An Evaluation of the Effectiveness of Public Financial Management System being used by Government Departments in Zimbabwe. (2000 – 2011)

The study sought to assess the effectiveness of the Public Financial Management System (PFMS) in financial planning, controlling and monitoring of public funds in government line ministries in Zimbabwe. The study was largely prompted by the fact that despite having professionalized it functions and putting in place a system of responsibility accounting system in 2003, the ministries were still facing a lot of challenges. The primary research (literature review) revealed features required for an effective monitoring, controlling and planning of public funds. It was emphasized that the government should be accountable on the use of public funds. The study was understood in the realism paradigm and employed both qualitative and quantitative (triangulation) methods of data collection. Exploratory study was chosen for this study in as far as it explored to find out the effectiveness of PFMS in government line ministries. Exploratory was useful in clarifying the understanding of the problem, especially when the researcher was not sure of the precise nature of the problem. The target population for the study were all employees who held management  positions and a sample of 70 employees from the government line ministries was used. Systematic sampling (probability sampling) and purposive or judgemental sampling (non-probability sampling) were used in this study. The research employed questionnaires and observations as instruments for gathering data.The researcher revealed that the PFMS is able to produce budgets from the budget proposal up to the final document. The system has effective internal controls with an exception on payment procedures and production of reconciliation statement. The end users are not adequately trained to use the system.Based on the findings of the study and conclusion the researcher makes the following recommendations: the system needs reliable internal control monitoring on payment procedures. The officers need to be trained on how to use the PFMS in the production of reconciliation statement. The training period of the PFMS need to be increased from 8 to 12 hours. Most respondents pointed out that they were not adequately trained to use the system. The study recommends more intensive training of officers in the application of PFMS. Key words: Budget, Public Finance Management System, Internal Control

Corporate Governance In Family Owned Businesses: A New Paradigm Shift In Management

Globally, family-owned businesses are the cornerstones of economic growth and improved standards of living. Empirically it has been proven that more than two thirds of all businesses in the world are estimated to be family businesses.  Worldwide family owned businesses have proven beyond any reasonable doubt to contribute significantly towards employment creation, poverty reduction and wealth creation. However, majority of family owned businesses in the retail sector in Zimbabwe have remained miniature compared to other listed counterparts. A crucial question to pose is whether their stunted growth, high death rates and bankruptcy be attributed to their failure of implementing corporate governance principles or to other factors?  Traditionally corporate governance has been associated with listed companies.  This research sought to investigate the extent to which family- owned businesses practice succession planning, determine the extent to which they businesses implement separation of management from control and establish the extent of transparency in family businesses. Both exploratory and descriptive research designs were employed. Desk research, questionnaires and interviews were used as data collection instruments. Research findings confirm that most family owned businesses hardly implement corporate governance principles despite its widely acclaimed benefits. Keywords: Corporate Governance, Family-Owned Businesses, Retail Secto

Significance of Service Quality And Customer Satisfaction In Zimbambwe’s Banking Sector.

Customer satisfaction is essential for the success of service firms because it leads to repeated purchases and word-of-mouth recommendations(Salaar,A et al,2004) .This case study sought to investigate the extent to which banks in Zimbabwe attempt to achieve customer satisfaction in order to reduce customer churn and attrition. Customer retention is now an important element of banking strategy in the Zimbabwean competitive environment..Furthermore, the study explored customer satisfaction determinants. Descriptive survey was used to collect data. A purposive sample consisting of ten banks was targeted including institutions like Barclays, Standard Chartered  , ZIMBANK ,Commercial Bank of Zimbabwe, and CABS Building Society among others. Research respondents included bank employees and customers who completed questionnaires and interviews. It was discovered that uncertainty within banking fraternity about Zimbabwe Government’s indigenization and empowerment Laws and regulations were stifling financial institutions’ capability to invest in customer satisfaction projects and strategies. Furthermore, it was realized that majority of customers are delighted in transacting with institutions like CBZ which provide loans for long –term capital investment in the form of houses construction etc. There is phenomenal rate of customer defection and attrition from commercial banks like Barclays etc which are not providing loans.  The study recommended that, organizations should always strive to ensure that their customers are very satisfied. Banks should always assess key determinants of service quality from the customer’s perspective. Furthermore, such institutions should monitor customer satisfaction through conducting meaningful market research Key words: customer satisfaction, customer retention, retail banking, customer defectio

Customs and Tax Reforms Effect on Manufacturing aqnd Retail Sectors in Matebeleland (Zimbabwe) (2000-2010)

The last decade (2000-2010) has been witness to one of the largest customs and tax experiments in economic history, the transformation from one tax system to the other. These changes in the customs and tax systems have had a lasting impact on the manufacturing and retail industries in Zimbabwe. The purpose of this dissertation is to test empirically whether customs and tax policies exist in Zimbabwe and whether these policies/reforms have been beneficial to the local industry. This is done by studying the manufacturing and retail industries in Matebeleland province. A sample of twenty (20) companies has been drawn from the Matebeleland region. Questionnaires have been distributed and interviews conducted with these companies using the stratified random sampling method. Results of the survey indicate that the customs and tax systems that have emerged are, at least in some way, satisfactory in terms of policy but deficient in terms of administration and enforcement. Inadequate education on implementation of the changes in tax and customs systems has contributed to some existing policies on customs and tax incentive not being correctly implemented. Controls on the implementation of the existing policies are not water tight, leaving room for implementers’ discretion and ambiguity. Experiences with the tax reforms have been diverse, with some respondents knowing very little about them. It also shows that despite changes in customs reforms, many businesses are still relying heavily on imported goods. The results from the study suggest that further tax reforms should take into account the need to build vertical accountability of the tax system by ensuring that taxpayers are more involved in the formulation of tax policy and planning for any reforms. Policy makers and implementers of taxes and customs laws should be engaged in meetings to map the way forward whenever changes to taxes and customs systems are about to take place. This should be followed by public awareness campaigns. The tax system must protect local industries, encourage the investments that make manufacturing successful, not tax it to benefit the rest of the economy. Key words: Tax Planning, Tax and customs reforms

How the Integrated Approach to Corporate Governance Enhances Company Performance? Case of Delta Beverages.

The researcher wanted to find out how the integrated approach to corporate governance enhances company performance. In the past periods many corporations collapsed and this was attributable to failure to keep in pace with corporate governance evolution trend. On contrary the performance of Delta Beverages proved to be well and it is in that same period that it appreciated and adopted the evolution in corporate governance leading to its adoption of an integrated approach to corporate governance. In light of this, the researcher was then prompted to find out how this integrated approach enhances company performance. The study looked into many sources of literature on the integrated approach to come up with more informed scientific outcomes on the effectiveness of risk management in GRC, how GRC enhances company performance and the benefits accruing from the adoption of GRC. Conclusions were drawn from a total sample of 33 respondents consisting of directors, managers and general employees. It then became evident that the integrated approach to corporate governance enhances company performance and the researcher advocates that the manufacturing industries adopt it. Key words: Governance, Risk Management, and Complianc

Does Corporate Size Influence CEO Incentives? Case of Zimbabwe Stock Exchange Listed Companies

The study sought to analyse the alignment of Chief Executive Officers (CEO) s’ incentives to corporate size (Sales / Revenue) in Zimbabwe Stock Exchange (ZSE) listed companies in 2009 to 2010 trading years. The research was motivated by the results of various findings from previous researches mostly in developed countries. The findings had results ranging from a negative relationship, no relationship, disappearing relationship to a positive relationship being observed. Some of these researches failed to give results because of total lack of information on directors’ fees. Quantitative data was analysed using simple regression model and Chi Square Test. Correlation coefficients were also calculated. The research found a very weak positive relationship between CEO incentives and corporate size and that the link is quickly weakening towards a no relationship if not a negative relationship. The basis for the setting and changes in CEO incentives for the Zimbabwe Stock Exchange listed companies remains a mystery. Information on CEO incentives was unexpectedly very scarce. This resulted in the Chi Square Test results at 5% significant level suggesting that the different sample sizes used could have influenced the research findings – the fall in the relationship. Key words: CEO Incentives; Firm Size; Corporate Performanc

Does Corporate Size Influence CEO Incentives? Case of Zimbabwe Stock Exchange Listed Companies

The study sought to analyse the alignment of Chief Executive Officers (CEO) s’ incentives to corporate size (Sales / Revenue) in Zimbabwe Stock Exchange (ZSE) listed companies in 2009 to 2010 trading years. The research was motivated by the results of various findings from previous researches mostly in developed countries. The findings had results ranging from a negative relationship, no relationship, disappearing relationship to a positive relationship being observed. Some of these researches failed to give results because of total lack of information on directors’ fees. Quantitative data was analysed using simple regression model and Chi Square Test. Correlation coefficients were also calculated. The research found a very weak positive relationship between CEO incentives and corporate size and that the link is quickly weakening towards a no relationship if not a negative relationship. The basis for the setting and changes in CEO incentives for the Zimbabwe Stock Exchange listed companies remains a mystery. Information on CEO incentives was unexpectedly very scarce. This resulted in the Chi Square Test results at 5% significant level suggesting that the different sample sizes used could have influenced the research findings – the fall in the relationship. Key words: CEO Incentives; Firm Size; Corporate Performanc