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Bba Assignment Brona

Mr. Tusheni took several strategic moves to improve the performance of National Bank of Zambia (NBZ) during his time as CEO: 1) He increased the number of branches across Zambia to expand the bank's geographical reach into rural areas. 2) He liberalized the bank's credit policies and lowered minimum balance requirements to attract more low-income customers and rural residents. 3) He began promoting more local and African managers to leadership positions, moving away from relying on British and Asian expatriates.

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410 views2 pages

Bba Assignment Brona

Mr. Tusheni took several strategic moves to improve the performance of National Bank of Zambia (NBZ) during his time as CEO: 1) He increased the number of branches across Zambia to expand the bank's geographical reach into rural areas. 2) He liberalized the bank's credit policies and lowered minimum balance requirements to attract more low-income customers and rural residents. 3) He began promoting more local and African managers to leadership positions, moving away from relying on British and Asian expatriates.

Uploaded by

Mwila Makasa
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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KWAME NKRUMAH UNIVERSITY

SCHOOL OF BUSINESS
BBS 420 – STRATEGIC MANAGEMENT
DIRECTORATE OF OPEN AND DISTANCE LEARNING

ASSIGNMENT ONE (CASE STUDY)


DATE ISSUED: Tuesday 13th Aug. 2019. DATE DUE: Tuesday 20th Aug. 2019. TIME:12:00 Hrs.

National Bank of Zambia (NBZ)


In the end, National Bank of Zambia (NBZ) could not keep up the pretence any longer. The
bank’s Chief Executive, Robert Tusheni, who came from Barclays Bank in 1997, and its
Chairman, Mr. Patrick Kunda, an old hand, were at each other’s throats and one of them had to
go. It was Mr. Tusheni, the young, well-regarded Zambian MBA graduate, who was ousted last
week, rather than Mr Kunda, who is 67 years old and due to retire in 2009.
As soon as Mr Tusheni arrived at the bank, he made the bank’s top managers face some
uncomfortable truths. In the late 1970s, he reminded them, NBZ and the other commercial banks
in Zambia, had roughly similar geographical reach, balance sheets, market capitalizations,
profits and staff numbers. Why was it, he asked, that NBZ had so dismally underperformed its
rival banks ever since? If it was not to lose even more ground, Mr. Tusheni told them, its culture
and strategy would have to change.
Under his leadership, NBZ increased the number of branches countrywide. In the urban area, the
bank still faced competition from the private banks, notably, Barclays Bank, Stanbic, Standard
Chartered, Finance Bank, Indo-Zambia Bank and Investrust. NBZ nevertheless had an edge on
the private banks because of its unquestionably privileged relationship with the government.
This special business relationship with the government was rooted in the fact that the bank was
a joint venture between the governments of India and Zambia, and the Zambian government
deemed it financially prudent to channel all its business through NBZ. In the case of rural areas,
the vacuum created by the withdrawal of private commercial banks was an added bonus for
NBZ. The bank’s market share standing was also boosted by its liberal credit policy and
affordable minimum balance requirement. The bank thus became a natural and automatic
attraction to low income groups and, more importantly, to rural dwellers who included
government civil servants, peasant farmers and an assortment of retirees who had opted to settle
away from the hustle and bustle of urban life. The turn in fortunes of the bank under Mr.
1
Tusheni’s stewardship was also manifested by an increase in business in the region attributed to
the decision to headquarter Comesa in Lusaka. The share of the bank’s profit that came from the
region rose sharply.
Last year Mr. Tusheni started to back away from the unspoken tradition of granting soft loans
and advances to old political hands, whose default rate on repayments was becoming a matter of
concern. This did not however please Mr Kunda who drew his support from the political
establishment of the ruling party. Moreover, so Mr Kunda argued, NBZ was a “national and
people’s bank.” On his part, Mr. Tusheni made no secret of his disdain for what he considered
Mr. Kunda’s “archaic banking practices.” Mr. Tusheni also riled the expatriate staff who felt
insecure by Mr Tusheni’s slant toward indigenization of the bank. A firm believer in the
“African way of doing things,” Mr. Tusheni had, in the last two years, began promoting local
fellow Zambians and Africans from COMESA member states to managerial positions,
traditionally a role reserved for British and Asian expatriates.
Forcing the pace of change at NBZ, half of which dates from the 1980s, was a hard task, and
Mr. Tusheni made enemies along the way. Critically, he failed to keep in with the bank’s non-
executive board members, viewed in the City of Lusaka as a conservative lot, and hopelessly
locked and steeped in English tradition. It was these folk who turned on Mr. Tusheni last week,
despite his support from the executive managers. Most recently, differences between Mr.
Tusheni and his Chairman had been aggravated by Mr. Tusheni’s open enthusiasm for a proposal
from advocates of privatization for the government of Zambia to sell its shares in the bank to
ordinary citizens. Mr. Kunda is known to be passionately opposed to any “watering down” of
government ownership.
How the bank charts its course in the post-Tusheni era will now be the job of Mukela Mundia,
NBZ’s former Operations Manager, who was promoted to Managing Director last week. Mr.
Mundia is known to be a close confidant of Mr. Tusheni and reliable sources believe there will
be no major shift from Mr Tusheni’s stance. So Mr. Tusheni’s ideas, if not his management
style, will continue. (Source: Adapted from The Economist, December 8-14, 2001, p.72)

Required:
Strategic Management is said to involve consideration of three questions:
 Where an organization is
 Where an organization wants to go, and
 How the organization gets to where it wants to go.
In terms of strategy, describe the moves Mr. Tusheni made to take the bank to where it was at
the time he left the bank.

ASSESSMENT CRITERIA
1. CONTENT: 25% Substance of your assertions, coherence and clarity of thought.
2. EVIDENCE: 25% Selection of research and use of appropriate references.
3. ANALYSIS: 40% Descriptive and critical analysis, good and reinforcing arguments.
4. PRESENTATION: 10% Appropriate Introduction, clear Conclusion /Recommendations.
5. Number of pages: 3 – 6; Font type: Times New Roman OR Tahoma; Font size: 12; Line Spacing: 1.5.
Course Lecturer: Mr. P. MWELA: 096-5-102014 / 097-9-069894; E-mail: [email protected]

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