INSTITUTE OF ACCOUNTANCY ARUSHA

NATURE:

INDIVIDUAL ASSIGNMENT

PROGRAM:ADVANCED DIPLOMMA IN ACCOUNTANCY

COURSE: CORPORATE STRATEGY AND ENTREPRENEURSHIP

CODE: BM 335

CASE STUDY: ARUSHA WOMEN IN BUSINESS SACCOS (AWIBs) PREPARED BY: MAJURA,Mariam

ARUSHA WOMEN IN BUSINESS SACCOS (AWBs) This is Savings and Credits Cooperative Society established in 2004 by Arusha Women, aimed at Improving Economic Conditions of Women through provision of low interest credits to support their business and other productive projects a) The following are important stakeholders of the AWIBs INTERNAL STAKEHOLDERS: these are stakeholders within the organization. These include Director; these are chief executive officers of AWIBs they perform day to day activities of the organization and. Department managers; these are the head department who helps the directors to run the organization. EXTERNAL STAKEHOLDERS: these are not running day to day activities within organization but they participate and influence company strategy of organization through their links with internal stakeholders. These include the following; Customers- these influence company strategies by different way such as printing suggestions and put them in suggestion box. Financial institutions- they influence company strategy through financial advice on how to deal with customers. Shareholders- they influence the company strategy by supporting various management decisions through buying more shares or decrease their share capital. Professional services supplies- by providing service as, IT service, Auditing service etc. b) The following are the primary objective of each groups : Directors- to make the company to grow, improve efficiency and maximize profit Department mangers- to provide quality product/service of their respective department Financial institution- to provide professional advice to the organization on how to manage their debtors, to maximize profit through the credit they provide to the organization. Customers- to get quality service/product at affordable price/minimal interest. Shareholders- to maximize profit of their shares. Professional service supplies- provide reliable service. c) Assessment of power of each group to affect the firms strategic outcomes and the ways in which this power may be exercised is done basing on the following grounds/criteria. Before proceeding it is necessary to understand what is meant here by power POWER is the ability of individuals or groups to persuade, induce or coerce others into following certain courses of action. This is the mechanism by which one set of expectation will dominate strategic development or seek compromise with others.

Figure 1.0 summarizes the various sources of power for both internal and external stakeholders and can be used to understand how powerful each shareholders is in influencing a particular strategy. It should be noted that the relative importance of these sources will vary over time. Indeed, major changes in the business environment such as deregulation or the advent of cheap and powerful IT can drastically shift the power balance between organizations and their stakeholders. For example consumer knowledge of different companies offering through internet browsing has increased their power considerably. Deregulation and citizens empowerment have required public service organization to adopt more customer focused strategies. Since there are a variety of different sources of power it is often useful to look for indicators of power, which are the visible signs that stakeholders have been able to exploit one or more of the sources of power listed in fig 1.0. there are four useful indicators of powers : Status of individual or group such as job grade or reputation. Claim of resources such as budget size. Representation in powerful position. Symbols of power such as office size or use of title and names

ASSESSMENT OF POWER;Internal stakeholders INDICATORS OF POWER Status Position in hierarchy Salary of top manager Average grade of staff Claim of resources Number of staff Budget as % of total Representation Number of directors Most influential directors Symbols Quality of accommodation Support services External stakeholders INDICATORS OF POWER Status Resources dependence Negotiating arrangement symbols CORPORATE FINANCE H H H M H H H H H MARKETING L L L H L NONE NONE L L H-High, M-Medium, L-Low

IT SUPPLIER M M M M

CUSTOMER H H H H

SHAREHOLDER L H L L

d) To explain how the firm may satisfy the interests or objectives of each group. Customers are satisfied by low interest loan, giving them financial advice and quality provision of service through customer care. Shareholders are satisfied by giving them dividends according to the portion of share they own in a company. If the company is experiencing profit shareholders may be happy otherwise they are very discouraged. Department manager are satisfied by giving them resources necessary for achieving their objectives. These resources may include financial, raw materials. Other stakeholders are satisfied through business consideration ie professional service provider are paid their their professional service fees as per contract. e)Recommendation of trade-offs that manager of AWIBs may make in satisfying stakeholders groups that will improve AWIBs performance; To revise interest rate for the credits offered by the AWIBs in order to attract more customers. To perform comprehensive marketing in order to reach more customers. To provide advice for the customer that they should only take credit for the purpose and not otherwise. To revise the payment duration and discount rates in order to prompt payment. To create other forms of investment instead of depending on interest rate paid by customer in order to increase profit. In case of potential customers; to make the regulations less tight and give them much time to repay their debts. To open branches to other areas such as Dar es salaam, Mwanza, Mbeya etc. Shareholders; Preparation of financial statement will make shareholders to know financial position and profitability of the company therefore encourage them to make more investiment. To give them their dividends without default will encourage them to buy more shares and to increase the capital of the firm therefore. To give a room for them to participate in some key decision that they can feel as part of the company. Other stakeholders; to interact with them without breach of contract, paying its consideration without default and maintaining human relationship.