May 19, 2020

Filling the gap: building African managers for Africa

Africa
AMI survey
African Management Institution
educational institutions
Bizclik Editor
4 min
Filling the gap: building African managers for Africa

New research shows that Africa is lacking in high-quality managers with the skills and competencies to capitalise on the continent’s economic potential. Part of the problem lies in the type of management that does exist: the continent needs to produce managers that are suited for Africa’s requirements. 

The latest research by the African Management Institution (AMI) shows that the continent is severely lacking in managers with the skills to advance its economy.

Director of the University of Cape Town’s Graduate School of Business (GSB), Walter Baets, said:  “Africa is a continent that is going through an economic growth spurt and is brimming with talent but is tragically short of the skills needed to support this.”

The 2012 AMI survey, which drew from 50 in-depth interviews with individuals at 40 organisations across Africa, including employers, educators, thought leaders, training providers and more, showed that in Africa the overall efforts to develop high quality managers are entirely inadequate to meet the opportunities the next few decades will bring.

The report states that more young Africans are pursuing higher education, but too often the quality is low.

To address this, Baets believes that it is the responsibility of business schools to rebalance education in Africa, so that leaders acquire the necessary skills to develop inclusive business, and contribute to human and economic advancement.

He said: “Educational institutions need to question the type of training that is being provided. In confronting the lack of managers at home and in the rest of Africa, the continent needs institutions that take on the responsibility to ensure that we have capable managers who can perform to international standards and managers who are capable of dealing with the unique opportunities and challenges that set Africa apart from the rest of the world.

“ At the same time they need to establish the foundations for a strong economy and the continent’s progress.”.

The appetite for learning in Africa is clearly there. According to Bruce MacDonald who heads the Programme for Management Development at the UCT GSB, a two-week programme that runs twice each year, African delegates on the course have surged in the past decade.

As one of the GSB’s longest running short courses, PMD deliberately changed its focus in 2001 from serving a narrowly South African market, to rather encapsulate the needs of broader Africa. MacDonald says that the development of the sub-Saharan market for the PMD has been an enormously rewarding undertaking.

“We have built PMD into what is surely the most diverse management development programme in Africa. Anything up to 70 percent of the participants in any one group arrived from countries outside of South Africa’s borders.

“Up to 10 different African countries are represented at a time. The opportunity for sharing perspectives, cultural, personal, regional, occupational , is breathtaking.

“The fact that, according to the CIA World Factbook for 2012, there are 34 sub-Saharan countries with GDP growth rates higher than the fastest-growing European country (Norway at 3.1%), suggests that we have been backing a winning horse,” he said.  

PMD takes a general management focus, and aims to upskill and equip participants with the appropriate perspective to progress to general management level; to ensure that the programme remains attuned to the needs of delegates in an African business context, the focus is on practical implementation rather than theory formulation.

Presenters are well-qualified practitioners who can present from a perspective of both academic validity and practical on-the-ground experience.

MacDonald said that through this practical approach, which includes a post-course assignment to give delegates the opportunity to demonstrate the value of what they have gained from the programme, delegates report “measurable payback that has been realised far in excess of the cost of the programme – and in some instances provided a return of investment that is so spectacular that it probably beggars belief.”

The ‘Afropolitan’ approach PMD takes is something the GSB strives to uphold in all its programmes, and one that Baets believes African educational institutions need to take to see that the continent reaches its potential.

“We live in a society that yearns for new ideas, and solutions for growing social and environmental problems. It is here that universities contribute most.

“By saying that the GSB is part of an Afropolitan university and being committed to this vision, we have the opportunity to think about its position as an educational institution in the context of global movements and developments; it forces us to ask the tough epistemological questions about the role the university plays in post-colonial society. Africa needs African ways of doing things.”

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Jun 27, 2021

Billionaire Kumar Birla Champions Regional Supply Chains

AdityaBirlaGroup
Alibaba
globalisation
Regionalisation
Elise Leise
3 min
As multinationals try to recover from the pandemic, Kumar Birla has a solution—narrow your scope and invest in reliable, regional suppliers

As the head of the Aditya Birla Group, a US$46bn firm that operates in 36 countries, Kumar Mangalam Birla is no stranger to splashy strategic moves. Yet his recent announcement that he no longer wants to acquire globally distributed supply chains stood out. While many companies have struggled to cope with shipping backlogs, his firm has chosen to pivot and focus on regional networks. Said Birla: ‘We wouldn’t look at a company or a business where you source in one corner of the world and sell in another’. 

 

He cited protectionism, the pandemic, and the limited movement of products and people around the world as ABG’s primary causes of lost profits. And they aren’t alone. Over the past year, 900 of the U.S. and Europe’s biggest IT, defence, and financial services firms have lost an average of US$184mn apiece

An Era of Global Disruption

Over the past few decades, low shipping rates and rapid delivery times have lulled multinational firms into a false sense of security. In the early 2000s, companies chose to take on significant global supply chain risks in exchange for increased profits. First, it made sense to manufacture higher-value goods, such as electronics, in low-cost regions throughout Southeast Asia, India, and Africa. Second, first-tier suppliers started to outsource the manufacturing of specific components to second-, third-, and even fourth-tiers—leaving supply chains with extremely limited visibility. 

 

So when COVID-19 disruptions struck certain regions, companies were caught unprepared. Usually, these events come few and far between. But over the past ten years, we’ve seen a number of ‘black swan’ events that have thrown the supply chain industry into chaos. Here’s a quick history of the most significant events in recent years, thanks to the MIT Sloan Management Review

 

  • 2010. China creates export quotas for rare earth elements. 
  • 2011. The Tōhoku Earthquake hits East Japan; flooding sweeps throughout Thailand. 
  • 2016-present. Trade wars between the U.S. and China hurt suppliers. 
  • 2020-present. COVID-19 pandemic shuts down international shipping ports.

 

Now, Kumar Birla is one of many who want to re-evaluate how we run our supply chains. Though his company has acquired 40+ companies in the last quarter decade, Birla intends to build up local hubs rather than expand operations. 

 

Why Pursue Regionalisation? 

Combine Chinese economic dominance, global supply chain vulnerabilities, and major government policy shifts around the world, and you have a storm brewing on the horizon for big multinational firms. As Brookings noted, ‘the biggest risk for trading opportunities in the developing world is growing protectionism in more advanced economies, often dressed up as national security protection’. 

 

Altogether, from the U.S. to the European Union, governments are trying to protect their domestic supply chains, secure adequate stockpiles of materials, and build world-class local networks. Consider Biden’s recent executive order, which seeks to bring semiconductor manufacturing back to home soil, or Japan’s bid to open more memory chip fabrication factories near Tokyo. The Aditya Birla Group intends to react in kind. Said Birla: ‘We’re looking at regionalism as a very big theme’. 

Will Others Follow Suit? 

In the post-pandemic economy, global businesses must decide whether to expand or contract. On one hand, the Alibaba Group’s Cainiao Smart Logistics Network recently launched a direct flight between Hong Kong, China, and Lagos, Nigeria. On the other, the Japanese government is desperate to make its chip manufacturing domestic. Indeed, as two supply chain strategies diverge in a post-pandemic world, the one businesses take may make all the difference. 

 

Yet Birla is confident that regionalisation is the right call. According to his words at the Qatar Economic Forum, even necessary cross-border transactions should be smaller in scope. And as the Bloomberg Billionaires Index now lists his net wealth at US$10.4bn, up 52% from 2020, he may have the cash to test his theories out. ‘Regional hubs, regional presence, regional employment, catering to regional demand’, he stated. ‘We’re a global company rooted in local economics’. 

 

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