Management Decision-Making Essay

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Horn of Africa experienced what was termed the worst drought in 60 years. The drought, caused by the failure of the rains for two consecutive seasons, led to a severe food crisis across Djibouti, Somalia, Ethiopia, and Kenya, and killed more than 100,000 people while placing hundreds of thousands at risk of starvation. According to Hiller and Dempsey (2011), the greatest tragedy was that the world had seen this disaster coming, but little had been done to prevent it. From as early as 2010, there had been clear indications of a looming crisis and its consequences. La Nina, a climate condition that would lead to drier than normal conditions over the entire area had already been confirmed. Further warnings of the crisis were repeated and became more strident in 2011. In light of all the warning signs, it is, therefore, rather surprising that proper response from the international aid system only came after the rains failed for a second successive time and by then, the crisis had already reached its peak and millions had been affected. This revealed flaws in the international emergency system and pointed to the ineffective application of management control systems by national governments, relief agencies, and non-governmental organizations (NGO's) in responding to disasters.

By definition, management control systems (MCS) are a set of communication structures and systems that organizations use to collect information and to apply it in evaluating the performance of different organizational resources. They provide information that enables the management team to direct behavior and steer the organization towards its competitive advantage and strategic objectives. In responding to crises like the Horn of Africa drought, it is imperative for national governments and organizations to apply the management control systems that will lead to timely and effective responses. This text evaluates the 2011 drought in detail and examines how ineffective management systems may have led to poor response by national governments, relief agencies, and NGOs. It starts by identifying the flaws in these systems and goes on to evaluate how an organization's MCS are implicated in the response to a crisis. It then looks at the role MCS played in the poor response to the 2011 crisis, and provides recommendations for better responses in future.

Flaws in the organizational, national and international response systems

Hiller and Dempsey (2011) state that it is outrageous that in spite of the advancement in technology in recent years, and all the knowledge that is available on ways to prevent drought and famine, thousands of lives were still lost in 2011. They further explain that a key evaluation of the humanitarian response in the Horn of Africa revealed that there was failure of earlier preventive action from 2010, as well as a collective failure in providing relief when it was needed the most in 2011. Sophisticated early warning systems (EWS) had already indicated that preemptive action was required to prepare for the drought and avoid costs that could be incurred later once the crisis reached its peak. The Food Security and Nutrition Working Group for East Africa (FSNWG) had also advised humanitarian organizations to implement multi-sectoral programs and to begin large scale response planning. The warnings went largely unheeded, which resulted in far greater suffering, malnutrition and damage to livelihoods.

The fact that all the four countries that were affected by the drought were in different situations was also not considered during planning. The crisis played out differently in all the countries with Somalia being the worst affected due to the unstable political environment. Kenya was struggling with a new constitution and at the time, almost all donor-funded and government projects in dry lands were slowed down by corruption allegations. Instead of focusing on the EWS, the Kenyan government also overemphasized on the food aid system, which made it harder to respond to the crisis because such systems rely on assessments that are done every year, and they often provide figures that are out of date. Although Ethiopia had developed a plan for interventions in advance; the government had underestimated the number of people that needed assistance, which also frustrated relief efforts.

Overall, the response at scale was not of the quality stipulated in the NGO code of conduct and the disaster prevention principles outlined in the Good Humanitarian Donorship Principles (Hiller and Dempsey, 2011). This can be largely attributed to the reliance on the media to first report the story as a disaster. Majority of the donors could not access funds from their headquarters until the media broke the story to the world, a point when malnutrition was at its worst.

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Moreover, even after the drought had been confirmed, relief agencies and NGOs were still reluctant to provide relief due to the fear of getting it wrong and risking their reputation and money; the fear that they would undermine the ability of the affected governments; and the belief that malnutrition was a common occurrence in the affected areas. The national governments of the two entities were also at fault because they had tried to conceal how bad the situation was because a declaration of an emergency would have been taken as a sign of weaknesses (Hiller and Dempsey, 2011). Such attitudes need to be corrected because effective responses to crises require those affected to be proactive.

It is evident that if the early warning signs had triggered a more substantive and earlier response, the scale of death and suffering would have been reduced. Fortunately, the flaws can be corrected by a review of the management control systems.

How an organization's management control systems are implicated in the response to a crisis

Accuracy and planning

The MCS have a huge role to play in the response to any crisis. First, they facilitate accuracy in planning. In the event of an imminent disaster, any form of information is not useful unless it is comparable to the set targets and benchmarks. Selznick (1984) explains that the two main activities management control systems should prioritize during planning are: task or operational control and strategic planning. In the 2011 crisis, there was a lot of inaccurate information that did not tally with the targets that had been set, which slowed the response. For instance, Ethiopia had only planned for 2.8million in case of the disaster, while the actual number was 4.5 million and this made it difficult for donors to access more funds from their headquarters. The United Nations (UN) had also underestimated the people in need of emergency aid because in the planning phase, MCS had failed to realign the seasons in the horn of Africa with the timeline of appeals, which gave a misleading picture of needs (Hiller and Dempsey, 2011). Therefore, in agreement with Mintzberg (1987), timely and effective response to crises is determined by how accurate the information used by MCS is, particularly because it has a great impact on the plans that are eventually put in place.

Objectivity

MCS have a large influence on the objectivity of the organization. Very often, managers do not act on the basis of control system results. According to Hiller and Dempsey (2011), the major reason the relief efforts did not reflect the principles of disaster prevention set in the NGO code of conduct and Good Humanitarian Donorship Principles was because they took too long to respond to the crisis because of fear of being termed as interventionists. During disasters like drought, for instance, they are required to act fast as any time wasted equates to lives being lost. However, NGOs and relief organizations had to wait for media to break the story and for national governments to declare a crisis, which they were reluctant to do. Therefore, the objectivity of the MCS will also determine how effective the response to the disaster will be.

Integration

When controls are consistent with the values and structure of the organization, they will work in harmony with the policies applied in the organization, and hence response will be faster (Kaplan and Norton, 1996). Among the four countries, Kenya's response was more efficient than response to other droughts because MCS in different relief organizations set up to deal with disasters had become an integrated part of the organizational culture. Moreover, MCS also determine how well risk management plans are integrated with both short-term and long-term plans.

Flexibility

In this context, the flexibility of MCS refers to how well NGOs and national governments can adapt to changing conditions during response to a crisis. If NGOs, relief agencies and governments had noticed that data that was being provided was not reflective of the actual situation in the Horn of Africa, the concerned management would have identified better sources and adapted to those, which would have reduced the extent of the damage. Rigid MCS do not allow for adjustments for unexpected opportunities and threats; and the organization incurs more expenses, and spends more time correcting the situation. Hiller and Dempsey (2011) explain that although agencies like Save the Children and Oxfam had begun small scale responses by the end….....

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