(a) Common failures of a Board of Directors

• Domination by a single individual
  A feature of many corporate governance scandals has been boards dominated by a single senior executive with other board members merely acting as a rubber stamp. Sometimes individual may bypass the board to action their own interests. Even if an organization is not dominated by a single individual, there may be other weaknesses. The organization may be run by a small group centered round the chief executive and chief finance officer, and appointments may be made by personal recommendation rather than a formal objective process.
• Lack of involvement of board
  Boards that do not meet regularly or that fail to systematically consider the activities and risks of an organization are clearly weak. Sometimes the failure to carry out proper oversight is due to a lack of information being provided, or the directors lacking the knowledge or skills necessary to contribute effectively.
• Lack of supervision
  Employees who are not properly supervised by the board can create large losses for the organization through their own incompetence, negligence or fraudulent activity.
• Poor oversight of accounts and audit
  A lot of governance guidance has been concerned with defining effective internal control. Inevitably, many companies involved in scandals have had glaring weaknesses in internal control, weaknesses that have not been picked up by those monitoring control.
• Lack of adequate control function
  An obvious weakness is a lack of internal audit. Another important weakness is lack of adequate technical knowledge in key roles, for example in the audit committee or in senior compliance positions. A rapid turnover of staff involved in accounting or control may suggest inadequate resourcing and will make control more difficult because of lack of continuity.
• Misleading accounts and information
  Often misleading figures are symptomatic of other problems, but clearly poor-quality accounting information is a major problem if markets are trying to make a fair assessment of the company’s value.
  The ultimate risk is of the organization making such large losses that bankruptcy becomes inevitable. The organization may also be closed down as a result of serious regulatory breaches, for example, by misapplying investors’ monies.

  (b) The different levels of strategic management as it relates to Zamu Enterprises are as follows:

  • Corporate level of strategy
    At the apex level of strategic management in Zamu Enterprises is the corporate head office located in Zambara. The corporate level of strategy, which is the responsibility of the board of directors of Zamu Enterprises, is concerned with the overall purpose and scope of the organization and how value will be added to the different strategic business units.
    In Zamu, strategy and strategic management at the corporate level is expected to impact upon the whole organization. Thus, all parts of the business operation should support and further the strategic plan.
    Specifically, the board of Zamu has the sole responsibility of determining which industries to involve the organization. It is also expected that the board of Zamu will prioritize and manage the expectations of stakeholders. Finally at the corporate level, the board is expected to allocate or obtain corporate resources both for the present and the future.
  • Business-level strategy
    Business level strategy represents the second-tier level of strategic management. In Zamu Enterprises, business level strategy would refer to each of the particular and distinct combination of products and markets dealt with by each strategic business unit – in this case the individual firms that operate in the different sectors aforementioned. It is the responsibility of each of the corporate managers to translate the statements of direction and intent generated at the corporate level into concrete objectives and strategies for their respective business units. In essence, the corporate managers of each business unit determine how their respective firms will compete in the product-market arena.
  • Functional or operational level strategy
    This level is concerned with how the components parts of an organization deliver effectively the corporate and business level strategies in terms of resources, processes and people. The functional level represents the third tier or the bottom of the decision-making hierarchy. The functional level in Zamu Enterprises will be the operational areas for each of the business units such as Finance and accounting, human resource, marketing and sales, research and development functions. The managers at the functional areas are to develop annual objectives and short-term strategies that would implement the strategic plans of their respective business units. The focus of functional level managers is to do things right – i.e. be efficient.

    (c) Effects of technological change on organizations

    • The type of products or services that are made and sold.
    • The way in which products are made (e.g. process automation (e.g. robotics), new raw materials).
    • The way in which goods and services are sold. The growth of direct selling via the internet has had a significant impact on the implementation of business strategy.
    • The way in which markets are identified. Database systems make it much easier to analyze the marketplace.
    • The way in which firms are managed. IT encourages delayering of organizational hierarchies, homeworking, and better communication. Technology has also enabled greater integration between buyers and suppliers via the use of Extranets.
    • The means and extent of communications with external clients. The financial sector is rapidly becoming electronic – call centers are now essential to stay in business, online banking is becoming increasingly common, and the internet, smart phones and tablets are featuring in business plans.
    • Data can often be captured, communicated and analyzed so that organizations are able to respond much more quickly than in the past to changing circumstances in their business or in the environment.
    • The huge increase in the amount of data (structured and unstructured) collected and stored.
    • The developments in machine learning (artificial intelligence application of machine learning to data analytics and the opportunities for product innovation that may arise from the use of generative AI).
    • Many companies have transferred their IT operations to the cloud and to external IT operations companies.
    • Greater risks to data, including data privacy, from cybercrime.