gsm mba dissertation
TRANSCRIPT
i
GSM MBA DISSERTATION
DISSERTATION TITLE
AN ANALYSIS OF THE IMPLEMENTATION OF SUCCESSION PLANNING
PRACTICE IN THE BANKING INDUSTRY IN ZIMBABWE.
DISSERTATION METHODOLOGY (please tick one)
QUANTITATIVE
QUALITATIVE X MIXED METHODS
INTAKE (YEAR AND MONTH)
JULY 2013 (INTAKE 2)
Registration No.: STUDENT NAME:
R021491F
RUFARO JESSIE MUTASA
DISSERTATION SUBMISSION DEADLINE
SUBMISSION DATE
29 FEBRUARY 2016 29 FEBRUARY 2016
This statement should be completed and signed by the student producing the dissertation.
Declaration and Statement of Authorship:
1. I hold a copy of this dissertation, which can be produced if the original is lost/damaged. 2. This work may be reproduced, communicated, compared and archived for the purpose of detecting plagiarism. 3. I give permission for a copy of my marked work to be retained by the Graduate School of Management for review and comparison,
including review by external examiners. I understand that:
4. Plagiarism is the presentation of the work, idea or creation of another person as though it is your own. It is considered cheating and is a very serious academic offence that may lead up to expulsion from the program. Plagiarised material can be drawn from, and presented in, written, graphic and visual form, including electronic data, and oral presentations. Plagiarism occurs when the origin of the material used is not appropriately cited.
5. Enabling plagiarism is the act of assisting or allowing another person to plagiarise or to copy your work. Last Name First Name Signature
MUTASA
RUFARO
ii
Dedication
I dedicate this dissertation to my dear parents and siblings, for their love, encouragement and
unconditional support.
iii
Declaration
I, Rufaro J Mutasa, do hereby declare that this dissertation is a result of my own work,
investigation and research, except to the extent indicated in the acknowledgements,
references and comments included in the body of the report and that it has not been
submitted in part or in full for any other degree to any other university.
.................................................. ....................................
Student signature Date
.................................................. .....................................
Supervisor signature Date
iv
Acknowledgements
I would like to thank the Lord whose favour strengthened and gave me will power during
my studies toward attaining a Masters Degree in Business Administration. I amsincerely
grateful to my supervisor for his invaluable advice, guidance and steadfast patience that
made this dissertation a success.His practical criticism, foresight and knowledge were of
great worth in the writing of this work.
My gratitude also goes to all the lecturers at University of Zimbabwe Graduate School of
Management (UZGSM). They helped in shaping this dissertation by providing the
theoretical knowledge which was fundamental to the production of this dissertation. I also
thank my MBA friends for their encouragement and friendship throughout the duration of
the degree programme.
I would like to acknowledge the assistance I received from all participants who took time
out of their busy schedules to attend to my questionnaires.
I am greatly indebted to my friend and husband, Takunda, whose love and support sustained
me during my studies. I would also like to thank my childrenfor understanding and bearing
with my absenceespeciallyduring weekends when they needed a mother’s attention.
I would also like to thank everyone who contributed in one way or another towards the
completion of this project.
v
Abstract
Succession planning studies have been mostly conducted on family owned businesses due to
the fact that the majority of family business operations start and end with the initial
owner.This study focused on banks for the simple reason that they are custodians of public
funds and are expected to be accountable to various stakeholders.The purpose of this
dissertation was to investigate and draw inferential conclusions pertaining to the
effectiveness of succession planning in Zimbabwe’s banking industry. This was done
through analysisofthe banks’ currentimplementationprocessof the practice. By virtue of
standing regulatory requirements, banks are expected to have business continuity plans in
place, particularly for top leadership positions, so the assumption is they already practice
succession planning. The study intended to analyse the current succession planning practice,
examine the challenges banks are facing in implementing it and discuss the strategies that
can be adopted to improve it.
Empirical data was obtained through administration ofexploratoryinterviewquestionnaires to
thirteen respondents in the banking industry. A qualitative philosophy was adopted and the
obtained data was analysed using the content analysis approach. Findings were tabulated and
discussed.
The study concluded that, although banks have succession plans in place as required by the
regulatory authority (Reserve Bank of Zimbabwe), the implementation process of the plans
is flawed by numerous challenges, amongst which lack of management support tops the list.
The process is therefore not running the full cycle.In light of these findings, the researcher
recommended thatsuccession planning be included as a key result area for top management’s
performance appraisals. The Board should be held accountable; human resources
management personnel should competently facilitate implementation with the aid of robust
HR systems. Succession planning should be formulated into policy in order to strengthen the
practice. The policy will make it more communicable and involving such that it seizes to be
a mystery or just another HR practice. The regulatory authority is advised
toproactivelymonitorand ensure banks adhere to identified successors’ developmental plans
they would have proposed and agreed on. The researcher also recommended need-
basedtraining and continuous professional development of the identified successors in order
toensure desired outcomes are achieved. This should be donewith the aid of periodic
evaluations so that progress can be measured.
vi
Table of Contents Dedication .............................................................................................................................................. ii
Declaration ............................................................................................................................................ iii
Acknowledgements ................................................................................................................................iv
Abstract ................................................................................................................................................... v
List of tables ............................................................................................................................................ x
List of Figures ........................................................................................................................................xi
List of Abbreviations ............................................................................................................................ xii
CHAPTER 1: INTRODUCTION AND BACKGROUND ..................................................................... 1
1.1 Introduction ....................................................................................................................................... 1
1.2 Background to the study .................................................................................................................... 1
1.2.1 Succession planning in Zimbabwe’s banking Industry ............................................................ 2
1.2.2 Business Environmental Analysis ............................................................................................ 4
1.3 Statement of the Problem .................................................................................................................. 9
1.4 Research Objectives ........................................................................................................................ 11
1.5 Research Questions ......................................................................................................................... 11
1.6 Research Proposition ....................................................................................................................... 12
1.7 Significance of Study ...................................................................................................................... 12
1.8 Limitations ...................................................................................................................................... 13
1.9 Scope of study ................................................................................................................................. 13
1.10 Dissertation Structure .................................................................................................................... 13
1.11 Summary ....................................................................................................................................... 14
CHAPTER TWO: LITERATURE REVIEW ....................................................................................... 16
2.1 Introduction ..................................................................................................................................... 16
2.1.1 What is Succession Planning? ................................................................................................ 16
2.1.2 Succession planning as a Talent Management tool ................................................................ 19
2.2 Theoretical Framework underpinning Succession Planning ........................................................... 20
2.3 Succession planning ........................................................................................................................ 23
2.3.1 Current Practice ...................................................................................................................... 23
2.3.2 Scope of Succession planning ................................................................................................ 25
vii
2.3.3 Implementation of Succession planning ................................................................................. 28
2.4 Challenges facing Succession planning .......................................................................................... 29
2.5Strategies to conquer Succession challenges .................................................................................... 32
2.6 Succession planning Models ........................................................................................................... 35
2.6.1 The Seven-Pointed Star Model for Systematic Succession Planning ..................................... 35
2.6.2 The Ohio’s talent tomorrow and beyond succession planning model .................................... 37
2.6.3 Succession planning case study .................................................................................................... 38
2.7 Research gaps .................................................................................................................................. 39
2.8 Research Conceptual Framework .................................................................................................... 40
2.9 Chapter Summary ............................................................................................................................ 41
CHAPTER THREE: RESEARCH MEHODOLOGY .......................................................................... 42
3.0 Introduction ..................................................................................................................................... 42
3.1 Research Design .............................................................................................................................. 43
3.1.1 Descriptive studies ................................................................................................................. 43
3.1.2 Explanatory studies ................................................................................................................ 43
3.1.3 Exploratory studies ................................................................................................................. 44
3.2Philosophical Paradigms .................................................................................................................. 44
3.3 Research Philosophies ..................................................................................................................... 46
3.3.1 Quantitative philosophy ......................................................................................................... 46
3.3.2 Qualitative philosophy ........................................................................................................... 47
3.3.3 Selecting a suitable approach ................................................................................................. 47
3.4 Research Strategies ......................................................................................................................... 48
3.5 Data Collection Instruments ............................................................................................................ 50
3.6 Population and Sampling ................................................................................................................ 50
3.6.1 Population............................................................................................................................... 50
3.6.2 Sampling................................................................................................................................. 51
3.6.3 Judgmental sampling .............................................................................................................. 51
3.7 Data Analysis Techniques ............................................................................................................... 52
3.8 Validity and Reliability ................................................................................................................... 52
3.8.1 Validity ................................................................................................................................... 52
3.8.2 Reliability ............................................................................................................................... 53
3.9 Limitations ...................................................................................................................................... 53
viii
3.10 Ethical Considerations ................................................................................................................... 53
3.11 Conclusion ..................................................................................................................................... 54
CHAPTER FOUR: RESULTS AND FINDINGS ................................................................................ 55
4.0 Introduction ..................................................................................................................................... 55
4.1 Profile of the respondents ................................................................................................................ 55
4.1.1 Demographic Information of respondents .............................................................................. 55
4.2 Section B: Current Succession planning practice ............................................................................ 58
4.3 Section C: Succession planning challenges ..................................................................................... 68
4.4 Succession planning strategies ........................................................................................................ 69
4.5 Summary of findings ....................................................................................................................... 70
4.5.1 Current succession planning practice ..................................................................................... 70
4.5.2 Challenges facing succession planning .................................................................................. 71
4.5.3 Strategies to improve succession planning practice ............................................................... 71
4.6 Conclusion ....................................................................................................................................... 71
CHAPTER FIVE: DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ...................... 72
5.0 Introduction ..................................................................................................................................... 72
5.1 The research .................................................................................................................................... 72
5.2 Conclusions ..................................................................................................................................... 72
5.2.1 Succession planning in banks ................................................................................................. 73
5.2.2 Challenges facing successful implementation of succession planning .................................. 74
5.2.3 Strategies to improve the practice .......................................................................................... 74
5.3 Recommendations ........................................................................................................................... 74
5.3.1 Board accountability .............................................................................................................. 74
5.3.2 Management Support and participation ................................................................................. 75
5.3.3 Succession Policy ................................................................................................................... 75
5.3.4 Strengthening regulatory compliance audits .......................................................................... 75
5.3.5 Human resources Management systems ................................................................................. 75
5.3.6 Performance appraisals: 360 degree ....................................................................................... 76
5.3.7 Training and Development ..................................................................................................... 76
5.4 Evaluation of research proposition .................................................................................................. 77
5.5 Limitations of study and areas of further research .......................................................................... 77
5.5.1 Limitations ............................................................................................................................. 77
ix
5.5.2 Areas of further research ........................................................................................................ 77
References ............................................................................................................................................. 79
APPENDICES ....................................................................................................................................... 83
x
List of tables
Table Description Page
Table 2.1: The VRIO Framework.......................................................................................22
Table 3.1: Banks in Zimbabwe............................................................................................51
Table 4.1: Demographic personal Information of respondents..........................................57
Table 4.2: Replacement of personnel in Executive positions..............................................58
Table 4.3: Succession planning...........................................................................................59
Table 4.4: Identification of Succession candidates............................................................60
Table 4.5: Developing internal candidates for succession.................................................61
Table 4.6: Incorporating Succession planning into Bank’s strategy..................................62
Table 4.7: Impact of Labour Act Amendments to Succession planning............................63
Table 4.8: Preservation of Institutional memory................................................................64
Table 4.9: Developmental Initiatives..................................................................................65
Table 4.10: Organisational Long term survival...................................................................66
Table 4.11: Overall rating of succession planning..............................................................67
Table 4.12: Succession planning challenges.......................................................................68
Table 4.13: Succession planning strategies........................................................................69
xi
List of Figures
Figure Description Page
Fig 1.1 PESTEG Analysis.................................................................................................4
Fig 2.1: Resource Based View of the Firm......................................................................20
Fig 2.2: Administration of Succession planning...............................................................26
Fig 2.3: The Seven Pointed star succession planning model............................................35
Fig 2.4: The Ohio talent tomorrow and beyond Succession planning model...................37
Fig 2.5: Conceptual Framework.......................................................................................40
Fig 3.1: The research Onion.............................................................................................42
Fig 4.1 Respondents’ level of Education.........................................................................55
Fig 4.2 Respondents’ professional background...............................................................56
xii
List of Abbreviations
AIDS Acquired Immuno Deficiency Syndrome
CEO Chief Executive Officer
CGRI Corporate Governance Research Initiative
ESAP Economic Structural Adjustment Programme
EU European Union
HRD Human Resources Department
GNU Government of National Unity
HIV Human Immuno Virus
HRM Human Resources Management
IMF International Monetary Fund
MD Managing Director
MDC Movement for Democratic Change
MFI Multilateral Financial Institutions
RBZ Reserve Bank of Zimbabwe
RBV Resource Based View
ROI Return on Investment
SP & M Succession Planning and Management
UN United Nations
USA United States of America
VRIO Value, Rarity, Imitability, Organisation
WB World Bank
ZANU PF Zimbabwe African National Union Patriotic Front
1
CHAPTER 1: INTRODUCTION AND BACKGROUND
1.1 Introduction
This chapter introduces the research study on the implementation of succession planning
process in the banking industry in Zimbabwe. It discusses the introduction, background to
the study, statement of the problem, research objectives, and significance of the study as
well as structure of the research.
While most organisations are quick to confirm that they have active succession plans in
place, it is the implementation effectiveness of their processes that warrant an analysis.
Although an organisation’s survival and long term prosperity can be attributed to quite an
array of factors, leadership stands out as a definite fundamental factor. Fayol (cited in Jarbou
2013), in his classic 14 points of management, elucidates that it is management’s
responsibility to ensure stability of tenure of personnel otherwise organisations will be ill
prepared to make necessary transitions. Succession planning assists with retention of
talented personnel through provision of developmental and growth opportunities so that staff
may not otherwise look elsewhere (Jarbou, 2013). This means planning for succession is a
very necessary activity to ensure fruition of strategic plans, human resources and other
organisational development plans and activities (Rothwell, 2010).
1.2 Background to the study
Due to the rapidly changing environments, succession planning could be a very fundamental
process in today’s organisation in order to preserve institutional memory, as well as ensure
organizational long term sustainability. It is a vital process whether the economy is good or
bad because no one situation remains permanently the same over time. Change is inevitably
the only constant. Organizations require talented employees who are skilled, highly adaptive
to changing economic environments and have a very good understanding of the company’s
strategic direction, cultural dynamics, vision and its mission.
The effects of the 2008-2009 global financial crisis did not spare the African continent and
for Zimbabwe the effects were quite calamitous as the country was already experiencing its
2
own localised financial crisis. According to Maunganidze (2013), this culminated into an era
of the worst economic and social crisis as most companies succumbed to viability
challenges. Like in other industries, the Banking sector lost a number of talented and
competent staff due to various reasons which included searching for greener pastures and
job stability. Needless to say, some banks lost quite valuable skilled personnel. The
turnaround time banks take to fill in a key vacancy is a reflection of the level of
preparedness of their human resources management systems, as well as their strategic thrust
in terms of succession planning and management processes. As popularly understood,
failure to plan is planning to fail. Mammat et al. (2007) postulate that failure to plan for
succession is a frequent cause of rapid organization deterioration and downfall. Finding a
suitable replacement for a key role could appear to be an easy task at face value if the
selection criteria are based on only qualifications and level of experience, but there may be
costs to be incurred in terms of finance, time and productivity if the replacement is sought
externally. De Juan (2003) cites the ability to foresee as a rare gift which can be developed
by adequate techniques. Building a sustainable talent pipeline of potential successors with
leadership capabilities and suitable culture fit is very necessary to mitigate risk of disruption
and discontinuity of business operations should any key staff departures take place.
Succession planning in banks, if implemented correctly, should endeavour to nurture
corporate entrepreneurship or intrapreneurship through recognition of high fliers, who may
view themselves as budding entrepreneurs, and doing the necessary developmental activities
to cultivate their loyalty and make them corporate warriors (Govender, 2010).
1.2.1 Succession planning in Zimbabwe’s banking Industry
According to Govender (2010), banks are an important source of working capital for
businesses and are catalysts of economic growth. The banking industry is characterized by
high volatility and stiff competition for competent and skilled personnel. Like any other
industry, the banking sector also faces the risk of untimely departures of critical employees
whether be it through retirement, ill health, dismissals, competition or even death. Nassor
(2013) emphasises the need to proactively find a suitable successor that can fill in a key
vacancy when it opens up since it is inevitable to stop employees from exiting the
organisation. The importance of succession planning cannot be under estimated; due to the
unpredictability of the banking industry, it is quite imperative to nurture and develop talent
from within due to issues to do with organisational culture as well as customer loyalty and
3
trust. A planned succession entails more than just filling in key positions but also involves
passing of a shared culture and vision. It facilitates continuity and change management. The
process of attracting, developing and retaining the best talent is not a once off event and may
take quite some time.
Gono (2014) asserts that forward looking succession planning is a critical ingredient of good
corporate governance. In light of this, the Reserve Bank of Zimbabwe vets all top bank
officials for qualifications, experience, appropriate track record and worthiness for their jobs
as an enforcement of good corporate governance measure. De Juan (2003), supports this
assertion as he postulates that succession prospect is one of the basic elements used to rate a
bank’s management. He further reiterates that if all banks were well managed then the only
reason for failure would be those due to economic or political factors. He stresses the role of
management as a major element in banking crises. It has been observed that most indigenous
banks struggle with management issues which impact on performance and return on
investment in the long run. Cases in point include Barbican bank, ZABG, Trust bank and
Kingdom bank, to mention a few.
Dessler (cited in Nassor, 2013) defines succession planning as an ongoing process of
systematically identifying, assessing, selecting and developing candidates who will fill the
key leadership positions to enhance performance. Furthermore, Rothwell (2010) defines
succession planning as a calculated effort by an organisation to ensure leadership continuity
in key positions. This may be necessitated by the fact that when experienced workers in
leadership roles unexpectedly leave the organisation, it results in an experience gap and a
glaring leadership void. However, despite the risk involved in not investing in this process,
organisations may purport to have succession plans in place, yet on closer investigations,
these plans may just be that. Plans. There may be no processes or activities whatsoever to
support the plans or the development of the ear marked talent. Miles and Dysart (cited in
Nassor 2013:2) point out that succession planning efforts are usually underdeveloped,
irregularly implemented and sometimes simply ignored. This study will endeavour to
unearth reasons why there may be lack of succession planning processes in such instances.
To analyse the implementation and effectiveness of succession planning in Zimbabwean
banks it will be worthy to find out the state of the current succession planning practice,
examine the challenges facing its implementation and discuss suitable strategies to counter
the challenges. Thereafter, it will be necessary to provide recommendations that the banks
can adopt in order to be able to practice succession planning effectively and successfully.
1.2.2 Business Environmental Analysis
In order to have a clearer understanding of the banking industry and validate the necessity of
analysing the effectiveness of succession planning processes in this sector, it is essential to
carry out an analysis of the business e
environment can be analysed through political, economic, s
global factors that affect a business. These factors create opportunities and threats
outcome of the analysis can assist in the appreciation of
Figure 1.1 below shows the major business environmental factors.
Figure 1.1: PESTELG ANALYSIS
Source: Adapted from http://www.strategicmanagementinsight.com/
Legal
Global
the challenges. Thereafter, it will be necessary to provide recommendations that the banks
can adopt in order to be able to practice succession planning effectively and successfully.
ss Environmental Analysis
In order to have a clearer understanding of the banking industry and validate the necessity of
analysing the effectiveness of succession planning processes in this sector, it is essential to
carry out an analysis of the business environment in which banks operate. The business
d through political, economic, social, technological, ethical and
global factors that affect a business. These factors create opportunities and threats
ysis can assist in the appreciation of the research question under study.
Figure 1.1 below shows the major business environmental factors.
Figure 1.1: PESTELG ANALYSIS
http://www.strategicmanagementinsight.com/ [accessed 27/10/2015]
Macro environment
INDUSTRY
Political
Economical
TechnologicalEthical
4
the challenges. Thereafter, it will be necessary to provide recommendations that the banks
can adopt in order to be able to practice succession planning effectively and successfully.
In order to have a clearer understanding of the banking industry and validate the necessity of
analysing the effectiveness of succession planning processes in this sector, it is essential to
nvironment in which banks operate. The business
ocial, technological, ethical and
global factors that affect a business. These factors create opportunities and threats, hence the
research question under study.
[accessed 27/10/2015]
Economical
Social
5
a) Political Factors
The banking sector in Zimbabwe had been basically dominated by traditional foreign banks
till the mid 90’s when liberalization of the sector promoted the establishment of indigenous
banks. Prior to the year 2000, Zimbabwe was regarded as the bread basket of Africa with
agriculture being the stronghold of economic activities while mining and manufacturing
were complements. Politically, the environment was stable and the country was enjoying
strong economic growth due to the confidence and support of the international community.
The government of Zimbabwe directed the banking industry’s regulatory authority, the
Reserve Bank of Zimbabwe (RBZ). The banking industry benefitted from lines of credit
from international financiers like the World Bank (WB) and International Monetary Fund
(IMF).
However, the political outlook in Zimbabwe took a really drastic turn in the year 2000
owing to the chaotic land reform programme which coincided with the creation of the
Movement for Democratic Change (MDC) political opposition party. The way the land
reform programme was administered did not go down well with the international
community. This resulted in the imposition of sanctions on the country by the European
Union (E.U) and also United States of America (U.S.A) as a way of registering their protest
against the Zimbabwean government’s policies regarding the land issue.
Multilateral Financial institutions (MFIs) imposed financial sanctions on Zimbabwe in the
following manner; suspension of Balance of Payment support, suspension of technical
assistance, suspension of voting and related rights by IMF and declaration of ineligibility to
access fund resources (RBZ, 2007). Needless to say, this turn of events negatively impacted
on the once robust banking sector which lost access to foreign lines of credit and also
diminished chances of forming strategic alliances with foreign banks due to the uncertainty
surrounding the political landscape of the country. The international community maintained
that the sanctions were not economic while the government argued otherwise and this
resulted in the isolation of the country from the rest of the world and caused a complete
collapse of relations (Chanaka, 2014). United Nations’ special envoy, Anna Tibaijuka
(2005) contended that in as much as these sanctions were not specifically economic in
nature, they adversely affected the Zimbabwean political environment and contributed to the
rift of the national and international media.
6
With the quality of life for the generality of Zimbabweans deteriorating from bad to worse,
coupled with political violence, the ruling political party, ZANU PF, compromised with the
competing M.D.C to form a Government of National Unity (G.N.U) in 2008. This did not
yield much in terms of improving the international community’s view of the country’s
political risk but at least it brought about the dollarization of the economy and curbed the
hyperinflation which was bedevilling the country. The RBZ lost its lender of last resort
status as it could no longer print money. Even though dollarization came as a relief, banks
had to devalue their customers’ savings and investments at an exchange rate that wiped
away any value of what the clients had entrusted to the banks. With this, the banking
industry lost quite a huge scale of customer trust and loyalty. It also was at high risk of
losing its best talent too as the future and prosperity of the industry appeared to be bleak
especially more so with the introduction of black empowerment policies. These policies are
meant to address colonial injustices but the question would remain on the nature of impact
on succession in banks if indigenization laws were to be applied to this industry. The
banking industry needs highly skilled and talented management and staff to be able to
neutralize external threats brought about by political interference on the macro fiscal and
monetary policy.
b) Economic factors
The Economic and Structural Adjustment Programme (ESAP) which the Government
embarked on in 1991 with the support of WB and IMF triggered the deterioration of the
economic situation in the country. Although the programme’s intended purpose was partly
to deregulate and liberalise the financial sector, the World Bank (2010) concedes that the
anticipated benefits such as growing the economy and creating jobs did not materialize but
the opposite actually became the reality. Furthermore, the imposition of targeted sanctions
on Zimbabwe adversely affected the weak and vulnerable people far more than the intended
targets. Kofi Anan (2000) described these sanctions as a misdirected apparatus used to inflict
undue pain on a multitude of ordinary people who do not deserve it. With a shrinking
economy and soaring unemployment levels, the population became poorer which impacted
negatively on the banking industry. Additionally, banks were failing to cope with
customers’ daily cash requirements due to the effects of hyper inflation and devaluation of
the Zimbabwean dollar.
7
From the period 2003 to 2015 many indigenous banks succumbed to liquidity and
management challenges and collapsed. These banks include Royal, Trust, Time, Barbican,
Genesis, Century, Allied, AfrAsia and Tetrad. The banks that survived had to take measures
to manage their exposure to risk. Indigenous banks have folded due to a compound of
factors amongst which mismanagement tops the list. One of the reasons can be attributed to
failure of founders to handover bank operations to professional managers. Poor succession
planning and management (SP and M) may also be a contributing factor. Running a bank
demands requisite skill and expertise therefore it may be imperative to separate ownership
and management as banks handle public funds; it is key to manage them professionally and
efficiently.
c) Social factors
The political and economic situation impacted negatively on the people of Zimbabwe and
the effects spilled into the social domain. The economy suffered so much in the period 2000-
2009 and this caused many companies to close down due to viability challenges which were
induced by the harsh operating environment. Resultantly, quite a number of job losses were
experienced and the labour market was awash with raw college graduates who could not be
absorbed into the dwindling formal markets. This situation gave birth to the informal sector
which initially traded in illegal activities such as foreign exchange dealings; an activity
termed “burning money” in street lingo. The country was subjected to brain drain as its
skilled people emigrated to neighbouring countries and abroad in search of greener pastures.
In as far as corporate social programs were concerned, companies could not even afford to
sponsor expected programmes due to a difficult economic environment.
As if this was not enough, the HIV and AIDS pandemic was also taking its toll on the same
productive age group. According to the United Nations (UN) report (2009) an estimate of
14% of the population was infected with the virus as at 2007. Given this bleak background,
companies that invest in tools like succession planning and nurture loyalty in their employee
retention strategies would less likely suffer as much risk as those that do not proactively
manage their human resources succession. The banking industry in Zimbabwe has also been
adversely affected as its talented personnel also ventured outside the country’s borders in
search of better prospects amidst the turmoil of uncertainty clouding the country’s economic
direction.
8
d) Technological factors
Zimbabwe, being a third world country, has been lagging behind on the technological front.
However, with the inception of the government of national unity (G.N.U) in 2008 and the
slight improvements in economic outlook, the small number of companies that was revived
embraced technological advancement, with a few exceptions such as Zimpost and Telone
succumbing to technological adjustment failures. The banking sector innovated around
mobile and online banking in a bid to delight its customers. Some banks upgraded their
Automated Teller Machines (ATMs) in an effort to improve service quality and security
features and also to be in line with international standards. On the human resources
management front, some banks invested in management and payroll systems in order to
manage their employees better. Noteworthy though is the fact that most have not considered
investing in succession and employee management tools as yet probably due to inadequate
familiarization of the benefits of these management tools and also financial resources
constraints. The banks’ human resources management tools could still be technologically
lagging behind in terms of adequacy.
e) Ethical factors
In today’s business environment, banking plays quite a critical role in framing public policy.
According to Saunders (2003), ethics refers to the appropriateness of one’s behaviour in
relation to the rights of those who become the subject of one’s work or are affected by it.
Although banks play a key role in the supply and movement of money, how they use this
money is not irrelevant from a moral and ethical perspective. In the same vein, their
selection of human resources, and particularly those that anchor leadership roles, should be
done ethically and the selected must play a stewardship role in execution of their duties.
All banks have codes of ethics in place and are expected to abide by them. The country
recently launched Zimcode-a national document of corporate governance-which is a
refreshing starting point and a step in the right direction.
f) Legal factors
The other factor is the legal environment that banks operate in. The banking sector is
regulated by the RBZ whose responsibility is regulation and supervision of banking
institutions in Zimbabwe. The RBZ endeavours to ensure that banks conform to its
prudential guidelines as well as statutory regulations. As part of their risk based supervision
9
and surveillance duties, the central regulatory body carries out compliance audits on banks’
human resources policy adequacy pertaining to succession of key roles. Banks are expected
to adhere to the Banking Act guidelines when carrying out their operations.
g) Global factors
Global factors affect succession in a notable way. Traditional foreign banks like Barclays,
Standard Chartered and Stanbic are controlled at group level and have their Head offices
outside the country. These banks are expected to adhere to international standards of
banking and this sets a standard for indigenous banks as well since customers will choose
banks that offer the best in terms of quality, service delivery and even security of deposits.
Succession planning of the traditional foreign banks is not necessarily restricted to
Zimbabwe only but goes beyond into regional and international assignments. Talent
management and succession planning therefore become very important at macro level since
the world has become a global village and having employees who understand the strategic
direction of the banks they work for; its vision, mission, values and culture dynamics create
a sustainable competitive advantage. Global transfers of employees are a common pattern in
international banks. Kutcher, Jones and Widener (cited in Nassor, 2013) assert that having a
workforce alone is not sufficient for a firm to derive a sustainable competitive advantage,
rather a firm must utilise their workforce as a strategic resource to sustain competitive
advantage.
1.3 Statement of the Problem
The world is now a global village and distance-induced inhibitions are no longer an
important aspect to consider when moving jobs or careers. Bankers are under immense
pressure everywhere due to management failures, as well as risk of losing their best brains to
competitors and other industries. In Zimbabwe, the pressure could be especially more so
with the amendments made to the Labour Act after the 2015 landmark Supreme Court ruling
that empowered employers to issue three months employment termination letters to
employees. This prompted some employers to abruptly dismiss their employees by giving
them three months’ salary in lieu of notice.
10
The banking industry is a specialised one, with a unique kind of culture and is expected to
uphold a high level of integrity, transparency and continuity since it trades in public funds
and assets. It is a regulated industry. Although most banks may indeed have succession plans
in place, it is the depth of these plans and the effectiveness of their implementation that this
study seeks to analyse. Continuity and smooth flow of business processes should not be
threatened by departures of key talent hence it is imperative for banks to have talent pools
where they can draw fit-for-role replacements from anytime. The question of whether or not
an employee should know that they are valued talent to the organisation may also arise given
the current state of affairs that enable employers to dismiss workers on three months’ notice.
The need for succession planning will always be there because departures are unpredictable
and inevitable given the demographic parameters of decreasing life expectancy forecasts.
This study seeks to analyse the extent to which Succession planning is effective in ensuring
key skills’ retention and leadership continuity in the Banking Sector in Zimbabwe. For
senior positions of Chief Executive Officer, Chief Finance Officer, Chief Operating Officer,
Chief Information Officer (C-suite) and other senior leadership roles, the Reserve Bank of
Zimbabwe (RBZ) prescribes a certain set of person specifications required for such
positions. More often than not, it has been observed that many banks fail to field a suitable
person from within when an unplanned departure occurs and may have to scout for a key
role successor externally.
The RBZ carries out a periodic compliance audit on bank operations and succession
planning is regarded a key human resources compliance issue. This raises the question of
whether banks do this exercise in order to be compliant or it is a process they ought to
regularly practice to meet their organisations’ short and long term strategic goals. It also
raises the question of whether succession planning is regarded a necessary process at all in
today’s banking organisations or it may only be an issue of complying with the regulatory
requirements. It can be observed that the country’s banking Industry has declined mainly
due to poor succession planning at leadership level, particularly among the indigenous
banks. Most indigenous banks have liquidated and some have gone under judicial
management. This has resulted in customers’ loss of confidence in banks.
11
1.4 Research Objectives
The overall objective of the study is;
To critically analyze the implementation process of succession planning practices in
Zimbabwe’s banking industry.
The Specific Objectives are;
i. To find out the current succession planning practices in the banking sector in
Zimbabwe.
ii. To examine the challenges that banks in Zimbabwe could face in implementing
succession planning best practice.
iii. To recommend suitable strategies that help improve the succession planning practice
in Zimbabwean banks.
1.5 Research Questions
The main research question is;
How effective is the implementation of the current succession planning practices as a human
resources management tool in banks in Zimbabwe?
The sub questions the research seeks to address are;
1. What is the current state of succession planning practice in Zimbabwe’s banking
industry?
2. Are there any prevalent challenges facing the effective implementation of succession
planning practice?
3. What strategies can be implemented to improve succession planning practice in
banks in Zimbabwe?
12
1.6 Research Proposition
The research proposes that Succession planning is not being fully utilized as a talent
management tool in Zimbabwe’s banking Industry. The assumption is that although plans
may be in place, they are not fully implemented and evaluated.
1.7 Significance of Study
Succession planning studies have been widely carried out in the Asian and European
countries and literature reveals that a few studies on the subject matter have been carried out
in developing countries. Notable succession planning studies carried out on banks in Africa
were done by Govender (2010), South Africa and Nassor (2013), Tanzania. In Zimbabwe,
succession planning studies have been carried out on family owned businesses and Small to
Medium Enterprises due to the fact that most of these are owner managed and in the event of
the passing on of the owner, the business also goes into demise. One such study was carried
out in 2008 by Maungandze.
Banks are owned by many shareholders, have various stakeholders and deal with public
funds. This study endeavours to fill in a gap in literature regarding the effectiveness of
succession planning practice in the banking industry in Zimbabwe in the midst of massive
job losses and company viability challenges against the volatile nature of banks’ business
operations and the unpredictable operating environment. It seeks to unearth why succession
planning is not being proactively implemented in some instances and whether or not it is
actually on the priority list of human resources workforce planning activities. This is against
the fact that a company’s competitive advantage is usually sustained by its calibre of human
resources.
The banking sector is a critical component of the country’s overall economic performance as
they deal with depositors’ funds and assets. It may be essential for banks to identify posts
that are critical for success, categorize talented people who can fit into them and disseminate
the best way to satisfy future requirements. Recent collapses of banks, particularly the local
ones, can be partly attributed to failure of founders to handover to professional managers.
This research is important to the student as she endeavours to contribute to the body of
knowledge in order to minimise such management discontinuity problems.
13
It is also important to the banking sector in that recommendations will be suggested on
strategies to strengthen effectiveness of succession planning as well as benefits that come
with proactively undertaking succession planning in this era of increased competition. The
researcher anticipates that this study will be a resource for Human Resources Practitioners,
as well as company executives, who spearhead and own the processes of succession
planning in their organizations. The study aims to incite other researchers to discuss the
concept of succession planning practice in other sectors as well as the relevancy of this
subject area as a tool of Talent Management in business.The research findings are also
expected to raise some human resource succession planning pitfalls which should be
addressed by banks in Zimbabwe. The researcher expects this study to benefit the various
stakeholders in the banking industry.
1.8 Limitations
Time constraints may be encountered given the limited research period. Some financial
institutions may be reluctant to divulge some information relating to their Human Resources
management processes and policies. The researcher will utilize her college contacts and
associates to establish networks that will lead her to her targeted participants. The researcher
will work with findings obtained from banks that agree to participate in the study and
synthesize with secondary data available in the public domain.
1.9 Scope of study
This study will focus on the banking industry in Zimbabwe and research will be carried out
on fifteen operational banks. The population would be limited to human resources
practitioners, senior and middle level management in the banking sector. The study will not
go into detail concerning other talent management tools. Findings obtained from the target
population will be recommended to the banking industry in Zimbabwe.
1.10 Dissertation Structure
This dissertation comprises of five chapters which are arranged as follows;
14
a. Chapter 1: Introduction and Background
This chapter introduces the research problem under study. It contextualizes the background
to the study area, problem statement, research objectives and research questions. The study
concludes with the limitations of the study, scope of the study and significance of the study
to the academic community, bankers and human resources practitioners.
b. Chapter 2: Literature Review
The chapter focuses on reviewing existing literature pertaining to the subject matter under
study. It outlines some of the relevant works that have been done by other researchers and
writers, streamlining the work against this study’s objectives and purpose. Applicable
theories will also be discussed.
c. Chapter 3: Methodology
The chapter focuses on the research methodology which the researcher adopted in carrying
out the researcher. An analytical framework of the research design that was selected will be
provided as well as the reasons why a single case study approach was preferred. The main
sources of data to the research, data collection processes and data analysis will be discussed.
d. Chapter 4: Results and Findings
The chapter will focus on discussing the findings obtained from banks. The collected data
will be presented, analysed and examined in order for inferences to be drawn from it. This
chapter will provide answers to the research questions articulated in chapter 1 as well as
validate the objectives raised.
e. Chapter 5: Conclusions and Recommendations
The chapter will consider theory and field findings and conclude the research study.
Recommendations will be offered and areas of further research will be highlighted.
1.11 Summary
The chapter introduced the research study on the analysis of the implementation of
succession planning practice in the banking industry in Zimbabwe. An overview of the
15
subject matter under study including its direction and scope were discussed. Three distinct
objectives were determined and in line with these objectives appropriate questions were also
posed. The objectives seek to establish the current state of succession planning, find out the
challenges facing the implementation of the practice and discuss the strategies that can be
applied to improve the implementation of the practice. The following chapter will
concentrate on reviewing available literature in line with the study objectives and also touch
on relevant theories to substantiate the research proposition and answer the research
questions.
16
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
This chapter reviews relevant literature on succession planning. It will firstly consider the
theoretical framework underpinning succession planning initiative. Secondly, the study
variables identified as objectives in chapter 1 will be discussed in depth and a relationship
amongst them will be established. Thirdly, applicable research models will be discussed as
well as identified research gaps. Lastly, the chapter will provide a conceptual framework for
the study and a summary.
The literature review will analyzethecurrent state of succession planning practices in the
banking industry; consider the challenges that inhibit the successful implementation of the
process and the strategies that can be used to mitigate or lessen the challenges. Additionally,
recommendations found in literature to improve the effectiveness of the succession planning
process will be discussed.
2.1.1 What is Succession Planning?
According to Rothwell (2010), succession planning is a deliberate and systematic effort by
an organisation to ensure leadership continuity in key positions, retain and develop
intellectual and knowledge capital for the future and encourage individual advancement.
Succession planning is not an event but a continuous process that improves with practice,
commitment and adjustment. Hedum (2010) views succession planning as a critical
leadership tool for ensuring organizational growth and continuity by eliminating substantial
gaps in institutional memory, knowledge, and leadership through strategic placement of key
personnel. Armstrong (2011) further posits that succession planning is a process of assessing
and auditing the talent in the organization in order to answer fundamental questions of
whether there is sufficient and good enough bench strength and also if they have the right
skills and competencies for the future.
Effective organizations are expected to proactively create the future by investing resources
such as time, money and intellectual capacity towards planning and management of
succession in order to ensure continuity of their leadership talent. Nguwi (2014) reiterates
17
that succession planning is a process that starts with proper recruitment and selection of
employees, development of their skills and preparing them for advancement through
mentorship and coaching. This suggests that Organizations are expected to select and recruit
high potential people who can feed into talent pools in preparation for key future manpower
requirements. This standpoint is supported by Noe et al (2008) who define succession
planning as more than just a backup or replacement plan to provide qualified successors.
They view it as a valuable tool that guarantees a continuous supply of competent and
talented skill. Succession planning is an ongoing process that demands constant revisiting,
maintenance and updating in order to keep abreast with current market changes as well as
future requirements in terms of workforce and particularly leadership planning.
In as much as succession planning may appear to be biased towards satisfying organizational
requirements (Govender 2010), it also promotes individual development thereby assisting
employees with fulfillment of their self actualization goals (Flynn 2014). A good succession
planning process creates congruence between organizational requirements and individuals’
needs. Flynn (2014) adds that succession planning helps address skills shortages, improve
diversity, and foster employee engagement. Without Succession planning the wealth of
knowledge amassed by staff over the years would be thrown away (Govender 2010).
Succession planning has been defined by various writers and the bottom line that comes out
clearly is that it is a proactive, deliberate and systematic process that organisations choose to
undertake in order to promote continuity through development and retention of key talent
and preservation of cultural values and intellectual property. It is a strategic and risk
mitigation measure that helps minimize disruption and discontinuity of business operations;
it helps companies to avoid promotion of employees due to crisis and equips organisations to
make planned and informed decisions in the selection and nurturing of talent that can feed
into specialised, management and leadership roles.
The succession planning process should not be done secretly or mysteriously. Effective
communication is very important throughout the process (Mehraban and Mahomed 2011).
This succession process should be the initiative of management but for it to be effective it
requires the avid support of the Chief Executive Officer, participation of line management,
active facilitation by Human Resources department and the effort of everyone in the
organisation. The identified talent should be trained, developed, mentored and coached
through exposing them to acting opportunities, rotational assignments, projects as well as
management and leadership development programs. By doing all this, succession planning is
18
then differentiated from replacement planning which favours quick fixes and is purely done
for risk aversion and crisis management reasons (Rothwell, 2010).
It will be of no use to try to talk a leaving key employee into staying when they state that
their reason for leaving is to look for growth opportunities. They could be leaving because
they may have noticed a trend that the company is always filling vacant key roles with
external people. More often than not it may be because succession management is not being
practised proactively and systematically. Organisations need to strategize to motivate and
connect their employees in order to create competitive advantage and achieve profitability
(Mehrabani and Mohamad, 2011). There are of course instances where bringing in new
blood into the organisation pays huge dividends, especially where brand equity is at stake or
where there is urgent need to drastically change organisational culture or shock the system.
Perhaps a mix of new appointments and internal promotions may be the best approach for
some organisations. However, proactively practising internal succession planning has quite a
number of benefits.
Rothwell (2010) asserts that succession planning is important in the long term success of a
company and this is reinforced by Govender (2010) who states that leadership transitions
have a rippling effect in business, thus affecting the entire organisation’s continuity, talented
employee retention, client retention and returns on investment. There are some aspects of
business which cannot be imitated easily and can be quite rare like quality of personnel,
organisational culture, relationships and even employee commitment. These may add a
unique value especially if a firm organises itself in such a way that enables exploitation of
such advantages. The banking industry is homogenous if looked at as a sector, but the
individual banks are heterogeneous. This can be attributed to a number of factors amongst
which human resources management processes is one key element. Ability to attract, select,
recruit skilled personnel and then develop, nurture and retain them is one key component of
strategic human resources management that really matters. It is even more important if a
firm endeavours to religiously practice succession planning process from the initial point of
recruitment because the very same people who were fed into the system will constitute the
future management and anchor the leadership echelons of the organisation. Investment in
succession planning is something that modern business leaders are recognising as an
important strategy in achieving the long-term vision of the organisation.
19
Succession planning enables proactive identification and grooming of high potential
candidates for future key positions ensuring that the return on investment (ROI) made in
each identified employee is realised in the form of organisational preparedness, confidence
and capability. This gives the organisation a good chance to be competitive and face the
future with confidence (Govender, 2010). Today’s rapidly changing environments expose
organisations to unpredictability and uncertainty which may cause instability in business
operations hence the need for organisations to rely on their most important asset: their
people (Mehrabani and Mohamad, 2011). Hills (2009) sums it up by defining succession
planning as doing all you can to ensure you have the right people in the right jobs at the right
time. He further goes on to categorize succession planning as a smart talent management
strategy that helps an organisation to ensure it has the required skills on hand to respond to
rapidly shifting sands that make up today’s business environment.
2.1.2 Succession planning as a Talent Management tool
Talented people possess special gifts, abilities and aptitudes which enable them to perform
effectively (Armstrong, 2011). These people have a special bundle of abilities, skills,
knowledge and unique style which makes them a major corporate resource. Cannon and
McGhee (2011) define talent management as a process of identifying, managing and
developing such people now for the future. Some scholars are of the view that Talent
management is anchored on the assumption that there is potential in every staff member and
any developmental approach should aim to release it. Armstrong (2011) indicates that talent
management may simply refer to succession planning and management development
activities which aim to identify, retain and nurture the key competencies that the
organisation requires. In her research,Chikumbi (2011) explains that talent management
focuses on the individual with undisputable abilities and skills. It also focuses on processes
that seek out these special employees that need to add value to improve the bottom line.
Succession planning cannot be effective without proper talent management and talent can be
measured through performance management of employees. The best way to compare
employees’ level of skill and expertise at what they do is through objective performance
management; other ways of measuring employees’ capabilities and level of aptitude usually
tend to be very subjective in nature and may adversely affect an organisation’s management
and leadership quality in the long run.
Society for Human Resources Management (cited in Kim, 2006) describes talent
management as the implementation of integrated strategies or systems designed to increase
workplace productivity by developing improved processes for attracting, developing,
retaining and utilising people with the required skill and aptitude to meet current and fut
business needs. Talent management is the notion of bundling in action which provides a
basis for Succession planning. Succession planning is based on information about people
which would have been gleaned from talent audits, employee performance and po
reviews as well as supply and demand forecasts.
2.2 Theoretical Framework underpinning Succession Planning
There are various theories that support succession planning amongst which there is the
Resources Based View of the firm. Figure 2.1 below dep
supports succession planning practice.
Fig 2.1: Resource Based View of the Firm (RBV).
Source:Barney and Hesterly
advantage: Concepts and cases
The Resource Based View of the Firm (RBV) is a management model of firm performance
that focuses on the resources and capabilities controlled by an organisation as sources of
competitive advantage (Barney and Hesterly
and intangible assets a firm controls and uses to envision and implement its strategies.
Capabilities are complex bundles of individual talents, attitudes, skills and accumulated
knowledge exercised through organisational processes and unique styl
Capabilities
Resources
Distinctive
competencies
Society for Human Resources Management (cited in Kim, 2006) describes talent
t as the implementation of integrated strategies or systems designed to increase
workplace productivity by developing improved processes for attracting, developing,
retaining and utilising people with the required skill and aptitude to meet current and fut
business needs. Talent management is the notion of bundling in action which provides a
basis for Succession planning. Succession planning is based on information about people
which would have been gleaned from talent audits, employee performance and po
reviews as well as supply and demand forecasts.
2.2 Theoretical Framework underpinning Succession Planning
There are various theories that support succession planning amongst which there is the
Resources Based View of the firm. Figure 2.1 below depicts the resource based view which
supports succession planning practice.
Fig 2.1: Resource Based View of the Firm (RBV).
and Hesterly(2012). Strategic Management and Competitive
advantage: Concepts and cases.
The Resource Based View of the Firm (RBV) is a management model of firm performance
that focuses on the resources and capabilities controlled by an organisation as sources of
competitive advantage (Barney and Hesterly, 2012). The resources are defined as t
and intangible assets a firm controls and uses to envision and implement its strategies.
Capabilities are complex bundles of individual talents, attitudes, skills and accumulated
knowledge exercised through organisational processes and unique styles that enable a firm
Distinctive
competencies
Competetitive
AdvantageCost/Differentiation
Advantage
20
Society for Human Resources Management (cited in Kim, 2006) describes talent
t as the implementation of integrated strategies or systems designed to increase
workplace productivity by developing improved processes for attracting, developing,
retaining and utilising people with the required skill and aptitude to meet current and future
business needs. Talent management is the notion of bundling in action which provides a
basis for Succession planning. Succession planning is based on information about people
which would have been gleaned from talent audits, employee performance and potential
There are various theories that support succession planning amongst which there is the
icts the resource based view which
(2012). Strategic Management and Competitive
The Resource Based View of the Firm (RBV) is a management model of firm performance
that focuses on the resources and capabilities controlled by an organisation as sources of
2012). The resources are defined as tangible
and intangible assets a firm controls and uses to envision and implement its strategies.
Capabilities are complex bundles of individual talents, attitudes, skills and accumulated
es that enable a firm
Cost/Differentiation Advantage
21
to coordinate activities and take advantage of the resources it controls. The knowledge basis
of capabilities makes them firm specific and resides in the collective memory of the
organisation’s personnel. A firm’s resources and capabilities are categorized into four
clusters namely financial, physical, human and organisational resources.
The fundamental principle of the RBV is that a firm derives competitive advantage by
primarily utilising the bundle of resources and capabilities at its disposal. This competitive
advantage is achieved when several resources that seem to be homogenous are bundled in a
heterogeneous combination. In this vein, managers matter because they possess the ability to
create firm differences even if they are working with resources that are rather common. Two
critical assumptions underpinning the RBV are that resources should be heterogeneous and
immobile. Resource heterogeneity implies that all firms are not the same and similarly
different firms may have different resources. Resource immobility is when it proves to be
costly for firms to acquire or develop certain resources and capabilities they do not have as
some resources cannot spread easily from firm to firm. These assumptions mean that a firm
can have valuable resources that other firms find costly to imitate, therefore making them
rare, which enables them to derive sustained competitive advantage. This explains why some
firms outperform other firms even if these firms are competing in the same industry.
To determine whether a resource is likely to be a source of competitive advantage, the RBV
uses an internal tool of analysis called VRIO framework. The VRIO framework stands for
four questions that should be asked about a resource or a capability to determine its
competitive potential: Value, Rarity, Imitability and Organisation (VRIO).
The VRIO framework
Table 2.1 overleaf presents the VRIO Framework, an internal analysis tool of RBV.
22
Table 2.1: The VRIO Framework
Valuable
?
Rare? Costly to
Imitate?
Exploited by
Organisation?
Competitive implications Economic
implications
No No
Yes
Competitive Disadvantage Below
normal
Yes No Competitive Parity normal
Yes Yes No Temporary Advantage Above
normal
Yes Yes Yes Sustained Advantage Above
normal
Source: Barney and Hesterly(2012).
a) Value
When considering the human resources and capabilities of an organisation as a valuable
source of competitive advantage, which validates importance of succession planning
practice, it is essential to determine whether the calibre of employees and their skills enable
a firm or bank to exploit an external opportunity or neutralize an external threat.
b) Rarity
The question of rarity creates competitive advantage if a resource is not controlled by
numerous other firms. If a firm has valuable but common resources and capabilities, it can
gain competitive parity, which increases its probability of survival. According to Barney and
Hesterly (2012), firms that have valuable and rare resources and capabilities gain first mover
advantages as they are strategic innovators with ability to conceive and engage in strategies
that other firms cannot because they lack the relevant resources and capabilities.
c) Imitability
For a firm with valuable and rare resources to sustain the competitive advantage, firms that
do not possess the same should face a cost disadvantage in obtaining and developing them as
compared to firms that already possess them. In such a scenario, a firm’s resources can be
said to be inimitable.
23
d) Organisation
Given that the RBV states that a firm’s competitive advantage depends on the value, rarity
and imitability of its resources, the question of whether that firm is well organised to exploit
the full competitive potential of these resources becomes the differentiating factor. The
components of a firm’s organisation include; formal reporting structure, management
control systems and its value chain system. All these constitute complementary resources
and capabilities as they only work well in combination with other resources to enable a firm
to realise its full potential for competitive advantage. If all these conditions hold, the firm’s
bundle of resources can assist it in sustaining above average returns.
The RBV logic holds that firms that are able to use human resources management practices
to develop socially complex human and organizational resources are able to gain
competitive advantage over firms that do not engage in such practices like succession
planning and other enabling processes.
2.3 Succession planning
2.3.1 Current Practice
Succession planning should invariably consist of more than simple identification of a list of
potential successors to senior positions. It has to be more strategic by developing pools of
talent at various levels of the organization, as well as taking a longer term approach to
development (Flynn 2014). Ideally, succession plans ought to be linked to competencies and
potential for both current and future business needs. Kotter (2003) is of the opinion that it is
important to identify employees with leadership potential early in their careers and foster the
skills and competencies that will be required to stretch and develop them over the course of
time. Conger and Fulmer (2003) assert that companies succeed in developing enduring
bench strength by approaching succession planning as more than just a mechanical process
of updating a list. They state that it is more effective to expose identified successors to a
variety of jobs and bosses using techniques such as job rotation, special assignments and
action learning which pulls together a group of high potential employees. Good succession
planning should categorize the identified talent according to their level of readiness to
succeed key posts in the event of departure, retirement or death of the incumbent. This
24
exercise enables appropriate interventions to be applied to ensure readiness of the identified
successors. Succession planning practice has to go beyond just having a plan in place but
should run the full process of integrating with other human resources supporting activities
(Rothwell, 2010;Nassor, 2013; and Flynn 2014).
a) The Kenyan Experience
Nassor (2013) carried out a study on succession planning among commercial banks in
Kenya and found out that succession planning is a once off event in the majority of banks
and it only takes place when a Chief Executive is about to exit the organisation. Lack of
succession planning in the majority of Kenyan banks made it impossible for them to name a
suitable successor to a key role within a year and the Board of Directors was found to be the
most influential in CEO succession process. These findings render succession planning
ineffective because the practice is handled as a replacement activity to avert a crisis, rather
than a proactive and developmental long term process. Avanesh (2011) posits that good
succession planning is not just looking at who is next in line for a fit but looking at people
early in their careers and disseminating what kind of training they may need to become good
leaders.
b) Succession in American banks
Rhonemus (2013) postulates that a thoughtful succession planning process keeps the mission
of the bank on track and forces accountability and talent assessment at least once or twice a
year. He cites the $250m Midwest Community bank as an example of good succession
planning because it managed to hire a CEO on board before the outgoing CEO’s retirement,
which ensured a seamless transition with no loss of continuity. In their article, Conger and
Fulmer (2003) cite Bank of America’s Ken Lewis as an exemplary CEO because when he
took over as Chairman and CEO, he took ownership of the talent management process and
holds business units heads personally responsible for meeting employee development
objectives within their units. The CEO influences the strategic direction of an organisation
therefore in the same vein his ownership of and commitment to practices like succession
planning process will have a positive and far reaching impact in organisational
sustainability.
25
2.3.2 Scope of Succession planning
In the 1980s, many studies centred on CEO succession practices and attendant issues. In the
1990s, succession planning expanded its focus from CEOs alone to include executives and
other key positions. At the beginning of the 21st century, succession planning and
management include a much broader spectrum of positions (Kim, 2006). While many
previous studies focus more on CEO succession, the spectrum of succession planning should
be wide enough to include middle management roles as well as specialised roles rather than
focus on only the upper echelons roles. Most organisations currently practise succession
planning at the senior level, but for the plan to be fully successful, it must be organised at
middle level management as well in order to ensure accountability for participation
(Avanesh, 2011).
Govender (2010) contends that a major increasingly important factor in today’s ever-
changing economy is the imminent retirement of an entire skilled, talented and
knowledgeable generation of leaders. Organisations are also being faced with a major
concern regarding the disparity of retiring age groups and the diminishing population of
younger talent to replace them. As a result of this, succession planning is becoming more
and more a distinct strategic imperative. With succession planning, the skill and knowledge
of an employee departing or nearing retirement is transferred to existing employees in the
organisation and the loss to the organisation of the training and development investment in
the outgoing employee will be minimal.
According to an article written by Nyakazeya ([email protected] [23/11/2015]), CEOs
tend to be less value-adding to entities the longer they stay with an organization and can
even end up being liabilities in terms of the need to be more innovative in a changing
environment. This then means it is important to renew leadership frequently which makes
succession planning a necessary process and practice. Systematic and proactive CEO
succession will open up gaps in lower positions if this succession is done
internally.Therefore there is need for succession planning and leadership development
strategies from management positions upwards.
Haworth (2005) observes that succession planning is a process that calls for organizations to
understand their business; know their people, create trust, take time to think, spot potential,
seek win-win approaches, let go, create opportunities, allow mistakes, invest in the future,
use creativity, take risks, encourage employees and es
Flynn (2014) proposes 6 steps to follow in the administration of succession planning. These
are presented diagrammatically
Figure 2.3: Administration of Succession planning
Source: Flynn, (2014).
Understanding strategic direction
succession planning, how and if it is done. Succession planning starts with
understanding an organisation’s strategic direction. A solid foundation in
understanding a company’s mission, vision, core values and an analysis of its
strengths, weaknesses, opportunities and threats helps a firm to identify competitive
advantage and enables a clear grasp of its goals and ultimately day
Grounded knowledge of what an organisation is trying to accomplish saves time and
also results in a better end product.
Embrace a Competency/Potential approach
needed to perform certain roles and these include knowledge, sk
recommended to start by identifying the competencies or potential needed to realise
the organisation’s vision and establish the requirements of each key role.
Competency profiles can be developed by reviewing job descriptions and
interviewing people current in the roles
competencies or potential a key role requires makes it easier to assess candidates and
help them develop in critical areas. These competency profiles can be used in the
Understand strategic direction
Develop potential successors
win approaches, let go, create opportunities, allow mistakes, invest in the future,
use creativity, take risks, encourage employees and establish a coaching culture.
Flynn (2014) proposes 6 steps to follow in the administration of succession planning. These
are presented diagrammatically below in figure 2.2.
: Administration of Succession planning
Source: Flynn, (2014).
Understanding strategic direction allows for assessment of the current state of
succession planning, how and if it is done. Succession planning starts with
understanding an organisation’s strategic direction. A solid foundation in
nderstanding a company’s mission, vision, core values and an analysis of its
strengths, weaknesses, opportunities and threats helps a firm to identify competitive
advantage and enables a clear grasp of its goals and ultimately day
ed knowledge of what an organisation is trying to accomplish saves time and
also results in a better end product.
Embrace a Competency/Potential approach- Competencies refer to qualifications
needed to perform certain roles and these include knowledge, sk
recommended to start by identifying the competencies or potential needed to realise
the organisation’s vision and establish the requirements of each key role.
Competency profiles can be developed by reviewing job descriptions and
erviewing people current in the roles, as well as other stakeholders. Knowing the
competencies or potential a key role requires makes it easier to assess candidates and
help them develop in critical areas. These competency profiles can be used in the
Understand strategic Embrace
competetency/Potential approach
Identify and assess
Develop potential Manage knowledge transfer
26
win approaches, let go, create opportunities, allow mistakes, invest in the future,
tablish a coaching culture.
Flynn (2014) proposes 6 steps to follow in the administration of succession planning. These
allows for assessment of the current state of
succession planning, how and if it is done. Succession planning starts with
understanding an organisation’s strategic direction. A solid foundation in
nderstanding a company’s mission, vision, core values and an analysis of its
strengths, weaknesses, opportunities and threats helps a firm to identify competitive
advantage and enables a clear grasp of its goals and ultimately day-to-day activities.
ed knowledge of what an organisation is trying to accomplish saves time and
Competencies refer to qualifications
needed to perform certain roles and these include knowledge, skill and ability. It is
recommended to start by identifying the competencies or potential needed to realise
the organisation’s vision and establish the requirements of each key role.
Competency profiles can be developed by reviewing job descriptions and
as well as other stakeholders. Knowing the
competencies or potential a key role requires makes it easier to assess candidates and
help them develop in critical areas. These competency profiles can be used in the
Identify and assess candidates
Evaluate
27
hiring process, identification of development opportunities for staff and also
measuring employee performance.
Identify and assess candidates- Identification of people with the requisite
competencies, or can acquire them, can be done once competency profiles for key
positions in the organisation are in place. Thereafter the identified candidates’
potential can be assessed using various tools. Reliance on the immediate supervisor’s
feedback alone will not be enough hence systematic process for assessing candidates
based on an array of perspectives and information sources will be required in order to
minimise subjectivity. Options can include periodic performance reviews,
interviews, 360 degree feedback, psychometric tests or examinations. Once
identification and assessment of employers has been done against the competencies
required, developmental activities can then be tailored accordingly.
Develop potential successors- The identification and assessment exercise provides
the roadmap for learning development which encompasses formal training, job
rotation, job enlargement, job enrichment, role acting opportunities, challenging
stretch assignment, coaching and mentoring. Education, experience and exposure are
important aspects on this step. Providing the succession employees to targeted
exposure, training or experience helps them acquire or build on competencies
required to assume more senior or alternative roles.
Manage knowledge transfer- Knowledge transfer may take time, so it is best to
ensure a departing employee has sufficient time to mentor and share knowledge with
the incoming ones. There is need to encourage an employee nearing the end of their
career, or planning to leave, to share tacit knowledge which may not be documented
anywhere but is inbuilt in an employee and refined through years of exposure and
experience. Tacit knowledge transfer can be facilitated by providing junior
employees opportunities to work alongside the more senior ones. Exit interviews for
employees leaving the organisation can also be used to capture critical information.
However, an employee can depart anytime without pre warning so it is best to also
practice cross functional training such that for every role in the organisation there is
28
one other person who knows enough to fill it on an emergency basis or to easily train
a replacement.
Evaluate- For succession planning to be effective, there is need to evaluate and
monitor key indicators and adjust accordingly. These key indicators may include;
vacancies, external/internal hire ratios, bench strength, performance ratings and
employee engagement.
a. Vacancies- Effective succession planning should result in fewer vacancies at
any given time, and a decrease in the time to fill them.
b. External/Internal hire ratio- Effective succession planning should enable
you to fill a higher number of key positions from within.
c. Bench strength- “Bench strength” represents the ratio of key positions with
no internal replacement to the total number of key positions. Effective
succession planning should maximize the number of internal replacements
available for all key positions.
d. Performance ratings- Monitor the performance ratings of employees who
are new to key positions. Employees should be able to meet performance
targets early into starting a new position if succession planning was
thoroughly done.
e. Employee engagement- Use satisfaction surveys and rates of turnover as a
general check on organizational health. Ask questions specific to succession
planning or the developmental process to illuminate the employee
perspective.
2.3.3 Implementation of Succession planning
Evidently, the succession planning process requires dedication and commitment and requires
time for it to become effective. Various scholars seem to agree on the fact that the
succession planning practice is not being fully implemented in most organisations in various
industries. The process seems to stall as soon as the identification of potential successor
candidates is done and nothing else happens thereafter. Saslow and Lacker (2014) advise
that succession is more time consuming, riskier, and more expensive when carried out
following a departure rather than in advance. Avanesh (2011) contends that for any industry
that thrives on the dynamics of constant change, success comes to those who have the
29
foresight and the ability to counter unexpected challenges. Literature reveals that succession
planning is currently practised at the senior level and also it is only going as far as just
having “plans” in place with no means to consider and measure outcomes.
It is important to find out the challenges that organisations face in their efforts to fully
implement their succession plans and discuss the strategies they can use to counter or
minimise these challenges that agitate the implementation of fruitful proactive succession
planning. According to Rothwell (2010), 70% of successions planning programs fail in the
long term due to implementation problems. The successful implementation of succession
plans hinges on the formula below:
Succession implementation success= Motivation x Accountability x Visibility x Follow-
through (http://www.emmerichfinancial.com/strategic-planning/succession-
plan/[24/01/2016]).
There has to be sufficient motivational levels to promote and sustain accountability of set
succession planning goals. Communication of relevant information should be visible enough
to all interested parties in order for the succession planning initiative to bear fruits.
Evaluation all the way through every step of the succession planning process will give clear
indications of how well the implementation is going and strategies to remedy any
shortcomings may be employed.
2.4 Challenges facing Succession planning
While just creating a succession “plan” may be fairly simple, Flynn (2014) points out that
the real benefit comes from the planning exercise and from the related activities engaged in
as a result. Although succession planning needs to be aligned with the business objectives of
the company, the process has its fair share of hurdles. Nassor (2013) cites unwillingness of
top managers to mentor middle management as one of the biggest succession challenges.
This challenge is also brought up by Aberdeen Group (2006) who postulates that for
Succession planning to be a companywide initiative the management needs to play an active
role in ensuring it becomes a more cohesive initiative. This is because management may fail
to envision the future of the organisations they work for and view their successors as a threat
to their present existence. Atwood (2007) posits that if top management does not support the
succession program it will most probably fail no matter how well thought out and Singer and
30
Griffith (2010) add that leadership must see the planning and development of the program as
a necessary endeavour that requires dedicated resources and goal oriented attention.
Most organisations fail to ensure that ownership is at executive level of the organisation and
leave the ownership to human resources departments (HRD). Of course HRD plays a key
role in facilitating and guiding the process but succession development should be the
executives’ and particularly the CEO’s ownership because he or she spearheads the
company’s vision. According to Avanesh (2011), the CEO must be an avid supporter and
active participant, line management must own the process with Human Resources playing a
supportive role. Also, the general staff must support the efforts and the activities of
succession planning practice, of which they can only be motivated to do so if their
management and leadership take ownership of the program.
Other challenges include; Inadequacy of robust human resources systems and policies,
misconception that succession planning is a process for the HR department only, failure to
close performance gaps, too much focus on planning versus outcomes, assuming success at
one level guarantees success at a higher level, the mirror effect, lack of communication
which breeds ignorance, failure to integrate succession planning with other human resources
processes, lack of budget and treating succession planning as a tick box compliance issue
rather than a necessary practice.
a) Integrating succession planning with other HR processes
Succession planning process becomes effective if it is integrated with other human resources
processes and also if human resources systems and policies are robust and adequate enough
to support it (Flynn 2014). The down side is that the succession planning endeavour is often
taken in isolation, yet it requires the support of other HR processes like recruitment,
learning, development, performance appraisal, job rotation as well as coaching and
mentorship. All these processes help in the development and grooming of the identified
talent. Creation of talent pools becomes successful if these other processes are interwoven
with succession planning practice.
b) Succession misconceptions
Another challenge is that management may perceive that an employee’s success at his or her
current level guarantees success at a higher level but this may not be the case. Once there is
this kind of perception, it is easy to overlook the much needed developmental activities that
31
the identified talent should go through before they match the competency requirements of a
key role. In many cases employees are promoted to their incompetency simply because of
such subjective assumptions by management. Related to this challenge is the mirror effect
problem whereby people rely on a natural tendency to choose those most like themselves
and earmark them for key roles. This behavior deprives organizations of the diversity
required for future needs.
c) Succession planning and outcomes
Organizations are prone to focus too much on planning with little regard to outcomes. Plans
look very good on paper but do not produce successful outcomes because there is lack of
recognition that succession planning is not episodic but an ongoing effort whose outcome
should be defined and measured. Without defining and measuring outcomes key
stakeholders will not be able to quantify nor appreciate the value of succession planning.
Key outcomes can include the percentage of critical vacancies filled with internal promotion
or lateral movements versus external hires and percentage of vacancies filled from talent
pools (http://docplayer.net/1316243-Succession-planning-your-bank-s-future-
leadership.html).
Literature reveals that lack of budget hinders succession planning efforts. However,
Michelson (2006), points out that succession planning does not require an extensive budget,
equipment, staffing, or resources but it does require a change of thinking. Development
activities must be a variety of methods which do not require extensive funding for example
job rotation, job enrichment, role acting capacity. Insufficiency of HR technology to support
applications like succession may of course substantiate the lack of budget challenge.
The findings of Larcker and Saslow’s 2014 survey reveal that most organisations treat
succession planning as a tick box compliance issue due to the scrutiny of regulators and
other market participants that emphasize the risk management and loss minimisation aspects
rather than value creating elements of succession planning. This implies that succession
planning is not done deliberately, but the plans are only in place in order to be compliant.
This one time planning mentality has been noted as a key barrier in achieving organisational
success with succession planning (Rothwell, 2010). Many respondents who participated in
the Larcker and Saslow’s survey (2014) understood the exercise in terms of its ability to
reduce future downside risk, rather than producing shareholder value benefits from the
identification and grooming of strong and appropriate leadership.
32
2.5Strategies to conquer Succession challenges
Although companies recognise the importance of a thorough and rigorous succession
process, most fail to create one (Flynn, 2014; Larcker and Saslow, 2014). The purpose of
succession planning is to ensure a bank has the executives and key talent with the skills and
depth of experience required to meet short and longterm operational and strategic plans.
Rhonemus (2012) envisions that the competitive advantage in the years to come will go to
those banking institutions that have the foresight to plan for their future talent needs to meet
critical challenges of technology and market movements. To avert a crisis of leadership, it is
imperative for management to seriously consider their mission plans to determine whether
they have the people in place to achieve these goals and objectives. A review of literature
reveals quite a number of recommendations for organisations to make the succession
planning program a success.
a) Cultural integration
Hedum (2010) advocates for integration of succession planning program into organisational
culture in order to avert leadership transition crisis in the near future. This is supported by
Larcker and Saslow (2014) who view the inability of companies to appreciate the
importance of succession planning as a cultural problem because most companies do not
have honest and open discussions about executive performance nor do they allocate
sufficient time to the process of identifying and grooming successors. They also recommend
organisations to foster a culture of executive development and avoid a “cloned culture’ by
identifying candidates with diverse backgrounds. Larcker and Saslow (2014) further explain
that culture actually drives how successful succession is and point out that it is the CEO who
creates the culture and the board members are custodians of that culture. Open and
transparent cultures promote productive succession plans and discussions as opposed to
those cultures that are not feedback based. People actually contribute more if they know
what rung they are on.Therefore, it is best to make succession planning transparent given
that employee contracts are now based on performance rather than loyalty or seniority. Good
succession planning depends on the willingness to differentiate individual performance and
a corporate culture in which the truth is valued more than politeness(Conger and Fulmer,
2003).
b) Succession planning ownership by leadership
33
For Succession planning efforts to be successful, there is greater need for the CEO to take
ownership of the program and be an avid supporter of the initiatives. He or she is the
custodian of the company vision. Senior and line management should be held accountable
for the processes of the program, hence the need to include succession planning
responsibility in their job descriptions for them to appreciate its importance (Davilia and
Pina-Ramirez, 2015). According to Govender (2010), although the succession planning
process has to be actively led and supported by the CEO, if managers do not actively
identify potential successors then they are lacking the ability to delegate, develop and groom
their subjects for succession. To reinforce accountability, Sims (2014) states that regular
talent review meetings should identify and document development action plans for
individuals and include who is responsible for each action item and when it should be
completed.
It is recommended to ascertain whether a succession process is appropriate for a banking
organisation’s size and complexity and also if it is consistent with the bank’s vision and
culture (Rhonemus, 2013). A strategy to make succession planning effective could be to turn
organisational charts into a developmental map in order to establish which skills or what
functions are necessary to have in order to fill in the key positions. It is fundamental to
create succession charts for each key position and put readiness codes for instance: 12-24
months, 24-36 months, more than 36 months. Succession planning should be taken beyond
organisational charts and use it as a comprehensive change management tool that helps the
organisation identify gaps in talent and fill them more effectively (Hedum 2010).
In the CGRI 2014 report of senior executive succession planning and talent development,
Larcker and Saslow recommend the following strategies to make the succession planning
process a success;
Consistency. Succession planning should be treated as a continuous practice
whereby management and board of directors prepare transitions at any time and at
multiple levels throughout the organisation. This exercise should include the CEO’s
direct reports and other critical positions.
Assign ownership and roles. An independent chairman or experienced director
from outside should have primary responsibility and other board members, CEO,
senior executives and support staff should be assigned specific roles and held
34
accountable for measurable results. This arrangement also promotes good corporate
governance in the organisation.
Cast a wider net. Due to the fact that an organisation and its strategy are constantly
evolving, the skills needed to run the organisation in the future might not be the same
as they are presently. The board of directors and senior management should look
broadly through the ranks of the organisation to ensure they are fostering a diverse
set of talents and skills to take the organisation forward.
Get strategic assistance and enlist the help of third party coaches and mentors when
necessary. Organisations should endeavour to understand their relative strengths
compared to their peers. The best organisations seek to learn from the practices of
others through conducting market surveys on practices of other corporate and
integrate the ones that are best suited to their current structure and situation.
Professional third party coaches bring an outside perspective and a degree of
objectivity to the development process of succession.
Connect CEO and senior executives’ succession plans with coaching and
internal development and let these programs strategically support each other.
Mapping succession to the pipeline of internal executive talent, identifying
deficiencies in internal talent and designing and implementing development plans to
overcome these is a sure way of ensuring a robust and reliable succession plan.
Jarbou (2013) further advises banks to conduct training on the succession planning concept
for senior management to develop an understanding for it and also have a documented
definite guide for succession planning that directs senior management.
It has been observed that succession planning practice in banks, and indeed other industries,
barely goes beyond the planning phase. Successors may be identified but no developmental
interventions are set in motion to prepare and groom them for the roles they are picked for.
The current status quo can only be improved by overcoming the challenges discussed above
and making use of the various strategies recommended in order to bridge the glaring gap that
is making the succession planning efforts ineffective. It could really be beneficial if
succession planning efforts run the full developmental course.
35
2.6 Succession planning Models
There is no single agreed model for succession planning and similarly, there are no hard and
fast rules governing which model an organisation should adopt or follow, since no two
organisations are exactly the same in terms of size and complexity. There are various
succession planning models formulated by different scholars in a bid to provide a framework
for best succession planning practice. Some of these include Rothwell’s “Seven pointed star
model” and Ohio’s “talent tomorrow and beyond succession planning model”. These are
discussed below.
2.6.1 The Seven-Pointed Star Model for Systematic Succession Planning
Rothwell (2010) developed the famous seven pointed star model for systematic succession
planning and management. Figure 2.3 overleaf shows the model that details the steps to
follow in order to achieve systematic succession planning and management in an
organisation.
Fig 2.4: The Seven-Pointed Star Model for Systematic Succession Planning and
Management.
Source: Rothwell, William. J. (2010a, p83).
36
Rothwell (2010) explains the steps as follows;
1. Make the commitment- The Organisation’s decision makers should deliberately
commit to the succession planning as a systematic process and establish a program.
Activities involved span from assessing existing problems and practices to
benchmarking succession practices in other organisations. The commitment is
strengthened by training and counselling managers on succession planning.
2. Assessment of present work/people requirements prepares advancement of
individuals in a way that is firmly grounded on work requirements. Decision makers
need to clarify where key leadership positions exist, as well as elucidate key
individuals who would be exceptionally difficult to replace due to their unique
talents, special knowledge or other reasons.
3. Appraisal of individual performance is important in order to establish how well
individuals are performing in their present roles since the assumption of succession
planning programs is that individuals should be performing exceptionally well in
their current jobs for them to qualify for advancement.It is necessary to establish an
inventory of talent to ascertain what human assets are already available.
4. Assessment of future work/people requirements prepares future leaders to cope
with future requirements and organisational strategic objectives. Decision makers
should align future work/competencies requirements to organisation’s strategic
direction.
5. Assessing future individual potential measures how well individuals are prepared
for advancement. It is a question of finding out the talents they possess, and how
well those talents match up to future work requirements. It is therefore necessary for
the organization to establish a future oriented performance appraisal process to
assess future individual potential.
6. Closing the developmental gap requires the organization to establish a continuing
leadership development program in order to cultivate future leaders internally.
Decision-makers may also explore
methods of meeting succession needs.
7. The Succession Planning program must be subjected to
assess its effectiveness. The results of evaluation should then be used to make
continuous and incremental program improvements and also to maintain a
commitment to systematic succession planning practice.
2.6.2 The Ohio’s talent tomorrow and beyond succession planning model
Another succession model is the Ohio’s talent tomorrow and beyond succ
model that is illustrated in Figure 2.4
Fig 2.5: The Ohio’s talent tomorrow and beyond succession planning model
Source:http://www.das.ohio.gov/Portals/0/DASDivisions/HumanResources/LPD/pdf/Succe
ssion_Planning_Mgrs_Toolkit.pdf
This Ohio model prescribes 5 steps to ensure succession planning is successful.
involves identification of key positions that can potentially impact business operations in the
event of sudden or even planned departure of the incumbent. At this stage it
create a key position inventory and evaluate the impact of each position in ensuring the
organisation meets its strategic goals and objectives. It is best to categorise position
inventory data in terms of; specialized knowledge, retirement
attrition. Prioritise succession planning
Step 2 entails the assessment of employees against critical competencies that the identified
critical roles require.It is also important for management to identify success factors for
critical positions to assess position impact and vacancy risks. The primary function of
assessing leadership talent is to determine whether there are one or more succession
step 1
Identify critical positions
Step 2
Assess leadership potential
makers may also explore alternatives to traditional promotion
methods of meeting succession needs.
The Succession Planning program must be subjected to continual evaluation
assess its effectiveness. The results of evaluation should then be used to make
and incremental program improvements and also to maintain a
commitment to systematic succession planning practice.
2.6.2 The Ohio’s talent tomorrow and beyond succession planning model
Another succession model is the Ohio’s talent tomorrow and beyond succ
model that is illustrated in Figure 2.4 below.
: The Ohio’s talent tomorrow and beyond succession planning model
http://www.das.ohio.gov/Portals/0/DASDivisions/HumanResources/LPD/pdf/Succe
ssion_Planning_Mgrs_Toolkit.pdf[Accessed 06/11/2015]
Ohio model prescribes 5 steps to ensure succession planning is successful.
involves identification of key positions that can potentially impact business operations in the
event of sudden or even planned departure of the incumbent. At this stage it
create a key position inventory and evaluate the impact of each position in ensuring the
organisation meets its strategic goals and objectives. It is best to categorise position
inventory data in terms of; specialized knowledge, retirement vulnerability and risk of
attrition. Prioritise succession planning
entails the assessment of employees against critical competencies that the identified
critical roles require.It is also important for management to identify success factors for
tical positions to assess position impact and vacancy risks. The primary function of
assessing leadership talent is to determine whether there are one or more succession
Step 2
Assess leadership potential
Step 3
Develop and retain talent
pool
Step 4
Capture,
transfer knowledge
37
alternatives to traditional promotion-from-within
continual evaluation to
assess its effectiveness. The results of evaluation should then be used to make
and incremental program improvements and also to maintain a
2.6.2 The Ohio’s talent tomorrow and beyond succession planning model
Another succession model is the Ohio’s talent tomorrow and beyond succession planning
: The Ohio’s talent tomorrow and beyond succession planning model
http://www.das.ohio.gov/Portals/0/DASDivisions/HumanResources/LPD/pdf/Succe
Ohio model prescribes 5 steps to ensure succession planning is successful. Step 1
involves identification of key positions that can potentially impact business operations in the
event of sudden or even planned departure of the incumbent. At this stage it is important to
create a key position inventory and evaluate the impact of each position in ensuring the
organisation meets its strategic goals and objectives. It is best to categorise position
vulnerability and risk of
entails the assessment of employees against critical competencies that the identified
critical roles require.It is also important for management to identify success factors for
tical positions to assess position impact and vacancy risks. The primary function of
assessing leadership talent is to determine whether there are one or more succession
Step 5
Measure, monitor and
Evaluate Success
38
candidates ready to successfully assume the role and responsibilities. Avoid relying on one
person for bench strength for multiple critical positions when identifying competencies.
Step 3 outlines the development strategies for identified talent pool based on required
business needs and leadership potential. Development of strategies for each member of the
“talent pool” should be based on information gathered during the assessing of leaders (Step
#2) process. To be effective in developing future leaders, key assignments, developmental
feedback, mentoring, coaching, formal classroom training, and professional memberships
must be made available. Design and implement career development strategies. Using a
career development plan helps track, monitor and facilitate development discussions with
the succession candidates.
Step 4 ensures key institutional knowledge and information is transferred appropriately to
successors. Knowledge transfer strategies such as Job shadowing, job rotation, on the job
training and job enlargement may be used.
The 5th and final step calls for measuring, evaluating and monitoring the succession
planning program. It is recommended that the succession planning efforts be measured and
monitored regularly to ensure effectiveness. It is important to establish metrics that can
measure succession planning and these metrics can be measured on a quarterly and/or
annual basis.
2.6.3 Succession planning case study
AfrAsia Zimbabwe Holdings Limited (Former Kingdom Financial Holdings Limited)
The researcher used to work for AfrAsia Zimbabwe Holdings Limited and this is her
observation.
Kingdom Financial Holdings was founded by Nigel Chanakira in 1997. It later merged with
Mauritius based Afrasia Bank in 2009 and by 2011 Afrasia Bank had acquired the majority
of Stake (65%) which prompted the company to change its name to AfrAsia Zimbabwe
Holdings Limited.
The company’s organisational structure was such that the role of the Managing Director
(MD) had a deputy role. This means there were effectively two Managing Directors.
39
When the substantive Managing Director tendered his resignation in March 2013, naturally
it was expected that the deputy MD would substantially assume the role but this did not
happen. The bank went for almost a year with the deputy MD holding fort while the Bank
was looking for a substantive MD. The institution hired Mr TineyiMawocha as its new MD
in January 2014 and the deputy MD reverted back to his shadow position. In March 2014 the
newly hired MD resigned and the deputy MD assumed the acting role of MD while the bank
looked for a substantive.
Ten months after Mr Mawocha’s departure the bank appointed Mr HashmonMatemera as
the new MD and again the acting MD reverted back to his deputy position.
After these attempts to substantially fill in the vacant Managing Director post with external
appointments, the question arises as to why the deputy Managing Director was not appointed
substantive Managing Director in the first place after departure of the then MD. The bank
lost time and money from the whole exercise of scouting for a substantive managing director
since the resignation of Mr Francois Molife in March 2013 up to January 2015. What were
the challenges hindering the deputy MD’s promotion? Could it perhaps have been a strategic
intent on the part of the board to bring in fresh blood? This may possibly be indicative of
loopholes in the implementation of succession plans and it can potentially undermine
investor confidence, customer trust and performance of the bank.
2.7 Research gaps
Extensive studies have been carried out on succession planning. These touched on
challenges of succession planning (Mwemezi, 2011) Succession planning as way to
minimize staff turnover rate in South Africa’s Nedbank (Govender 2009), effectiveness of
succession planning in law enforcement authority (Erasmus, 2009), succession planning
among commercial banks in Kenya (Nassor, 2013) and various such studies touching on
family owned businesses, for example, Maunganidze’s thesis on succession planning and
business survival for family controlled businesses (2008). This study is biased more towards
management and leadership succession, with a bid to ensure organisational sustainability
and leadership continuity in banks operating in Zimbabwe. It seeks to explore how the
succession planning program can help minimise management and leadership problems in
these banks by analysing the current state of the practice, discussing the challenges that
40
militate against its successful implementation and recommending strategies to make the
practice a success. The researcher chose the banking industry because this sector thrives on
competitiveness, loyalty and trust that customers bestow on the calibre of people managing
and leading the banks. The choice was also influenced by the fact that the researcher’s career
developed while she was working in the banking industry.
However, the researcher is aware of the need to consider technical succession in order to
meet knowledge transfer needs in specialised roles, as well as transitioning from strategic
succession to tactical daily succession (Rothwell, 2010). Succession planning aims to ensure
development of competent future management and leadership, avert risk associated with
unexpected loss of individuals to death, disability, or sudden resignation, multi skill the
identified talented employees through exposure, training and experience. However, this may
not be enough. Succession planning should further focus on linchpin positions, jobs that are
essential to the long term health of the organisation, regardless of whether they are
managerial, leadership roles or not (Conger and Fulmer, 2003). It would be beneficial to find
out the benefits and effectiveness of intensifying succession planning and management (SP
& M) initiatives to jobs lower than management level, technical or specialised jobs, as well
as extending this practice to the contingent workforce (Aberdeen Group, 2006).
2.8 Research Conceptual Framework
Fig 2.5: Conceptual Framework
Fig 2.5 below depicts a diagrammatic summary of the research.
Source: Developed by the Researcher, 2015.
Current state of
Succession
planning
Challenges
facing
Succession
Planning
Effective
Succession
planning
Strategies to counter
challenges/improve
Succession planning
41
Current state of succession planning
This component provides an analysis of the succession planning as currently practised and
highlights the loop holes inherent in the implementation of the process. It seeks to unearth
the extent to which the planning goes in terms of process administration.
Challenges of succession planning
For succession planning to be effective it has to be properly and fully implemented. The
challenges facing succession planning implementation are examined and discussed.
Strategies to improve succession planning
Strategies to overcome or neutralise the challenges that hinder successful implementation of
succession planning practice are considered and discussed in this component.
Effective succession planning
This component of the framework encompasses how an effective succession plan should
function. Models that depict ideal succession planning systems and processes are discussed.
2.9 Chapter Summary
The chapter reviewed appropriate literature to analyse the current state of succession
planning in banking and other organisations. It discussed the challenges banks face in the
implementation of prosperous succession planning and also looked at the strategies found in
literature to improve and make succession planning a worthy investment that can be
effective in organisational and leadership continuity. An appropriate theory underpinning the
importance of succession practice was discussed, models of succession planning were
selected, research gaps were highlighted and the researcher’s conceptual framework was
developed. The subsequent chapters will concentrate on comparing the literature information
and actual field findings in order to recommend the way forward.
CHAPTER THREE: RESEARCH MEHODOLOGY
3.0 Introduction
This Chapter explains how the research was developed and conducted in order to address the
research objectives and the problem statement outlined in Chapter One. Research
methodology focuses on the research process and the kind of tools and procedures to be used
(Poisat, 2006). The aim of the research was to analyze
planning practice in the banking industry in Zimbabwe. The study particularly sought to find
out the challenges banks face in effecting succession planning best practice and ways to
overcome these challenges in order t
major research question of this study is how effective is the implementation of current
succession planning practice as a human resources management tool in Zimbabwe’s banking
industry. The analysis was p
not being fully utilised as a talent management tool in Zimbabwe’s banking industry.
The structure of this chapter was
Lewis and Thornhill (2009). This Chapter also looked at the limitations in this research as
well as research ethics and credibility of data gathered. Below is figure 3.1 which shows key
aspects to consider when carrying out research.
Fig 3.1: The Research Onion
Source: Saunders, Lewis and Thornhill, A. (2009)
CHAPTER THREE: RESEARCH MEHODOLOGY
This Chapter explains how the research was developed and conducted in order to address the
research objectives and the problem statement outlined in Chapter One. Research
the research process and the kind of tools and procedures to be used
The aim of the research was to analyze the implementation of the succession
planning practice in the banking industry in Zimbabwe. The study particularly sought to find
out the challenges banks face in effecting succession planning best practice and ways to
overcome these challenges in order to improve on the effectiveness of the process. The
major research question of this study is how effective is the implementation of current
succession planning practice as a human resources management tool in Zimbabwe’s banking
industry. The analysis was premised on the research proposition that succession planning is
not being fully utilised as a talent management tool in Zimbabwe’s banking industry.
structure of this chapter was aided by the research ‘onion’ adapted from Saunders,
(2009). This Chapter also looked at the limitations in this research as
well as research ethics and credibility of data gathered. Below is figure 3.1 which shows key
aspects to consider when carrying out research.
Fig 3.1: The Research Onion
and Thornhill, A. (2009)
42
CHAPTER THREE: RESEARCH MEHODOLOGY
This Chapter explains how the research was developed and conducted in order to address the
research objectives and the problem statement outlined in Chapter One. Research
the research process and the kind of tools and procedures to be used
the implementation of the succession
planning practice in the banking industry in Zimbabwe. The study particularly sought to find
out the challenges banks face in effecting succession planning best practice and ways to
o improve on the effectiveness of the process. The
major research question of this study is how effective is the implementation of current
succession planning practice as a human resources management tool in Zimbabwe’s banking
remised on the research proposition that succession planning is
not being fully utilised as a talent management tool in Zimbabwe’s banking industry.
aided by the research ‘onion’ adapted from Saunders,
(2009). This Chapter also looked at the limitations in this research as
well as research ethics and credibility of data gathered. Below is figure 3.1 which shows key
43
3.1 Research Design
According to Saunders et al. (2009), a research design is an overall plan of how the
researcher will go about answering the research questions. Yin (2003) further explains that a
research design is the sequential logic that links the practical data to the study’s research
questions and eventually to its conclusions. A case study design was preferred for this
research in an effort toanswer the research questions and achieve the stated objectives. This
design is suitable when a case is representative (Yin 2003). The succession planning process
is one of the human resources management tools in the banking industry in Zimbabwe. In
designing research, there are mainly three research purposes that a researcher may utilise
and these are descriptive, explanatory and exploratory. These will be briefly described.
3.1.1 Descriptive studies
According to Robson (cited in Saunders et al, 2009:140), the objective of descriptive
researchis ‘to portray an accurate profile of persons, events or situations’. Descriptive
studies are meant to provide answers to who, what, where, when, why and how questions.
The researcher knows beforehand what has to be studied and where to look for the solution.
The advantage of descriptive studies is that they may be conclusive and confirmatory and
they may use structured or unstructured questions. The downside is that more research may
be required as this type of research seeks to answer a research question and not necessarily
to test a hypothesis.
3.1.2 Explanatory studies
Explanatory studies seek to establish the causal relationship between variables (Saunders et
al, 2009). The main objective is to test hypothesis in order to confirm or disconfirm an
available theory. Explanatory studies are compatible with both quantitative and qualitative
research approaches. They are confirmatory and conclusive as they concentrate on the cause
and effect relationship between variables. However, it is important to ensure the study
variables are clearly defined if one is to utilize this research purpose.
44
3.1.3 Exploratory studies
An exploratory study is valuable when a researcher intends to seek new insights, find out
what is happening, assess phenomena in a new light or obtain precise understanding of
nature of a problem (Robson, 2002). An exploratory study may develop a hypothesis but
does not seek to test it. Usually, exploratory studies are conducted at preliminary stages of
decision making and seek to provide answers to research questions. Such studies are
discovery oriented and speculative, such that they often need further research. The variables
involved are usually, although not always, highly ambiguous, with open ended or semi-
structured questions.
This research made use of the exploratory design in order to bridge the gap between the
succession planning as currently practiced and succession planning as should be practiced in
the banking industry in Zimbabwe. This choice was influenced by the flexibility and
adaptability to change of this research design. The study starts from the broad perspective by
analysing the current state of succession planning and narrows down to analysing the
challenges involved and then to making recommendations on how the challenges can be
curbed and on how the process can be improved to achieve best practice. Adams and
Schvaneveldt (cited in Saunders et al., 2009) argue that,although exploratory research is
flexible in nature, it does not imply absence of direction, but simply indicatesthat research
flows from broad to narrow as it progresses.
3.2Philosophical Paradigms
Saunders et al., (2009) explain that research philosophy relates to the development of
knowledge and the nature of that knowledge. They further posit that the research philosophy
a researcher adopts contains important assumptions about the way in which she views the
world and these assumptions will underpin the research strategy and the methods chosen as
part of that strategy. Research philosophy is influenced by the view of the relationship
between knowledge (ontology) and the process to develop that knowledge (epistemology).
Ontology deals with the nature of reality, it is concerned with whether reality is objective
(factual) or subjective (feelings, attitudes) in nature. Epistemology concerns what constitutes
acceptable knowledge in a field of study (Saunders et al., 2009). Mouton (1995) suggests
that in the final analysis, one has to examine each case before drawing any conclusions
45
about the respective roles of epistemological and ontological assumptions and the
methodological and technical level.
There are basically three main types of research philosophies namely the positivist, the
interpretivist and the realist. Positivism is usually associated with natural sciences and is
deductive in nature. It involves empirical testing of hypothesis and makes use of quantitative
research methods like experiments and surveys. According to Saunders et al (2009) this type
of approach is objective, value free, deductive and normally uses quantitative data. For
credible data to be produced only phenomena that is observable should be utilised. The
positivist philosophy depends on large samples and involves highly structured data
collection and analytical procedures. Although it is objective, a major disadvantage of this
philosophical paradigm is its rigidity and lack of feeling when it comes to issues that require
understanding of human perceptions, and behaviour. It is not suitable for social science.
The interpretivist philosophy conjectures that human phenomena are basically distinct from
natural phenomena (Babbie and Mouton, 2012). It assumes that the social world is too
complex to be assessed based on defined principles or laws as is done in physical science
since this discards other rich insights into such a complex social world (Saunders et al.,
2009). This paradigm, also known as the phenomenological philosophy, seeks to view the
study through the eyes of the people being studied and aims to interpret human behaviour
rather than predict or explain it. This is achieved through use of qualitative research methods
such as unstructured interviews and discourse analysis to exploretheperceptions and
construction of reality of the selected sample of people in organisations (Saunders, 2007).
The merits of this paradigm include flexibility in terms of changing research direction and it
is very useful in understanding social phenomena since it seeks to facilitate understanding of
how and why questions (Saunders et al, 2009). The disadvantages of this paradigm are that
data analysis may be quite difficult and there may also be researcher bias and subjectivity.
The realist paradigm is associated with mixed methods or triangulation whereby one
combines the quantitative and qualitative research methods in conducting research. In as
much as this philosophical paradigm attaches value to social reality (interpretivist) it also
concurs with the positivists’ approach which holds that phenomena should be scientifically
and objectively studied.
The researcher chose to utilize the interpretivist paradigm because the study is based on
qualitative data. This philosophical paradigm is epistemological in natureas it advocates for
46
the necessity to understand the differences between humans as social actors (Saunders et al.,
2009: 129). Even though this philosophy is generally perceived as less credible, the
researcher reckons that it is more informative to engage the targeted people through one to
one interviews in order to gain an understanding ofhow they perceive the world, interpret
and rationalise their daily actions (De vos et al., 2013). Reality is contextual and relative
hence the researcher’s choice to use the interpretivist paradigm. It is essential to understand
underlying issues regarding the succession planning practice and the better way is to engage
people who are knowledgeable about it, as the findings could provide new useful insights.
3.3 Research Philosophies
Research can be conducted by making use of either qualitative (inductive) or quantitative
(deductive) approaches (White, 2012). De vos, Strydom, Fouche and Delport (2012) explain
that quantitative and qualitative paradigms are the two common approaches to research. A
research may be done using a blend of the two approaches, but Silverton (2000), argues that
these two approaches are often evaluated differently and views quantitative approach as a
more superior approach because it is value free. However, good qualitative data helps the
researcher to get beyond initial conceptions and generate or revise conceptual frameworks
(Hurmerinta-Peltomaki, 2004).
3.3.1 Quantitative philosophy
Quantitative research involves collection of numerical and statistical data which will then
be sorted, classified and measured in an objective manner. This approach provides
summaries of data that support or refute generalisations made about the phenomena under
study. As postulated by White (2000), quantitative research is an iterative process involving
evaluation of evidence, as well as refining and testing theories and hypotheses.Unlike
qualitative researchers, quantitative researchers try to remain detached from research
participants as much as possible in order to draw unbiased conclusions (De vos et al., 2012).
According to Denzin and Lincoln (2005), measurement is the only means to numerically
quantify observations in investigating causal relationships or associations. Although
quantitative methods are ideally suited for finding out who, what, when and where, they are
inappropriate for the collection of behavioural data (Govender 2010, Saunders et al., 2009).
47
3.3.2 Qualitative philosophy
According to Muhammad , Muhammad and Muhammad (2008; 35) qualitative studies are
suitably utilised in understanding and describing the world of human experience. The
qualitative approach uses a small number of individuals,usually thirty or less, who are
carefully selected. It is an unstructured research methodology that aims to produce
theoretical insights into behaviour, motivations and attitudes (Wilson 2006). Leedy and
Ormrod (2005; 140) state that qualitative studies arefundamentally used to describe,
understand and answer questions about thecomplex nature of phenomena basing on the
participants’ point of view. Qualitative methods allow one to precisely and sequentially
follow events in a way that allows one to establish possible relationships between the events.
Researchers who choose qualitative approach anticipate to accurately interpret meanings of
phenomena by means of describing and decoding the phenomena occurring in normal
contexts. According to Creswell (2007; 57), qualitative researchers tend to collect data in the
field at the site where the participants experience the problem under study. Babbie and
Mouton (2012), assert that qualitative researchers prefer to utilise categories and
conceptsthat participants use,rather than reverting to abstract theoretical constructs in an
effort to identify with the actors or participants’meanings. This approach makes use of
inductive reasoning.
3.3.3 Selecting a suitable approach
Choosing a suitable research approach essentially depends on the type of information
required, nature of the research, availability of relevant resources and the context of the
study (Chanaka, 2014). Denzin and Lincoln (2005) posit that qualitative research produces
rich and detailed data that deepens understanding of the context whereas quantitative data
generates reliable probability-based data that is useful in explaining cause and effect
relationships.
In this research, the researcher deliberately chose the qualitative approach because of the
qualitative nature of case study methodology that was used as a strategy for inquiry. This
approach is appropriate for the phenomena under study, which focuses on human
perceptions within a social setting. It is thus the intention of the study to discover and reveal
the nature of the different opinions pertaining to the issue of succession planning as an
48
effective human resources management tool. One to one semi-structured interviews were
used to gather information from human resources executives and the various organisations’
senior management team.
Qualitative methods thrive on naturalness and they allow adjustments in the interaction
between the researcher and the respondent, which render them flexible in comparison to
quantitative methods (Mark et al., 2005). Qualitative methods usually use open ended
questions in order to allow the respondents to answer in their own words,thereby providing
comprehensive information, unlike the quantitative methods that are rigid and require
respondents to choose from the provided fixed responses (Chanaka, 2014). Qualitative
methods allow for manipulation of research direction due to their flexibility and also probing
for more information is possible, especially in one to one personal interviews.
3.4 Research Strategies
Yin (2003) informsthat there are several ways or strategies of undertaking research and these
include; experiments, surveys, case studies, histories and analysis of archival information.
Saunders et al. (2009) postulate various research strategies in their research ‘onion’ diagram
and these include experiment, survey, case study and archival research. Each of these
strategies has unique advantages and disadvantages, depending on the type of research
question, the control the investigator has over actual behavioural events and the focus on
contemporary, as opposed to historical phenomena (Chanaka 2014, p59).
Experiment
The purpose of experiments is to see the causal relationships between variables.
Experiments are often used in explanatory research where it is important to ascertain the
effect of change in one variable and the result in another. According to Babbie and Mouton
(2012) experiments involve taking action and observing the consequences of that action.
One advantage of experiments is that risk of extraneous variables (factors outside the
experiments but have influential potential) is minimized, although it is quite difficult to
completely eliminate the effects of the same.
49
Survey
According to Wilson (2006) a survey is a research strategy which allows the researcher to
make inferences about a population from which a sample of study subjects would have been
drawn. The survey method is suitable for economically collecting original data to describe a
population that is too large to observe individually and directly (Saunders et al., 2009). It
facilitates collection of the same information about all cases through use of standardised
questions which may be structured or unstructured. The objective is to get answers to
consistent questions. This method allows replication of studies in different settings to allow
comparisons. It is quick and cost effective. Saunders et al. (2009) assert that the survey
strategy is generally perceived as authoritative by people and is comparatively easy to
explain and understand. However, surveys tend to rely more on breath rather than depth and
focus is on quantity of data rather than quality.
Grounded theory
This strategy is problem focused, context specific and future oriented. It is a process of
continual re-examination of data in order to determine the research findings. Theory is
formulated from data gathered after certain serial observations. This theory is then grounded
in continual reference to the data.
Case study
Robson (cited in Saunders et al., 2009) defines a case studyasa strategy for doing research
which involves an empirical investigation of a particular contemporary phenomenon within
its real life context using multiple sources of evidence. According to Creswell (2007) a case
study is an investigation of a restricted system over a period of time through detailed data
collection involving several sources of information. Before conducting field research, it is
imperative for case study researchers to enter the field of study with prior knowledge of
applicable literature (Babbie and Mouton, 2013). The underlying principle of using the case
study strategy is to probe deeply and analyze intensively the phenomena with a view to
generalize to the wider population to which a unit under study belongs.
In this research, the researcher analyzed the current succession planning practice in banks,
considered the inherent challenges and possible strategies to overcome them. The case study
strategy allowed the researcher to holistically explore the research questions. The researcher
found this approach to be quite appropriate since the research involves a set of contemporary
50
events over which the researcher has limited control over (Yin, 2003). This strategy enables
respondents to express phenomena in their own words, since a combination of open-ended
and semi-structured questions will be used. This approach yields extraction of rich data
which is more informative. In as much as case studies allow for collection of credible
information, it has been noted that they provide little basis for scientific generalizations
(Thomas, 2004). Moreover, it is quite debatable to ascertain the extent to which casing can
produce meticulous data and produce findings of high validity. Nevertheless, Saunders et al.
(2009) conclude that a well-constructed case study strategy can enable a researcher to
challenge an existing theory and also provide a source of new research questions.
3.5 Data Collection Instruments
Data was collected through semi-structured interview questionnaires to allow room for
probing and also to enable respondents toconvenientlyand freely express themselves.
3.6 Population and Sampling
3.6.1 Population
According to Saunders et al. (2009), a target population refers to the entire group of
individuals or objects to which researchers are interested in generalizing the conclusions. A
sampling frame is a list of all those within a population who can be sampled, and these may
include individuals, households or institutions. In this research study, the population is all
the banking institutions in Zimbabwe. A list of all the operating banking institutions was
obtained from the Reserve Bank of Zimbabwe (RBZ). At least one interview guide was
administered at each institution to promote fair representation.
Table 3.1 overleaf tabulates the number of banks in Zimbabwe.
51
Table 3.1: Banks in Zimbabwe
Bank
1 Agricultural development bank(Agribank)
2 BancAbc Zimbabwe
3 Barclays Bank of Zimbabwe
4 CABS
5 CBZ Bank Limited
6 Ecobank Zimbabwe
7 FBC Bank Limited
8 MBCA Bank limited
9 Metropolitan
10 NMBZ Bank Limited
11 POSB
12 Stanbic Bank Zimbabwe Limited
13 Standard Chartered Zimbabwe
14 Steward
15 ZB Bank Limited
3.6.2 Sampling
Saunders (2007) defines a sample as a representativecomponent of a statistical population
which is studied to obtain information about the whole population. There are two classes of
sampling techniques namely, probability and non-probability sampling techniques.
Probability sampling techniques are compatible with quantitative research approaches
whereas qualitative studies make use of non probability sampling techniques. Some of the
probability sampling techniques are simple random sampling, stratified random sampling
and cluster sampling. The non-probability sampling techniques include,purposive or
judgmental sampling and convenience sampling.
3.6.3 Judgmental sampling
Purposive or judgemental sampling enables use of judgement in selecting cases that will
best enable the researcher to answer the research questions) and to meet the research
objectives (Saunders et al., 2009; 237). Babbie and Mouton (2012),endorse that it is
52
appropriate to select a sample on the basis of the researcher’s knowledge of the population,
its elements and the nature of the research aims. In conducting this study, the researcher
used judgmental sampling method. The researcher targeted human resources practitioners,
based on their knowledge of human resources management tools, particularly the succession
planning and management practice. The researcher also targeted bank management since
they are expected to be responsible for the implementation of succession planning practice.
3.7 Data Analysis Techniques
Qualitative data obtained through semi structured interview guides was analyzed using the
thematic approach and content analysis. The information obtained from interview
transcripts was analyzed against theory referred to in literature review in order to inductively
develop coded categories. Data coding enabled establishment of common themes, patterns
and relationships in order to make appropriate inferences.
3.8 Validity and Reliability
3.8.1 Validity
According to Saunders et al. (2009) validity is concerned with whether the findings are
really about what they appear to be about. Greener (2008) characterizes validity in three
different ways, namely, internal validity, face validity, and construct validity. Internal
validity refers to the ability to identify extraneous or independent variables and how they
may affect the dependent variable. Face validity relates to the ability to decipher whether a
research instrument and the method used are suitable and appropriate from the face of it.
Construct validity is when the instrument and method are able to measure that which the
researcher intends to measure. Sometimes results can be invalidated because the respondent
does not understand the questions and answer in a way that they think is intended. To
address the issue of validity, the researcher continuously collected qualitative data through
semi-structured questionnaires until data saturation was reached (Saunders et al., 2009;
235). The researcher conducted interviews until additional data collected provided very little
new insights. An upper limit of 25 interviews and a lower limit of 10 were used.
53
3.8.2 Reliability
Reliability refers to the degree to which research instruments and methods are consistent and
reliable. It is the extent to which data collection techniques or analysis procedures yield
regular findings (Saunders et al., 2009). To ensure reliability, the researcher pilot tested the
research instrument to five possible respondents.
3.9 Limitations
The research had a deadline to complete the study in six months. It was cross sectional and
made use of responses of thirteen targeted respondents due to time and cost constraints.
3.10 Ethical Considerations
According to Saunders et al. (2009),research ethics refer to the appropriateness of the
researchers’ behaviour in relation to the rights of those who become the subject of their
work or are affected by the work. Ethics are moral choices that determine decisions,
standards and behavior (Greener 2008). In carrying out the research, the researcher faces a
dilemma in moral choices, such as how to gather data, how to meet people or how to deal
with uncooperative people. Qualitative research poses a greater range of ethical concerns as
compared to quantitative research (Saunders et al., 2009). These range from seeking access
to maintaining confidentiality.
a) Gaining access: the researcher addressed this by providing all the relevant
information pertaining to the research purpose and objectives. Ethical concerns are
associated with the ‘power relationship’ between the researcher and those who grant
access, and the researcher’s role (Saunders et al., 2009). A confirmation letter from
the University of Zimbabwe authenticating the researcher’s student status, together
with a research proposal and an introductory letter drafted by the researcher were
availed to the relevant banking officials.
b) Researcher’s identity- the researcher displayed a student Identification Card for
identification purpose.
c) Confidentiality- By nature, a bank’s human resources system is usually confidential,
therefore, it was imperative for the researcher to maintain confidentiality in carrying
54
out research. The purpose of ethical considerations is to ensure that no one is harmed
or suffers adverse consequences from the research activities (Cooper and Schindler,
2003). To avoid eembarrassment and harm resulting from reporting data that are
clearly attributable to a particular individual (Cooper and Schindler 2008; Robson
2002), the researcher was careful to protect the participants by maintaining
confidentiality and anonymity of their information, identities and the organisations
they work for.
3.11 Conclusion
This chapter outlined how the researcher carried out the research by looking at the research
philosophy that influences the researcher’s decision and identifying the population and
sampling frame as well as the sampling method used. It indicated that the research was
qualitatively conducted. Primary data was predominantly used, secondary data was also
considered in order to qualify some findings. The following chapter considers field findings,
data presentation and analysis.
CHAPTER FOUR: RESULTS AND FINDINGS
4.0 Introduction
This chapter presents the research findings from the interview questionnaire that the
researcher administered to the targeted manag
findings using content analytic tables. The results obtained from the questionnaires were
summarised and presented. The researcher then went further to cross link the findings to the
reviewed literature relating to succession planning practices in banks. The research questions
were used as a basis of the questionnaire and were conveniently categorised into four
sections namely; demographics, the current succession planning practice, succession
planning challenges and succession planning strategies.
4.1 Profile of the respondents
The questionnaires were administered to thirteen respondents. The targeted respondents
were made up of executives and managers from different professional backgrounds in the
local banking industry.
4.1.1 Demographic Information of respondents
Figure 4.1 displays the respondents’ level of education.
Figure 4.1: Respondents’ level of education
54%
Respondents' level of Education
CHAPTER FOUR: RESULTS AND FINDINGS
This chapter presents the research findings from the interview questionnaire that the
researcher administered to the targeted management in banks. The researcher analysed these
findings using content analytic tables. The results obtained from the questionnaires were
summarised and presented. The researcher then went further to cross link the findings to the
g to succession planning practices in banks. The research questions
were used as a basis of the questionnaire and were conveniently categorised into four
sections namely; demographics, the current succession planning practice, succession
s and succession planning strategies.
4.1 Profile of the respondents
The questionnaires were administered to thirteen respondents. The targeted respondents
were made up of executives and managers from different professional backgrounds in the
4.1.1 Demographic Information of respondents
Figure 4.1 displays the respondents’ level of education.
Figure 4.1: Respondents’ level of education
46%
54%
Respondents' level of Education
Degree Masters
55
This chapter presents the research findings from the interview questionnaire that the
ement in banks. The researcher analysed these
findings using content analytic tables. The results obtained from the questionnaires were
summarised and presented. The researcher then went further to cross link the findings to the
g to succession planning practices in banks. The research questions
were used as a basis of the questionnaire and were conveniently categorised into four
sections namely; demographics, the current succession planning practice, succession
The questionnaires were administered to thirteen respondents. The targeted respondents
were made up of executives and managers from different professional backgrounds in the
56
The majority of respondents (54%) were holders of masters’ degrees while the remainder
(46%) have first degrees.
Figure 4.2: Professional background of respondents
The respondents’ profile comprised people from various backgrounds in the banking sector.
Table 4.1 overleaf displays the summarised demographic information of the respondents.
Respondents by Professional background
HR
Marketing
Corp. Banking
Retail Banking
Finance
Accounting
Treasury
Strategy
57
Table 4.1: Demographic personal information of respondents
Respondent’s
current
position
Key Age of
respondent
Professional
background
No. Of years in the
banking industry
No. Of years
in current
position
Level of
Education
Head R1 36-40 Corporate banking 11-15 ≤ 5 Masters
Manager R2 36-40 Strategy 6-10 ≤ 5 Masters
Manager R3 36-40 Corporate Banking 11-15 6-10 Masters
Manager R4 31-35 Human Resources 6-10 ≤ 5 Masters
Head R5 31-35 Finance 11-15 ≤ 5 Masters
Executive R6 41-45 Finance 16-20 ≤ 5 Masters
Manager R7 31-35 Accounting 6-10 ≤ 5 Degree
Manager R8 36-40 Retail banking 11-15 ≤ 5 Degree
Executive R9 41-45 Marketing 6-10 6-10 Degree
Manager R10 36-40 Human Resources 11-15 6-10 Masters
Executive R11 46-50 Human Resources 16-20 6-10 Degree
Manager R12 36-40 Retail Banking 11-15 6-10 Degree
Manager R13 41-45 Treasury 11-15 11-15 Degree
The demographic information indicates that the majority of respondents have satisfactory
experience in the banking sector. By virtue of their designated roles, they suffice as suitable
respondents to the subject matter the researcher is analysing. Literature reveals that the
succession planning process should be owned by line management, senior management and
the Chief Executive Officer for it to bear fruits. The researcher chose to interview executives
and managers with different professional backgrounds in the banking industry in order to
understand the way each of them views and relates to the research problem. These are the
people responsible for ensuring succession planning takes place and are influential in its
implementation. They are presumably knowledgeable enough to articulate the current
succession planning practice in their banks and the way it is implemented.
58
4.2 Section B: Current Succession planning practice
This section analyses the responses given to questions on the current succession planning
practice in the banking industry in Zimbabwe.
The tabulated information in Table 4.2 below shows the given responses pertaining to
succession of Executive roles.
Table 4.2 Replacement of personnel in Executive roles
Respondent Response
R1 Done internally
R2 From internal talent pools
R3 Internally and externally
R4 Internally
R5 Both Internally and externally
R6 Internally
R7 From within the organisation unless there is no ready fit
R8 Both internal and external candidates are considered
R9 Either internally or externally
R10 First preference is given to internal talent
R11 The bank considers suitability of internal candidates before looking outside
R12 Depends on requirements of the role
R13 The bank considers the internal talent pool first.
Thirty eight percent of the respondents indicated that executive roles that fall vacant are
filled in with either internally promoted people or external appointments. Where internal
promotions to executive positions take place in most cases the incumbent would have been
recruited into the bank at a level slightly lower than the executive level. Through further
analysis of banks’ current executives’ profiles, the researcher observed that there are a few
cases of executives who rose through the ranks of one bank to land the executive role. Of the
few cases the researcher observed, there is the current managing director of Barclays bank
Zimbabwe who rose through the ranks to become the managing director. This is an example
of a successful succession plan within an organisation. Further analysis of executive profiles
show that some banks’ succession management of the CEO role follows a clear pattern of
59
having a deputy CEO who will later be appointed to the substantive role of CEO in the event
of a departure.
The organisation can fill in positions “internally or externally depending on the complexity
of the position and skill set required for the job” (R5).
Table 4.3 below summarises the responses in relation to how respondents view succession
planning.
Table 4.3 Respondents’ view on Succession planning
Respondent Response
R1 It is a necessary talent management tool, it increases productivity and
financial performance
R2 It is essential
R3 It aids in ensuring business continuity
R4 It is an effective tool of ensuring business delivery in an organisation
R5 It is necessary to ensure leadership sustainability
R6 It is a staff retention and motivation tool
R7 It fosters employee loyalty and investor confidence.
It is also a regulatory requirement at senior levels.
R8 Succession planning is good for continuity purposes
R9 Succession planning ensures the bank has a fallback position
R10 It averts risk of business disruption and leadership crisis
R11 It is important, it gives the bank direction
It ensures there is adequate bench strength of talent
R12 Succession planning saves the organisation time and money
R13 It helps create the future for the organisation
Despite the prevalent harsh economic environment, punctuated by high levels of
unemployment in Zimbabwe, all the respondents concurred that succession planning is a
very necessary organisational practice. The researcher found out from one respondent (R1)
that succession planning increases financial performance. Most of the respondents’ views of
succession planning as a staff retention tool, a necessary practice to ensure leadership and
organisational continuity are in line with literature recommendations (Rothwell, 2005;
60
Groves, 2007). One respondent (R6) summarised their understanding of succession planning
as follows;
“Succession planning is an effective tool of ensuring that there is continuity in terms of
business delivery within an organisation. A proper succession planning ensures that a
company’s business culture is preserved by way of elevating staff who understand the
organisation’s values and principles. This aids in avoiding disruption of work when key
members of an organisation leave. Succession planning also acts as a motivator for
incumbent staff in various positions to produce the best they can with a view to assuming
senior roles as they gain experience”. (R6)
By posing this question to respondents, the researcher wanted to ascertain how well they
understood the notion of succession planning, especially given that most of them are not
from a human resources management background. The researcher was satisfied with
respondents’ level of appreciation of the concept and its benefits to business.
Table 4.4displays responses on identification of candidates for succession.
Table 4.4 Identification of succession candidates
Respondent Response
R1 Based on performance, qualifications and experience
R2 Consider qualifications, experience, expertise and performance
R3 Consider the right attitude, qualifications, experience and ability.
R4 Based on individual performance in current role and consistency in
performance levels.
R5 Candidates selected based on performance, qualifications, expertise and
experience.
R6 Identify people with expertise.
R7 Consider performance in current role, qualifications, experience and expertise
R8 Qualifications and experience are important
R9 Level of Experience
R10 Qualifications, experience, performance
R11 Consider multi skilled candidates, their performance and qualifications
R12 Experience, qualifications and performance
R13 Consider high leadership potential, qualifications and performance levels
61
Analysis of responses regarding identification of succession candidates shows that 77% of
the respondents consider qualifications, performance and experience as basic criteria for
selection of candidates. This is in line with what Flynn (2014) recommends when she
explains adoption of a competency/potential approach in creation of talent pools. However,
one respondent (R3) stated that it is quite important for the identification exercise to
consider attitude, ability and leadership potential of employees;
“People may have the right qualifications and experience but lacking the ability, the drive
and the correct attitude that a leader should possess”. (R3)
Table 4.5 captures respondents’ feelings relating to development of internal candidates for
promotion to key positions versus hiring externally.
Table 4.5 Developing internal candidates for promotion to critical position
Respondent Response
R1 Its good, promotes loyalty and productivity
R2 Good-it preserves organisational culture
Bad-promotes resistance to change, inbreeding
R3 Developing internal candidates for succession minimises learning curves
and promotes seamless business continuity
R4 Good-motivates staff and preserves organisational culture
R5 Good for value system preservation and cultivating loyalty
Bad in terms of change management
R6 Good for motivational purposes. However, hiring externally is also good for
organisational culture change
R7 Developing internal succession candidates ensures the bank realises return
on investment. However, It may create entitlement mentality
R8 It is good for the organisation and the individuals
R9 It is a worthy investment
R10 It is better than hiring externally
R11 It is better to develop internally to minimise learning curves and preserve
culture
R12 Developing people internally strengthens brand equity if the people are
sharp enough
R13 It’s worthwhile and cost effective, on the flipside people may hold the
organisation at ransom
62
Although all the respondents viewed development of internal candidates for promotion to
senior crucial roles as being good, about 31% also commented on the flipside of this
initiative. Those who expressed sentiments against developing internal candidates were of
the view that internally developing candidates for promotion fuels inbreeding and encourage
resistance to change. One respondent (R7) expressed that it may create entitlement
mentality in those being groomed for succession;
“It’s very good if done objectively and the bank will realise return on investment. It may be
bad when it promotes entitlement mentality in the identified candidates. Having a talent pool
of potential successors is a good back up plan in case of departures”. (R7)
Another respondent (R13) put his views across as follows;
“Developing internal candidates for promotion is a good initiative as it builds on already
existing experience and knowledge of people in the organisation. However, it turns out to be
bad when the individuals use their expertise and experience against the organisation’s
strategies and we sometimes encounter such challenges” (R13).
Table 4.6 below reveals responses pertaining to incorporation of succession planning into
the bank’s strategic plans.
Table 4.6 Incorporation of succession planning into the bank’s strategic plans
Respondent Response
R1 Yes it is incorporated
R2 Yes it is incorporated through personal development programs and
talent discussions
R3 Yes through management and leadership development programs
R4 Succession planning is part of the bank’s strategic plan
R5 It is part of strategy
R6 Yes-it is a requirement for business continuity plan
R7 It is, through training and development initiatives for managers
R8 It is part of strategy, it is a regulatory requirement
R9 Yes, it is discussed as part of talent management initiatives
R10 Yes, but it is not highly prioritised as it should
R11 It is included as it is a compliance requirement
63
R12 It is incorporated as a staffing issue
R13 Yes it is included
The research finding indicates that all banks indeed include succession planning in the
organisational strategic plans. However, the researcher gathered that it could be an issue of
being compliant with regulatory requirements more than being the bank’s strategic initiative.
In their own words, (R11) had this to say;
“Succession management is part of the bank’s strategic plan. The only slacking component
is to assign accountability for the processes that the practice demands. More effort should
be channelled towards how the developmental initiatives will be handled. As long as there
are plans in place then we are compliant with regulatory requirements” (R11).
In relation to Labour Act amendments and their possible impact on succession planning,
table 4.7 below details the obtained responses.
Table 4.7 Impact of amendments to the Labour Act on Succession planning
Respondent Response
R1 No Impact
R2 No impact
R3 This does not impact negatively on succession planning
R4 No impact- termination of employment usually targets non-performers
R5 No
R6 No
R7 None
R8 To a lesser extent
R9 No major impact
R10 No impact
R11 No negative impact
R12 I don’t see how the amendment impacts the practice
R13 Not necessarily
All the respondents agreed that the amendments made to the labour Act after the Zuva
Petroleum 2015 case ruling have no impact on succession planning as a practice. This is in
64
line with scholars who stated that succession planning should be practiced regardless of the
state of economic situations, in good and bad times (Goldsmith, 2009). One respondent (R6)
put across that there is no impact “since it is likely that those who receive the letters were not
in the organisational plans. The required staff members will be retained and will not be
given such notices”. Another respondent articulated that although it may cause employees to
feel insecure, three months’ notice letters usually target non-performers. One executive
summed it up as follows;
“The amendment is not exactly a threat to succession planning practice because there is no
way a competent employee can be unceremoniously given notice of employment termination
unless on the grounds of misconduct, fraud or other related offences that warrant
dismissal”. (R9)
Table 4.8 below captures the human resources management tools that the respondents’
banks utilise to preserve institutional memory.
Table 4.8 Human resources management tools that facilitate preservation of
institutional memory
Respondent Response
R1 Coaching and mentoring
R2 I am not sure
R3 Training and development
R4 In house training and on the job mentoring
R5 Technical and behavioural training
R6 mentoring
R7 Job shadowing and coaching
R8 mentoring
R9 mentoring
R10 mentoring
R11 Coaching and mentorship
R12 Coaching and mentorship
R13 Job shadowing
65
Whilst it could be fairly easy to pass technical knowledge from one employee to the other,
tacit knowledge may be difficult to impart. Seventy seven percent of respondents cited
mentorship and coaching as key ways that facilitate preservation of institutional memory.
Eight percent were not sure of the tools and 15% mentioned job shadowing, technical and
behavioural training.
Table 4.9 details the developmental initiatives used to narrow the gap between present work
needs and future work requirements of identified successors.
Table 4.9 Developmental initiatives to narrow gaps between the selected successors’
present work needs and future work requirements
Respondent Response
R1 Coaching, Mentoring, training
R2 Job enrichment, Training, Coaching, Mentoring
R3 Management and Leadership development programmes
Assigning acting roles to potential successors
R4 In house and external training, on the job mentoring
R5 Job rotation and enrichment, training,
R6 Job rotation
R7 Targeted training
R8 Training and development
R9 Job enrichment
R10 Training
R11 Management and Leadership development programmes
R12 Training
R13 Training, job enrichment
It is evident from the responses that banks use a variety of developmental initiatives to
bridge the gap between the identified successors’ present work needs and future work
requirements. Training is almost always recommended as a panacea to cure organisational
ills like under performance of employees, but on its own, it may not sufficiently bridge
performance gaps. One respondent (R1) had this to say;
66
“Identifying people suitable to succeed key posts is not enough; interventions should surely
be in place to mould the individuals in such a way that when the time comes they will be fit
enough to match the role. To me, mentorship and coaching are very important. Training is
not usually individual specific though of course it helps too.”
In relation to the importance of succession planning to organisational sustainability, table
4.10 below presents the responses given.
Table 4.10 Succession planning and organisational long term sustainability
Respondent Response
R1 Succession planning ensures organisational long term sustainability
R2 It ensures retention of the vision
R3 Succession planning ensures seamless business continuity
R4 Succession planning helps preserve a company’s identity
R5 Succession planning is beneficial to organisational long term
sustainability
R6 Yes it ensures long term survival
R7 Planning for the future of the organisation is critical for business
continuity
R8 The practice strengthens the brand
Succession planning also boosts investor confidence
R9 It fosters loyalty in employees and ensures organisational sustainability
R10 Yes it ensures organisational long term survival
R11 It aids in retention of skilled personnel who will carry the organisation
further
R12 It is a necessary tool to ensure organisational survival
R13 Yes, it creates a sense of organisational continuity and culture
All respondents agreed that succession planning is beneficial to organisational longevity.
This finding is in line with other scholars’ findings (Govender, 2010), as well as literature on
the subject matter. In their own words, one of the respondents (R4) summarised their
sentiments as follows;
“Succession planning is beneficial in the sense that it ensures that key organisational values
and principles are passed on from one generation to the next, which is important in
67
preserving a company’s identity. The only possible threat is that it may limit the amount of
new ideas that can be introduced to the company. In the long term, an organisation also
needs to adapt to changes within the trading environment in order to ensure sustainability of
operations and this can largely be achieved through injection of fresh ideas”. (R4)
The respondent’s sentiment on injection of fresh ideas is also in affirmation with other
studies that show that external succession brings about strategic change and is more
appealing (Elsaid, 2011).
Respondents rated their organisations’ current practice of succession planning and their
responses are presented in Table 4.11 below.
Table 4.11 Overall state of the current succession practice
Respondent Response
R1 it is good enough
R2 it is fair, difficult to measure as people remain in the same job for too
long due to the prevalent hardships
R3 Good
R4 Fair, no consistency
R5 Fair
R6 Good, internal candidates are considered first
R7 Good, though there is room for improving the process
R8 Good
R9 Good
R10 fair
R11 Good
R12 fair
R13 Poor
Fifty four percent of respondents rated their organisations’ succession planning process as
good, with 38% rating it as fair and eight percent rating it as poor. This finding can be
compared with what Nassor (2013) found out when he carried out a similar research on
Kenyan commercial banks. According to his study findings, 92% rated their banks’
68
succession planning processes as good or better and only eight percent rated the processes as
fair.
In this research, one of the respondents who rated it as fair stated that “it is sometimes
affected by bureaucracy and favouritism which slows decisions and shifts them from being
objective” (R10).
Another respondent (R2) had this to say;
“The process barely goes beyond identifying candidates that qualify to make the talent pool.
It is only just about enough to ensure that there is continuity of operations when key staff
leaves the organisation. Human resources department should do more to ensure the process
runs the full cycle”.
Of the 54% who rated the process as good, R3 aptly captured the sentiments of the other
respondents with these words;
“The organisation always gives internal candidates the first opportunity to fill in vacant
posts before considering outsiders. Ninety percent of vacancies at managerial level going up
are filled internally. This is an indication that the process is being followed through”
4.3 Section C: Succession planning challenges
This section looks at the challenges that work against successful implementation of
succession planning processes. The researcher wanted to ascertain whether the respondents
are aware of any challenges that could be working against implementation of fruitful
succession plans. Table 4.12 below summarises the findings.
Table 4.12 Succession planning challenges
Respondent Response
R1 Lack of management support, Lack of communication, Inadequate HR
systems and policies
R2 Mirror effect of management, Lack of management support
R3 Lack of management support, Closed culture approach, Nepotism
R4 Lack of transparency, Nepotism and favouritism, Incompetent HR staff
R5 Lack of management support
69
R6 Lack of budget, too much focus on planning, Inadequate HR systems
R7 Lack of communication, Inadequate HR systems
R8 Lack of management support
R9 Lack of communication
R10 Lack of management support, Lack of communication
R11 Lack of management involvement, Favouritism
R12 Lack of management support
R13 Lack of communication
The finding reveals that there is rampant lack of management support (62%) that works
against effective implementation of succession planning processes. Lack of communication
as well (38%) was given as another major challenge and this is in line with literature
findings that people usually co-operate better when they are aware of what is happening and
what is expected of them. There is one finding the researcher found worrisome. One
respondent (R4) articulated that;
“Succession planning efforts are hindered by incompetent Human Resources staff who are
too narrow-minded in how they administer the process”
4.4 Succession planning strategies
Having outlined the various challenges that hinder successful implementation of succession
plans, respondents offered strategies to minimise and overcome the challenges. Table 4.13
below presents the strategies.
Table 4.13 Succession planning strategies
Respondent Response
R1 Be objective in selecting talent.
Obtain board and management buy-in.
R2 Bench mark against other working environments and countries.
Adoption of best practice.
R3 Expose identified successors to other countries and/or business units.
Educate decision makers on benefits of succession planning.
70
R4 Set out a clearly defined succession policy.
Strategise on ways to bridge performance gaps in identified successors.
R5 Communicate with the identified talent and set clear career paths.
R6 Improve on communication.
Adopt modern HRM practices
R7 The bank should have a provisional budget to cater for staff development.
Succession planning should not be done mysteriously.
R8 Plans should be executed, hold the relevant people accountable by including
it on their key result areas.
RBZ should carry out compliance audits after every 18 months or so.
R9 Communicate with all staff using staff bulletins on what succession planning
is and how it benefits the bank.
R10 The regulatory authority should request detailed developmental plans for the
identified successors.
Succession planning should be a board initiative.
R11 Effective communication with all stakeholders is important.
The CEO must be enthusiastic about it for everyone to appreciate it.
R12 Have the HR people to follow up on line management regarding what
training interventions are required.
R13 Training of all interested parties on how effective succession planning
process should work.
Senior roles should have fixed term performance related contracts-term
limits.
4.5 Summary of findings
4.5.1 Current succession planning practice
The research findings revealed that banks have succession plans in place and are indeed
compliant with the regulatory authority requirements. Respondents have adequate
understanding of succession planning as a practice. However, the mixed sentiments
71
concerning developing internal successors for promotion to key roles vis a vis taking on
board external successors bear testimony that internal succession planning implementation
could be burdened with some challenges. The responses showed that even though succession
plans are there, they are not sufficiently subjected to a sequential process to ensure effective
implementation.
4.5.2 Challenges facing succession planning
Responses obtained were in tandem with findings observed in other studies conducted in
banks elsewhere (Mwemezi, 2011) and also what other writers on succession planning cited.
The implementation process is flawed with quite a number of challenges as revealed in the
findings. Lack of management support tops the list. Some respondents hinted that while
some managers and executives are doing so much to coach and mentor their subjects for
succession some are simply sabotaging the process probably due to reasons to do with
insecurity.
4.5.3 Strategies to improve succession planning practice
After analysing the current state of succession planning and taking into account the
challenges facing the practice, respondents recommended an array of strategies that they felt
can help improve succession planning process in banks in Zimbabwe. When a system or
process is not working as it is supposed to, it is best to firstly find out the reasons why in
order to formulate appropriate strategies to remedy the situation. Most strategies suggested
by the respondents were in confirmation with literature findings (Larcker and Saslow, 2014;
Flynn, 2014). Management and CEO support were found to be of fundamental influence.
4.6 Conclusion
The chapter presented the research findings obtained from respondents in the Zimbabwean
banking industry. Findings were obtained on the current succession planning practice, the
challenges inherent in implementation and respondents’ proposed strategies to improve the
practice. The researcher presented and compared some of the findings to those obtained by
other scholars in related studies as well as to other bodies of literature. The final chapter
focuses on conclusions and recommendations of this study.
72
CHAPTER FIVE: DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
5.0 Introduction
This chapter details the inferences and conclusions drawn from the research study on the
implementation of succession planning practice in the banking industry in Zimbabwe. It also
focuses on recommendations and possible areas of further study. The research confirmed the
proposition that “succession planning as currently practised in Zimbabwe’s banking industry
is not being fully utilized as a talent management tool”. There is a glaring gap between
planning and implementation. This chapter is significant in that it suggests recommendations
and areas of further study in order to minimise management problems emanating from
succession management, particularly in the banking sector in Zimbabwe.
5.1 The research
The main objective of this study was to analyze the implementation process of succession
planning practices in the banking industry in Zimbabwe. Literature reveals that effective
succession planning processes assist in retaining talent, preserving institutional memory and
enhancing organisational sustainability and development.
The banking industry trades in public funds and has multiple stakeholders, therefore the
concepts of continuity and active institutional memory are of great importance. This study
sought to establish the current practice of succession planning in banks, examine the
challenges preventing the practice from running the complete cycle, as well as find out the
strategies that can be employed to counter these challenges. The findings obtained from this
study confirm that banks make an effort in coming up with succession plans for key
positions. The findings also reveal that the implementation process of these plans is troubled
by quite a number of challenges which obstruct realisation of tangible outcomes.
5.2 Conclusions
The conclusion drawn from this research is that although banks fully appreciate the benefits
of succession planning practice, they are struggling to bridge the gap between planning and
73
outcomes. It is evident that there are challenges limiting the successful implementation of
the related processes that are crucial to make the practice effective. The study gathered that
some human resources practitioners in banks in Zimbabwe are not competently playing their
facilitation role in implementing succession planning as evidenced by the investigation. The
research proposition that “succession planning is not being fully utilized as a talent
management tool in Zimbabwe’s banking industry” was validated by the findings relating to
the current administration of the practice. The research concluded that there are various
strategies that can be adopted to enhance the smooth flow of succession planning
implementation. This is apparent from the subsequent conclusions reached in relation to the
research objectives.
5.2.1 Succession planning in banks
The researcher inferred that there is a gap between the plans and the expected outcomes,
which suggests that the implementation process is not as effective as it ought to be. Due to
the regulatory compliance requirement, succession planning is a strategic issue, individuals
are earmarked for succession but that is only as far as the planning goes. Implementation of
the plans by way of developing and periodically appraising the identified successors is
fraught with challenges. The researcher concluded that succession planning as currently
practised in banks in Zimbabwe is not up to expected standard as it is not adequately running
the full cycle. This may explain the random manner in which vacancies in executive
positions are filled in.
On identification of candidates for succession, the research concluded that there is lack of
objectivity as some candidates are selected on grounds of favouritism and nepotism rather
than on merit.
Succession of executive positions is done with either internal or external candidates
depending on skill set required. This could be symptomatic of the fact that internal
succession candidates sometimes fall short of the competence requirements of executive
roles which prompts the organisation to look outside for suitably skilled successors. It could
also be suggestive that banks value injection of fresh ideas in a bid to remain competitive in
the midst of a volatile business operating environment.
The findings confirm that succession planning is beneficial to organisational long term
survival by way of preserving the institutional memory and culture. The research concluded
74
that the succession practice in banks requires management accountability and objectivity of
selection process for it to be effective.
5.2.2 Challenges facing successful implementation of succession planning
Of the challenges facing succession planning, lack of management support was commonly
cited factor. Some other challenges included inadequate human resources systems, lack of
communication, closed culture approach, as well as lack of budget. It is clear that succession
planning as a practice cannot be effective as long as these challenges are not seriously
addressed. It is also unambiguous that without adequate management buy-in, succession
planning will remain just a plan without satisfactory outcomes.
5.2.3 Strategies to improve the practice
Respondents suggested a number of strategies they deemed suitable to make succession
planning an effective practice. The study concluded that although there may be various
strategies available, the most important strategy that will set in motion all the other strategies
is Management involvement in succession planning as a practice. The study findings reveal
that support at board level is of fundamental importance.
5.3 Recommendations
In light of the findings obtained, this study suggests the following recommendations to
improve the succession planning implementation process in the banking industry in
Zimbabwe.
5.3.1 Board accountability
Succession planning should be included on the board’s performance scorecard. Not only
will this ensure the practice gets entrenched into the system, it will also uphold good
corporate governance practice. Term limits should also be introduced alongside this
measure. Contractual term limits ensure constant regeneration of banks as people get used
to passing on the baton when the time is ripe or when nearing retirement.
75
5.3.2 Management Support and participation
The researcher recommends that management takes the initiative to ensure succession
planning practice runs the full cycle by taking ownership of the processes from planning to
outcomes. They should actively disseminate plans for implementation and be avid
supporters of the activities involved in order for the same feeling to cascade down to all the
employees. It is popularly said that a fish rots from the head and this saying suggests that if
management do not proactively engage themselves in the processes of succession planning
then the rest of the workers’ body will not be able to appreciate its importance or
significance. Regular reviews should be done to evaluate the implementation processes.
5.3.3 Succession Policy
Banks should craft a standalone policy and procedure document that details the succession
planning process as well as outline the relevant accountable officers. By virtue of it being a
standing instruction, a succession policy will ensure there is uniformity of understanding and
implementation of the processes. It will also ensure that efforts will be made towards
maintenance of the talent pool. Furthermore, a disclaimer should be included in succession
planning documents to guide against promotion expectancy syndrome that may arise in the
identified successors.
5.3.4 Strengthening regulatory compliance audits
The RBZ should ensure they have human resources practitioners in their supervision wing
so that they can appropriately monitor the submitted succession plans to ensure the proposed
developmental plans are implemented. This will assist in making the succession planning
efforts effective. RBZ bank supervision officers should not just be satisfied with the
presentation of succession plans during compliance audits.
5.3.5 Human resources Management systems
It would be ideal for banks to invest in robust human resources management systems with
talent management tools that enable tracking of succession planning process from
identification of potential successors (talent pool) to performance appraisals and evaluation
of the processes. This assists with follow ups as well as accountability in terms of managing
76
the related activities involved in the process. In line with this, it would be best to ensure the
human resources practitioners in banks are proficient enough to facilitate the administration
of the talent management processes amongst which succession planning is a key tool.
5.3.6 Performance appraisals: 360 degree
To address the problem of lack of objectivity in the selection of succession candidates as
well as curb the management mirror effect, it will be best for banks to identify their high
fliers through use of 360 degree feedback performance appraisals. It is to the organisation’s
long term benefit if the right people with the right competencies and potential are identified
and groomed for succession. This will minimise challenges of favouritism and nepotism in
the selection of potential successors.
5.3.7 Training and Development
Although training is not the panacea to all organisational ills, it surely plays an important
role in shaping the successors, as well as preparing incumbent job holders to let go when
their term of office is up. Banks should endeavour to develop their future leaders in a bid to
bridge the gaps between their present work needs and their projected future work
requirements. Need based training shifts the focus from just planning but ensures the desired
outcomes are achieved. It is necessary to invest in management development programs
(MDPs) and leadership development programs (LDPs), the return on investment will be
realised through well groomed employees who have the capacity to carry the organisation
forward.
Adoption of these recommendations will ensure succession planning practice is treated with
the seriousness it deserves and may assist with alleviation of the challenges that prevent the
successful implementation of the practice.
77
5.4 Evaluation of research proposition
The researcher maintains that the actual practice of succession planning is not being fully
utilized as a talent management tool in Zimbabwe’s banking industry. It is not running the
full cycle.
5.5 Limitations of study and areas of further research
5.5.1 Limitations
The major constraint to this study was the limited time frame within which the researcher
had to conduct research especially as she delivered a baby within the same period.
Additionally, the researcher faced some difficulties in obtaining information from some of
the targeted respondents whose responses would have uniquely enhanced the quality of this
research.
This research was conducted in a single industry and it exclusively focused on the banking
sector therefore its recommendations may not necessarily be generalized to other contexts.
However, a similar case study for the IT industry done by Avanesh (2011) revealed similar
observations, suggesting that the recommendations may be applicable in other specialised
industries. The research focused on succession planning as a single tool. Results may be
inconclusive since inferences can also be drawn from other talent and human resources
management tools that aid talent retention and organisational sustainability and continuity.
The research also made use of the non-probability sampling approach, therefore, results
cannot be generalised to a larger population.Nevertheless, learning points can be derived
from it.
5.5.2 Areas of further research
Succession planning is a component of talent managementpracticetherefore, it could be
beneficial to look at other talent management tools in a bid to enhance organisations’ talent
retention strategies. This study focused on succession of executive positions; there are other
crucial technical roles in the banking industry that warrant the need for succession planning.
Further studies can be conducted on technical succession. Furthermore, due to the growing
informal sector in Zimbabwe, it would be interesting for future research on succession
planning to investigate whether budding entrepreneurs consider the practice at all and to
78
what extent they deem it a necessary continuity tool. Issues or topics that warrant further
research may include;
Sole proprietorship and business continuity.
Succession management at technical levels, a case of corporate entrepreneurship.
Investigating succession planning against stewardship and Agency approaches to
leadership.
The relationship between succession planning and Organisational performance.
79
References
Annan, K., 17 April 2000, “Excerpts of Secretary General of UN’s Introductory Remarks.
Armstrong, M. (2011) A Handbook of Human Resource Management Practice. Volume
9.Kogan Page Publishers.
Avanesh, N. (2011). A study on Succession Planning and Its Impact on Organizational
Performance in the IT Sector.Journal of Arts, Science & Commerce, 2(1) 1-12 Canavan K.
(2001). Leadership Succession in Catholic Schools: Planned or Unplanned? A journal.
Barlow, L. 2006, Talent development: the new imperative. Development and Learning in
Organisations. Vol. 20, no. 3, pp.6 – 9.
Barney J.B, Hesterly W (2012). Strategic Management and Competitive advantage:
Concepts and cases
Chanaka NF (2014). An Evaluation of the effectiveness of the Labour Arbitration System in
Zimbabwe, Dissertation of Masters in Business Administration(MBA), University of
Zimbabwe, Zimbabwe.
Creswell, J.W (2009). A Research design: qualitative, quantitative and mixed methods
approaches. London.
De Juan, A. (2003). From good bankers to bad bankers.Economic development Institute of
the Word Bank, Journal of banking regulation.
Elsaid E. (2011). Does Experience matter? CEO Successions by former CEOs Managerial
Finance 37 (10) 915-939
Erasmus, E (2009). The Effectiveness Of Succession Planning in SARS Enforcement Port
Elizabeth, Unpublished Dissertation of Masters in Business Administration(MBA) at the
Nelson Mandela Metropolitan University, SA.
Flynn, J.L.C (2014). Succession Planning beyond Theory.Legal Education Society of
Alberta ACLEA’s 50th Annual Meeting Boston, MA, August 2-5, 2014.
Govender, I (2010).Succession Planning as a tool to minimise staff turnover rate: A case
study ofNedbankHomeloans’ KZN operations. University of Kwazulu Natal, South Africa.
80
Groves, K.S. 2007, Integrating leadership development and succession planning best
practices, Journal of Management Development, Vol. 26. No. 3, pp. 239-260.
Hedum, K (2010). Succession Planning: The Critical Challenge for Law Enforcement of
Developing Leadership Capital in the 21st Century. University of Central Florida.
http://www.asaecenter.org/Resources/whitepaperdetail.cfm?ItemNumber=40406
[27/01/2016]
http://www.emmerichfinancial.com/strategic-planning/succession-plan/[23/01/2016]
Ibarra, P. (2005). Succession Planning: An idea whose time has come. Journal of Public
Management, 87(1): 18 – 24.
Ibarra, P., (2004) “Incorporating Succession Planning into Your Organization”. ACMA-
Arizona City/County Management Association 2004 Summer Conference, <PDF>
[Electronic Version]
Kim, Y (2006). Measuring the value of succession planning and Management: A qualitative
study of U.S. Affiliates of foreign Multinational companies, Doctor of Philosophy thesis,
The Pennsylvania State University, USA.
Marshall, J. 2007, How to Succeed at Succession, Financial Executive: October, Vol.23, no.
8, pp. 37-40.
Maunganidze, L (2008). Succession Planning and Business Survival at Crossroads: The case
of family controlled businesses in Harare, Doctor of Philosophy in Sociology thesis,
University of Zimbabwe, Zimbabwe.
Mehrabani, S. E, Mahomad, N. A (2011) Succession Planning: A necessary Process in
Today’s Organisation. International Journal of e-Education, e-Business, e-Management and
e-Learning, Vol. 1, No. 5.
Monetary Policy Statement.January 2015, Reserve Bank of Zimbabwe.
Muhammad , B . Muhammad , T . A and Muhammad , A . ( 2008 ) . Pakistan Journal of
Statistics and Operation Research . Volume 4 Number 1 .
journal.vaggi.org/index.php/bfowse/index/191. [ Accessed 20.12.15 ]
81
Mwemezi, D.B (2011). Challenges facing Human Resources Succession Planning in
Tanzania Work organisations: A case of public and private work organisations based in Dar
es Salaam, MBA Dissertation, Open University of Tanzania, Tanzania.
Nassor, A.T.A (2013). Succession planning among commercial banks in Kenya, Masters in
Business Administration Dissertation, University of Nairobi, Kenya.
Noe, R.A., Hollenbeck, J.R., Gerhart, B., (2008) Fundamentals of Human Resource
Management. Irwin/McGraw-Hill
Perecman Ellen and Sara R Curran 2006).A handbook for social science field research.
Rothwell, W.J. (2010). The future of succession planning. T+D, September 2010, 51-54.
Rothwell, W.J. (2010a). Effective Succession Planning: Ensuring Leadership Continuity and
Building Talent from Within. 4th edition. New York: American Management Association.
Ruppe, L. 2007, Be structured in managing talent. Don’t leave sustainable competitive
advantage to chance. Development and Learning in Organisations. Vol. 21, no. 3, pp.31-34.
Steele, P (2006) Succession Planning, White Paper (Revised), Regis Learning Solutions.
to the International Peace Academy’s Seminar on Sanctions”, New York City
UK Essays. November 2013. Risks Faced By Banks. Available from:
http://www.ukessays.com/essays/banking/risks-faced-by-banks.php?cref=1 [Accessed
5/10/2015].
Wilson, A. (2006). Marketing Research: An Integrated Approach, 2nd Edition, Prentice
Hall.
White, B. (2000) Dissertation skills for Business and Management students, Continuum.
Woodsong, M. N, Macqueen, C, Guest, K.M and Namey. E, (2005), “Qualitative Research
Methods: A collector’s field guide” Family Health International
Yin, R.K. (2009).Case Study Research Design and Methods 4th Edition Sage.
Yin R.K. (2009).Case Study Research Design and Methods 3rd Edition Sage.
82
http://docplayer.net/1316243-Succession-planning-your-bank-s-future-leadership.html
[17/08/2015]
http://www.herald.co.zw/mawocha-appointed-afrasia-bank-md/[accessed 16/02/2016]
https://www.dailynews.co.zw/articles/2015/01/06/matemera-appointed-afrasia-bank-md
[Accessed 16/02/2016]
83
APPENDICES
1. Interview Questionnaire.
2. Academic Research letter (University of Zimbabwe).
84
Appendix 1
My name is Rufaro Jessie Mutasa (R021491F); I’m studying towards a Masters Degree in
Business Administration at the University of Zimbabwe. I’m conducting a research study on
the implementation of Succession planning practice in the Zimbabwean banking Industry
and would be grateful if you could take time to answer the questions I have on the stated
subject matter. I specifically chose you because of your experience, knowledge and
exposure. Your responses will enable me to make inferences which would be of use to the
University of Zimbabwe’s academic body of knowledge, policy makers in the Human
Resources Management field and stakeholders in the banking industry. All information and
data obtained from you will be treated as strictly confidential and anonymous.
SECTION “A” DEMOGRAPHICS (Please tick/highlight appropriate boxes)
1. Please tick your age category.
20-25 yrs 26-30 31-35 36-40 41-45 46-50 51-55 56 plus
3. What is your current position/capacity in your organisation/bank?
CEO EXECUTIVE HEAD MANAGER OTHER (Please specify)
4. What is your professional background?
Finance HR Corporate
Banking
Retail
Banking
Accounting Other (Please specify)
85
5. How long have you been in the banking industry?
5 years or less 6-10 years 11-15 years 16-20 years Plus 21years
6. How long have you been in your current position?
5 years or less 6-10 years 11-15 years 16-20 years Plus 21years
7. Please state your level of education.
Certificate Diploma Degree Masters Other(Specify)
SECTION “B”: STATE OF THE CURRENT SUCCESSION PLANNING PRACTICE
1. How does your organisation usually replace personnel in executive roles?
Externally
Internally
I do not know
(Please explain)
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
2. What is your view on succession planning? Please tick appropriate boxes and
explain.
It is a necessary talent management tool
It is not very important
It is a regulatory compliance issue
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
86
3. How does the organisation/ bank identify candidates for succession?(Please tick
appropriate boxes)
Qualifications
Experience
Expertise
Performance
Tenure
Other(Please specify)
4. What is your view regarding developing internal candidates for promotion to critical
positions versus hiring externally? (What are the pros and cons) Please explain.
Good Bad I don’t know
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
5. Is succession planning incorporated into the bank’s strategic plan? Please explain.
Yes No I do not know
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
6. In your view, does the Zuva petroleum ruling that empowered employers to give
employees three months’ notice of employment termination have an impact on the
succession planning practice in your organisation/bank?
....................................................................................................................................................
....................................................................................................................................................
87
....................................................................................................................................................
....................................................................................................................................................
7. Which human resources management tools or activities do you utilise to manage
knowledge transfer? (Preserving institutional memory).
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
8. What developmental plans do you use to narrow the gap between the selected
successors’ present work needs and future work requirements? (*If internal
succession)
Job rotation
Job enrichment
Training
Coaching
Mentoring
Other (Please specify below)
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
9. What kind of HRM indicators (if any) do you use to evaluate your succession
planning initiatives? (How do you evaluate Succession Planning in your
Organisation?)
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
88
....................................................................................................................................................
....................................................................................................................................................
10. Is succession planning beneficial to organisational long term sustainability? Please
explain how so.
Yes No I do not know
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
11. Overally, how would you rate your organisation’s current succession planning
process? Please explain.
1 2 3 4
poor fair good Excellent
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
SECTION “C”: SUCCESSION PLANNING CHALLENGES
1. In your view, what challenges affect the effectiveness of the succession planning
process? (Please tick all appropriate)
Lack of management support
Lack of communication
Lack of budget
Too much focus on planning instead of outcomes
Inadequate HR systems and policies
The mirror effect of management
Other (Please specify below)
89
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
SECTION “D”: SUCCESSION PLANNING STRATEGIES
1. What do you think can be done to improve succession planning as a talent
management tool?
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
CONCLUSION
Apart from what we have discussed, is there anything else that you would want to share
with me which you think might be useful to my research?
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
....................................................................................................................................................
End of Interview
Thank you very much for your time.
90
Appendix 2