EASTERN AND SOUTHERN AFRICAN MANAGEMENT INSTITUTE (ESAMI)

STRATEGIC MANAGEMENT COURSE (SM 502) PROJECT ASSIGNMENT ASSIGNMENT TITTLE

A STUDY OF THE STRATEGIC MANAGEMENT PROCESS OF EXIM BANK (T) LTD

PREPARED AND SUBMITTED BY: James Nzalalila 19EHQ9967 SUBMITTED TO: Prof !!or C" # $% C&'$()$*) BOX ! ! ESAMI " ARUSHA

TABLE OF CONTENTS+ P)* Ta#le $% &$'(e'(s)))))))))))))))))))*** 1

I'(+$,-&(i$')))))))))))))))))))))) . /0a( s(+a(e12 a', s(+a(e1i& ma'a1eme'( is all a#$-()))))) E3im Ba'4 P+$,-&(s))))))))))))))))))) 5 E3im Ba'4 s(+a(e1i& ma'a1eme'( 6+$&ess)))))))))**** 5 S(a%% i'7$l7eme'( i' (0e s(+a(e1i& ma'a1eme'( 6+$&ess)))))* 9 8$+6$+a(e Missi$' s(a(eme'( a', 7al-es)))))))))))* 9 Im6leme'(a(i$' a', e3e&-(i$' $% (0e s(+a(e1ies))))))))* 1!

Re7ie9i'1 (0e s(+a(e1i& 6la'))))))))))))))))* 11 Re&$mme',a(i$' a', &$'&l-si$')))))))))))))***** 11 Bi#li$1+a602: &$'s-l(e, s(a%% a', 9e#si(e -se,)))*)))))** 1.

INTRODUCTION This project paper concentrates in the strategic management process of EXIM Bank (T) Ltd which has been in use for the past five in brief the background and profi#e of the EXIM Bank (T) Ltd$ BRIEF INTRODUCTION ABOUT EXIM BANK. E"im Bank is a #oca## estab#ished and private# owned commercia# bank$ %perations began in &ugust '(() as a resu#t of the #ibera#i*ation of the banking and financia# sector in Tan*ania$ The Bank broke even within its first + months of operations! which is a rare occurrence in an banking sector$ ,ince its inception! E"im has enjo ed ear to ear growth in profits! assets and deposits$ E"im is now ranks among the top ten Banks in Tan*ania$ EXIM Network E"im Bank started its operations back in '(() with on# one branch that is -ar es ,a#aam main branch$ Toda the bank has e"panded its branch network to fourteen fu## f#edged branches! which are. In -ar es ,a#aam/ -ar es ,a#aam main !0#ock Tower! M#imani! 1amanga! 1 erere 2oad and Temeke$ In &rusha/ &rusha Main Branch! Mount Metu branch %ther 3pcountr branches are/ Tanga! Mtwara! Morogoro! Mwan*a! Moshi! Mbe a 4an*ibar and 5aratu$ These branches are on#ine connected to one another and are a## operating with profits$ ears! before discussing issues of strategic management in E"im Bank It is essentia# to know

WHAT STRATEGY AND STRATEGIC MANAGEMENT IS ALL ABOUT? ,trateg is concerned with positioning the business in the market! estab#ishing a reputation with 0ustomers! emp#o ees and other stakeho#ders$ It is concerned with #ong term growth and with stewardship of resources$ Those making strateg need to know the are in contro# of the business$ (6era#d 0o#e management theor 7 practice) &ccording to %hmae ('(89) comments what is business strateg is a## about is in a wor#d co !et"t"#e $%#$&t$'e without competitors! there wou#d be no need for ,trateg strateg for the purpose of strateg is to sustain an edge over competitors$ :owever strateg is more than just a ;uestion of gaining competitive advantage is a#so about setting standards of behavior! deve#oping a corporate cu#ture setting goa#s in re#ation to other stake ho#ders! such as compan emp#o ees! its supp#iers and its shareho#ders$ 3sing the strategic management approach! managers at a## #eve#s of the firm interact in p#anning and imp#ementing$ &s a resu#t the behaviora# conse;uences of strategic management are simi#ar to those of participative decision making$ Therefore an accurate assessment of the impact of strateg non financia# eva#uation criteria$ Business firms var in the process the use to formu#ate and direct their strategic management activities however the most important thing in a successfu## strateg management is e"ecution and imp#ementation of the p#an which often formu#ation on organi*ation performance re;uires not on# financia# eva#uation criteria but a#so

#ead to unsuccessfu# targets when wrong# e"ecution of the formu#ated strategic p#an$

imp#emented or due to #ack of

Str$te'"c or "&(t"t)t"o&$*

$&$'e e&t is the conduct of drafting! imp#ementing

and eva#uating cross<functiona# decisions that wi## enab#e an organi*ation to achieve its #ong<term objectives$ It is the process of specif ing the organi*ation=s mission! vision and objectives! deve#oping po#icies and p#ans! often in terms of projects and programs! which are designed to achieve these objectives! and then a##ocating resources to imp#ement the po#icies and p#ans! projects and programs$ & ba#anced scorecard is often used to eva#uate the overa## performance of the business and its progress towards objectives$ ,trategic management is a #eve# of manageria# activit under setting goa#s and over Tactics$ ,trategic management provides overa## direction to the enterprise and is c#ose# re#ated to the fie#d of %rgani*ation ,tudies$ In the fie#d of business administration it is usefu# to ta#k about >strategic a#ignment> between the organi*ation and its environment or >strategic consistenc >$ &ccording to &rieu (9??))! >there is strategic consistenc when the actions of an organi*ation are consistent with the e"pectations of management! and these in turn are with the market and the conte"t$> @,trategic management is an ongoing process that eva#uates and contro#s the business and the industries in which the compan is invo#ved. assesses its competitors and sets goa#s and strategies to meet a## e"isting and potentia# competitors. and then reassesses each strateg annua## or ;uarter# Ai$e$ regu#ar# B to determine how it has been imp#emented and whether it has succeeded or needs rep#acement b a new strateg to meet changed circumstances! new techno#og ! new competitors! a new economic environment$! or a new socia#! financia#! or po#itica# environment$C (Lamb! '(8D/i") STRATEGY FORMULATION ,trategic management is a combination of three main processes which are as fo##ows/

<

Eerforming a situation ana# sis! se#f<eva#uation and competitor ana# sis/ both interna# and e"terna#. both micro<environmenta# and macro< environmenta#$

0oncurrent with this assessment! objectives are set$ These objectives shou#d be para##e# to a time#ine. some are in the short<term and others on the #ong<term$ This invo#ves crafting vision statements (#ong term view of a possib#e future)! mission statements (the ro#e that the organi*ation gives itse#f in societ )! overa## corporate objectives (both financia# and strategic)! strategic business unit objectives (both financia# and strategic)! and tactica# objectives$

These objectives shou#d! in the #ight of the situation ana# sis! suggest a strategic p#an$ The p#an provides the detai#s of how to achieve these objectives$

This three<step strateg formu#ation process is sometimes referred to as determining where ou are now! determining where ou want to go! and then determining how to get there$ These three ;uestions are the essence of strategic p#anning$ STRATEGY IM+LEMENTATION

&##ocation and management of sufficient resources (financia#! personne#! operationa# support! time! techno#og support)

Estab#ishing a chain of command or some a#ternative structure (such as cross functiona# teams)

&ssigning responsibi#it of specific tasks or processes to specific individua#s or groups

It a#so invo#ves managing the process$ This inc#udes monitoring resu#ts! comparing to benchmarks and best practices! eva#uating the efficac and efficienc of the process! contro##ing for variances! and making adjustments to the process as necessar $

Fhen imp#ementing specific programs! this invo#ves ac;uiring the re;uisite resources! deve#oping the process! training! process testing! documentation! and integration with (andGor conversion from) #egac processes$

Thus! when the strateg imp#ementation processes! there have been man prob#ems arising such as human re#ations andGor the emp#o ee<communication$ &t this stage! the greatest imp#ementation prob#em usua## invo#ves marketing strateg ! with emphasis on the appropriate timing of new products$ &n organi*ation! with a effective management! shou#d tr to imp#ement its p#ans without signa#ing the fact to its competitors$ In order for a po#ic to work! there must be a #eve# of consistenc from ever person in an organi*ation! inc#uding from the management$ This is what needs to occur on the tactica# #eve# of management as we## as strategic$ STRATEGY E,ALUATION

Measuring the effectiveness of the organi*ationa# strateg ! it=s e"treme# important to conduct a ,F%T ana# sis to figure out the strengths! weaknesses! opportunities and threats (both interna# and e"terna#) of the entit in ;uestion$ This ma re;uire to take certain precautionar measures or even to change the entire strateg $

In corporate strateg ! Hohnson and ,cho#es present a mode# in which strategic options are eva#uated against three ke success criteria/

,uitabi#it (wou#d it workI) Jeasibi#it (can it be made to workI) &cceptabi#it (wi## the work itI)

S)"t$-"*"t. ,uitabi#it dea#s with the overa## rationa#e of the strateg $ The ke point to consider is whether the strateg wou#d address the ke strategic issues under#ined b the organisation=s strategic position$ 7

-oes it make economic senseI Fou#d the organisation obtain economies of sca#e! economies of scope or e"perience econom I

Fou#d it be suitab#e in terms of environment and capabi#itiesI

Too#s that can be used to eva#uate suitabi#it inc#ude/

2anking strategic options -ecision trees Fhat<if ana# sis

Fe$("-"*"t. Jeasibi#it is concerned with the resources re;uired to imp#ement the strateg are avai#ab#e! can be deve#oped or obtained$ 2esources inc#ude funding, people, time and information$ Too#s that can be used to eva#uate feasibi#it inc#ude/

cash f#ow ana# sis and forecasting break<even ana# sis resource dep#o ment ana# sis

Acce!t$-"*"t. &cceptabi#it is concerned with the e"pectations of the identified stakeho#ders (main# shareho#ders! emp#o ees and customers) with the e"pected performance outcomes! which can be return! risk and stakeho#der reactions$

Ret)r& dea#s with the benefits e"pected b the stakeho#ders (financia# and non<financia#)$ Jor e"amp#e! shareho#ders wou#d e"pect the increase of their wea#th! emp#o ees wou#d e"pect improvement in their careers and customers wou#d e"pect better va#ue for mone $

R"(k dea#s with the probabi#it and conse;uences of fai#ure of a strateg (financia# and non<financia#)$ 5

St$ke/o*%er re$ct"o&( dea#s with anticipating the #ike# reaction of stakeho#ders$ ,hareho#ders cou#d oppose the issuing of new shares! emp#o ees and unions cou#d oppose outsourcing for fear of #osing their jobs! customers cou#d have concerns over a merger with regards to ;ua#it and support$

Too#s that can be used to eva#uate acceptabi#it inc#ude/

what<if ana# sis stakeho#der mapping

EXIM BANK +RODUCTS0SER,ICES 0urrent account Ji"ed deposit Investment ,chemes Treasur Bi##s and Bonds Trust &ccounts

Internationa# Banking ,avings account 1 ota 0hi#drenKs E#an Mone garm 0redit 0ards E"press 0ash 0ards 9

,a#ar 0ards Tumaini &ccounts Fomen Entrepreneurs Jinance program (FEJ)

EXIM BANK 1T2 LTD STRATEGIC MANAGEMENT +ROCESS. Initiation and agreement of imp#ementation of new strategic management and p#anning in the EXIM Bank (T) Ltd started in the ear '((L after #ibera#i*ation act of '((L which a##owed private 0ommercia# Banks and Jinancia# Institution p#a ers in the market and hence high competition on the industr $ E"im bank has been growing since it started the business in the ear '((L and it started tremendous growing from ear 9??9 in terms of network$ It has ana average of opening M branches per ear$ 1ow it has 'L fu## f#edged Branches$

STAFF IN,OL,EMENT IN THE STRATEGIC MANAGEMENT +ROCESS Jurther to m observation! stud and interview conducted with E"im &rusha

branch Manager! %perations Manager and few staff regarding their invo#vement it was noted that the staff were not invo#ved in the who#e process of strategic management$ ,taff didnKt knew their aim and objectives in their organi*ation$ The were just coming to the office! performing their dai# duties and go home$ %n# branch Manager knew the business prospects and targets of the 0ompan $

1!

COR+ORATE MISSION3 ,ISION STATEMENT AND ,ALUES MISSION STATEMENT 0ommitted to remain an innovative Tan*ania Bank offering service of Internationa# ,tandards ,ISSION STATEMENT To be the bank of choice ,ALUES J#e"ibi#it 2e#iabi#it :igh Integrit Erofessiona#ism & drive for customer satisfaction

&## EXIM Bank Branches are using the same Mission! Nision and Na#ues

IM+LEMENTATION AND EXCUTION OF THE STRATEGIES ,o far the stud of EXIM Bank revea#s that though there are good strategic

management p#ans but imp#ementation has a#wa s been difficu#t due to #ack of support from the top management and especia# in a##ocation of resources needed for imp#ementation$ The fo##owing is the actua# imp#ementation and e"ecution of EXIM Bank strategic p#anning for Hanuar and Jebruar 9??L imp#emented b 1I0 &rusha Branch$

In process of estab#ishing a chain of command or some a#ternative structure (such as cross functiona# teams)! it seems that the management is headed b one person that is 6enera# manager$ %ther Managers has no decision mandated 11

even for their dai# duties which sometimes resu#t to de#a of work as the are seeking decision from top management$ In the process of assigning responsibi#it of specific tasks or processes to specific individua#s or groups! this is not we## practiced in upcountr Branches$ Most of the staff donKt have job descriptions which ma targeting them to accomp#ish certain task$ It is a#so observed that there is huge turnover of staff which makes the compan to start afresh when recruiting new staff$ Most of staff were not motivated from compan incentives in #oans$ The compan is providing #oan which doesnKt sustain current #ife and econom $ In managing the process$ This inc#udes monitoring resu#ts! comparing to benchmarks and best practices! eva#uating the efficac and efficienc of the process! contro##ing for variances! and making adjustments to the process as necessar $ Fhen imp#ementing specific services! E"im Bank is tr ing the #eve# best to act on this portion of strategic imp#ementation$ The bank has now introduced staff training center that wi## shsrpen staff know#edge in performing their duties$

RE,IEWING THE STRATEGIC +LAN It has been #earned that the EXIM Bank review its strategic p#an ever ear in

addition to that the Board instruct Managing director to guide the Management team to supervise and monitor strategies imp#ementation and suggest improvement if an as ma be recommended b Branches or other departments$

1.

RECOMMENDATIONS4 Jo##owing the stud ! observations and interview conducted with the EXIM Bank management &rusha branch donKt have mandates to make decision for the Branch! but the depend from top management$ The top management especia## those concerned with a##ocation of resources are advised to time# a##ocate the resources needed for the branch for successfu# imp#ementation of strategic p#ans$ The resources which have been observed to be insufficient a##ocated or not a##ocated at a## are/ Forking stationer %ffice too#sGe;uipments (e$g$ 0omputers) Man power (,taff)

CONCLUSION4 EXIM Bank being one of the firms which adopted the strategic management process ear#ier has a## the resources to e"ecute the strategies and tactics created$ There is a need for some of senior staff to be f#e"ib#e and work in accordance with the surrounding business environment$ The have a#so to be reminded of the strategic management importance and hence abide to the strategic p#ans created$

BIBLIOGRA+HY '$ 6era#d 0ore! 2esearch fe##ow! 3niversit of ,usse" Institute of Education$ Management and Eractice si"th edition$ 9$ :arvard Business 2eview maga*ine (The high performance organi*ation) Hu# < &ugust! 9??+ vo#ume 8M! number ) www$hbr!org * www$wikipedia$com ;* www$e"imbank<t*$com

Co&()*te% EXIM B$&k (e&"or St$55 '$ Mr$ Lucas Eeter %perations Manager E"im bank (T) Ltd &rusha Branch$ 9$ Mr$ Livingstone Hu#ius 0hief 0ashier E"im bank (T) Ltd &rusha Branch$

1;

M$ Ms Joster 1gunda ,enior Trainer! E"im Bank (T) Ltd! Training 0enter! -ar es sa#aam

1<