Further to the issue of job performance, which we saw over the past two weeks, is the product of individual attributes, work effort and organizational support. Last week we looked at some of the individual attributes, which influence the capacity of workers to perform, more especially demographic characteristics (e.g. gender, age), competency characteristics (aptitude or ability) and personality characteristics (what a person is like). From a performance management point of view the individual attributes must match task requirements to facilitate job performance and here follows a summary of some of the conclusions we drew:
Contrary to what many people believe, there are very few differences between men and women that would affect job performance. There are in fact no consistent differences between men and women in the ability to solve problems, analyse, compete, motivate, learn, or socialise. Yet women face a hard time having to prove that they are able to perform just as well or even better than their male counterparts.
A common stereotype, when it comes to age is that many people don’t think elderly people are still able to learn and be flexible. However, the truth is that this depends on the individual. Many elderly show themselves to be quite flexible indeed, while age and performance have been found to be unrelated in research. Older people are no more likely to be unproductive than younger people.
Understanding personalities helps the manager predict what somebody can do and what that somebody will do. Cultural values and norms play a substantial role in the development of an individual’s personality and behaviour.
Personality may develop over time, for example from immaturity to maturity, from passivity to activity, from dependence to independence, from shallow behaviour to deep interests, from short-term to long-term perspective, from little self-awareness to much self-awareness.
There are quite a number of attributes that determine the individual, his or her personality, who somebody is, that a good manager must be aware of. Not being aware of these factors, which also influence individual performance, will lead managers into using blanket management instruments, not necessarily the most effective.
The next factor in the equation that we will look into is work effort or the willingness of a person to perform. Work effort relates to the motivation of the worker. Even if the employee fits the task requirements as closely as possible, it does not necessarily mean that performance will be high. In order to achieve high levels of performance, even people with the right capacities must have the willingness to perform. If in a factory for example, workers have the same academic qualifications, skills and experience, their individual performance may vary considerably. Why is this so? Part of the answer lies in each person’s motivation to work. I observe that work effort is a real problem in Ethiopia. Many workers consistently fail to demonstrate that they want to put in the best they have during working hours. In addition to that, many people are not very time conscious and as a result a lot of production time is lost. Here follow a few examples of what I observe:
Last week I walked into an office and as I passed some workers, I noticed they were busy chatting on their private mobile phones. By the time I was done and walked out of the office, they were still chatting. In other words, they were not doing what was expected from them; in fact, they were not performing at all and seemed quite pleased with their conversation instead. And this is all done quite openly.
As I entered a company the other day, I was received quite well at the reception. Behind the reception however, I noticed a cleaner sitting in the corner, looking bored and yawning while looking at me. The receptionist led me to the office where I needed to be and by the time I had finished and came out, I found the lady in the same position, still yawning and looking bored, following me with her eyes as I walked out. The positive impression created by the effectiveness of the receptionist was negatively affected by this person and I wondered what could be wrong with her.
I wanted to enter a shop during lunch time and just before getting in, the shopkeeper walked to the door and turned to “Open” sign around into “Closed”. I asked if I could still come in and the shopkeeper answered that they were closed for lunch, effectively robbing the shop owner of a sales opportunity.
Without doing injustice to all people who try and put in the best they can, these are some of the realities that managers and business owners face, while trying to run their company. In doing so, they must develop ways of positively influencing workers’ motivation to work. There are many ways of doing so, ranging from punishments to rewards, to pay raises, to creating a conducive work environment, to coaching, to delegating, giving more responsibility, sharing profits etc. and managers must make themselves aware of the possibilities. There are countless books written on the subject of motivation and enough material will be found on the internet nowadays as well.
Even so, the willingness to put in the best ultimately rests with the individual worker. The manager cannot do the employee’s work. Personal accountability and work ethics come in here. Where somebody has been given the opportunity to work, earn a living to pay the bills and provide for the family, it is a personal responsibility to make the best effort to perform in return. To employees I suggest that in case there are factors that make it difficult to do this, take up the courage to discuss this with the supervisor. A solution may be worked out. Don’t just sit there and do nothing, thereby harming the business and yourself in the end.
Ton Haverkort
What are zombie companies? One can find a number of criterions by which one can define zombie companies. The straightforward and easy answer is; zombie companies are those that have become unviable in the market place. What is meant by ‘unviable’? Here, one has to resort to traditional parameters to assess the health of companies in a given capitalist economy. Again, what are these parameters? Traditionally, a company’s health is/was ascertained from its books, i.e., its audited financial reports. This served as the main ‘certificate of health’ for companies, big or small. Up until recently, GAAP-Generally Accepted Accounting Principle; was the most used standard in the audit business. This standard served to streamline valuations and evaluations of companies in the various jurisdictions of the world system. In the past few decades, however, this standard/GAAP was increasingly demoted, so to speak. In its place, different parochial systems were instituted, to help accommodate the unviable zombie companies of the world!
ENRON was a company that started out in 1985 and folded in 2001. Fortune, the business magazine, named Enron ‘America’s Most Innovative Company for six consecutive years! Sure enough, it was amongst the first few companies that pioneered ‘creative accounting’. When its assets appreciated, it borrowed abundantly, when it assets go south, it magically concocted new figures to compensate for its deceased asset prices, with a view to borrow even more. The once prestigious accounting firm, ‘Arthur Andersen’ was the auditor of ENRON. It also went kaput along with its generous client. WORLDCOM was another of these ‘unicorn’ companies that used creative accounting to mislead/fool, not only shareholders, but also governments and the public at large. WORLDCOM, more like WORLDCON, started out in 1983 and soon became one of the largest telecommunication companies in the US. It acquired many corporations by cooking its books and pushing the massive losses on the gullible investors. Like Enron, it ungraciously collapsed in 2002. ENRON and WORLDCOM outshined old-fashioned corporations that had to rely on traditional parameters such as earnings/profits, etc., via GAAP to secure their places in the hierarchy of corporate-dom. Zombies can’t stand such hassles!
Here is another way of defining a zombie company. It is an entity that cannot pay the interest on its debts from operating income. By and large, this phenomenon is pronounced in countries where companies have to rely on bank credits rather than the stock market, to finance their operations and expansions. In other words, zombie companies are like sovereign states. States do not pay their debts, (sovereign bonds) they just roll them over, so to speak. They pay their outstanding debts by issuing more new debts; new bonds replace old bonds! Zombie companies are the equivalent of states, in the domain of the market. Just like the states, zombie companies need to borrow more new money in order to pay the interests on the old borrowed money. In short, these entities are bottomless money pits! Today these companies are a dime a dozen and dominate plenty of economies across the planet, ranging from the small to the large. Most importantly, they tend to be ‘too big to fail’ within the economies they operate. Zombie companies are almost always protected by their respective states and are not forced to face the vagaries of the market place, like the others. When zombie companies proliferate in a given country, it is a sure sign that economic collapse cannot be far behind!
Companies like Tesla, Amazon, etc., are hardly profitable, but that is not the main criterion they have to adhere to. There are plenty of entities like them that are fully supported by the States, with a mission to change the whole business environment of a given economic sector. To this end, financial institutions and equity markets are given the green light to support them, come what may! The long-term objectives of these companies seem to be the weeding out of healthy competitors, who have become unwieldy to the desires of the ‘permanent government’ or the DS (Deep States). Besides the hidden agenda of the DS, there are visible problems confronting late modernity. One major problem is the issue of unfunded liabilities. For example, pension funds, insurance companies, etc., are major players both in the global equity as well as debt market. Pension funds expect an average of 7% return per annum from their diverse investments. Their actuarial policies are based on this magic number. However, today’s global bond market only delivers zero or negative interest. In addition, dividends from equity investments are negligible. Therefore, to assume such a consolidated return of 7% is at best preposterous. Therein lays one of the major problems contemporary capitalism!
Since many of the world’s major pension funds are players in the equity and bond markets, all kinds of maneuvering and manipulations are used to give the impression that adequate returns are there to sustain pension payments, even though the facts on the ground do not support this ridiculous supposition. This is one of the reasons why zombie companies are allowed to flourish in the market place. For instance, almost all of the zombie corporations in the world have insignificant tangible assets. To compensate for this shortcoming, their balance sheets are beefed up astronomically, by assigning crazy numbers to their intangible assets! This holds true even in the case of ‘blue chip’ companies like Microsoft, etc.
Ministry of Mines (MoM) dismisses claims being made about the central government agreeing to transfer the natural gas field in Ogaden Basin to US companies. Nonetheless, the ministry has confirmed that US companies are potential prospects to take over the field.
It can be recalled that in last August, Ethiopia received its first natural gas certificate for the energy resource located in Somali region, Ogaden Basin, following a comprehensive five month study carried out by Netherland, Sewell and Associates, Inc (NSAI) which proved that there were oil and natural gas reserves in Ethiopia.
The certificate confirmed the presence of 7 trillion cubic feet of natural gas reserve in the area, which was controlled by different companies on various occasions to develop the resource, without anything materializing.
The last company that took over the field was Poly GCL, a British Virgin Island registered company, which lost its concession by MoM owing to intangible results despite possessing the area since 2013.
(Photo: Anteneh Aklilu)
After different signaled warnings to start operations falling on deaf ears, in September, MoM revoked the natural gas and crude oil exploration and production license of Poly GCL.
Since then the ministry has been engaged on changing the face of the history seen in the sector by actively looking for development partners with a good track record.
Takele Uma, former Minister of Mines, during his leadership era said that most of the companies that had agreed with the Ethiopian government to develop the natural gas did not have a well-established reputation and some of them were not even known, “This is one of the reasons that have hurdled development in the mining sector.”
He explained that since internationally renowned oil companies got to see the certificate, they have been showing interest, “We have approached some of them directly.”
“Since NSAI approved the reserve through the involvement of the US ambassador in Ethiopia, I had talked with some US companies and we have had fruitful discussions with them through webinar. Similarly, as per the order of PM Abiy Ahmed I have traveled to UAE and discussed with the well-known gulf oil company Abu Dhabi National Oil Company /ADNOC to convince them to invest on the energy sector in Ethiopia. Similarly, in collaboration with Turkish Ministry of Trade I also visited Türkiye and directly discussed with Çalik Energy to invest in Ethiopia,” Takele told Capital in a recent interview and added that there are also other huge companies including the Russian GAZProm, and Sinopec and China Petro of Chinese who have become interested since the certificate was disclosed.
“As you may recall, we had terminated our contract with the Chinese firm Poly GCL. The company was incapable so we are directly approaching trustworthy and reputable huge companies in different countries to change the history of the sector,” he explained.
However, he dismissed the claim that cited that during the PM’s visit to the US, certain US oil companies were promised an award for the natural gas field site in eastern Ethiopia.
“We are talking with the Russians, UAE, Turkey and US companies including Baker Hughes and Chevron and Chinese companies who have shown their interest. We are waiting for a company with a strong track record to table a proposal for our country. Since I wasn’t there with the team which paid a visit to the US, I am not sure about their discussion. But one thing I can assure you is that we are still waiting for the best company so as to take on the project,” he elaborated.
(Photo: Anteneh Aklilu)
However some experts in the sector and Kaleyesus Bekele, CEO of Origins Media, viewed the issue at an angle that huge companies interests are far beyond natural gas fields and require additional resources to lure these renowned companies to the country.
“The certified reserve amount is not big for the companies stated by the government but they may have interest if there is a possibility to get additional reserve at the area,” Kaleyesus, who closely follows the petroleum exploration and reporting told Capital whilst sharing insights on the progress of the sector over the years.
“Small companies interest might be sparked, however, companies weather in US or others that MoM mentioned will certainly not be interested in such small amounts of reserve,” he added.
“The sedimentary basin at Ogaden is very big that covers 350,000km2, while as far as my knowledge about 50 wells have only been drilled in the area, which is very small. So if additional exploration wells shall be drilled more resources can be realized. However, the approved resource confirmed by the MoM is not big,” Kaleyesus elaborated.
However, he confidently stated that the government will give the field for well-known companies that have money, technology, and knowledge to utilize the resource in the near future.
In the second Home Grown Economic Reform (HGER) that will be approved by the Council of Minister in the coming weeks, the mining sector is stated as one of the priority sectors.
“Regarding the natural gas development, we have targeted to commence development, which is at the second stage after exploration in the second HGER which will be a three years economic development plan,” Takele explained.
Natural gas development includes the construction and installation that will be followed by production of methane gas that is transformed to ammonia, which means the country stands a chance to produce fertilizer.
(Photo: Anteneh Aklilu)
In related development, on Wednesday January 18, on his social media account, Takele disclosed the discovery of over two billion barrels of crude oil at parts of the Abay Basin.
He said that oil exploration is being conducted in 5 basins throughout Ethiopia. “In an oil exploration study conducted in Warra Iluu, part of the Abay basin, the study showed that there are more than 2 billion barrels of crude oil.”
Oil seeps were first discovered in the Woreilu locality during the imperial regime. Ogaden, Gambela, Mekele, Omo Valley and Abay are the five sedimentary basins considered to be highly prospective areas for oil and gas discoveries.
Currently, the Ogaden and Gambela basins have been relatively better explored compared to the other basins.
