a negative impact on the shareholdings of his business.


    The share price can decline sharply and worse yet, it can lead to the exit of senior staff members and thus undermining the business, its leadership values, and objectives.


    This why it is critical for companies to adopt the right practices and responsible leadership to enable them to address both internal and external issues affecting them.


    This is even most relevant when dealing with a company that has a multinational operational facet such as the Murray and Roberts Group – a South African company that operates in a global setting.


    This specific multinational company was used in a case study for a research paper because it is firmly entrenched in the construction and engineering industry.


    More specifically, they service the global natural resources market sectors of underground mining; Oil & Gas; Power & Energy.
    Such a diverse set of operations requires a varied set of objectives spearheaded by a solid leadership path.

    A new model of leadership

    We have covered the topic of Emotional Intelligence before. It now surfaces again within a brand-new leadership model known as the ARCHES model.
    The name derives from a key characteristic of the physical structure of an arch and its durability.

    Coupled with its diversity in models and materials and its depiction as symbols of triumph, it represents an apt analogy of what responsible and effective leadership should be.


    The model was especially derived by an academic* for a syndicate group assignment and is based on six key characteristics that should be imparted in a leader.


    An effective and responsible leader is one who is attuned to their followers, responsive, possesses the necessary competencies, serves with humility, is ethical and adopts a sustainable approach to leadership.

    A leader who possesses all these attributes is one who can rise above adversity and lead their followers in a way that promotes innovation, motivates, develops skills, promotes personal growth, and encourages improved performance.

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    Application of the model

    ARCHES

    The model defines attuned leadership as the act of being self-aware, informed, and aware of the environment in which you exist – servant leadership.


    Employees should be encouraged to take responsibility for their actions because responsibility and effectiveness are complimentary. The demise of US energy company Enron, for example, was due to a failure of management to execute communication-based responsibility, internally and externally.

    A volatile, uncertain, complex, and ambiguous environment in which a business operates can result in many potential projects not coming to fruition.


    In such an environment, leaders that are attuned, responsive, and possess the right competencies can expert power as their way to influence followers to exhibit the same traits.


    Referent power develops out of admiration of another and a desire to be like them. Expert power, on the other hand, is a person’s ability to influence others’ behaviour because of recognized knowledge, skills, or abilities.
    This requires the leader to have a tolerable level of humility.

    This is defined as a personal quality reflecting the willingness to understand the self (identities, strengths, and limitations). That combined with a purpose in the self’s relationship with others.


    Once again, the emphasis on Emotional Intelligence coupled with traditional leadership competencies is needed to steer multifaceted companies.

    Even more so when dealing with diverse cultures and work ethics across borders and continents.

    Direct consequences

    Being the largest employer in the locality directly implied that Murray and Roberts had to be consistent with the idiomatic Zulu expression of “Umuntu ngumuntu ngabantu”. This means: I am because you are, you are because we are.
    Good leadership in the Ubuntu philosophy is based on the engagement with communities and defines a well-led organization.


    Not paying attention to ethical issues surrounding a community or the environment can have an adverse effect on your values. This would also affect your staff and the image of the company you steer.


    A bitter consequence of the failure of ethics was evident in the $4.2m (64.1 million ZAR) fine to the said company. This was for its involvement in sector collusion related to construction projects for the 2010 World Cup.

    Concluding remarks

    Finally, a practical leader will also consider any upcoming projects with the lens of understanding the environment that surrounds them to incorporate the concept of sustainability.


    These traits might sound like they need to be learned but most should be already ingrained or come naturally to you or your leaders.

    If not this is not the case, you need to quickly install the right personnel with such to help steer your business enterprise or economy for that matter, to success.

    *This blog post contains excerpts and is derived from a master’s research paper. It was conducted by Bonnie Moyo for the Rhodes University Business School.


  • Elasticity and Sin Tax

    Elasticity and Sin Tax

    We can change our dependence on certain goods and services so that we don’t take too high a knock when their prices fluctuate.

    Life is about making choices. As rational beings, we tend to make choices that benefit our wealth and well-being.


    But some choices have to be made on our behalf — especially when it comes to the provision of commonly used goods and services.

    What is elsaticity?

    The prices of government-regulated products such as fuel, alcohol, and cigarettes are examples. How we react to the price change (whether an increase or decrease) is referred to in economics as elasticity.


    It is a general term for a ratio of change and scientifically attempts to capture your sensitivity to price movements. It is the percentage change in the quantity demanded (or supplied) of something brought about by a percentage change in its price.

    A 10% increase in the price of bread, resulting in a decrease in the quantity demanded by 8%, means your price elasticity of demand for bread is 0,8.

    The ratio is expressed as a number between negative infinity and infinity, with one being the midpoint. The number has no unit — it is not expressed in centimetres, litres or as a percentage.

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    But that number tells us a great deal. If it is higher than one, the product is said to be elastic. This means the quantity you demand responds strongly to price changes.


    Anything under one is inelastic. This means a price change doesn’t affect your demand for it much.

    When a product is said to be unit elastic, it means the change in quantity demanded is equal to the change in price.

    Practical examples

    On the commercial side, the concept becomes more useful when formulating and studying consumer trends. It is especially beneficial to brand managers who need to set prices for their products while paying attention to sales.


    Income elasticity of demand measures the responsiveness of the quantity of a good to changes to your disposable income.


    Generally, the more inelastic the product, the easier it is for firms to maximize profit by increasing their price.

    Taking advantage of addictions

    If you’ve ever wondered why the prices of your alcohol and cigarettes — commonly referred to as “sin taxes” — always rise, it is because they are inelastic.


    If you were addicted to nicotine, for instance, you would rather cut down on movie tickets to still afford a box of smokes. This makes you inelastic to the increase in cigarette prices.


    Likewise, we industrialize, we become heavily reliant on oil. Our dependence on oil was reiterated in the latest Organisation of Petroleum Exporting Countries (Opec) oil outlook, which paints a gloomy picture. The West’s demand for oil is predicted to surpass the available supply in the coming years.


    Globally, over the decade of 1994-2004, about five times more passenger cars appeared on our roads than commercial vehicles. In South Africa, alone, commercial vehicle sales for July were up 13% in the same period.
    Concurrently, increases in lorry volumes worldwide have been observed.


    The more inelastic your product is, the easier it is for you to slap your consumers with high price increases.

    At the time of writing in 2007, the oil price once hovered around $73/barrel and threatened to reach a record high of $80*

    Concluding remarks

    By using other means of energy (oil substitutes, wind, electricity, and solar) we could reduce our reliance on oil. this would make it less inelastic.

    In South Africa, for example, using trains for cargo transport would ease our dependence on petrol and diesel-powered commercial vehicles.

    Carmaker Tesla recently launched its future truck and alleged fastest production car in a big to reduce our reliance on fossil fuels. Tesla is gaining steady ground to introduce its electric cars to the world and has surpassed the net worth of Ford.


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