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KASNEB NEWSLINE, Issue No. 1, January - March 2015 1
KASNEB The Professional Journal of KASNEB Issue No. 1 January - March 2015
KASNEB NEWSLINEEDUCATIVE INFORMATIVE ENTERTAINING
TOPICS FEATURED
ENVIRONMENTAL ANALYSIS IN STRATEGIC
MANAGEMENTCROSS LISTING
DEBTORS TRAITS EXTERNALITIES
CRITICAL SUCCESS FACTORS IN FILE
CONVERSION
EXTRAORDINARY BOSSES
REVISED SYLLABUSES
ENVIRONMENTAL ANALYSIS
KASNEB NEWSLINE, Issue No. 1, January - March 2015 1
KASNEB
Editor HonorarisPius M. Nduatih
Editorial TeamStaff members of KASNEB
Circulation OfficeKASNEB Towers
Hospital Road, Upper HillP.O. Box 41362 - 00100
Nairobi - KenyaTel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624Fax: 254(020) 2712915
E-mail: [email protected]: www.kasneb.or.ke
KASNEB Newsline is the professional students journal of KASNEB.
The views expressed in this journal are those of the respective authors and do not necessarily reflect
those of KASNEB.
The Editor welcomes contributions from readers especially students and trainers in accountancy, finance,
management, administration, ICT and cognate subjects.
The Editor reserves the right to edit articles for the purposes of clarity and brevity.
Trainers and students are free to photocopy materials contained in this journal for purposes of learning without seeking prior consent from
KASNEB.
Reproduction is allowed without charge as long as prior consent is sought and the source
acknowledged.
Correspondence should be addressed to:
The EditorKASNEB Newsline
Marketing and Corporate Affairs UnitP.O. Box 41362 - 00100, Nairobi
E-mail: [email protected]
CONTRIBUTORS TO THIS ISSUE
James MajiwaWasilwa MiriongiGabriel NjugunaPeter Murimi Maina Ernest Madara Jeff Haden
13 Cross listing
3 Environmental analysis in strategic management
25 Externalities
45 Extraordinary bosses
50 KASNEB updates
48 Pictorial
53 Syllabuses Review KASNEB is ISO 9001:2008 certified
CONTENTS KASNEB NewslineIssue No. 1, January - March 2015
19 Debtors traits
35 Critical success factors in file conversion
KASNEB NEWSLINE, Issue No. 1, January - March 2015 2
From the CEO’s desk
Editor HonorarisPius M. Nduatih
Organisations today operate in a dynamic and complex environment which requires
continuous scanning to identify emerging opportunities and potential pitfalls.
Competition in industry has gone a notch higher, as epitomised by the push and shove
witnessed among organisations today as each seeks to elbow out the competitors and
solidify its market share. In order to survive, an organisation must endeavour to understand its
environment, seize any opportunities and sniff out any threats.
One of the hallmarks of a strategic leader is the ability to navigate through the labyrinth of
environmental factors and steer the organisation to prosperity. In order to achieve this, a
leader should understand the various types of business environments, the different models
that can be applied to analyse the environment and the optimal response to each situation.
This knowledge forms a critical component of the competence requirements of a leader today.
The above background sets the stage for the lead article in this edition of the KASNEB Newsline.
The article explores the role of environmental analysis in the context of strategic management.
The writer notes that environmental scanning is critical in not only identifying potential
opportunities and threats, but also in providing information for strategic planning. The writer
goes further to examine various models that can be used to undertake an environmental
analysis. These models include the SWOT, PESTEL, Porter’s five forces and the 5Cs analyses.
The second article sheds light on the process and benefits of cross-listing of companies.
Cross-listing applies where a company’s shares are listed in various stock exchanges located
in different countries. One of the angles explored by the writer in discussing the benefits is
based on corporate governance and the competitive edge that a company considered to
be practising good governance can derive. In discussing this perspective, the writer argues
that, due to the high standards required for listing in any stock exchange, and particularly on
governance issues, a cross-listed company is considered to be better governed and hence its
ability to meet the set standards in more than one stock exchange. This perception is likely to
drive in clients particularly those with a higher benchmark for governance issues.
In addition to featuring other articles on topical issues such as debtors management and
file conversions in ICT, we have included important updates to stakeholders on the major
syllabuses review, including the revised structure of examinations, transition arrangements and changes to policies, rules and regulations. The revised syllabuses will take effect from
1 July 2015 and be examined for the first time from the November 2015 sitting. These
updates form part of the initiatives to ensure a smooth roll over from the current
to the revised syllabuses.
Welcome and enjoy your reading.
KASNEB NEWSLINE, Issue No. 1, January - March 2015 3
Pete
r Mur
imi M
aina
, CS g
radu
ate,
Busin
ess E
xecu
tive,
Roya
l Med
ia Se
rvice
s An environmental analysis
or scan examines the
changes and forces that
affect business either directly or
indirectly through customers,
suppliers, competitors and other
stakeholders. It focuses on internal
and external environments in order
to understand the organisation’s
capabilities, customers and
business environment. It basically
involves identifying and studying
environmental factors that will
impact on the organisation so as
to develop effective responses
which will secure or improve the
organisation’s position in the future.
THE PURPOSE OF ENVIRONMENTAL ANALYSIS
Environmental scanning has many
advantages for the company which
successfully executes a constant
scanning strategy. Some of the
benefits of environmental scanning
include:
1. Providing information for strategic planning
Environmental scanning provides
information, such as the strengths
or weaknesses of competitors
and consumer behaviour and
enables companies to discern
which resources are valuable to
the market and also provides
information which can be used as
the basis of marketing strategies
to leverage these resources and
apply them most appropriately.
This can strengthen a company’s
own competitive position and
weaken that of the competition.
Environmental scanning also
provides information about the
environment which can guide
strategic direction. Porter notes
that a successful strategy should
result in “a favourable position
in an industry” -- a “competitive
advantage”. Sustainable competitive
advantage is achieved by generating
or possessing resources that are
inimitable, valued by the customer
and can be used effectively.
Macro- environment
Micro- environment
Internal- environment
Employees Cash flow
Capital assets Materials Structure
Stakeholders COMPETITORS
Suppliers Intermediaries
Consumers
Political Environmental
Social Technological
in strategic management
Environmental analysis
KASNEB NEWSLINE, Issue No. 1, January - March 2015 4
ENVIRONMENTAL ANALYSIS
2. Detecting new opportunities
A key purpose of environmental
scanning is to detect new
opportunities and forecast
demand. This is necessary in
increasing company’s portfolio.
3. Executive stimulation and development
Executive level strategic planning
should be based on data rather
than whim. This is important
as it not only projects a more
professional image but also keeps
the executive decision makers in
tune with the market. Further, it
provides education and stimulation
for decision makers, who are usually
appointed to these positions due to
their capacity to turn thought into
action and ultimately profit.
4. Monitoring market trends and fashions
Strategic success or failure depends
on “ever-quicker reactions to
market trends, requirements and
aspirations”. However, it could be
argued that to “react” suggests
that companies should act after
the event, by which time, it may be
too late. Environmental scanning
increases sensitivity to customers
changing needs and companies
should be proactive in monitoring,
predicting and responding to
market trends. Even if the company
is not able to be first to market with
a new product or service, simply
being aware of what is happening
in the competitive environment
enables them to plan ahead and
build competitive strategies.
5. Monitoring the dynamic business environment
Due to the dynamic nature of the
modern business environment,
the importance of regular and
continual scanning cannot be
overemphasized. This is because
even small changes in the
environment such as legislative,
cultural or technological changes,
if not anticipated and acted upon,
can be the difference between
becoming the market leader and
insolvency.
6. Identifying opportunities and threats
Scanning enables an organisation
gain a competitive advantage
and improve short and long term
planning through SWOT, PESTEL
and other forms of environmental
analysis.
TYPES OF BUSINESS ENVIRONMENT
Basically, there are three distinct
business environments which are:
1. Internal environment
This is environment which is
within the organisation and the
organisation has control over it. Its
components are mission and vision
of the organisation, employees,
managerial and leadership
philosophies, organisational
culture, organisational structure
and policies of the organisation.
2. External environment
This includes the factors outside
a business that influence its
decisions. It is also called macro
environment. Its components are
well captured by the acronym
PESTEL which includes political,
economical, social, technological,
environmental/ecological and legal
environments.
3. Operating environment
This is environment which affects
the operations of an organisation
and basically constitute of
customers, creditors, competitors,
marketing intermediaries like
middle men and other publics of a
firm.
MODELS OF ENVIRONMENTAL ANALYSIS
Several models are used to
understand the surrounding
situation. These models include:
(i) SWOT analysis
(ii) PESTEL analysis Identify your weaknesses and resolve them
KASNEB NEWSLINE, Issue No. 1, January - March 2015 5
ENVIRONMENTAL ANALYSIS
(iii) Porters five forces analysis
(iv) 5Cs’ analysis
These are further explained below.
(a) SWOT analysis
SWOT stands for strengths,
weaknesses, opportunities and
threats. To understand SWOT
analysis, the four terms should
clearly be distinguished.
Strengths refer to positive internal
conditions in the environment
like competent staff, superior
technology, strong customer and
capital base. A media house may
for instance count on its strength as
having the largest viewership and
listenership in a given region.
Weaknesses are negative internal
conditions in the environment e.g.
poor technology, low customer
base and poor image.
Opportunities are positive external
conditions in the environment. This
is when PESTEL factors are in favour
of a firm like favourable legislations,
new markets are developing for the
firm and increased demand of a
firm’s products.
Threats are negative external
conditions in the environment like
stiff competition, unfavourable
legislations, poor economic and
political environments among
other factors.
The SWOT Matrix
Strengths Weaknesses
Opportunities S-O strategies W-O strategies
Threats S-T strategies W-T strategies
Quadrant I (S-O strategies) This
is where strengths match with
opportunities. A firm can explore
the available opportunities in the
environment by use of appropriate
strategies supported by its
strengths.
Quadrant II (W-O strategies)
A firm has an advantage of
opportunities but a disadvantage
of weaknesses. An example is a
country rich in oil but does not
have the technology to exploit it.
In such a scenario, the country can
use its opportunities to overcome
its weaknesses. It can for instance
look for a firm with appropriate
technology to exploit the oil and
then share profits therefrom on a
predetermined ratio.
Quadrant III (S-T strategies)
In this scenario, threats like
competition affect strengths of
a firm. A company which may
be enjoying monopoly may for
instance have entrants of new
competitors which may affect
its sales turnover. The firm in
this case must identify ways to
use its strengths to reduce its
vulnerability to external threats
like coming up with strategies to
manage competition. An example
is a company enjoying economies
of scale and strong capital base.
It will use funds at its disposal to
aggressively advertise and surpass
competition.
Opportunities
• What trends can you take advantage of now?• How can you leverage your strengths?• Are there any opportunities immediately
open to you?
Weaknesses
• What are your weak areas?• In what areas do you have fewer resources?• Do others avoid asking you for help on
certain things?
Threats
• What is your competition doing?• Do any of your weaknesses pose an
immediate threat?• Is there anything that you must address
right now?
SWOTANALYSIS
Strengths
• What do you do well?• What do other people ask you for help on?• What is unique about you?
Build; enhance Resolve; reduce
Strategic analysis
InternalExternal
Strengths Exploit; expand
Resolve; reduce
Build; enhance
Avoid; thwart
Weaknesses Opportunities Threats
KASNEB NEWSLINE, Issue No. 1, January - March 2015 6
ENVIRONMENTAL ANALYSIS
Quadrant IV (W-T strategies)
The firm at this point must formulate
a strategy that will enable it prevent
the firm’s weaknesses from making
it highly susceptible to external
threats.
(b) PESTEL analysis
PESTEL includes political,
economical, social, technological,
environmental/ecological and legal
environments. Each component is
examined in PESTEL analysis.
Political environment: Examines
political stability, trade restrictions,
tariffs and sanctions. Investor
confidence is highly dependent
on perceived political stability of
a country. Post election conflicts
for instance keep investors away
affecting a country’s economy.
Trade sanctions would also mean
a country’s level of exporting its
produce is limited.
Economic environment: It
examines inflation rates, interest
rates, exchange rates, income levels
and distribution, taxation policies,
credit policies, economic stability
or crisis including global economy
and economic growth.
Social environment: These
consist of the value system, socio-
demographic characteristics and
other basic characteristics of
people comprising the society.
Such characteristics include
attitudes, desires and expectations,
level of education, beliefs, religion,
traditions, habits and customs of
people in a society. The population
structure, for example, would
influence decisions on what
products to produce by a business
concern. Demographic patterns
would also dictate the availability
of workforce for a business entity.
If a firm ignores society’s social
concern, the society will impose
legal restrictions. Many African
societies and religions are for
instance not receptive to family
planning and condoms use.
Technological environment: This
refers to inventions and techniques
in areas of processes, machines,
tools and information technology
including automation. Technology
is key to an organisation’s
transformation processes affecting
processing speed as well as quality
of the final output.
include labour laws of a country,
taxation laws, constitution of the
country and precedent cases on
business.
(c) Porter’s five forces analysis
Michael Porter (A Harvard Business
School researcher) developed
the five forces model to examine
an industry’s attractiveness. An
industry may have the right size
and growth but not attractive from
a profitability point of view. The
company must therefore examine
several major structural factors that
affect long term attractiveness. The
five forces are:
• Rivalry posed by competitors/
threat of new entrants
• Entry barriers
• Threats of substitute products
• Bargaining power of the buyer
• Bargaining power of the
supplier
The five forces model is useful in
understanding the industry context
in which a firm operates. They are
discussed here below:
(i) Rivalry posed by competitors/threat of new entrants
A market with strong rivalry is
less attractive. Firms are always
in competition for market share.
The market share may in this case
be customer base, profits or sales
a given market can provide. The
intensity of rivalry is influenced
by certain industry characteristics
which include the following:
Factors which increase rivalry among firms in the same industry
A large number of firms in similar
operations increases rivalry in an
Ecological environment:
This refers to the protection
of the ecosystem. This is
currently becoming more
critical as environmental
awareness increases
globally. It covers functions
of garbage collection and
management, sewerage
and drainage systems
and protection of wildlife
which includes trees and
animals in the forests.
Legal environment: This
refers to various legislations
that affect business. They
Pestel analysis
Political
Legal
Environmental
Technological
Social
Economical
KASNEB NEWSLINE, Issue No. 1, January - March 2015 7
ENVIRONMENTAL ANALYSIS
industry. Firms in overcoming this
challenge always seek to diversify
their product portfolio to meet
varied needs of the customers.
Limited market growth and
size causes firms to fight for
the available market share.
Firms overcome this challenge by
venturing into new markets. In this
era of globalization, many firms
are venturing into international
markets. A case in point is Kenya
where many banks and media
houses have expanded their
operations to other Eastern Africa
countries like Rwanda, South
Sudan, Uganda, Tanzania and
Burundi.
High fixed and storage costs
intensify rivalry since firms seek
to make returns on the expenses
incurred in addition to profits. To
overcome this challenge, firms
always seek to lower expenses
incurred by cutting on unnecessary
costs.
Low switching costs increase
rivalry among firms. Switching
costs are also called switching
barriers and refer to any impediment
to a customer’s changing from one
product to the other.
Strategies firms adopt in response to Rivalry
Igor Ansoff presented a matrix
that focused on a firm’s strategy
for growth. Rivalry presents a
challenge to firms growth and thus
adopting the matrix can offer a
breakthrough to organisations.
Ansoff matrix
Existing product
New product
Existing market
Market penetration
Product development
New market
Market development
Diversification
The four growth strategies can be
solutions to rivalry among firms.
They are discussed here below:
Market penetration: An
organisation seeks to have more
consumption of its existing
products in its existing markets
through aggressive adverting
and marketing. It is the least risky
strategy among the four strategies.
The aim is to increase the market
share of the existing products.
Market development: This
involves taking existing products
to new markets. This has been the
trend in Eastern Africa where many
organisations have been extending
their operations beyond their
countries of operations to the wider
region.
Product development: This
involves developing new products
for the existing market. Mobile
telephone companies have for
instance established money
transfer services within their
existing markets as a new product.
Diversification: This involves
development of new products to
new markets. It is the most risky
strategy and its quadrant is referred
as “suicide cell”. It is an option when
good returns are expected.
Among the four strategies, market
penetration is least risky but
once the market is saturated,
other strategies must be sought.
A market development strategy
is appropriate if the firm’s core
competences are related more
to the specific product than to its
experience with a specific market
Barriers to entry:• Economies of scale• Proprietary product differences• Brand identity• Switching costs• Capital requirements• Access to distribution• Absolute cost advantage• Government policy• Expected retaliation
Determinants of supplier power:• Differentiation of inputs• Switching costs of suppliers and firms in the industry• Presence of substitute inputs• Supplier concentration• Importance of volume to supplier• Cost relative to total purchases in the industry• Impact of inputs on cost of differentiation• Threat of forward integration relative to threat of
backward integration by firms in the industry
Rivalry determinants• Industry growth• Fixed (or storage) costs/value added• intermittent overcapacity• Product differences• Brand identity• Switching costs• Concentration and balance• Informational complexity• Diversity of competitors• Corporate stakes• Exit barriers
Bargaining leverage:• Buyer concentration
versus firm concentration
• Buyer volume• Buyer switching
costs relative to firm switching costs
• Buyer information• Ability to backward
integrate• Substitute products• Pull-through
Price sensitivity:• Price/total purchases• Product differences• Brand identity impact on
quality/performance• Buyer profits• Decision makers’ incentives
Determinants of substitution threats:• Relative price performance of
substitutes• Switching costs• Buyer propensity to substitute
Determinants of buyer power
Bargaining power of buyers
Bargaining power of suppliers
Threat of new entrants
Threat of substitutes
Suppliers
New entrants
Buyers
Substitutes
Industry competitors
Intensity of rivalry
Products
Mar
ket
Exist
ing
Existing
Product Development
MarketPenetration
MarketDevelopment
DiversificationNew
New
KASNEB NEWSLINE, Issue No. 1, January - March 2015 8
ENVIRONMENTAL ANALYSIS
segment. A product development
strategy may be appropriate if a
firm’s strengths are related to its
specific customers rather than
to the specific product itself. In
this situation, it can leverage its
strengths by developing a new
product targeted to its existing
customers.
Market penetration is the least risky
followed by market development,
then product development
whereas diversification is the most
risky.
(ii) Entry barriers
This refers to barriers and
challenges which prevent new
players who want to operate in the
market from entry. An industry with
entry barriers is less attractive and
thus will discourage new entrants.
Existing firms may deliberately
create entry barriers to reduce
entry of new firms so that they can
be able to maintain a steady level of
profits. It is expected that when an
industry profits increase, additional
firms will enter in the market to take
advantage of the opportunities.
This however does not usually
happen because of certain barriers
including the existing firms
establishing these walls to ensure
profits are not driven down by firms
at the entry point. Some of these
barriers that prevent entry of new
firms include:
Government regulations
New firms may face the hurdle
of compliance matters with the
government regulations and
requirements including registration
processes which are lengthy,
technical and cumbersome.
Governments in other industries
grant monopolies limiting entry of
new firms.
Brand loyalty
This refers to the loyalty customers
may have on the existing brands
denying market to new brands at
the entry stage.
Economies of scale
Existing players may enjoy
economies of scale thus are able
to have enough funds to sponsor
powerful adverts denying market
penetration to players at the entry
level.
Lack of capital base
Firms at the entry level usually do
not have enough capital to enable
them match up with existing firms
in terms of human resource, quality
and diversification. Existing players
have enough funds thus are able
to produce highly differentiated
products.
High switching costs to the
customer
Switching costs refer to the value
and benefits a customer would
lose by deciding to use another
product to meet the same needs
he used to meet with a previous
product. A good example is mobile
telephone industry. A customer
may find it difficult to move to
another service provider at the
entry level even when the prices of
such a firm are low. This is because
the inconveniences of changing
the telephone number and missing
out on other services like money
transfer make the switching
costs high. This is why entry and
penetration of new players in the
telephone industry has always
been difficult.
Patents and proprietary rights
A patent is a set of exclusive rights
granted by a government to an
inventor for a certain amount
of time. It is a legal document
defining ownership of a particular
area of new technology and gives
inventors the right “to exclude
others from making, using, offering
for sale, or selling their invention”.
Thus a patent effectively acts as a
barrier to entry.
(iii) Threat of substitutes
An industry is less attractive if
actual or potential substitutes
exist. Substitute products refer to
different products having ability
of satisfying customer’s needs
similarly. They can therefore be
MarketPenetration
Strategy
Growth
Low risk
Gain market share
Sell more of current product to existing
market
KASNEB NEWSLINE, Issue No. 1, January - March 2015 9
ENVIRONMENTAL ANALYSIS
used to replace one another.
With substitute goods, demand
increases when the price of a similar
good increases. In other words, an
increase in the price of product
A will cause its users to decide to
switch to product B as a substitute
due to its lower price and similar
benefits. Substitute products are
bound together, in that customers
can trade one good for another if
they see fit. Substitutes therefore
place a limit on prices and on
profits. The company has to monitor
price trends closely. If technology
advances or competition increases
in these substitute industries, prices
and profits in the segment are likely
to fall. The best defense is to watch
out for competing products, their
quality, prices and dealer capacities
in the marketplace.
(iv) Bargaining power of the buyer
This refers to the ability of the
consumer to bargain for either
low price or high quality of the
product. Certain factors determine
the bargaining power of the buyer
which include:
Monopsony: This is a market in
which there are many sellers and
one buyer. In such a market, a buyer
is a chooser among many suppliers
and thus has more bargaining
power.
Low switching costs: This is when
a customer can easily move to
another product which will equally
meet his needs (substitute). When
a customer can decide to use a
substitute without difficulties, he
has a higher bargaining power
over the supplier who is currently
supplying him with products.
Backward integration threats:
Backward integration refers to
the situation where a company
takes over the functions of the
supplier. It is one of the forms
of the vertical integration. The
other form is forward integration
where a company takes over the
distribution functions. Backward
integration threats increase the
bargaining power of the buyer
since the supplier will have fears of
losing business.
Buyer purchases a significant
proportion of the product: A
consumer who purchases a large
unit from a supplier will have a
higher bargaining power for lower
prices and higher quality than the
one who buys in small units.
Price sensitive customers:
Customers are price sensitive
when they highly react to any price
change, for example, abandoning
a product because the competitor
has begun to charge a lower price
for the same. Customers are highly
price sensitive when products are
less differentiated and thus they
attach similar value to a product as
to that of a competitor.
Bargaining power of the supplier
This is the power of the supplier
to increase the price of a
product.
Certain factors which increase
this power include the supplier’s
products having no or few
substitutes, high switching costs
and especially when products of
the supplier are unique and highly
differentiated. A threat of forward
integration is another aspect which
increases the power.
(d) 5CS’ ANALYSIS
The 5Cs of situation analysis are
customer, competitor, company,
Mobile wallets challenging
payment gatewaysTelcos’
e-money challenging
banks
Messaging Apps challenging Telcos’
SMS-service providersThreat of
substitute products or
Services
e-book readers challenging retail
book stores
Factors that increase customer’s bargaining power
Customers more concentrated than sellers
Switching costs are low
Customer well informed about the product
High portion of sellers sale is made up of their purchases
Their own product is affected
Products have little differentiation
High threat of backward integration
KASNEB NEWSLINE, Issue No. 1, January - March 2015 10
collaborators and climate/context.
It enables businesses to gain
more information on the internal,
macro-environmental and micro-
environmental factors within the
environment. It is a very complete
analysis of the internal and external
aspects of the business. The internal
aspects are the company and the
collaborators while the external
aspects are the customers, the
competitors, and the climate.
Company
It involves evaluation of the
company’s objectives, strategies
and capabilities. An evaluation
of the strengths, weaknesses,
opportunities and threats of the
company is done at this level. The
analysis is done in an endeavour
to fully understand the company.
Other aspects analyzed are product
line, image of the company in the
market, technology and experience,
culture and goals.
Collaborators
They include distributors,
suppliers and alliances a company
may decide to take with other
organisations. Distributors make it
easy to find products of a company
in little shops, malls, supermarkets
and restaurants. A company is
always working in order to have
effective working relationships with
suppliers to ensure a continuity in
supply of raw materials.
Alliances are necessary because a
lot of times, a company is involved
in sponsorship of events.
Customers
This involves examining market
size and growth, market segments,
benefits that the consumer is
seeking whether tangible or
intangible, consumer information
sources, buying processes and
behaviors of the consumer that
is whether it is impulse or careful
comparison, frequency of purchase,
quantity purchased at a time
and trends of the consumer, that is how
consumer needs and preferences change
over time.
This enables the company to design
discounts and promotional programmes to
stimulate the customers purchase all year
long, in order to make the customers buy.
It also enables the company to position the
product in a way that will be convenient to
the customer.
A company is also able to design
information campaigns and implement
them through web sites, social networks,
events, and in the media to ensure it
maximally reaches the customers.
Competitors
Successful business requires that a
company has to satisfy consumers better
than the competitor. They must adapt to
the strategies that are being used by the
competitors who are serving the same
target markets. Competitors’ analysis is
essential so that a company can benchmark
with other companies in the same industry.
When a company analyses its competitors,
it is able to borrow the best practices from
the competitors. The analysis involves both
internal and external factors. These factors
include corporate objectives, size and power
of the organisation, resources available
and procedures used by the organisation,
product diversification, market size and
geographical coverage, number of market
segments served, distribution channels,
branding and market penetration. It
also involves analysis of advertising
strategies of the competitors. Information
on competitors and their intelligence is
sourced from different sources including
commercial databases like newspapers and
business magazines, trade publications,
websites and promotional materials like
handbills and brochures, customers of the
competitors, tradeshows and exhibitions
and competitors’ employees.
ENVIRONMENTAL ANALYSIS
There are two ways to establish competitive
advantage; do things better than others or do them
differently - Karl Albrecht
Factors that increase supplier’s power
Raise prices without affecting demand
Can reduce quantity supplied
Can coorperate formally or informally
Few substitutes are available
Their ‘product’ is critical to end product
Can impose switching costs on cutomers
Have potential to integrate downstream
Climate/Context
This is basically PESTEL analysis. It
examines the macro environment
thus focusing on political, economic,
social, technological, ecological
and legal environments. Political
and regulatory environments focus
on governmental policies and
regulations that affect the market
whereas the economic environment
examines the business cycle,
inflation rates, interest rates, and
other macroeconomic issues. Social
and cultural environment examines
society’s trends and fashions.
Technological environment on
the other hand analyses new
knowledge that makes possible
new ways of satisfying needs and
the impact of technology on the
demand for existing products.
Conclusion
To sum up, it is important to learn about the internal and external factors that
can affect the project or strategy during planning. By working through each of
the above models of environmental analysis, it is possible to identify internal
and external advantages and disadvantages which could benefit or hinder
the outcome of a planned project thus making a difference to the success or
failure of a project. By knowing this information, it can be possible to plan a
successful project that is ready to work around certain problems effectively
and to avoid failure. It is a good idea and excellent practice to work through
the situation analysis with a team in the early stages of a project or strategy
planning. Brainstorming is a great way of introducing all the relevant internal
and external factors for each section of the analysis.
If yo don’t have a competitive advantage,
don’t compete. Jack Welch
ENVIRONMENTAL ANALYSIS
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KASNEB NEWSLINE, Issue No. 1, January - March 2015 13
Gabr
iel N
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Introduction
As the trading landscape
becomes increasingly
international, exchanges
are cross listing each other’s
securities in a cooperative bid
to boost liquidity and increase
trading volume. The hope is that
these arrangements tap into a
latent demand suppressed by the
complexity of trading on a foreign
exchange.
Cross listing of shares is when a
firm lists its equity shares on one
or more foreign stock exchange in
addition to its domestic exchange.
Generally, such a company’s primary
listing is on a stock exchange in
its country of incorporation, and
its secondary listing(s) is on an
exchange in another country.
Cross-listing is especially common
for companies that started out in a
small market but grew into a larger
market.
The main purposes for cross-
listing are more oriented towards
corporate governance matters
(accounting standards, investor’s
rights protection, better media/
analyst coverage, visibility to clients
and suppliers), but also towards
the access to easier and more
competitive financing conditions.
While cross-listing has some major
advantages, it also has its share
of disadvantages. Ultimately, the
decision to cross-list will depend
on whether the pros outweigh the
cons.
Cross Listing Pros and cons
KASNEB NEWSLINE, Issue No. 1, January - March 2015 14
CROSS LISTING
This article discusses some of
the main pros and cons that any
company wishing to cross-list will
have to address.
Motivations to cross-listing
A number of arguments have been
advanced for cross listing. These
include:
(i) Cross-listing enables listed firms to trade shares in foreign markets
This is the most obvious of
motivations to cross-list. Cross-
listing refers to the listing of a
company’s ordinary shares on a
different exchange other than
its original stock exchange. For
example, a company might list
its equity shares on a foreign
stock exchange in addition to its
domestic exchange. For a company
to be permitted to cross-list, it must
meet the same requirements as
other listed companies. These are
basic requirements for share count,
filing requirements for financial
reporting, accounting principles
and firm revenues.
(ii) Increased market liquidity
Cross-listing enables companies
to trade its shares not only in
numerous time zones and multiple
currencies but also in deeper and
more liquid markets. This increases
the issuing company’s liquidity and
gives it more ability to raise capital.
Foreign companies that cross-list
in the United States of America, for
example, do so through American
depository receipts. This term
applies to foreign companies that
seek to list their stocks on United
States-based exchanges.
By virtue of being listed on different
exchanges, a firms’s stocks are
automatically exposed to more
investors. If a such a firm wishes to
raise additional equity capital, they
have a wider market of potential
investors.
(iii) Market segmentation
investor markets into segments
which are easy to access.
(iv) Lower cost of capital
The traditional argument for why
firms seek a cross-listing is that they
expect to benefit from a lower cost
of capital that arises because their
shares become more accessible
and available to foreign investors
whose access would otherwise be
restricted because of international
investment barriers.
(v) Disclosure
Cross-listing on a foreign market
can reduce the cost of capital
through an improvement of the
firm’s information environment.
Firms can use a cross-listing on
markets with stringent disclosure
requirements to signal their quality
to outside investors and to provide
improved information to potential
customers and suppliers (for
example, by adopting US GAAP).
Also, cross-listings tend to be
associated with increased media
attention, greater analyst coverage,
better analysts’ forecast accuracy,
and higher quality of accounting
information.
Stringent disclosure requirements
invariably forces firms to adhere
Market segmentation
is the practice of
dividing a large market
into clear segments
with similar needs.
Cross-listing enables
firms to divide foreign
to high standards of corporate governance. The
effects of this realignment is ultimately improved
performance which consequently leads to
desirability of the company shares and therefore
demand.
Better investor protection
Increase in accounting governance standards
Better media/ analyst coverage
Reduce transactional costs
Render access to capital markets
Corporate governance
Reduce the risk
Reduce volatility
Lower cost of capital
Increase companies valuation
Increase prestige
Increase liquidity and volumes
Increase visibility(clients and Supplies)
Diversify shareholding
More clients and investorsForeign cross-listing
KASNEB NEWSLINE, Issue No. 1, January - March 2015 15
Cross listing definitely enhances
a company’s visibility and image.
Cross-listed companies feature
a lot more in media reports on
stock performances and are
more likely to be etched in the
minds of customers. This helps in
entrenching the brand name. With
an enhanced image and visibility
comes increased sales. Cross-listing
therefore boosts the advertising
and marketing campaign.
(vi) Investor protection
Cross-listing on exchanges that
are subject to higher standards
of compliance acts as a bonding
mechanism used by firms that
are incorporated in a jurisdiction
with poor investor protection
and enforcement systems. These
companies commit themselves
willingly to higher standards of
corporate governance. Investors
will therefore feel safe to invest in
these companies because their
investments are protected. In this
way, firms attract investors who
would otherwise be reluctant to
invest. Because of bonding, cross
listing will, for instance, reduce
the extent to which controlling
shareholders can engage in
expropriation over minority
shareholders.
(vii) Risk diversification
Given that changes in economic
and market conditions in a country
affect stock prices, the impact
of such changes will not be felt
in equal measure in a different
country or political jurisdiction.
Thus companies cross-list to
diversify risk. Adverse trends in
a given jurisdiction are offset by
positive trends in another market.
Therefore, cross-listed companies
are insulated from the impacts of
fluctuations of market conditions.
The case is even stronger for
companies that have subsidiaries
in different jurisdictions and have
merged and operate in different
countries where their stocks are
listed.
(viii) Increase in value
Different stock exchanges have
different characteristics and
efficiency levels. This has been
observed to have an effect on
stock valuations. In fact, there is a
vast amount of literature on the
impact of cross-listings on the
value of the cross-listed firms. For
instance, most studies find that a
cross-listing on a U.S. stock market
by a non-U.S. firm is associated
with a significantly positive stock
price reaction in the home market.
This finding suggests that the stock
market expects the cross-listing to
have a positive impact on a firm’s
value. This certainly increases the
demand.
In the US, studies have shown that,
such a firm will enjoy value addition
of up to 16.5% in the domicile
country upon cross-listing.
(ix) Increased publicity
Finally, cross listing would also
benefit a company as a result of
increased publicity. This is a key
benefit as such company would
incur lower costs in attempts of
winning consumer confidence
in the prevailing competitive
markets. For instance, consumers
will willingly purchase products of
cross listed company, but will also
want to invest in such a company
through share acquisition.
(x) Other motivations
Cross-listing may also be driven
by product and labour market
considerations (for example, to
increase visibility with customers by
broadening product identification),
to facilitate foreign acquisitions,
and to improve labour relations in
foreign countries by introducing
share and option plans for foreign
employees.
Impediments to cross-listing
In spite of the many compelling
reasons to cross-list, there exists
another side to the coin. This
explains why most firms avoid cross
listing or seek deregistration after
being cross-listed.
(i) High costs
The main impediment to a foreign
cross-listing results from its cost.
We may point out two types of cost:
direct and indirect. Direct costs
correspond to expenses incurred
for the listing process (mainly listing
charges and fees for advisors),
whereas indirect costs include
commitments for the company to
abide by the local laws.
Nowadays, most of costs regarding
a foreign cross-listing stem from
the obligation to comply with
different international accounting
standards such as GAAP and IFRS.
For instance, in the USA, the costs
of keeping an ADR compliant
with the Securities and Exchange
Commission (SEC) regulations have
become increasingly annoying
and demotivating, even for the
biggest European companies.
This non-negligible element
may thus become a “financial
border” between small and large
CROSS LISTING
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been advanced by critics of cross-
listing.
(iii) Overexposure to rivals
Critics of cross-listing argue
that, the increased need for the
investor’s protection requires
excessive disclosures which may
indirectly harm the company.
Detailed information availed in
the public domain is likely to be
utilised by rival companies on the
competitive front to the company’s
disadvantage. Apart from that,
disclosures are expensive to
prepare and consequently, they
consume valuable time which
could be used for more productive
activities.
Conclusion
Generally, cross listing creates a truly global
marketplace with great breadth of product
and geographic reach that benefits all
investors, issuers and shareholders. For
exchanges, any cross-listing that is enticing
to investors creates a new revenue base at
a relatively low cost. As the proliferation
of cross listed securities occurs, it adds
another choice to the investment menu
of how to gain exposure to a market. For
a company, the decision to cross-list or not
rests with the managers. For a decision to
be reached, the managers will need to do
a thorough appraisal of the pros and cons
balancing the needs of all stakeholders.
companies, these last ones being the only
ones that could afford such expenses.
(ii) increased reporting and disclosure requirements
High barriers set by foreign listing
requirements have been cited by most
managers as an impediment to cross listing.
In the USA, for instance, the introduction
of ‘Sarbanes Oxley Act’ imposed strict
rules for companies wishing to cross-list
in the country. Cumbersome SEC rules in
the US have also resulted in companies
deregistering, in most cases, within one
year after cross listing. Increased pressure
on executives due to closer public scrutiny
and additional scrutiny by analysts in
advanced market economies have also
CROSS LISTING
KASNEB NEWSLINE, Issue No. 1, January - March 2015 19
Have you ever realised that it
is not always true whenever
customers tell you that
they are unable to settle their
debts? What they really mean is
that they have other priorities. They
sometimes use the poor cash flow
excuse as a ploy to gain sympathy
from you to avoid payment.
Naturally, there are customers
who are having difficulty and their
cash flow is weak. We should be
realistic in our collection efforts and
acknowledge this fact. But in many
cases, the customer will have other
obligations they have to meet
before settling their invoices. These
may include employees’ salaries,
employees’ benefits, facility
expenses and government taxes.
The challenge for the collector is
to determine which one of the
customers is truly short of money
and which one is using it as an
excuse not to pay immediately.
One of the methods is to inquire
about the condition of the
customer’s debts. This is not a
conversation to be held with the
accountant but rather with the
owner, a partner or a senior manager
of the corporation. The issue should
be approached as “looking for ways
to help the customer resolve their
debt situation so that they can
meet their obligations”.
Often times, the collector is
unaware or forgets that counseling
is a significant element of collection
along with negotiation and
empathy. Therefore, whenever
the customer informs you that
they do not have money, your
response should be something
along the lines of “if there was a
source of money, one that you have
overlooked, and it could take care
of our invoices and perhaps some
of your other obligations, would
you be interested in discussing this
further?”
This is a pretty straightforward
question and one that an owner,
partner, or senior manager will
have to answer with either a “yes”,
“no”, or perhaps a question such
as “what do you mean by that?”
The last choice may indicate the
customer is suspicious but it places
the collector in a position to follow
up with something like “we deal
with this type of unfortunate
situation quite often and we are
pretty good at helping firms such as
yours find the money to meet their
obligations. I wanted to know if you
are interested in discussing ways of
handling this that you may not be
aware of.” Eventually, they should
respond with either a “yes” or a “no.”
and options for debt recovery
Was
ilwa M
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el Cr
eder
Cred
it M
anag
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Naturally, there are customers who are having difficulty and their cash flow is weak
Debtors traits
KASNEB NEWSLINE, Issue No. 1, January - March 2015 20
DEBTORS TRAITS
If it is yes, then you know they
are willing to work with you, and
they can still be considered as
customers. If the answer is no, they
have informed you that they are
not willing to work with you and
they have changed their status
from customer to debtor.
Therefore, one of the first things
you should establish in the early
collection stage is whether the
individual or firm that owes you
money is a customer or a debtor.
If you pay close attention, there
are underlying traits that will
distinguish the customer from the
debtor.
Customer traits:
• Accepts your phone calls
or returns them within a
reasonable time
• Responds positively to your
requests for information
• Talks to you about the reasons
they cannot pay
• Keeps the promises they make
• Pays your invoices, perhaps not
in full but they pay something
• Are open to your suggestions.
Debtor traits:
• Do not take or return your
phone calls
• Never provide the information
you request
• Will not give you any
information as to why they are
not paying
• Break their promises
• Issue bouncing cheques
• Curse or scream at you
• Cannot speak or understand
your language unless they
are placing an order or want
something
• Take unauthorised deductions
• Make false accusations to your
superiors as to how you have
handled them
There are times when you have
done your best to collect but still
are unable to motivate the debtor
to pay.
When dealing with a customer
you should always seek assistance
from within your organisation.
This may be a subordinate, a peer,
or a supervisor. It could even be
someone outside the credit and
collection department, anyone in
your organisation who has a good
rapport with the customer and
can motivate them to pay your
invoice. Customers should never
be turned over to or contacted by
anyone outside your organisation
for payment.
If you have identified the
delinquent as a “debtor”, that is
an entirely different situation and
the quicker you transfer the debt
over to a third party, the better the
chance you have of getting paid all
your dues.
When dealing with debtors, there
are several choices available to
you. The following examples of
choice are in the order of the least
to the most expensive and, not
surprisingly, from the least likely
to produce payment to the most
likely.
Debtors may curse or scream at you
Debtors often do not take or return your phone calls
KASNEB NEWSLINE, Issue No. 1, January - March 2015 21
Collection letters
Collection letters are generated
by the organisation. They follow a
time sequence, say at least twice
in the month. The first letter is
usually to clear any problems and
discuss the date and amount of the
next payment before it is due. The
second one should be to come up
with the payment arrangement i.e.
post collection or bank transfer.
Credit reference bureau listing
The main function of a credit
bureau is to maintain records to
assist in obtaining information
regarding the credit status of would
be borrowers. The information
relating to consumer credit would
be, records of court judgments in
the last six years, credit information
on current and unsettled accounts
with member companies,
information given by other traders
regarding bad repayments trends,
records of bankruptcies and
administration orders, cautions or
notices to auctions, satisfaction
of judgment and auction notices.
Listing in reference bureau will
affect the way the debtor conducts
business as they may end up
being denied credit or get it very
expensively.
Collection agencies
Collection agencies offer the best
odds of obtaining the most net
money even after their fees are
deducted. It is always advisable
to hire a collection agency that
specialises in collecting debts in the
industry you are in. Often they have
encountered the debtor before and
know who to speak with and how
to motivate them to pay.
When using a collection agency, it
is wise to investigate their practices,
obtain references along with copies
of their registration certificates.
Remember that if you contract a
collection agency, you are liable for
whatever actions they take against
the debtor.
A reputable collection agency
should be a member of the Institute
of Credit Management (ICM-K).
It is a good idea to verify their
membership if they claim to be a
member of this organisation.
Court process
It needs no emphasizing that legal
action should be taken as a last
resort. One should be able to obtain
judgment without employing
the services of a lawyer or even
attending the court. Heaving action
Possible seizure of debtor’s personal
assets by debt recovery solicitors
Personal visits by collection
agents
Written friendly reminders and recall phone conversations
Official letters before action
What is a debt collector -
strategies and recovery
attempts?
Court actions and legal
proceedings
DEBTORS TRAITS
Court action offers the last hope in debt recovery
can be taken by return of goods when a
fixed date summons is applied for or a
money judgment when a default summon
is applied for.
When a fixed date summon is issued and
served on the defendant, the court fixes
a date for the hearing of the claim. The
defendant may chose to attend court or
not and or dispute the details. In this case,
a sworn affidavit can then be sent to court,
giving the exact details requesting court
to enter judgment in the plaintiff’s favour.
A copy of the sworn affidavit must also
be sent to the debtor advising him that
evidence is submitted to court.
When a default summons is issued for a
money judgment, and no defense or offer
is received from the defendant within 14
days, a written request is then made to the
court for judgment to be entered.
Once judgment has been entered
and payment is not made, action
is made by way of warrant of
execution or by applying to the
court for an attachment of earnings.
This is paid to the court and then
to the trading company on a pre-
arranged method.
Write off the account
Actually, this option can be the
least expensive depending on the
gross margins.
This option is only recommended
when the balance is small and will
cost more to collect compared to
what is recoverable. Some firms
choose to write off balances that
are in dispute especially from key
or major customers. The risk in
doing this is that we may encourage the
behaviour that created the initial write-off.
In a nutshell, whichever option we take, it
should be made within a reasonable time,
usually within the first 45 days after the due
date. The longer we wait to initiate action,
the harder it becomes to collect. Many
organisations have very old debts in their
books and are unaware of what to do with
them. The options presented in this article
are worth trying if organisations are to
recover what they are owed.
LEVELS I & II
2014 GRADUATION CEREMONY
DEBTORS TRAITS
LEVELS I & II
2014 GRADUATION CEREMONY
KASNEB NEWSLINE, Issue No. 1, January - March 2015 25
INTRODUCTION
Since time immemorial, good
human values require every
person to be considerate of
their neighbour as they go about
their daily activities.
Thus before carrying out an activity
of any type – socio-economic or
otherwise – one should ask what
impact, negative or otherwise, this
activity is likely to have on a third
party within the proximity of the
environment and beyond.
This is a topic that should be of
interest to everybody because no
one lives on an island. We all live in
some environmental context and
our activities invariably have an
effect on it, no matter how small.
Thus the topic on externalities.
EXTERNALITIESMEANING, TYPES, CAUSES, CONSEQUENCES AND SOLUTIONS
MEANING OF EXTERNALITY
An externality may be defined as
a consequence of an economic
activity that is experienced
by unrelated third parties. It is
therefore important to appraise
your environment and consider
who or what is in it and what
activities take place in it. Try to
relate these to the activities in the
diagram below.
If you are in business in this
environment, you may not be the
only one. Activities of others that
affect your operations are external
to your internal activities. Just
find out how population growth
in the environment in which your
business operates influences your
business growth. What about
the socio-cultural activities of
the population on your business.
You can go on and on examining
how economic, political, legal
technological and global activities
affect your business operations
and growth. These activities are
in your environment just as you
and your business are in the same
environment. Ask yourself how they
affect you or how your activities
affect theirs and explore any need
to cooperate with the others for
mutual optimal outcomes.
Jam
es M
ajiw
a, CP
A gra
duat
e, Le
cture
r, Kisu
mu P
olyte
chnic
KASNEB NEWSLINE, Issue No. 1, January - March 2015 26
directing it at
the university
administration,
with whom they
have grievances,
they end up
hurting people who
have nothing at all to
do with their issues. This is
clearly uncalled for and bespeaks of
a people who have no compassion
for their neighbours.
Large aircrafts taking off or landing
emit loud noise which in some
cases causes stress and creates
fear in residents of neighbouring
estates. It means that nobody cared
about location considerations at
the design stage of the airport
or airstrip. The government
could probably have considered
relocating the residents or
reconsidered the location of the
landing zone depending on who
occupied first.
Examples of negative externalities
abound in our environment and we
could go on and on.
POSITIVE EXTERNALITIES
Let us start by asking a few
questions to help us understand
positive externalities.
Does your family benefit from
a carpentry workshop in the
neighbourhood?
Does a maize farmer benefit
from a slaughter house in the
neighbourhood?
Who of the parties benefits from
the other in the neighbourhood –
the maize farmer or the bee farmer,
the dairy farmer or the livestock
farmer? Your answers are as right
as mine.
If we all became aware of how
each person’s activities affect their
neighbours, and acted responsibly,
we all would be a happier lot.
Take another look of a well-
educated and trained population
and neighbourhood from which a
company draws its workforce. This
company will enjoy benefits of high
productivity and low industrial
strife. Such workers are likely
to be good time managers and
diplomatic in case of any industrial
dispute hence a source of industrial
TYPES OF EXTERNALITIES
An externality can be a cost or a
benefit to a third party resulting
in either a negative or positive
outcome.
NEGATIVE EXTERNALITIES
Let us look at a few examples of
negative externalities to deepen
our understanding.
Pollution is one of the most
ubiquitous negative externalities.
Examples include emissions of
toxic gases and effluents from
factories, dumping of garbage in
undesignated places by factories
and homes and so on. These
activities not only create eyesores
but also pose serious health hazards
to residents in the neighbourhood.
A cattle herder who cannot
control his animals and lets them
loose to feed on flowers and
crops of neighbours becomes a
nuisance and a statistic of negative
externalities.
Think of the university and college
students who wreck havoc on
innocent motorists as a way of
ventilating their anger. Instead of
Transport externalities
Barrier effect (communities severed
by roads or rail)
Accident-related damage
Dust particles
NoiseCongestion
Water pollution
Local air pollution
Green house gases
Ecological impact
Visual blight
Building vibration damage
Oil spills
Consumption
Medicine
Health education
Public transport
Hygiene
Attractive environment
Human resource Development
Research and developmentProduction
Production
Pollution
Consumption
Positive externalities
Externalities
Negative externalities
Air
Land
Water
Noise
Smoking
Litter
Noise
Anti-social
behaviour
Congestion
Intensive farming
Development
Crime
Examples of positive and negative externalities
EXTERNALITIES
KASNEB NEWSLINE, Issue No. 1, January - March 2015 27
EXTERNALITIES
peace in the work environment.
What a blessing!
Imagine you were using demand
and supply curves in your
analysis of negative and positive
externalities and started from
a market equilibrium position
when all resource allocations were
optimal, answers to the following
questions would add great values
to your stock of knowledge in the
subject area - I can bet that if you
try them and go wrong, you will not
be penalised.
Assuming unchanged demand
(ceteris paribus) for the product of
the producer, what impact would
a negative externality have on the
producer’s supply curve? The price
he will charge for what he sells?
Diagram 1 helps to illustrate this.
Keen observation would show that
that an externality to a producer
or supplier would force him to
produce and supply less causing
his supply curve to shift inwards to
the left from S2 to S1. As a result
of this, Market Quantity Equilibrium
falls from Q30 to Q20. By extension,
this would cause the Market
Equilibrium Price to rise from P5 to
P10. Guess who would suffer most
between the suppliers and the
consumers of this product because
of the externality.
Now take a case of a positive
externality. Assuming a state
of unchanged demand for the
product, a positive externality
would confer benefits of reduced
production costs on the producer.
As a result of this, guess what would
happen to the producer’s supply
curve, his market equilibrium point,
market equilibrium quantity and
his market equilibrium price. Don’t
forget to ask yourself who between
the consumer and the producer of
this product would benefit most.
Justify your argument for the
position you have taken in this case.
Diagram 2 below shows that the
positive externality which has
caused a reduction in production
costs for a product has induced the
producer to hire more factor inputs
for more production of the good.
Given that demand for the product
remained unchanged, increased
supply of the product from Q30 to
Q45 caused by an outward shift in
supply curve from S2 to S3 would
cause the equilibrium price to
fall from P5 to P2. This will greatly
benefit the consumers as their
welfare would be enhanced.
CAUSES OF EXTERNALITIES
An externality arises when a
person engages in an activity
that influences either adversely
or otherwise the wellbeing of a
bystander. In this case, neither the
source of the externality pays nor
is compensated by the recipient of
the externality nor is recipient of the
A production externality
initiated and received in production
A mixed Externality
Initiated in produc tion but received in consumption
A CONSUMPTION EXTERNALITY
Initiated and received in consumption
A MIXED EXTERNALITYINITIATED IN CONSUMPTION BUT
RECEIVED IN PRODUCTION
As a negative externality
Example
The
discharge of radioactive
waste from a nuclear power station enters the food chain an makes local
meat unsaleable
As positive externality
Example
A firm offers training to its
workforce which increases their
skills; other firms benefit when the workers change
jobs
As a negative personality
Example
A firm sells sweets to children
which causes tooth decay,
toothache and extreme discomfort
As a positive externality
Example
A DIY store landscapes an
adjacent stretch of wasteland
enhancing the attraction of the area for all who
pass by
As a negative externality
Example
A minority of rowdy impolite
students in class talk amongst themselves,
thus preventing the majority of well behaved students from
learning
As a positive externality
Example
A person gets vaccinated against a
contagious disease and
prevents it from spreading to other people
As a negative externality
Example
People drink excessive
amounts of alcohol which impairs their
health and thus their efficiency
at work
As a positive externality
Example
A firm’s employlees spend their
lunch breaks at a fitness centre;
their health is improved
which enhances their efficiency
at work
External cost
Externalbenefit
External cost
External benefit
External cost
External benefit
External cost
External benefit
THE VARIOUS KINDS OF EXTERNALITY
1 2 3 4 5 6 7 8
Diagram 1 Diagram 2
KASNEB NEWSLINE, Issue No. 1, January - March 2015 28
externality paid or compensated for
the effect of the externality. When
a market outcome affects parties
other than the buyers and sellers
in the market, side-effects created
are called externalities. Externalities
cause markets to be inefficient and
thus fail to maximise total surplus or
profits to producers. To consumers,
total utilities from the use of a
product affected by an externality
may be less or more than is socially
desirable because the externality
has resulted into production that
is either less or more than socially
desirable.
EFFICIENT FREE MARKET
If there were no market failures,
the Market Price Mechanism would
operate through free forces of
Supply and Demand to facilitate
optimal resource allocation. In such
situations, we would be living in
a Utopian World. In such a world,
each product would have many
buyers and sellers where none
would have domineering influence
in the market. Such a product would
be technically and economically
homogeneous. The buyers of the
product in this market as well as
suppliers of the product would be
all knowledgeable of the market
situation and would not rely on any
influence through advertisements
and other inducements to buy or
produce a good. All participants in
such a market enjoy zero transport
costs as if located at the same point.
Of course, only a single uniform unit
price prevails in the whole market
for the product. You can imagine a
market in which not even a trace of
government influence or directive
is heard of. In such a wonderful
market, the producers will freely
enter the market and partake of
the super-normal profits. They
would enjoy the same freedom
to vacate the market if evidences
abound that firms in the market
reap only losses. Of course each
firm would evaluate if it generates
revenue above or at or below its
variable costs in the light of losses
before taking a decision to quit or
continue producing and selling. In
such a market, optimal resource
allocation would be achieved when
producers charge a price equal to
the firm’s Marginal Costs.
MARKET FAILURES AND EXTERNALITIES
From the typical utopian market
alluded to above, we can guess with
much confidence what a failed (or
call it an imperfect) market would
look like. In such a market:
There would be fewer buyers and
fewer sellers, this number going
as low as one on both sides. Here
you will meet a monopsonist who
takes pride for being the sole
buyer of a commodity or factor.
He pays the lowest price below
his marginal costs but justifying
the use of marginalist principles
in setting his price to exploit the
seller of the product or factor. In
his neighbourhood, you will come
across a monopolist bragging to be
the only seller of a product, fleecing
the consumers with impunity.
Yes! In an imperfect product or
factor market you will enter a market
gate and meet heterogeneous or
differentiated products or factors,
the reasons for which traders will
justify charging price differentials
because each seller enjoys some
degree of monopoly.
Once you hear of a monopolist or a
monopsonist or their monopolistic
competitors, you would be sure
of restricted mobilities into or out
of a factor or product market. The
monopolist will even show you why
he would charge different prices
for different buyers for the same
quantities of the same product. This
will be because he can segment his
product market into income blocks.
Of course he will never charge
marginal cost price just as his friend
the monopsonist would not pay
the marginal wage rate for labour
or marginal interest rate for capital
or marginal rent rate for land that
he buys.
In an imperfect market, both
consumer and producer ignorance
abound, made worse by powerful
advertisements whose contents
may not make the buyer any better.
Existence of economies of scale
in the hands of a few by virtue of
natural or acquired or stolen (or
Money
Consumer
Cost imposed on others involuntarily or benefits received free
Consumption external cost or benefit
Production external cost or benefit
Firm
A product
Voluntary Exchange
EXTERNALITIES
KASNEB NEWSLINE, Issue No. 1, January - March 2015 29
EXTERNALITIES
illegally purchased) endowments
renders buyers prone to
exploitation.
Sometimes, it may not be surprising
to find impunity and law of the
jungle operating in a market where
there is a failed administrative,
judicial and police systems. In a
such a situation, aggrieved buyers
or sellers do not get justice.
SOLUTIONS TO EXTERNALITIES
How would externalities arise in
such situations of failed market
systems? Cases of environmental
degradation – on water, in the
air and on land - are a common
sight. Charcoal burners and sand
harvesters continue to benefit at
the expense of the environment
and the community at large.
In the case of a negative externality,
it is only fair that a party that
suffers consequences should be
adequately compensated either
directly or indirectly by the source
of the externality. Similarly, a
party that benefits from a positive
externality should feel obligated to
reciprocate in some way.
The extent of the damage or benefit
of the externality in question should
have a way to be measured. This will
make it possible to determine the
amount of penalty to be paid by the
source of the negative externality
and extent of compensation to the
party that suffers from it.
Similarly, it will make it possible
to determine how much the
beneficiaries from positive
externalities need to cough
out to subsidise the source of
this externality. The bee farmer
definitely benefits from the
Maize farmer and so does the
Maize farmer benefit from the
bee farmer. The two can be good
friends absorbing the effects of the
externalities without requiring any
compensation from each other.
It is very important that every
government should have a clear
and effective public policy on
externalities to promptly deal
with the problems of externalities.
When externalities are significant
and private solutions are possible,
the government should through
relevant Acts of Parliament,
regulations and by-laws prohibit
or regulate activities that cause
harmful externalities. These could
come in the form of command-
and-control policies or market-
based policies applicable to
firms, individual producers and
consumers. Those who fail to
comply should face the full force of
the law.
Because the effects of externalities
generated in an area or a country
or a region may spill over to
the neighbouring countries,
part of solutions to deal with
such externalities must include
inter-governmental or regional
cooperation and policy integration.
Use of fiscal measures - taxes to
deter negative externalities and
subsidies to encourage positive
externalities has been quite
effective. When an anti-pollution
law or regulation has specified a
maximum limit of waste discharge,
any firm exceeding this limit may
be forbidden from continuing
the excess discharge or may be
prosecuted and fined appropriately
or may be instructed to install
pollution abatement equipment
or otherwise stop its activities all
together.
Think of cases where activities of a
firm generate positive externalities
in a community’ such as the
construction of a cattle dip. This
would definitely reduce incidences
of tick borne diseases. More milk
and healthy beef would also follow
as a result. The owner of such a
cattle dip needs to be compensated
KASNEB NEWSLINE, Issue No. 1, January - March 2015 30
by way of charging
some amout to the
users. In both cases,
externalities would
have been internalized.
The Coase Theorem
(Coase1 (1960) states
that if private parties
can bargain without
cost over the allocation
of resources, then
the private market
will always solve
the problem of
externalities on its own
and allocate resources
efficiently. If the victim
of an externality can
negotiate with the
source of externality
on how the effect of
the externality can be
minimised, the better.
What negotiation can
you have with your
neighbour who always
arrives back home
drunk and very noisy in
the dead of the night?
If negotiation fails, an
alternative course of
action can be resorted
to. Either the source of
externality can be sued
in court for being a
public nuisance or the
victim can move out
of the place to a more
convenient area. When
these options fail, the
Law of the Jungle is
unfortunately likely to
be applied whereby
the source of the
harmful externality will
be forcefully ejected
out of the particular
environment.
The effects of a dump site for instance affects many people in different ways. It is an eyesore and a health
hazard, it degrades an estate and it eats up space that could be used in other ways. But a dumpsite is
also a source of reveune for garbage collectors and recyclers. The victims and beneficiaries of the dump
site could co-operate for mutual benefit. Those who view it as a nuisance could pay those who benefit
from it and everybody will be happy in the end. As a result both sides would have internalized the
externality.
Ultimately, an appropriate solution to impacts of an externality should strike a fair balance between
the source and the affected with each party sincerely and willingly obligated towards the welfare of the
other. What a wonderful world it would be!
EXTERNALITIES
KASNEB NEWSLINE, Issue No. 1, January - March 2015 34
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Introduction
Every organisation invests
heavily in information
communication technology
in anticipation that this will in
turn provide value addition and
competitive advantage. In view
of the numerous challenges
that businesses face amidst
deteriorating markets, inability to
respond swiftly to ever-growing
customer demands and rising
costs of doing business, ICT plays a
pivotal role in enabling businesses
to tap into new markets and cut
down on operational costs.
There are many challenges
associated with file conversion
— also known as data migration.
First, the amount of data to be
migrated is increasing as quickly
as storage capacity grows. Second,
file conversion is problematic for
most users. Third, applications
need 24/7 data availability, so that
IT departments have only narrow
downtime for essential system
maintenance and don’t want to
“waste” this time converting data.
Definition
In computing, the term “file
conversion” applies mostly to
changing the format and place
where the data is stored so it can be
readable and accessible in another
system. Any time an organisation
buys, changes or upgrades its
computer system, the need for
data migration arises and hence the
need for file conversion.
Legacy system
This is an old method, technology,
computer system, or application
program which may not have web-
based capabilities whose cost of
replacement is high if not carefully
considered.
CRITICAL SUCCESS FACTORS IN
FILE CONVERSIONFILE CONVERSION
Erne
st M
adar
a, Le
cture
r, IT c
onsu
ltant
, KCA
Univ
ersit
y
KASNEB NEWSLINE, Issue No. 1, January - March 2015 36
FILE CONVERSION
Systems development life cycle
SDLC is a logical sequence of
activities used to identify new
systems needs and to develop new
systems to support those needs.
SDLC is a model for reducing risk
through planning, execution,
control and documentation of key
activities.
Implementation Phase
Depending on whether the
system is a bespoke solution, that
is, a consultant or a programmer
developing a system from scratch
or an off-the-shelf (OTS), that is,
a system that is ready made and
readily available from the outlet
stores, implementation phase
stands out as a critical success
factor. Among the activities that are
carried out include the following:
• Site preparation
• Acquisition of hardware and/
or software
• Installation of hardware,
software and/or network
• User acceptance testing
• End user training
• File/data conversion(data
migration)
• Changeover
Data Purging
This is the deletion of inactive, old
and obsolete data. For example,
you may delete all one-time
customers or those for which there
were no transactions in the last two
years, also delete unused materials.
Data Cleansing
This process corrects data
inconsistencies and ensures the
integrity of the existing data during
the migration process. For example
removing duplicate accounts for
customers, suppliers or accounts
in the chart of accounts, electricity
expenses and lighting expenses.
DataMapping/
Assessment
FinalMigration
TestMigration
MigrationValidation
DataCleansing
PostMigration
Data Newerthan N-1 Days
Not Purged Data Purged
DataDeleted
Data CopiedOlder than
N days
Archive Data
KASNEB NEWSLINE, Issue No. 1, January - March 2015 37
FILE CONVERSION
Any of the above steps either singly
or jointly contribute immensely
to system failure. We are paying
attention to file conversion because
most organisations don’t give
the due attention or seriousness
it deserves. File conversion is
a messy, time-consuming and
difficult undertaking. Some surveys
quote that 84% of file conversion
projects fail. A survey of UK-based
financial services firms found that
72% of organisations deferred
moving applications because file
conversion is ‘too risky.
Factors driving File Conversion
Technology refresh - replacing
a server with a new one - is
the number-one driver of
file conversion, followed by
consolidation and relocation.
The storage hardware and server
replacement involved in technology
refresh, coupled with the expiration
of storage equipment leases, means
that ICT managers have to move
data on a regular basis. In addition,
storage and server capacity are
acquired at a rate typically ranging
from 25 to 50 percent annually to
accommodate data and application
growth. So, every year - or even
more often - a typical organisation
acquires storage technology to
replace file servers on which lease
or maintenance agreements are
expiring, and it acquires additional
capacity to accommodate
anticipated growth. It can be an
exercise that can last a few minutes,
days to months for example
upgrading from a lower version to a
higher version of a similar software
platform, moving from a manual
to computerized environment
or a switch from one software to
another for example from brilliant
to sage pastel.
Reasons why file conversion is bound to fail
• Failing to engage the business
users at the outset.
• Absence of data governance
policies and organisational
structure.
• Poor data quality in a legacy
system.
• Neglecting to validate and
redefine business rules.
• Failure to validate and test the
data-migration process.
• Employees entrusted with
a data-migration project
lack industry best-practices
experience.
• Your team relies too much on
the tools of the job.
• Attempting to go live in one
big upload at the end.
• Budget overruns due to
inadequate scoping or
preparation at the start.
File conversion is usually part of
a larger project deliverable, and
typically the majority of business
attention is focused on the package
selection and configuration rather
than on ensuring that the data
that populates the new system is
fit for the purpose. Choosing the
new system is an exciting, strategic
business activity that usually entails
working with new technologies,
suppliers and opportunities.
IT BUDGETSHORTFALL
DATA GROWTH
2011 2012 2013 2014 2015
EFFECT OF DATAOPTIMIZATION
IT BUDGETS
COST OF STORAGE/GB
Data and schema analysis
Test, test, test
Define formats, rules and workflows
Verify transformations
Transform data
Export/ import data
KASNEB NEWSLINE, Issue No. 1, January - March 2015 38
FILE CONVERSION
Costs associated with file conversion
• Unplanned downtime
• Delaying the purchase of new,
better storage
• Lease overruns
• Overpaying for capacity
• The need for additional
storage hardware
• Exceeding planned staff time
• Exceeding file conversion
budget
• Exceeding scheduled
downtime
• Lack of validation procedures
to ensure data integrity.
The success or failure of file
conversion is dependent on the
activities and management of
issues before file conversion, during
file conversion and the time after
the file conversion
Before file conversion
Many issues arise before any
migration process actually starts.
That doesn’t sound too good. But
the optimistic side is that they can
also be solved before they turn
into any serious consequences.
Thereupon, every file conversion
has to be preceded with responsible
preparation, considering especially
the following issues.
Specialists needed
One of the most important and
common problems with file con-
version is the fact it is disregarded
by company management, whose
representatives don’t pay enough
attention to the importance of file
conversion projects. They consider
it one of many routine tasks which
IT employees should be able to
pass through without any special
help or support. Unfortunately,
this is not the case. File conversion
isn’t just a matter for the IT depart-
ment. It is a process which involves
almost every employee across the
organisation. Therefore it requires
engagement not only from IT, but
also from experts from other de-
partments, data users and others.
What else is needed is to allocate
powerful system resources to file
conversion so it could be completed
quickly and efficiently.
Unreal scoping and budgeting
It is extremely important not to
underestimate the cost of file
conversion - looking for savings
on this stage is suicidal. The same
is to scoping - underestimating
the number or intensity of things
which have to be done makes file
conversion longer than predicted
and, therefore, much more
annoying to data users across the
organisation.
Data inconsistency and lack of management strategies
It definitely isn’t easy to keep
data quality on its highest level.
However, it is required to keep
data as usable as possible.
Unfortunately, it doesn’t happen in
many organisations. In fact, proper
data management strategies and
regular data cleansing are the best
methods for keeping data quality
on the demanded level.
DATA MIGRATION PROCESS
ASSESS PLAN EXTRACT CLEANSE LOAD VERIFY
OLD SYSTEMALL MEDIA /FORMATS DATA MIGRATION
NEW SYSTEMSALL MEDIA/FORMAT
KASNEB NEWSLINE, Issue No. 1, January - March 2015 39
FILE CONVERSION
During file conversion
Wrong migration strategy
What to do next? It is one of these
questions which shouldn’t be asked
when file conversion is started.
People who are involved in data
transfer have to know very well all
steps of file conversion and have to
know what’s next. If the strategy is
incomplete or - even worse - it has
not been prepared at all, chances
that migration will finish with
success are getting lower and lower
in proportion to the complexity
of processes that have to be done
anyway.
Wrong tools
The choice of tools should be a
part of file conversion strategy,
but the fact is that managers from
different organisations don’t pay
real attention to tools designated
to support data transfer. In many
cases, the only tools used for file
conversion are the ones which the
company already owns.
No cooperation among teams
File conversion truly is a complicated
process which - if it has to be done
as quickly as possible - requires
involvement of people from totally
different departments across the
organisation. If these teams do not
cooperate in a required way, the
risk of mistakes and - in some cases
- counteractions is very high.
Inflexibility
A good and detailed plan is truly
the first step every successful
conversion/migration should start
with, but it is not always possible
to keep it alive. The worst one can
do during migration is to keep the
already fixed plan regardless of
changing situation. Sometimes it is
a must to introduce some changes
and improvements when the work
is in progress.
After file conversion
Conversion lateness
One of the worst things that
happens after conversion is
realising that it wasn’t needed.
Or - what also happens, and may
be even more common - it has
been done too late. The situation
in which business operates, is
changing constantly and so do
business processes, systems, and
applications. Thereupon, spending
a few days on migration might
come out as a waste of time after
all.
Lack of proper after-migration validation
The last step of every file conversion
should be validation of its results.
It is important to realise that
validation should not only be done
by the ones directly responsible
for the process. The real users of
transferred data need to confirm
that everything is the way it should
be. They’re the most probable
group to identify the issues which
may seem not worth mentioning,
but turns vital later.
Data MigrationLegacy StorageSystem
Data processing
Post migrationactivites
Migrationvalidation
File extractand load
Test extractand load
Data cleaning
SAP Standard
Read data
Convert data
Direct input processing
IDoc inbound processing
Read data
Converted data
One or several files
BAPI processingvia ALE interface
Batch input processing
Legacy dataon application
sever
Legacy dataon PC
Structure relations
Field mapping
Conversation rules
KASNEB NEWSLINE, Issue No. 1, January - March 2015 40
Two approaches to file conversion
(i) Big bang migrations
In a word, it suggests shutting
all applications and databases
immediately, stopping the
work and putting all force in file
conversion. In fact, it really seems to
be a good option, because only this
way guarantees that the migration
lasts for a short time as possible.
Moreover, it almost eliminates the
risk that something unpredicted
happens during the process. On
the other hand though big bang
migration might be destructive to
the organisation’s work. In cases
where companies depend on real
time data, being cut from such data
might be a real problem. There is,
of course, a way to minimise the
negative influence of big bang
migrations. In most companies
which decide to choose this type of
file conversion strategy, the process
is being initialised after work hours
or on holidays. This way, cutting off
the access to data may cause the
least problems.
Big bang migrations
Advantages Disadvantages
short time of migrationcan be run during weekends and holidays
obligatory organisation systems’ downtime risky
(ii) Trickle migration
Trickle migration is performed
during the normal work of all
involved systems. How is it possible
then? The idea behind trickle file
conversion is not to shut the whole
system at once, but operate only on
chosen areas so that all other areas
could be accessible at the moment
of migration.
Trickle migrations
Advantages Disadvantages
No interruption in employees’ work No system downtime
Long time of migration More complex to organize
File conversion methodology
File conversion, understood as
a process of transferring data
from one system to another,
often a newer one, seems simple.
Nonetheless, it still requires quite a
lot time to prepare as well as some
time to finish with proper migration
validation. That is why complete file
conversion may take noticeably
longer than the time needed to
extract, transform and load data
into new databases.
1. Analysis of business impact
- Every migration means a lot of
inconveniences for company staff.
People need to be prepared to have
lost access to data they usually work
on. Therefore, it is crucial to ensure
that migration won’t interrupt
them too much.
2. Information gathering -
Knowing what impact migration
can have on business users, is
the first step, but gathering the
information about software and
hardware migration aspects isn’t
less important.
3. Mapping, designing - Knowing
where migration tools will take data
from is one side of the question,
while another one is to determine
what place it is going to be stored
at.
4. Plan of migration - Making a
plan, even if seems superfluous in
case of small migrations, is almost
a must. It lets people responsible
for migration keep an eye on the
process and be sure that they don’t
omit any single but very important
detail.
Advance analysis, scoping and data cleaningUser agreements and initial training
Cleaning,mapping, matchingand merging of your dataPre-migration notificationmailing to your alumini
Special Early Life Support by support CentreData enhancement and process development
Preparation
Data migration
Post Go-Live
FILE CONVERSION
Data Assessment
Data Cleansing
Test Extract & Load
Final Extract & Load
Migration Validation
Post Migration Activities
KASNEB NEWSLINE, Issue No. 1, January - March 2015 41
5. Provisioning - The real
provisioning differs according to
the layout of migration chosen a
few steps earlier. In case of one-to-
one migration layout, provisioning
is nothing more than copying
former structure of files, data
volumes, and attributes so that the
new environment could be ready
for receiving the actual streams of
data.
6. Test migration - A test migration
is always required to check in
practice if all the presumptions were
correct and if the tools were chosen
properly. Test migration should
apply to a little but representative
part of data.
7. Migration - In short, it is all what
file conversion is about - moving
data from its original source to a
new destination.
8. Validation - Once all migration
processes finish, it has to be
checked if everything went in
an ordered way. In some cases,
even if the migration seems to be
successfully accomplished, there
may be some errors hidden deeper
so there is a need to identify and
correct them as soon as possible so
that they may not interrupt future
work on the database.
Conclusion
Whatever the reason for the
file conversion, its ultimate aim
should be to improve corporate
performance and deliver
competitive advantage. To succeed,
file conversions must be given
the attention they deserve, rather
than simply being considered
part of a larger underlying project.
Lacking this and without proper
planning, there is a high risk that
the project will go over budget,
exceed the allotted time, or even
fail completely. Most organisations
rely on their end users to validate
whether their file conversion has
been successful or not. Without
validation procedures, problems
Data quality remediation
Prepare data load
Data load trial
GO LIVE
Validate results
Target systemloading
Identification dataand requirement
Asses source data
Scoping
Data Migration Methodology
Project preparation
Buisinessblueprint Realisation Final
preparationGo-Live &support
Facts and Findings Migration Roadmap Quotation
Task Task Task
• Collect data of existing LN Apps• Conduct interview with
application owners• Categorize and generate
inventory of existing LN App
• Complexity Classification.• Recommended target
platforms.• Recommend Migration
Approach.
• Apply norm and estimation process to calculate the estimated effort.
• Cost calculation.
Outcomes Outcomes Outcomes
LN Application Inventory • List of target applications with complexity level and recommended platforms.
• Migration approach.
• Effort Estimation.• Cost Estimation.
MIGRATION ASSESSMENT PROCESS
Application Inventory Data Analysis Estimation
FILE CONVERSION
show up when the business
is running. The result can be
downtime during working
hours that the weekend
data move was intended to
avoid. It is clear that users
face very real issues in ICT
environments where the
need for storage grows
rapidly and downtime is
not an option.
KASNEB NEWSLINE, Issue No. 1, January - March 2015 45
Good bosses have strong organizational skills. Good bosses have solid
decision-making skills. Good bosses get important things done.
Exceptional bosses do all of the above--and more. Sure, they care about
their company and customers, their vendors and suppliers. But most important,
they care to an exceptional degree about the people who work for them.
That’s why extraordinary bosses give every employee:
1. Autonomy and independence
Great organizations are built on the optimizing of processes and procedures.
Still, every task doesn’t deserve a best practice or a micromanaged approach.
(I’m looking at you, manufacturing.)
Engagement and satisfaction are largely
based on autonomy and independence.
I care when it’s “mine.” I care when I’m in
charge and feel empowered to do what’s
right.
Plus, freedom breeds innovation: Even
heavily process-oriented positions have
room for different approaches. (Still looking
at you, manufacturing.)
Whenever possible, give your employees
the autonomy and independence to work
the way they work best. When you do, they
give employeesGood bosses care about getting important things done. Exceptional bosses care about their people.
10 thingsextraordinary bosses
By Je
ff Ha
den
KASNEB NEWSLINE, Issue No. 1, January - March 2015 46
almost always find ways to do their jobs
better than you imagined possible.
2. Clear expectations
While every job should include some
degree of independence, every job also
needs basic expectations for how specific
situations should be handled.
Criticize an employee for offering a discount
to an irate customer today, even though
yesterday that was standard practice, and
you make that employee’s job impossible.
Few things are more stressful than not
knowing what is expected from one day to
the next.
When an exceptional boss changes a
standard or guideline, she communicates
the change beforehand--and when that is
not possible, she takes the time to explain
why she made the decision she made and
what she expects in the future.
3. Meaningful objectives
Almost everyone is competitive; often the
best employees are extremely competitive-
-especially with themselves. Meaningful
targets can create a sense of purpose and
add a little meaning to even the most
repetitive tasks.
Plus, goals are fun. Without a meaningful
goal to shoot for, work is just work.
No one likes work.
them to make suggestions, or
instantly disregard their ideas
without consideration, and they
immediately disengage.
That’s why exceptional bosses make
it incredibly easy for employees to
offer suggestions. They ask leading
questions. They probe gently. They
help employees feel comfortable
proposing new ways to get things
done. When an idea isn’t feasible,
they always take the time to explain
why.
Great bosses know that employees
who make suggestions care about
the company, so they ensure those
employees know their input is
valued and appreciated.
6. A real sense of connection
Employees work for a paycheck
(otherwise they would do volunteer
work), but they want to work for
more than a paycheck: to work with
and for people they respect and
admire--and with and for people
who respect and admire them.
That’s why a kind word, a quick
discussion about family, an informal
conversation to ask if an employee
needs any help--those moments are
much more important than group
meetings or formal evaluations.
4. A true sense of purpose
Everyone likes to feel a part of
something bigger. Everyone loves
to feel that sense of teamwork and
esprit de corps that turn a group of
individuals into a real team.
The best missions involve making
a real impact on the lives of the
customers you serve. Let employees
know what you want to achieve for
your business, for your customers,
and even your community. And
if you can, let them create a few
missions of their own.
Feeling a true purpose starts with
knowing what to care about and,
more important, why to care.
5. Opportunities to provide
significant input
Engaged employees have ideas;
take away opportunities for
LEADERSHIP
LEADERSHIP
A true sense of connection is
personal. That’s why exceptional
bosses show they see and
appreciate the person, not just the
worker.
7. Consistency
Most people don’t mind a boss
who is strict, demanding, and
quick to offer (not always positive)
feedback, as long as he or she treats
every employee fairly.
(Great bosses treat each employee
differently while treating every
employee fairly. There’s a big
difference.)
Exceptional bosses know the key
to showing employees consistency
and fairness is communication: The
more employees understand why a
decision was made, the less likely
they are to assume unfair treatment
or favouritism.
KNEC, KASNEB, ICM , CSKManagement Consulting & Corporate Training
EAST AFRICASCHOOL MANAGEMENT
4th FLOORANSH PLAZA
ofS C H O O L O F E X C E L L E N C E
Offering;
www.easm.ac.ke . [email protected] Tel: 0729 817954 020 222 0973
8. Private criticism
No employee is perfect. Every
employee needs constructive
feedback. Every employee deserves
constructive feedback. Good
bosses give that feedback.
Great bosses always do it in private.
9. Public praise
Every employee--even a relatively
poor performer--does something
well. Every employee deserves
praise and appreciation. It’s easy
to recognize some of your best
employees, because they’re
consistently doing awesome
things. (Maybe consistent
recognition is a reason they’re your
best employees? Something to
think about.)
You might have to work hard
to find reasons to recognize an
employee who simply meets standards,
but that’s OK: A few words of recognition-
-especially public recognition--may be the
nudge an average performer needs to start
becoming a great performer.
10. A chance for a meaningful future
Every job should have the potential to lead
to greater things. Exceptional bosses take
the time to develop employees for the jobs
they someday hope to land, even if the jobs
are with another company.
How can you know what an employee
hopes to do someday? Ask.
Employees will only care about your
business after you first show you care
about them. One of the best ways to do
so is to show that while you certainly have
hopes for your company’s future, you also
have hopes for your employees’ futures.
KASNEB NEWSLINE, Issue No. 1, January - March 2015 48
PICTORIAL
Cancer walk
Corporate Social Responsibility
Cancer campaigh Walk and Prayer Ring at Kenyatta National Hospital grounds on Sunday, 15 February 2015 to mark World Cancer Day.
Healt
h pilla
r Ed
ucat
ion an
d Env
ironm
enta
l pilla
r
One of the two tanks under construction at Kamariru Primary School, Tunyai in Meru County to provide safe drinking water and a condusive learning environment to the pupils of Tunyai Children Centre.
Water tank
KASNEB NEWSLINE, Issue No. 1, January - March 2015 49
MarketingCEO’s forum organised by Guru Professionals, PwaniUnivesity in Kilifi County on Saturday, 21 March 2015.
East Africa Business Forum organised by Accounting Students Association, University of Nairobi, Lower Kabete Campus held on Thursday, 12 March 2015 and Friday, 13 March 2015 in Nairobi County.
Presenting the highlights of the revised syllabuses on Saturday, 14 March 2015 in Radio Jambo in Nairobi County.
Stakeholders forums held on Friday, 30 January 2015 and Friday, 20 February 2015 at the Hilton Hotel, Nairobi to discuss the syllabuses review.
KASNEB NEWSLINE, Issue No. 1, January - March 2015 50
I. HOW TO CREATE A STUDENT ACCOUNT ON THE KASNEB STUDENT PORTAL
All students are required to open a
student account on the KASNEB website.
To open the account, follow the steps
below:
1. Click on the student login link then
choose the student icon or proceed
to click the student icon if you use the
direct link (http://online.kasneb.or.ke )
to the student portal.
2. Click on create account and select
whether you have a Student
Registration Number or not and
proceed to provide names, preferred
email address and a strong password
(which will be used for future access to
self information) and click save.
3. Provide the email address and
password used when creating the
account and click unlock to login in.
4. Select the “Registration Details” tab.
5. Access the “Course Choice” tab.
6. Select the examination from the
dropdown box, click on the “Yes”
checkbox and provide the registration
number without the prefix (e.g.
if your registration number is
NAC/68148, provide 68148 as
the registration number) and
click save.
Benefits
You will be able to:
• Download authority to sit for
examination/timetable
• Result summary.
Once the website upgrade is finalised in
the near future, you will be able to:
• Edit your contact address
• Check payment status
• Book for examinations.
Students are hereby advised to ensure they have active student accounts given that moving forward, timetables, result summaries and other individualised communication will only be channelled through the student accounts.
UPDATES
II. CALLING ON KASNEB STUDENTS WITH DISABILITIES
We are in the process of enhancing disability
mainstreaming at KASNEB. This is in an effort to
improve our service delivery to our students with
disabilities.
In this connection, KASNEB wishes to invite any
student with a disability to forward the following
details to KASNEB:
• Full name and National Identification/
Passport Number.
• KASNEB registration number.
• Current email, telephone number and
postal address.
• Nature of disability.
Whether registered with the National Council
for Persons with Disability and if so, details of
the registration.
Students with disability are encouraged to
register with the Council. Further details on
the Council are available on the Council’s
website www.ncpwd.go.ke
KASNEB NEWSLINE, Issue No. 1, January - March 2015 51
III. KASNEB STUDENT FEE COLLECTION ACCOUNTS WITH BANKS
Students, trainers, parents/guardians/sponsors, employers and other stakeholders are
hereby informed that KASNEB has opened student fee collection accounts with the
following banks:
a) National Bank of Kenya Ltd. (NBK)
Account Number: 01001031572601
b) Equity Bank Ltd.
Account Number: 0170299238025
c) Kenya Post Office Savings Bank (Postbank)
Account Number: 0744130009246
d) Co-operative Bank of Kenya Ltd.
Account Number: 01129128535900
The bank accounts are already operational.
Students are required to complete the appropriate KASNEB forms and relevant fee
deposit slips (except for Postbank which does not use deposit slips). The students will
be issued with one copy of the deposit slip and a computer generated slip for their
records. However, for Postbank only a computer generated receipt will be issued.
Upon payment of the requisite fees to the bank, a cash deposit receipt will be issued
to the payee. The completed KASNEB forms will be left with the bank for onward
transmission to KASNEB together with one copy of the deposit slip.
Students are advised that payment of fees at KASNEB offices will soon be phased
out and therefore they should utilise the available channels through the banks.
Note: Students should ensure that all documents requiring certification, such as copies
of academic and professional certificates and identity card/passport are certified before
being handed over to the bank.
UPDATES
IV. BANNING OF MOBILE PHONES FROM THE EXAMINATIONS ROOM
All students are hereby informed
that mobile phones were banned
from the examinations room
with effect from the November/
December 2014 sitting.
Students are further required to
note that disciplinary action will be
taken against any student found
in possession of a phone in the
examination room, regardless of
whether the phone was in use or
not at the time of its detection.
V. KASNEB CONTACTS
+254 - (020) 4923000
0722201214
0734600624
www.kasneb.or.ke
KASNEBOfficial
KASNEBOfficial
EXAMINATION DATES
EXAMINATIONS NOTICE - NOVEMBER 2015 EXAMINATIONS
Students of KASNEB, parents, sponsors, guardians, training institutions and other stakeholders are hereby notified of the following important dates and information.
1. Examination dates for the November 2015 examinations are as follows:
(a) ATC, ICTT, IST and CMT Levels I and II - Tuesday, 17 November 2015, Wednesday, 18 November 2015 and Thursday, 19 November 2015
(b) Accounting Technicians Diploma (ATD), Diploma in Information Communication Technology (DICT) and Diploma in Credit Management (DCM) Levels I and II only
Tuesday, 17 November 2015 and Wednesday, 18 November 2015 (c) CPA, CS, CICT ,CIFA and CCP Part I - Friday, 20 November 2015, Monday, 23 November 2015 and Tuesday, 24 November 2015
(d) CPA, CS, CICT ,CIFA and CCP Parts II and III - Wednesday, 25 November 2015, Thursday, 26 November 2015 and Friday, 27 November 2015 (e) Foreign Accountancy Qualifications (FAQ) - Wednesday, 25 November 2015 and Thursday, 26 November 2015
(f) Foreign Secretaries Qualifications (FSQ) - Tuesday, 24 November 2015 and Wednesday, 25 November 2015
(g) Kenya Institute of Supplies Management - Associate in Procurement and Supply of Kenya (APS-K) examination - Levels I and II Tuesday, 17 November 2015, Wednesday, 18 November 2015 and Thursday, 19 November 2015
(h) Kenya Institute of Supplies Management - Certified Procurement and Supply Chain Professional of Kenya (CPSP-K) - Part I examination only
Friday, 20 November 2015, Monday, 23 November 2015 and Tuesday, 24 November 2015
2. Closing dates for examinations entries for the November 2015 examinations are as shown below: Normal entry: Friday, 14 August 2015 Late entry: Wednesday, 30 September 2015
3. Examination brochures and forms are obtainable on request, free of charge: (a) In Kenya either in person at the offices of KASNEB or through the post. The examination brochures and forms are also available at any branch of the Kenya
National Library Service (KNLS) countrywide or training institutions. (b) Outside Kenya at the following offices in Eastern and Central Africa:
(i) In Uganda at DMK Associates, Sabina Baiga House, Bombo Road, 2nd floor suite 05 - Kampala, Makerere University Business School (MUBS) - Nakawa, Kampala International University - Kansanga, Busoga University - Iganga, and Bugema University, Kampala Campus - Bombo Road.
(ii) In Rwanda at Kigali Institute of Management - Rimera, University of Rwanda, College of Business and Economics, Gikondo - Kigali, Institut Polytechnique De Byumba, University of Kigali, Kacyiru Campus and Kigali Independent University (ULK).
(iii) In Burundi at the East Africa Centre for Professional Studies (EACPS), Rohero 2, Avenue Mosso next to Solecs Micro Finance, Bujumbura and Kim-PAC, Rohero 2, Avenue Mosso, No.28 - Bujumbura.
(iv) In Cameroon at Maaron Business School, 10 Rue, Joffre, Akwa - Douala and Fomic Business School, Buea, Cameroon. (v) In South Sudan, at the University of Juba.
(c) Forms can also be downloaded from the website; www.kasneb.or.ke
4. Method of payment of fees Attention of students is drawn to the “Guide to the November 2015 examinations” regarding secure methods of paying fees to KASNEB.
(a) In Kenya. Students are advised to pay through any branch of the National Bank of Kenya Ltd. (NBK), Equity Bank, Kenya Post Office Savings Bank (Postbank) or Co-operative Bank of Kenya. Students may also make payment in person at KASNEB offices in cash, by cheques/bankers cheques/drafts drawn in the name of KASNEB or through the post.
(b) Outside Kenya. Students are advised to pay the applicable fees in dollars at any branch of KCB in their countries to KASNEB KCB collection account number 1123096465, domiciled at Capital Hill Branch, Nairobi. Thereafter, students should submit their documents to KASNEB together with a copy of the bank deposit slip. Students are individually and personally responsible for ensuring that fees are paid to KASNEB. Consequently, students who pay fees through third parties should ensure that such parties are honest and reliable and will therefore remit the fees to KASNEB without delay. Bankers Cheques/Drafts should be drawn payable to KASNEB and Inter-State Money Orders should be payable at City Square Post Office - Nairobi. Examination entry/annual registration renewal forms and remittances which are sent by post should be posted at least one week before the closing date to ensure that they are received in time.
5. All students who sat for the May 2015 examinations should ENTER for the November 2015 examinations immediately upon confirmation of their May 2015 examination results.
6. All continuing students of KASNEB are required to update their annual registration renewal position by 1 July of each year. New students are required to note that the registration renewal fee is due on 1 July following the examinations sitting to which they are first eligible to enter.
7. The late registration closing date for applicants wishing to be registered as students in order to be eligible to enter for the November 2015 examinations is Friday, 14 August 2015.
KASNEB NEWSLINE, Issue No. 1, January - March 2015 53
Introduction
The KASNEB policy on review of examination syllabuses provides for a mid-term review of the syllabuses after two and a half years and a major review after five years. A major review of
the syllabuses usually involves significant changes in structure and content of the syllabuses. On the other hand, the focus of a mid-term review is usually on content and not structure of the examinations.
The last major review of the examination syllabuses was undertaken in the years 2008 and 2009 and the revised syllabuses administered for the first time in the November/December 2009 sitting. A mid-term review of the examination syllabuses was undertaken in the year 2012 and the revised syllabuses administered for the first time in the November/December 2012 sitting.
The current major review of the syllabuses commenced in the year 2013 and involved a number of activities, including the following:
(a) Benchmarking visits were undertaken to various reputable professional examinations bodies in various parts of the globe.
(b) A consultant was engaged to collect and analyse views from a wide range of stakeholders both in the public and private sectors. The consultant was also required to engage with employers and undertake a job analysis to identify any gaps between the syllabuses and the market demands.
(c) A syllabuses review technical task force comprising subject experts and practitioners from various fields in both public and private sectors was constituted to develop the draft syllabuses.
(d) Two major stakeholders workshops were held where comments were received on the draft syllabuses and considered as appropriate.
(e) A forum was held with relevant professional institutes for the validation of the syllabuses.
(f ) The syllabuses were approved by the Board of KASNEB.
The revised syllabuses will take effect from 1 July 2015 and be examined for the first time from the November/December 2015 sitting.
1. Examinations under the revised syllabuses
The following examinations will be administered under the
revised syllabuses:
1.1 Professional Examinations(i) Certified Public Accountants (CPA)(ii) Certified Secretaries (CS)
(iii) Certified Information Communication Technologists (CICT)
(iv) Certified Investment and Financial Analysts (CIFA)(v) Certified Credit Professionals (CCP)
Note:
(a) The Certified Public Secretaries (CPS) examination has
been renamed Certified Secretaries (CS) examination.
(b) The Certified Securities and Investment Analysts (CSIA)
examination has been renamed Certified Investment
and Financial Analysts (CIFA) examination.
1.2 Diploma Examinations
(i) Accounting Technicians Diploma (ATD)(ii) Diploma in Information Communication
Technology (DICT)(iii) Diploma in Credit Management (DCM)
2. Examinations to be phased out
The following technician examinations will be phased out after
the November/December 2015 examination sitting:
(a) Accounting Technicians Certificate (ATC)(b) Information Communication Technology Technicians
(ICTT)(c) Credit Management Technicians (CMT)(d) Investment and Securities Technicians (IST)
3. Review of policies, rules and regulations
The major review of the syllabuses also involved a review of
the policies, rules and regulations in order to ensure effective
implementation of the revised syllabuses and enhance customer
satisfaction. The changes in policies, rules and regulations can be
accessed on the KASNEB website www.kasneb.or.ke.
4. Structure of examinations under the revised syllabuses
The revised structure of the examinations and transition
arrangements are presented below. Advance copies of the
syllabuses featuring the learning outcomes and detailed content
have been dispatched to the training institutions, both accredited
and those in the process of accreditation. The syllabuses booklets
will also be available to all registered students as at 30 June 2015
free of charge.
2015 KASNEB SYLLABUSESSyllabus
May 2015
CPACertified Public Accountant
KASNEB
KASNEBKASNEB Towers
Hospital Road, Upper Hill
P.O. Box 41362 - 00100 Nairobi - Kenya
Tel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624
Fax: 254(020) 2712915
E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
Syllabus
May 2015
CSCertified Secretary
KASNEB
KASNEB
KASNEB Towers
Hospital Road, Upper Hill
P.O. Box 41362 - 00100 Nairobi - Kenya
Tel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624
Fax: 254(020) 2712915
E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
Revised Syllabus
May 2015
CICTCertified Information Communication Technologist
KASNEB
KASNEB
KASNEB Towers
Hospital Road, Upper Hill
P.O. Box 41362 - 00100 Nairobi - Kenya
Tel: 254(020) 2712640 / 2712828
Cellphone: 0722-201214/0734-600624
Fax: 254(020) 2712915
E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
Syllabus May 2015
CIFACertified Investment & Financial Analyst
KASNEB
KASNEBKASNEB Towers
Hospital Road, Upper Hill
P.O. Box 41362 - 00100 Nairobi - Kenya
Tel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624
Fax: 254(020) 2712915
E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
Revised Syllabus May 2015
CCPCertified Credit Professional
KASNEB
KASNEBKASNEB Towers
Hospital Road, Upper Hill
P.O. Box 41362 - 00100 Nairobi - Kenya
Tel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624
Fax: 254(020) 2712915
E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
Syllabus May 2015
ATAccounting Technician
KASNEB
KASNEBKASNEB Towers Hospital Road, Upper Hill
P.O. Box 41362 - 00100 Nairobi - Kenya
Tel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624
Fax: 254(020) 2712915
E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
KASNEB
KASNEBKASNEB Towers Hospital Road, Upper Hill
P.O. Box 41362 - 00100 Nairobi - KenyaTel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624Fax: 254(020) 2712915E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
Governance & Management
Diploma inSyllabus
May 2015
KASNEB
KASNEBKASNEB Towers
Hospital Road, Upper HillP.O. Box 41362 - 00100 Nairobi - Kenya
Tel: 254(020) 4923000Cellphone: 0722-201214/0734-600624
Fax: 254(020) 2712915E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
Information Communication Technology
Diploma inSyllabus
May 2015
KASNEB
KASNEBKASNEB Towers
Hospital Road, Upper Hill
P.O. Box 41362 - 00100 Nairobi - Kenya
Tel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624
Fax: 254(020) 2712915
E-mail: [email protected]
Website: www.kasneb.or.ke
Providing globally competitive professionals
KASNEB is ISO 9001:2008 certified
Providing globally competitive professionals
Credit ManagementDiploma in
REVISED
KASNEB NEWSLINE, Issue No. 1, January - March 2015 54
REVISED 2015 KASNEB SYLLABUSES
CPAPaper No: Paper
Section 1CA11 Financial Accounting
CA12 Commercial Law
CA13 Entrepreneurship and Communication
Section 2CA21 Economics
CA22 Management Accounting
CA23 Public Finance and Taxation
Section 3CA31 Company Law
CA32 Financial Management
CA33 Financial Reporting
Section 4CA41 Auditing and Assurance
CA42 Management Information Systems
CA43
Quantitative Analysis
Section 5CA51 Strategy,
Governance and Ethics
CA52 Advanced Management Accounting
CA53 Advanced Financial Management
Section 6CA61 Advanced Public Finance
and TaxationCA62 Advanced Auditing and
AssuranceCA63 Advanced Financial
Reporting
CSPaper No: Paper
Section 1CS11 Organisational Behaviour
CS12 Commercial Law
CS13 Business Communication
Section 2CS21 Economics
CS22 Principles of Accounting
CS23 Public Finance and Taxation
Section 3CS31 Company Law
CS32 Financial Management
CS33 Principles and Practice of Management
Section 4CS41 Corporate Secretarial
PracticeCS42 Management
Information SystemsCS43 Law and Procedure of
Meetings
Section 5CS51 Human Resource
ManagementCS52 Financial Markets Law
CS53 Governance and Ethics
Section 6CS61 Strategic Management
CS62 Public Policy and Administration
CS63 Governance and Secretarial Audit
CICTPaper No: Paper
Section 1CT11 Introduction to
ComputingCT12 Computer Applications
- PracticalCT13 Entrepreneurship
and CommunicationSection 2CT21 Operating Systems -
PracticalCT22 Principles of
AccountingCT23 Computer Support
and Maintenance
Section 3CT31 Database Systems
CT32 Systems Analysis and Design
CT33 Structured Programming
Section 4CT41 Object Oriented
ProgrammingCT42 Web design and
e-CommerceCT43 Data Communication
and Computer Networks (Practical)
Section 5CT51 Strategy,
Governance and Ethics
CT52 Software Engineering
CT53 Mobile Application Development
Section 6CT61 Systems Security
CT62 Information Systems Project Management
CT63 Research Methods
ICT ProjectCICT candidates are required to undertake an ICT project after completing the above 18 papers. The project must commence within 12 months after completing the papers.
CIFAPaper No: Paper
Section 1CI11 Financial Accounting
CI12 Financial Mathematics
CI13 Entrepreneurship and Communication
Section 2CI21 Economics
CI22 Financial Institutions and Markets
CI23 Public Finance and Taxation
Section 3CI31 Regulation of Financial
MarketsCI32 Corporate Finance
CI33 Financial Statements Analysis
Section 4CI41 Equity Investments
AnalysisCI42 Portfolio Management
CI43 Quantitative Analysis
Section 5CI51 Strategy,
Governance and Ethics
CI52 Fixed Income Investments Analysis
CI53 Alternative Investments Analysis
Section 6CI61 Advanced Portfolio
ManagementCI62 International Finance
CI63 Derivatives Analysis
CCPPaper No: Paper
Section 1CP11 Credit Management
CP12 Commercial Law
CP13 Entrepreneurship and Communication
Section 2CP21 Economics
CP22 Principles of Accounting
CP23 Public Finance and Taxation
Section 3CP31 Company Law
CP32 Financial Management
CP33 Marketing and Public Relations
Section 4CP41 Law Governing Credit
PracticeCP42 Management
Information SystemsCP43 Quantitative
Analysis
Section 5CP51 Strategy,
Governance and Ethics
CP52 Banking Law and Practice
CP53 Credit Management in the Financial Sector
Section 6CP61 Debt Recovery
CP62 Corporate Lending
CP63 Credit Practice
I. REVISED STRUCTURES OF PROFESSIONAL AND DIPLOMA EXAMINATION SYLLABUSES
(a) Professional Examinations
KASNEB NEWSLINE, Issue No. 1, January - March 2015 55
I. REVISED STRUCTURES OF PROFESSIONAL AND DIPLOMA EXAMINATION SYLLABUSES
REVISED 2015 KASNEB SYLLABUSESAccounting Technicians Diploma (ATD)Paper No: Paper
LEVEL I
AD11 Introduction to Financial Accounting
AD12 Commercial Law
AD13 Entrepreneurship and Communication
AD14 Information Communication Technology
LEVEL II
AD21 Financial Accounting
AD22 Principles of Management
AD23 Business Mathematics and Statistics
AD24 Fundamentals of Finance
LEVEL III
AD31 Principles of Economics
AD32 Fundamentals of Management Accounting
AD33 Principles of Public Finance and Taxation
AD34 Auditing
Diploma in Information Communication Technology (DICT)Paper No: Paper
LEVEL I
TD11 Introduction to Computing
TD12 Computer Mathematics
TD13 Entrepreneurship and Communication
TD14 Computer Applications Practical I
LEVEL II
TD21 Computer Networking
TD22 Internet Skills
TD23 Computer Support and Maintenance
TD24 Programming Concepts
LEVEL III
TD31 Principles of Web Development
TD32 Foundations of Accounting
TD33 Information Systems Project Skills
TD34 Computer Applications Practical II
Diploma in Credit Management (DCM)Paper No: Paper
LEVEL I
CD11 Fundamentals of Credit Management
CD12 Commercial Law
CD13 Entrepreneurship and Communication
CD14 Information Communication Technology
LEVEL II
CD21 Credit Management
CD22 Principles of Management
CD23 Business Mathematics and Statistics
CD24 Law Governing Credit Practice
LEVEL III
CD31 Marketing and Customer Relations
CD32 Foundations of Accounting
CD33 Principles of Public Finance and Taxation
CD34 Practice of Credit Management
NB: Common papers in bold
II. TRANSITION ARRANGEMENTS FOR THE REVISED EXAMINATION SYLLABUSES Transition arrangements are usually made to ensure a smooth roll over
from the old syllabuses to the new syllabuses. The current transition
arrangements address the change over to the revised syllabuses with
effect from 1 July 2015. These arrangements have addressed the
following factors, among others:
• Unexpiredcreditretentionsasat30June2015.
• Exemptionsgranted forpapers insectionsnotsatasat30June
2015.
• Progression forcandidatesofexaminationswhicharedue tobe
phased out.
• Progressionforcandidateswhere levels,partsandsectionshave
changed in terms of composition of papers.
• Progression for registered candidates who have not sat any
examination as at 30 June 2015.
• Registrationofcandidatesforexaminationsafter30June2015.
Specific transition provisions
The transition provisions from the current syllabuses to the revised
syllabuses are as follows.
1. CPA, CPS, CICT, CSIA and CCP students
(a) All students for the above listed examinations will convert
to the revised examination syllabuses commencing 1 July
2015 in the various parts and sections that they will have
progressed to in the current syllabuses.
(b) Exemptions:
(i) Where a student had been granted an exemption in a
particular paper, the exemption will be retained. This
will include papers where the titles may have changed
but the substantive content has remained the same,
such as Management Accounting (previously Cost
Accounting) in CPA Section 2.
(ii) However, where a student had been granted
exemption in a paper which, under the revised
syllabuses, has been moved to a section which the
student will have already completed as at the May
2015 sitting, the exemption fee paid for the paper
concerned will be credited to the student’s account
at KASNEB.
(iii) Exemptions granted for whole sections or parts
under the current syllabuses shall be retained under
the revised syllabuses.
(c) Credit retentions for students who will not have
completed their respective sections after the May 2015
sitting will be retained provided that the paper(s)
with credit retentions have remained in the same
section(s) under the revised syllabuses.
2. ATC, ICTT, IST and CMT students
The four technician examinations namely ATC, ICTT, IST and CMT
will be phased out after the November/December 2015 sitting.
A parallel examination administration system will be adopted for
the technician examinations during the November/December
2015 sitting with a view to phasing out the examinations after the
November/December 2015 sitting.
KASNEB NEWSLINE, Issue No. 1, January - March 2015 56
Under the parallel system, the technician examinations will be
administered together with the diploma examinations namely ATD,
DICT and DCM in the November/December 2015 sitting.
The transition arrangements will work out as follows:
1. Students currently in ATC/ICTT/CMT Level I who sit and pass the
May 2015 sitting
(a) The students will be required to choose either ATC/ICTT/
CMT Level II as applicable, or Level II of the respective
Diploma in the November/December 2015 sitting.
(b) Students who choose the ATC/ICTT/CMT Level II and pass
during the November/December 2015 sitting will graduate
under the respective examination passed. Those who do
not pass will be transferred to Level II of the respective
Diploma with effect from 1 January 2016.
(c) Students who choose the respective Diploma Level II and
pass the November/December 2015 sitting will proceed to
Diploma Level III from 1 January 2016. Those who fail will
repeat the respective Diploma Level II from 1 January 2016.
2. Students currently in ATC/ICTT/CMT Level I who sit but do not pass
the May 2015 sitting
(a) The students will be required to resit the papers not
passed in ATC/ICTT/CMT Level I in the November/
December 2015 sitting.
(b) Students who pass the ATC/ICTT/CMT Level I in the
November/December 2015 sitting will proceed to the
respective Diploma Level II from 1 January 2016. Those
who do not pass will be transferred to Level I of the
respective Diploma with effect from 1 January 2016.
3. Registered students in ATC/ICTT/CMT Level I who have not booked
the May 2015 sitting (mostly new students)
(a) The students will be allowed to book for either ATC/ICTT/
CMT Level I as registered, or the respective Diploma Level I
in the November/December 2015 sitting.
(b) Students who pass the ATC/ICTT/CMT Level I in the
November/December 2015 sitting will proceed to the
respective Diploma Level II. The same will apply to those
who sit and pass the Diploma Level I.
(c) Students who fail the ATC/ICTT/CMT Level I or Diploma
Level I in the November/December 2015 sitting will repeat
the Diploma Level I with effect from 1 January 2016.
4. Students currently in ATC/ICTT/CMT Level II who sit and pass the
May 2015 sitting
The students will graduate.
5. Students currently in ATC/ICTT/CMT Level II who sit but do
not pass the May 2015 sitting
(a) The students will be required to resit the papers not passed in ATC/
ICTT/CMT Level II in the November/December 2015 sitting.
(b) Students who pass the ATC/ICTT/CMT Level II in the November/
December 2015 sitting will graduate. Those who do not pass will
be transferred to Level II of the respective Diploma with effect from
1 January 2016.
6. IST students
(a) Students who pass Level I of the IST examination during the May
2015 sitting will proceed to Level II of the examination and be
eligible to sit for that Level during the November/December 2015
sitting.
(b) Students who do not pass Level I of the IST examination during the
May 2015 sitting will be expected to resit the papers not passed in
the same level during the November/December 2015 sitting.
(c) Students who pass Level II of the examination either during the
May 2015 sitting or the November/December 2015 sitting will be
allowed to graduate in the respective sitting.
(d) Students who do not pass either Level I or Level II of the IST
examination in the November/December 2015 sitting will be
required to transit to either the ATD or DCM in the respective levels.
Both graduates of the Technician and Diploma examinations will be
eligible to pursue the relevant professional programmes of KASNEB.
3. Other transition provisions
(a) Students who are eligible to convert to the Diploma programmes
(ATD/DICT and DCM) will be allowed to do so and book the
November/December 2015 examinations up to 15 September
2015 by paying the normal examination entry fees.
(b) All credit retentions for ATC, ICTT, IST and CMT will expire after the November/December 2015 sitting.
REVISED 2015 KASNEB SYLLABUSES
III. CHANGES IN POLICIES, RULES AND REGULATIONS UNDER THE REVISED EXAMINATION SYLLABUSES
The following changes in policies, rules and regulations have been introduced as part of the major review of examination syllabuses. The changes
are aimed at, among other objectives, ensuring effective implementation of the revised examination syllabuses, enhancing customer service,
enhancing the recognition of KASNEB qualifications regionally and globally and continuously realigning the qualifications with market trends
and demands.
One of the major changes introduced as part of the major review of the syllabuses is the introduction of diploma qualifications to replace the
current technician qualifications which will be phased out commencing from 1 January 2016.
KASNEB NEWSLINE, Issue No. 1, January - March 2015 57
The changes in policies, rules and regulations are summarised in the table below. Unless otherwise specified, the changes take effect from 1 July 2015.
Policy/rule/regulation Current provision New provisionMinimum entry requirements for diploma programmes
Not applicable The minimum entry requirement for the diploma programmes will be KCSE mean grade C- or equivalent.
Deadlines for late registration and examination entry
Late registration deadline: •31DecemberfortheMay/Junesitting.•30JunefortheNovember/Decembersitting.
Late examination entry deadline:• 15 March for the May/June sitting.• 15 September for the November/December
sitting.
The deadline for late registration has been extended to:• 15FebruaryfortheMay/Junesitting.• 15AugustfortheNovember/Decembersitting.
The deadline for late examination entry has been extended to:• 31MarchfortheMay/Junesitting.• 30SeptemberfortheNovember/Decembersitting.
Effective date for payment of annual registration renewal fee
This fee is payable on 1 July following the date of registration
The annual registration renewal fee shall become due on 1 July following the first eligible examination sitting and annually thereafter. For instance, a student who registers by 31 May 2015 will be eligible to enter examinations from the November/December 2015 sitting. The first renewal will therefore be due on 1 July 2016
Exemptions for diploma holders wishing to pursue KASNEB professional programmes
Exemptions are granted to diploma holders from various institutions of higher learning and nation-al examination bodies on paper by paper basis
Exemptions will be granted on paper by paper basis to holders of diplomas from KNEC and KIM. For other diploma programmes, exemptions will be considered subject to evaluation of content of the respective diploma programmes as submitted to KASNEB
Law and taxation papers for foreign candidates based outside Kenya
All foreign candidates based outside Kenya are required to sit for law and taxation papers broadly based on Kenyan law
Localised papers in law and taxation will be set for students in Rwanda, Cameroon and other countries. The change in policy will take effect from 1 July 2016
Code of Conduct and Ethics for students
There are various rules and regulations governing the conduct of students. There is no Code of Conduct and Ethics
A Code of Conduct and Ethics will be introduced for new and continuing students. The Code will be distributed to all students. All students will be required to commit themselves and abide by the Code
Practical experience requirement There is no system in place to enable candidates log in their practical experience acquired in the course of their studies
A practical experience log will be issued to students at the point of registration. The roll out of the log will start with the CPA students. It will thereafter be applicable to other students pursuing other KASNEB professional programmes. The effective date for implementing the practical experience log is 1 July 2016
Past papers Students are allowed to collect their past papers after 24 hours of sitting the paper. Online access is not available
Past papers will be uploaded on the KASNEB website for controlled access by students whose annual registration renewal status is up to date and accredited training institutions
Undertaking of the ICT Project in the CICT examination
The duration within which the project must be started after the student completes CICT Part III papers is not specified
A student is required to restart a project afresh and pay the full fees if he/she does not pass during the final presentation
Students will be required to commence the project within twelve (12) months of complet-ing CICT Part III
Students who commence the project after the one year period will be required to pay late project fee of 50%
Where a student presents a proposal which is accepted by KASNEB, but which is not successfully defended during the first examination sitting, the student may be allowed upon request to improve on the proposal and pay 50% of the applicable fee, provided the project is presented during the next immediate examination sitting. Otherwise the student will be required to pay the full project fee
Students who register but do not book for any examination or continuing students who do not book for any examination within three years of registration
The students’ registration numbers are retained in the system and they continue accumulating annual registration renewal arrears
The registration numbers for the students will be automatically deactivated after the three years. The deactivated registration numbers will be reactivated upon payment of a reactivation fee of Sh. 6,000 and the renewal arrears for the last three years before the registration number was reactivated
KASNEB graduates who wish to register for other KASNEB programmes
The KASNEB graduates wishing to pursue other KASNEB programmes are required to resubmit academic certificates, passport photos and other documents prior to registration
Such graduates wishing to pursue other KASNEB programmes will only be required to complete the registration form, attach a copy of identity card/passport, two recent passport photos and pay the requisite registration fee
Security checks on candidates entering the examinations room
Security checks have not been fully effected Security checks will be conducted as part of preventive and precautionary measures for candidates entering the examinations room
REVISED 2015 KASNEB SYLLABUSES
KASNEB NEWSLINE, Issue No. 1, January - March 2015 58
REVISED 2015 KASNEB SYLLABUSESIV. RETENTION OF CREDITS AND EXEMPTIONS FROM THE CURRENT SYLLABUSES TO THE
REVISED SYLLABUSES
1. CERTIFIED PUBLIC ACCOUNTANTS (CPA) EXAMINATIONCURRENT SYLLABUS RETENTION OF
CREDITRETENTION OF EXEMPTION WHERE GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS
SECTION 1 SECTION 1
CA11: Financial Accounting Retained under CA11 Retained under CA11 CA11: Financial Accounting
CA12: Introduction to Law Retained under CA12 Retained under CA12 CA12: Commercial Law
CA13: Entrepreneurship and Communication Retained under CA13 Retained under CA13 CA13: Entrepreneurship and Communication
SECTION 2 SECTION 2
CA21: Economics Retained under CA21 Retain under CA21 CA21: Economics
CA22: Cost Accounting Retained under CA 22 Retained under CA22 CA22: Management Accounting
CA23: Auditing and Assurance Not retained Retained under CA41 CA23: Public Finance and Taxation
SECTION 3 SECTION 3
CA31: Management Information Systems Not retained Retained under CA42 provided Section 4 not yet passed CA31: Company Law
CA32: Financial Management Retained under CA32 Retained under CA32 CA32: Financial Management
CA33: Financial Reporting Retained under CA33 No exemptions are granted in paper CA33: Financial Reporting
SECTION 4 SECTION 4
CA41: Taxation Not retained No exemptions are granted in paper CA41: .Auditing and Assurance
CA42: Company Law Not retained Retained under CA31 provided Section 3 not yet passed CA42: Management Information Systems
CA43: Quantitative Analysis Retained under CA 43 Retained under CA 43 CA43: Quantitative Analysis
SECTION 5 SECTION 5
CA51: Principles and Practice of Management Not retained Not retained CA51: Strategy, Governance and Ethics
CA52: Management Accounting Retained under CA52 No exemptions are granted in paper CA52: Advanced Management Accounting
CA53: Advanced Financial Management Retained under CA53 No exemptions are granted in paper CA53: Advanced Financial Management
SECTION 6 SECTION 6
CA61: Advanced Taxation Retained under CA61 No exemptions are granted in paper CA61: Advanced Public Finance and Taxation
CA62: Advanced Auditing and Assurance Retained under CA62 No exemptions are granted in paper CA62: Advanced Auditing and Assurance
CA63: Advanced Financial Reporting Retained under CA63 No exemptions are granted in paper CA63: Advanced Financial Reporting
2. CERTIFIED PUBLIC SECRETARIES (CPS) - REBRANDED AS CERTIFIED SECRETARIES (CS) EXAMINATIONCURRENT SYLLABUS (CPS) RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE
GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS (CS)
SECTION 1 SECTION 1
CS11: Organisational Behaviour Retained under CS11 Retained under CS11 CS11: Organisational Behaviour
CS12: Introduction to Law Retained under CS12 Retained under CS12 CS12: Commercial Law
CS13: Communication and Report Writing Retained under CS13 Retained under CS13 CS13: Business Communication
SECTION 2 SECTION 2
CS21: Economics Retained under CS21 Retain under CS21 CS21: Economics
CS22: Financial Accounting Retained under CS 22 Retained under CS22 CS22: Principles of Accounting
CS23: Taxation Theory and Practice Retained under CS23 Retained under CS23 CS23: Public Finance and Taxation
SECTION 3 SECTION 3
CS31: Management Information Systems Not retained Retained under CS42 provided Section 4 not yet passed CS31: Company Law
CS32: Financial Management Retained under CS32 Retained under CS32 CS32: Financial Management
CS33: Company Secretarial Practice Not retained No exemptions are granted in paper CS33: Principles and Practice of Management
KASNEB NEWSLINE, Issue No. 1, January - March 2015 59
CURRENT SYLLABUS (CPS) RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS (CS)
SECTION 4 SECTION 4
CS41: Entrepreneurship Not retained Not retained CS41: Corporate Secretarial Practice
CS42: Company Law Not retained Retained under CS31 provided Section 3 not yet passed CS42: Management Information Systems
CS43: Meetings - Law and Procedure Retained under CS 43 No exemptions are granted in paper CS43: Law and Procedure of Meetings
SECTION 5 SECTION 5
CS51: Principles and Practice of Management Not retained Not retained CS51: Human Resource Management
CS52: Advanced Company Secretarial Practice Retained under CS52 No exemptions are granted in paper CS52: Financial Markets Law
CS53: Project Planning and Management Not retained Not retained CS53: Governance and Ethics
SECTION 6 SECTION 6
CS61: Strategic Management Retained under CS61 No exemptions are granted in paper CS61: Strategic Management
CS62: Strategic Human Resources Management Not retained No exemptions are granted in paper CS62: Public Policy and Administration
CS63: Corporate Governance and Ethics Not retained No exemptions are granted in paper CS63: Governance and Secretarial Audit
3. CERTIFIED INFORMATION COMMUNICATION TECHNOLOGISTS (CICT) EXAMINATIONCURRENT SYLLABUS RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE
GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS
SECTION 1 SECTION 1
CT11: Introduction to Computing Retained under CT11 Retained under CT11 CT11: Introduction to Computing
CT12 (T) Computer Applications - Theory Not retained Not retained CT12: Computer Applications - Practical
CT12 (P): Computer Applications - Practical Retained under CT12 Retained under CT12 CT13: Entrepreneurship and Communication
CT 13: Entrepreneurship and Communication Retained under CT13 Retained under CT13
SECTION 2 SECTION 2
CT21 (T): Operating Systems - Theory Not retained Not retained CT21: Operating Systems - Practical
CT21 (P): Operating Systems - Practical Retained under CT 21 Retained under CT 21 CT22: Principles of Accounting
CT22: Financial Accounting Retained under CT 22 Retained under CT22 CT23: Computer Support and Maintenance
CT23: Computer Support and Maintenance Retained under CT23 Retained under CT23
SECTION 3 SECTION 3
CT31: Database systems Retained under CT 31 Retained under CT 31 CT31: Database systems
CT32: Structured programming Retained under CT33 Retained under CT33 CT32: Systems analysis and Design
CT33: Systems analysis and design Retained under CT32 Retained under CT32 CT33: Structured Programming
SECTION 4 SECTION 4
CT41: Object Oriented Programming Retained under CT41 Retained under CT41 CT41: Object Oriented ProgrammingCT42 (T): Data Communication and Computer Networks - Theory Not retained Not retained CT42: Web design and e-Commerce
CS42 (P): Data Communication and Computer Networks - Practical Retained under CT 43 No exemptions are granted in paper CT43: Data Communication and Computer Networks -
PracticalCT 43: Systems Security, Professional Values
and Ethics Not retained No exemptions are granted in paper
SECTION 5 SECTION 5
CT51: Principles and Practice of Management Not retained Not retained CT51: Strategy, Governance and Ethics
CT52: Software Engineering Retained under CT52 No exemptions are granted in paper CT52: Software Engineering
CT53: Project Planning and Management Not retained Retained under CT62 CT53: Mobile Application Development
SECTION 6 SECTION 6
CT61: Information Systems Management Not retained No exemptions are granted in paper CT61: Systems SecurityCT62: Web design, Internet programming and
e-commerce Not retained No exemptions are granted in paper CT62: Information Systems Project Management
CT63: Research Methods Retained under CT63 No exemptions are granted in paper CT63: Research Methods
Information Systems Project Not applicable Not applicable ICT Project
REVISED 2015 KASNEB SYLLABUSES
KASNEB NEWSLINE, Issue No. 1, January - March 2015 60
4. CERTIFIED SECURITIES AND INVESTMENT ANALYSTS (CSIA) - REBRANDED AS CERTIFIED INVESTMENT AND FINANCIAL ANALYSTS (CIFA) EXAMINATION
CURRENT SYLLABUS (CSIA) RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS (CIFA)
SECTION 1 SECTION 1
CI11: Financial Mathematics Retained under CI12 Retained under CI12 CI11: Financial Accounting
CI12: Financial Institutions and Markets Not retained Retained under CI22 provided Section 2 not yet passed CI12: Financial Mathematics
CI13: Entrepreneurship and Communication Retained under CI13 Retained under CI13 CI13: Entrepreneurship and Communication
SECTION 2 SECTION 2
CI21: Economics Retained under CI21 Retain under CI21 CI21: Economics
CI22: Financial Accounting Not retained Retained under CI11 provided Section 1 not yet passed CI22: Financial Institutions and Markets
CI23: Taxation Theory and Practice Retained under CI23 Retained under CI23 CI23: Public Finance and Taxation
SECTION 3 SECTION 3
CI31: Management Information Systems Not retained Retained under CI42 provided Section 4 not yet passed CI31: Regulation of Financial Markets
CI32: Financial Management Retained under CI32 Retained under CI32 CI32: Corporate Finance
CI33: Financial Statements Analysis Retained under CI33 Retained under CI33 CI33: Financial Statements Analysis
SECTION 4 SECTION 4CI41: Advanced Finance, Investment and
Equity Analysis Retained under CI41 No exemptions are granted in paper CI41: Equity Investments Analysis
CI42: Law and Regulations Governing Financial Markets Not retained No exemptions are granted in paper CI42: Portfolio Management
CI43: Quantitative Analysis Retained under CI43 Retained under CI43 CI43: Quantitative Analysis
SECTION 5 SECTION 5
CI51: Principles and Practice of Management Not retained Not retained CI51: Strategy, Governance and EthicsCI52: Valuation and Analysis of Fixed
IncomeSecurities Retained under CI52 No exemptions are granted in paper CI52: Fixed Income Investments Analysis
CI53: Asset Management Not retained No exemptions are granted in paper CI53: Alternative Investments Analysis
SECTION 6 SECTION 6
CI61: Portfolio Management Retained under CI61 No exemptions are granted in paper CI61: Advanced Portfolio Management
CI62: International Finance Retained under CI62 No exemptions are granted in paper CI62: International Finance
CI63: Valuation and Analysis of Derivatives Retained under CI63 No exemptions are granted in paper CI63: Derivatives Analysis
5. CERTIFIED CREDIT PROFESSIONALS (CCP) EXAMINATIONCURRENT SYLLABUS RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE
GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS
SECTION 1 SECTION 1
CP11: Credit Management Retained under CP11 Retained under CP11 CP11: Credit Management
CP12: Introduction to Law Retained under CP12 Retained under CP12 CP12: Commercial Law
CP13: Entrepreneurship and Communication Retained under CP13 Retained under CP13 CP13: Entrepreneurship and Communication
SECTION 2 SECTION 2
CP21: Economics Retained under CP21 Retain under CP21 CP21: Economics
CP22: Financial Accounting Retained under CP22 Retained under CP22 CP22: Principles of Accounting
CP23: Taxation Theory and Practice Retained under CP23 Retained under CP23 CP23: Public Finance and Taxation
SECTION 3 SECTION 3
CP31: Management Information Systems Not retained Retained under CP42 provided Section 4 not yet passed CP31: Company Law
CP32: Financial Management Retained under CP32 Retained under CP32 CP32: Financial Management
CP33: Advanced Credit Management Not retained No exemptions are granted in paper CP33: Marketing and Public Relations
SECTION 4 SECTION 4
CP41: Marketing Not retained Retained under CP33 provided Section 3 not yet passed CP41: Law Governing Credit Practice
CP42: Company Law Not retained Retained under CP31 provided Section 3 not yet passed CP42: Management Information Systems
CP43: Quantitative Analysis Retained under CP43 Retained under CP43 CP43: Quantitative Analysis
REVISED 2015 KASNEB SYLLABUSES
KASNEB NEWSLINE, Issue No. 1, January - March 2015 61
CURRENT SYLLABUS RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS
SECTION 5 SECTION 5
CP51: Principles and Practice of Management Not retained Not retained CP51: Strategy, Governance and Ethics
CP52: Public Relations Not retained No exemptions are granted in paper CP52: Banking Law and Practice
CP53: Law Governing Credit Practice Not retained No exemptions are granted in paper CP53: Credit Management in the Financial Sector
SECTION 6 SECTION 6
CP61: Debt recovery Retained under CP61 No exemptions are granted in paper CP61: Debt recovery
CP62: Corporate lending Retained under CP62 No exemptions are granted in paper CP62: Corporate lending
CP63: Practice of Credit Management Retained under CP63 No exemptions are granted in paper CP63: Credit Practice
Enquiries and clarificationsAny enquiries or clarifications on the major syllabuses review may be forwarded to Isaac M. Njuguna (email: [email protected]); Christabel L. Osango (email: [email protected]) or Erasto M. Ng’ang’a (email: [email protected]).
REVISED 2015 KASNEB SYLLABUSES
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KASNEB NEWSLINEEDUCATIVE INFORMATIVE ENTERTAINING
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PRIZE WINNERS
ELECTRONIC RECORDS MANAGEMENT
KASNEB NEWSLINE, Issue No. 1, January - March 2015 62
1. REGISTRATION FEES
1.1 DIPLOMA EXAMINATIONS - ATD/DICT/DCM
Kenya Shillings
Foreign currency
Sh. US$ £Sterling
Registration fees 5,000 83 50
Annual registration renewal fees 1,500 25 15
Registration reactivation fees 6,000 100 60
Student identity card replacement fees 500 8 5
1.2 PROFESSIONAL EXAMINATIONS - CPS/CS/CICT/CIFA/CCP
Registration fees 5,000 83 50
Annual registration renewal fees 1,500 25 15
Registration reactivation fees 6,000 100 60
Student identity card replacement fees 500 8 5
1.3 HOLDERS OF FOREIGN ACCOUNTANCY QUALIFICATIONS/ SECRETARIES QUALIFICATIONS (FAQs/FSQs)
Enrolment fee 40,000 667 400
Examination fee per paper 20,000 333 200
Continuation fee per annum 15,000 250 150
2. EXAMINATION ENTRY FEES
2.1 DIPLOMA
2.1.1 ATD/DCM
Level I 3,500 58 35
Level II 4,000 67 40
Level III 4,500 75 45
*Single paper Level I 1,000 17 10
Level II 1,200 20 12
Level III 1,400 23 14
2.1.2 DICT
Level I 4,100 68 41
Level II 4,000 67 40
Level III 5,100 85 51
*Single paper Level I: Theory 1000 17 10
Level II: Theory 1,200 20 12
Level III: Theory 1,400 23 14
Level I: Practical 1,600 27 16
Level III: Practical 2,000 33 20
2.2 PROFESSIONAL EXAMINATIONS
2.2.1 CPA/CS/CIFA/CCP
Part I: Section 1 2,700 45 27
Section 2 2,700 45 27
Total for Part I 5,400 90 54
*Single paper 1,350 23 14
Kenya Shillings
Foreign currency
Sh. US$ £Sterling
Part II: Section 3 4,400 73 44
Section 4 4,400 73 44
Total for Part II 8,800 146 88
*Single paper 2,200 37 22
Part III: Section 5 6,600 110 66
Section 6 6,600 110 66
Total for Part III 13,200 220 132
*Single paper 3,300 55 33
2.2.2 CICT
Part I: Section 1 3,300 55 33
Section 2 3,300 55 33
Total for Part I 6,600 110 66
*Single paper (Theory) 1,350 23 14
*Single paper (Practical) 1,950 33 20
Part II: Section 3 4,400 73 44
Section 4 5,000 83 50
Total for Part II 9,400 156 94
*Single paper (Theory) 2,200 37 22
*Single paper (Practical) 2,800 47 28
Part III: Section 5 6,600 110 66
Section 6 6,600 110 66
Total for Part III 13,200 220 132
*Single paper (Theory) 3,300 55 33
ICT Project 7,500 125 75
3. EXEMPTIONS
3.1 DIPLOMA EXAMINATIONS
ATD/DICT/DCM
Level I: Per paper 1,300 22 13
Level II: Per paper 1,500 25 15
Level III: Per paper 1,700 28 17
3.2 PROFESSIONAL EXAMINATIONS
CPA/CS/CICT/CIFA/CCP
Part I per paper 1,800 30 18
Part II per paper 2,700 45 27
Part III per paper 3,800 63 38
4. SALE OF PUBLICATIONS
4.1 SYLLABUSES
Cost per copy 500 8 5
4.2 PAST QUESTION PAPERS
A set for each section or level 150 3 2
It is hereby notified for general information to all students of KASNEB, parents, sponsors, training institutions, members of the public and other interested parties that the following schedule of examination fees and related charges shall be applicable under the revised examination syllabuses:
EXAMINATION FEES AND RELATED CHARGES: EFFECTIVE FROM 1 JULY 2015
The fee structure for the Technician examinations remains the same. The technician examinations will be phased out after the November 2015 examinations
KENYA INSTITUTE OF SUPPLIES MANAGEMENTin partnership with KASNEB
CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL OF KENYA (CPSP-K) EXAMINATION ASSOCIATE IN PROCUREMENT AND SUPPLY OF KENYA (APS-K) EXAMINATION
Kenya Institute of Supplies Management, Nation Center, Tower B,
12th Floor, Kimathi Street, P. O. Box 30400 – 00100 NAIROBI.
Tel: +254 733333226, +254721244828, +254 0717 004842 Email: [email protected] Website: www.kism.or.ke
KASNEB Towers, Hospital Road, Upper Hill, P.O. Box 41362 – 00100 Nairobi, Kenya Tel: +254(020) 4923000 Cellphone: 0734 600624/0722 201214 Fax: +254(020) 2712915 Email: [email protected] Website: www.kasneb.or.ke
An updated list of training institutions for the APS-K and CPSP-K is available on KISM website www.kism.or.ke
The CPSP-K and APS-K national examinations are established as the National Examinations for certification of procurement and supply chain management professionals in Kenya under sections 5 and 13 of the Supplies Practitioners Management Act, 2007. The examinations are administered nationally in the periods MAY/JUNE and NOVEMBER/DECEMBER, through a partnership between KASNEB and KISM.
Pioneer classes commence in July 2015, with the first examinations in NOVEMBER/DECEMBER 2015.
OVERALL OBJECTIVES OF THE EXAMINATIONS
The CPSP-K examination syllabus is designed to equip learners with knowledge, practical skills and attitudes that will enable them perform supervisory, management and leadership roles as buyers, Supply Chain managers, supervisors, directors, or consultants for organizations. The APS-K examination syllabus equips learners with knowledge, skills and aptitudes to support procurement and supply chain management functions in large organizations and to provide leadership for similar functions in small organizations.
THE CPSP-K COMPRISES FOUR (4) PARTS WITH THE FOLLOWING EXAMINABLE MODULES:
CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL PART I
PL1.01 Organizational EnvironmentPL1.02 Procurement of Goods, Services and WorksPL1.03 Procurement PlanningPL1.04 Supply Chain Management Information SystemsPL1.05 Contract Law and NegotiationPL1.06 Finance for Procurement
CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL PART II
PL2.01 Supply Chain Management for SMEsPL2.02 Procurement Costing and BudgetingPL2.03 Procurement of Consultancy ServicesPL2.04 Procurement Audit and Risk ManagementPL2.05 Quantitative TechniquesPL2.06 Category Management
CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL PART III
PL3.01 Sustainable ProcurementPL3.02 International ProcurementPL3.03 Logistics and Inventory ManagementPL3.04 Research in ProcurementPL3.05 Operations Management
CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL PART IV
PL4.01 Procurement GovernancePL4.02 Strategic Supply Chain ManagementPL4.03 Procurement LeadershipPL4.04 Project ManagementPL4.05 Public Private Partnerships (PPPs)PL4.06 Research Project in Procurement and Supply
CPSP-K ENTRY REQUIREMENTS
A person seeking to be registered as a student for the CPSP examination must show evidence of being a holder of one of the following qualifications:
(a) Pass in APS-K, or(b) Degree from a recognized university, or(c) Kenya Certificate of Secondary Education
(KCSE), mean grade of C+ (plus) with minimum C+(plus) in English and in Mathematics, or
(d) Kenya Advanced Certificate of Education (KACE) with atleast TWO principle passes and credits in Mathematics and English at Kenya Certificate of Education (KCE)
(e) Equivalent qualifications as determined by Kenya Institute of Supplies Management (KISM).
THE APS-K COMPRISES TWO (2) PARTS WITH THE FOLLOWING EXAMINABLE MODULES:
ASSOCIATE IN PROCUREMENT AND SUPPLY LEVEL I
AL1.1 Principles of Procurement and SupplyAL1.2 Supply MarketsAL1.3 Introduction to Business LawAL1.4 Supply Chain ManagementAL1.5 Entrepreneurship and Business Ethics
ASSOCIATE IN PROCUREMENT AND SUPPLY LEVEL II
AL2.1 Stores and DistributionAL2.2 Procurement and Supply RelationshipsAL2.3 Contract AdministrationAL2.4 Quantitative SkillsAL2.5 Communication and Office Management
APS-K ENTRY REQUIREMENTS
A person seeking to be registered as a student for the APS-K examination must show evidence of being a holder of one of the following qualifications:
(a) Kenya Certificate of Secondary Education (KCSE)
examination with an aggregate average of at least grade C plain, or
(b) Equivalent qualifications as determined by Kenya Institute of Supplies Management (KISM)
REGISTRATION OF STUDENTS Students must register (by completing form CPSP/APS/1 and submitting with the necessary attachments) before sitting for any examination. Validity of student registration is one calendar year from January to December. Students must renew registration annually by filling student Examination Entry/Registration Renewal form (CPSP/APS/2) and submitting the form to the designated KISM receiving office in Nairobi or to a designated KASNEB or KISM representative in locations outside Nairobi, in accordance with instructions on the Student Registration form.
EXAMINATION ENTRY
Registered students who wish to take the examinations are required to complete form CPSP/ASP/2 and submit with attachements and eveidence of payment of the examination fee on or before 15th August for the November/December examinations and 15th February for the May/June examinations.
Additional information on CPSP -K and APS-K examinations may be obtained from:
(a) KISM offices(b) KASNEB offices(c) Kenya National Library Services (KNLS) branches
countrywide(d) Training institutions(e) KISM and KASNEB websites www.kism.or.ke and
www.kasneb.or.ke
PIONEER TRAINING INSTITUTIONS
• Achievers School of Professional Studies - Nakuru• College of Human Resource Management - Nairobi• Cornerstone Training Institute - Nairobi• Chuka University Embu Campus - Embu• Dedan Kimathi University - Nairobi• Dima College - Nairobi• KCA University - Nairobi• Kisii College of Accountancy - Kisii• Moi University - Eldoret • Nakuru Training Institute - Nakuru• Star Institute of Professionals - Mombasa• Technical University of Mombasa - Mombasa • Times Training Centre - Mombasa
KASNEB NEWSLINE, Issue No. 1, January - March 2015 64
Across
1 Market force led by consumers7 Overheads Absorption Rate
(abbreviation)8 Liabilities11 Amount paid to acquire an asset12 Part earning of a firm that is paid
to shareholders14 A sheet used to record financial
position of an entity16 Unit ownership in a company17 Authority that collects revenue
on behalf of the government of Kenya
20 When a private company issues shares to the public for the first time
21 Deliberate mistakes in financial records
24 In statistics the middle value of a series of values
1 2 3 4
5 6 7
8 9
10
11 12
13
14 15 16
17 18
19
20 21 22 23
24 25
26 27
28 29
Across Down 1 Market force led by consumers 2 Quantity to be purchased to minimize
total cost 7 Overheads Absorption Rate (abbreviation) 3 Review of records to verify accuracy
8 Liabilities 4 internal constitution of a company 11 Amount paid to acquire an asset 5 Owner's equity in a business 12 Part earning of a firm that is paid to shareholders 6 English economist who advocated for
monetary and fiscal policies 14 A sheet used to record financial position of an
entity 9 Summary of intended expenditure
16 Unit ownership in a company 10 Organization that regulates activities of accountants in Kenya
17 Authority that collects revenue on behalf of the government of Kenya
13 International accounting standards (abbreviation)
25 A portfolio that provides the greatest expected return for a given level of risk
26 An institution that accepts deposits and lends out money
27 To appropriate retained earnings
28 One of the two columns of an account
29 An unsecured debt instrument issued by corporate entities
Down
2 Quantity to be purchased to minimize total cost
3 Review of records to verify accuracy
4 Internal constitution of a company
5 Owner’s equity in a business6 English economist who
advocated for monetary and fiscal policies
9 Summary of intended expenditure
10 Organisation that regulates activities of accountants in Kenya
13 International accounting standards (abbreviation)
15 Accounting method that records incomes when they are earned
18 Act of minimizing tax liability19 What is done to costs of running
an entity 22 Unit measure of utility23 Goods subject to VAT
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