NDICHAONA WINSTON R021842Air.uz.ac.zw/jspui/bitstream/10646/3590/1/Ndichaona_Adequacy_of... · Kyra...
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i Adequacy of informa Sector: Th Dissertation the deg ation technology Governance in Zimba he Case of Maranatha Ferrochrome (Pv By Winston Ndichaona R021842A n submitted in partial fulfilment of the r gree of Master’s of business administra Graduate School of Management University of Zimbabwe. Supervisor: Eng. M. Manuhwa February 2013 abwe’s Mining vt) Ltd. requirements for ation
Transcript of NDICHAONA WINSTON R021842Air.uz.ac.zw/jspui/bitstream/10646/3590/1/Ndichaona_Adequacy_of... · Kyra...
i
Adequacy of information t
Sector: The Case of Maranatha Ferrochrome (Pvt) Ltd .
Dissertation submitted in partial fulfilment of the requirements
the degree of Master
Adequacy of information t echnology Governance in Zimbabwe’s Mining
Sector: The Case of Maranatha Ferrochrome (Pvt) Ltd .
By Winston Ndichaona
R021842A
Dissertation submitted in partial fulfilment of the requirements
degree of Master ’s of business a dministration
Graduate School of Management
University of Zimbabwe.
Supervisor: Eng. M. Manuhwa
February 2013
echnology Governance in Zimbabwe’s Mining
Sector: The Case of Maranatha Ferrochrome (Pvt) Ltd .
Dissertation submitted in partial fulfilment of the requirements for
dministration
ii
Dedications
This dissertation is dedicated to my mother, Rejoice Farai M’tanda and my daughter
Kyra Cameron Gunura Ndichaona. You are the reason why I have challenged to see
through this study.
iii
Declarations
I, Winston Ndichaona , do hereby declare that this dissertation is the result of my
own investigation and research, except to the extent indicated in the
Acknowledgements, References and, by comments included in the body of the
report, and that it has not been submitted in part or in full for any other degree to any
other university.
______________ Date_________
Student signature
_______________ Name:_____________ Date:_________
Supervisor’s Signature
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Acknowledgements
Firstly, I would like to convey my deepest gratitude to my supervisor Eng. M.
Manhuwa for the effort put in guiding me in this research.
I would also like to thank my work colleagues and classmates especially, Group 1 of
the Financial Services MBA for their support during the entire duration of this study. I
shall forever be grateful for their roles in making the study period a success.
Last, I want to thank my family for the support.
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Abstract
The decline in Zimbabwe economy from 1998 to 2008 had an adverse effect on the
business ventures, not sparing the ferrochrome industry. This led to reduction in
production. On the after math of economic recovery, ferrochrome prices went down
which forced a number of mines to close shop, in the face of rapid advancement in
technology and the inclusion of IT governance as a King III chapter of good
corporate governance for the first time in 2009. This research wishes to investigate
the factors that led to production stoppage in line with Information Technology. The
research objectives are to discover if there is adequate IT governance for
sustainability in the ferrochrome industry with a special emphasis in Maranatha
Ferrochrome Limited.
The researchadopted a phenomenology approach because it permits analysis of
qualitative data, which provides in-depth understanding and meaning to events. Self-
administered questionnaires were used as the main data collection tools, although
small interviews were sought to get further understanding on responses.
The research study discovered that Maranatha Ferrochrome has high use of IT
products and services, but there is little control in terms of the management of the IT
assets. The research also found out that there was no IT department and an IT
policy, or accommodating IT frameworks at the company. In addition the research
discovered that there was little in place for disaster recovery planning and that there
was over reliance on outsourcing of IT services with little or no reporting on IT
importance to the company. Last the research discovered that Maranatha
Ferrochrome was not practising industry best practices in terms of IT management
and governance, which implies that there is inadequate IT governance at the
company.
The researcher recommends that Maranatha Ferrochrome should reform it conduct
on IT governance, and benchmark their organization against the standard of
published institutes, such as the Institute of IT governance and the Institute of
Directors South Africa. It is also vital that the company creates an IT governance
system that has the input of all levels of corporate hierarchy.
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Table of Contents Dedications ............................................................................................................................................ ii
Declarations ........................................................................................................................................ iii
Acknowledgements .......................................................................................................................... iv
List of Figures ....................................................................................................................................... x
List of Tables ........................................................................................................................................ xi
Chapter One .......................................................................................................................................... 1
Introduction and Background ............................................................................................................. 1
1.0 Introduction ............................................................................................................................ 1
1.1 BACKGROUND ......................................................................................................................... 3
1.1.1.1 Ferrochrome Production Trends since 1990 .......................................................................... 3
1.1.1.3 Factors affecting mining operations ............................................................................. 3
1.1.2 Zimbabwean Economy and Mining Sector Contribution ........................................ 5
1.2 Maranatha Ferrochrome Private Limited ...................................................................... 8
1.3 Statement of the problem ................................................................................................... 11
1.4 Research Objectives ........................................................................................................... 13
1.4.0 Primary Research Objective ............................................................................................... 13
1.4.1 Secondary Research Objectives........................................................................................ 13
1.5 Research Questions ............................................................................................................ 13
1.6 The Research Proposition .................................................................................................. 14
1.7 Justification of Research .................................................................................................... 14
1.8 Scope of Research .............................................................................................................. 15
1.9 Chapter Summary and Organisation of the Research ................................................... 15
Chapter Two ........................................................................................................................................ 17
Literature Review ............................................................................................................................... 17
2.0 Introduction ............................................................................................................................... 17
2.1 Industry Factors for Success ................................................................................................. 17
2.2 IT Governance Defined ........................................................................................................... 18
2.3 Principles of good and effective IT Governance ................................................................. 20
2.3.1 Board Responsibility for IT governance ........................................................................ 20
2.3.2 IT adherence to sustainability and performance objectives ....................................... 21
2.3.3 Management Role in Implementation of IT governance framework ......................... 21
2.3.4 Board monitoring of IT investments and expenditure ................................................. 21
2.3.5 IT as part of risk management ........................................................................................ 22
2.3.6 Effective management of information assets ............................................................... 22
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2.3.7 Risk and Audit Committee involvement in board IT functions ................................... 22
2.4.0 Frameworks of IT Governance ........................................................................................... 23
2.4.1 COBIT ................................................................................................................................ 23
2.4.2 ITIL ...................................................................................................................................... 23
2.4.3 International Organisation of Standardisation .............................................................. 24
2.5. Dimensions of IT Governance .............................................................................................. 24
2.5.1 Structure ............................................................................................................................ 25
2.5.2 People ................................................................................................................................ 25
2.6 IT Governance Process .......................................................................................................... 26
2.7 Determinants of IT Governance effectiveness .................................................................... 27
2.7.1 Organisational demographics ......................................................................................... 27
2.7.3 IT function characteristics ............................................................................................... 29
2.7.5 Organisational Culture ..................................................................................................... 30
2.8 IT existence, growth, and challenges ................................................................................... 30
2.8.1 IT Issues in Botswana and South Africa ....................................................................... 31
2.8.2 IT issues in Zimbabwe ..................................................................................................... 32
2.9 Ferrochrome Industry Structure ............................................................................................ 34
2.9.1 Industry Defined ............................................................................................................... 34
2.9.2 Industry Structure ............................................................................................................. 34
2.10 Liberalisation and Globalisation .......................................................................................... 36
2.10.1 Tanzania and liberalisation ........................................................................................... 36
2.11 Benefits of IT Governance ................................................................................................... 37
Chapter Three ..................................................................................................................................... 39
Research Methodology ..................................................................................................................... 39
3.0 Introduction ............................................................................................................................... 39
3.1 Research Design ..................................................................................................................... 39
3.1.1 Research Philosophy ....................................................................................................... 39
3.1.2 Research Approach ......................................................................................................... 42
3.1.3 Research Strategy ........................................................................................................... 43
3.2 Population ................................................................................................................................. 46
3.3 Sampling ................................................................................................................................... 47
3.3.1 Sampling Techniques ...................................................................................................... 47
3.4 Sources of Data ....................................................................................................................... 48
3.4.1 Internal Versus External Data Sources ......................................................................... 49
3.4.2 Primary data ...................................................................................................................... 49
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3.4.3 Secondary data ................................................................................................................. 49
3.5 Research Instruments ............................................................................................................. 49
3.5.1 Focus Group Discussions ............................................................................................... 50
3.5.2 Observation ....................................................................................................................... 50
3.5.3 Interviews ........................................................................................................................... 50
3.5.4 Experimentation ................................................................................................................ 51
3.5.4 Questionnaire .................................................................................................................... 51
3.6 Data Analysis ........................................................................................................................... 52
3.7 Reliability and Validity ............................................................................................................. 53
3.7.1 Validity ................................................................................................................................ 53
3.7.2 Reliability ........................................................................................................................... 53
Chapter Four ....................................................................................................................................... 55
Research Findings, Analysis, and Discussions ............................................................................. 55
4.0 Introduction ............................................................................................................................... 55
4.1 Response Rate ........................................................................................................................ 55
4.2. Research Findings ................................................................................................................. 55
4.2.1 Age Distribution ................................................................................................................ 55
4.2.2 IT usage ............................................................................................................................. 56
4.2.3 Security on Computers, and IT equipment ................................................................... 57
4.2.4 Electronic mails and Internet .......................................................................................... 58
4.2.5 IT information dissemination ........................................................................................... 58
4.2.5 IT Services and Maintenance ......................................................................................... 60
4.2.6 Automation vs. Human workforce .................................................................................. 61
4.2.7 IT Governance for better performance .......................................................................... 62
4.2.8 Accountability for IT Assets ............................................................................................ 63
4.2.9 Adequacy of IT services .................................................................................................. 64
4.2.10 Factors for production decline in 2011 ........................................................................ 65
4.2.11: IT Information to the Board .......................................................................................... 66
4.2.12 Industry best practice in line with IT ............................................................................ 68
4.2.13: IT reporting ..................................................................................................................... 69
4.2.14 Disaster Recovery Plans ............................................................................................... 70
4.2.15 IT Governance Policy Familiarity ................................................................................. 71
Chapter Five ........................................................................................................................................ 73
Conclusions and Recommendations ............................................................................................... 73
5.0 Introduction ............................................................................................................................... 73
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5.1 Conclusions .............................................................................................................................. 73
5.2 Research Proposition .............................................................................................................. 75
5.3 Recommendations ................................................................................................................... 75
Bibliography ........................................................................................................................................ 77
APPENDICES ..................................................................................................................................... 83
Appendix I – Letter of Intent ......................................................................................................... 83
APPENDIX II: Research Questionnaire ...................................................................................... 84
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List of Figures Figure Page
Figure 1.1: Zimbabwe ferrochrome production 1990-2006 3
Figure 1.2: Mining export earnings by commodity 6
Figure 2.1: Focus area of It governance 20
Figure 2.2: IT governance process 27
Figure 4.1: Ratio of computer users against non-users 56
Figure 4.2: Availability of security 57
Figure 4.3: Meeting attendance 59
Figure 4.4: Sources of IT solutions 60
Figure 4.5: Automation preferred over manpower 61
Figure 4.6: Proper IT governance 62
Figure 4.7: Accountability for assets 63
Figure 4.8: Adequacy of IT services 64
Figure 4.9: Lack of IT governance as a factor of production decline 65
Figure 4.10: Factors affecting production 66
Figure 4.11: Board awareness of IT developments 67
Figure 4.12: Industry practice at Maranatha Ferrochrome 68
Figure 4.13: It reporting commensurate with IT importance 69
Figure 4.14: Existence of disaster recovery plan 70
Figure 4.15: IT policy popularity 71
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List of Tables
Table Page
Table 2.1: Ferrochrome productioncapacities………………………………………………………… 35
Table 2.2: Ferrochrome export sales……………………………………………………………………… 35
Table 4.1: Age distribution ………………………………………………………………………………………55
Table 4.2 Emails and internet availability……………………………………………………………… 58
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1
Chapter One
Introduction and Background
1.0 Introduction
“In the 21st Century, IT governance is critical for all organisations. Those without an
IT governance strategy face significant risk, those with one, perform measurably
better.” (Anon, 2010)
There has been growing importance of Information Technology (IT) governance
within corporates. Most focus on research was on IT governance, the link between IT
governance and its determinants, and the link between IT governance and its impact
(Mohamed, Kaur, & Singh, 2012). This studyhowever the factors in implementing
Information Technology (IT) governance in the ferrochrome mining sector in
Zimbabwe as well as to investigate the adequacy of IT governance with respect to
sustainable mining operations.
Zimbabwe has a long history of mining, dating back several centuries. For instance,
despite being in the middle of war in the 1970s, the country ranked sixth in gold
production, with a production of 18.6 tonnes in 1975(World Gold Analyst, 2010).
Zimbabwe’s mining sector crisis has been building up over the years. The crisis was
imbedded on declining production efficiencies and investor wariness(Saunders,
2007). This was a result ofZimbabwe’s economic climate, and political faction fights
over assets(Saunders, 2007).
Information technology governance is a subcommittee of corporate governance as
stipulated in the King III report(Instutute of Directors South Africa, 2009). The King III
report came after the issuance of a number of reports that included; the Cadbury
Report, the Greenbury, Hampel, Turnbull, Smith, and Higgs Reports (Institute of
directors in Southern Africa, 2009). The fore-mentioned were combined and the UK
governance code is now known as the Combined Code(Institute of directors in
Southern Africa, 2009). IT governance relates to a number of ideals that include IT
decision-making authority, capabilities of an organization, structures and processes,
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and relational mechanisms that yield an alignment between business and IT
(Simonsson & Johnson, 2006).
Disregarding world economic decline, IT spending world-over managed to reach
$3.4 trillion in 2010 (a 4.6% increase from 2009) (Mohamed, Kaur, & Singh, 2012). It
was discovered that despite an increase in IT investment, a greater ratio of IT
investment do not warranty high returns for the investor (Mohamed, Kaur, & Singh,
2012). This shows how much IT investment has risen the pecking order. According
to Standish Group (2006), an estimated 67% of IT projects within the group did not
substantiate the reason to invest in such projects. Exposure to high risks surfaces as
organizations invest more in IT and depend strongly on IT(Mohamed, Kaur, & Singh,
2012). To this end, organizations need to progressively review and protect adopted
information assets from loss or disaster. Some notable disasters and losses in
history took the form of the September 11 terrorist attacks on the World Trade
Center in New York City(Mohamed, Kaur, & Singh, 2012). The other acts of
corporate malfunction that call for effective disaster management include financial
misbehavior by organizations, e.g., Worldcom and Enron disasters (Mohamed, Kaur,
& Singh, 2012). This would imply that IT governance is necessary for effective use of
IT resources. IT governance is key for the success of IT in an organization.
In the ever-changing world, businesses and corporates need a new equation, one
that makes IT governance part of corporate strategy. To this end, Maranatha
Ferrochrome cannot be left behind in the race to stay afloat.This study assesses the
extent to which IT governance has been adopted and implemented at Maranatha
Ferrochrome and the extent to which it is employable to ensure sustainable
ferrochrome production operations.
3
1.1 BACKGROUND
1.1.1 The Zimbabwean Ferrochrome Mining Industry
1.1.1.1 Ferrochrome Production Trends since 1990
The graph below shows annual ferrochrome output from 1990 in tonnes. The highest
ferrochrome production was in 1995 and 1996 when about 290 000 tonnes was
produced annually. As seen from the graph overleaf, the production declined after
1996 to maintain an average of about 200 00tonnes (Saunders, 2007).
Figure 1.1: Zimbabwe Ferrochrome Production 1990-20 06
Source: Saunders 2007
1.1.1.3 Factors affecting mining operations
The ferrochrome mining sector, like all other mining sectors faces a number of
impediments that hinder achieving optimum production levels (African Development
Bank, 2012). These hindering factors include social, economic, environmental,
political, and legal factors.
0
50000
100000
150000
200000
250000
300000
350000
19901991199219931994199519961997199819992000200120022003200420052006
Zimbabwe Ferrochrome 1990-2006
Tonnes
4
1.1.1.3.1 Social Factors
The Chamber of Mines (2010) noted the need to attract back into the local mining
industry, exported skilled professionals to boost the mining sector revival. This came
on the background, of an unpublished report of August 2007 by Professor Keith
Viewing, which noted the worsening crisis of skills shortage. The mining sector had
an estimated 700 vacancies for technicians, and estimated graduate vacancies to be
between 166 and 233 for 19 mining companies that provided data (Veiwing, 2007).
1.1.1.3.2 Environmental Factors
The continuous power cuts and limited electricity supplies played a role in reducing
production levels for miners over the past couple of years(World Gold Analyst,
2010). The capacity utilisation of mining operations and treatment plants was about
50% mainly due to the inability by Zimbabwe Electricity Power Authority (ZESA) to
match electricity output to demand (The Chamber of Mines, 2010). In 2012, the
Zimbabwe had a production of 1300mv against a demand of 2200mv, thus a deficit
of 900mv (Ministry of Finance, 2012).
The power situation in Zimbabwe is worsened by the situation that the country
cannot import as the problem is all regional in Southern Africa (World Gold Analyst,
2010). To this extent, miners especially gold producers are making initiatives to
install their own power generating facilities to deal with power outage problems (The
Chamber of Mines, 2010). This would however increase operating costs for miners.
1.1.1.3.3 Economic Factors
Ferrochrome production, like all other minerals is affected by the unavailability of
capital investment to strengthen balance sheet requirements and recapitalisation
efforts (The Chamber of Mines, 2010). According to The Chamber of Mines (2010),
the mining sector required between US$3 billion and US$5 billion over the five-year
period ranging 2010-2014 for recapitalisation purposes only.
5
Due to strains on local financial markets, external sources would be an option.
However, high country riskperceptions among potential investors hinder fund
sourcing efforts (World Gold Analyst, 2010).
1.1.1.3.4 Political Factors
Political instability in Zimbabwe is one of the pivotal factors that hinder development
in the mining sector (World Gold Analyst, 2010). For most mining companies
(ferrochrome included), indigenisation and empowerment issues are among the
scariest issues. More so, the delays in finalization of proposed amendments to the
Mines and Minerals Act are not helping the situation (The Chamber of Mines, 2010).
As much as the country may hold recognisable mineral deposits, a history of tenure
and economic outlook uncertainty has disqualified the levels of modern investment
that other comparable areas have realized(World Gold Analyst, 2010).
1.1.2 Zimbabwean Economy and Mining Sector Contribu tion
The main mineral products from Zimbabwe include platinum, gold, diamonds, ferro-
alloys, coal, black granite, and phosphates (Ministry on Economic Planning and
Investment Promotion, 2011).The mining sector contributions are at related matrix
levels. These levels include contribution to Gross domestic product (GDP), foreign
currency, and exchange generation, infrastructure and technological development as
well as employment creation. In addition, the mining sector encourages synergies
and as a vertical and horizontal multiplier effect in the sense of creation and
development of industries that serve or rely on the mining sector.
1.1.2.1 Gross Domestic Product Contributions
Basing on the sectorial contributions at 1990 constant prices, The Chamber of Mines
(2010) argues that the contribution of mining sector to GDP should be at least 15%.
This comes on the background that the contribution was stated as 4% by Central
Statistics Office (CSO) in 2010. The argument was imbedded in that the economic
6
structure has changed and that the informal sector has grown significantly whereas
official CSO figures were derived from the formal sector only. More so, mineral
exports account for 17% of GDP, which cannot be reconciled to CSO figures, so the
4% CSO figure of GDP contribution was understated (The Chamber of Mines, 2010).
The Minister of Finance also added weight to the Chamber of Mines argument
conceding that the mining sector had risen its contribution to the GDP at 13%, as
presented in the budget (Ministry of Finance, 2011). In addition, the average share of
mining to GDP grew to an average of 16.9% from 2009-2011 overtaking agriculture
(Ministry of Finance, 2012).
1.1.2.2 Foreign Exchange Generation
The generation of foreign exchange has been one the mining sector’s major
attributes for the economy. In addition, mining accounted for 50% of total export
earnings in 2009 ((The Chamber of Mines, 2010). The reserve Bank of Zimbabwe
figures estimated that mineral exports accounted for US$1.7 billion, which converts
to 67% of total export receipts between January and October 2011.In 2012 mineral
exports accounted for 64% of total exports (Ministry of Finance, 2012)
The graph below shows the contribution by ferrochrome (10%) as well as other
minerals to mining export earnings for 2011 upto the month of October.
Figure 1.2: Mining Export Earnings by Commodity
Source: Ministry of Finance (2011)
2011 MINING EXPORT EARNINGS BY COMMODITY
45%
24%
14%
10%7%
Platinum
Gold
Diamonds
Ferrochrome
Other
7
From 2012 going forward mineral exports are estimated to have grown by 38.7% in
2011 and an extra estimated growth of 13.3% in 2012 (Ministry of Finance, 2011).
However, the outlook of chrome production remained subdued due to lack of
favorable global prices, forcing a downward revision in chrome production from 750
000 tons to 420 000 tons(Ministry of Finance, 2012).
1.1.2.3 Infrastructure Development
In Zimbabwe, most mines plough back benefits to their host communities through
differing initiatives that may include infrastructure development, which may be meant
to benefit their employees such as roads, recreational facilities, clinics, and schools.
However, there is a thin line between employees and the catchment community,
inevitably, the host community as a result also derives benefits from such initiatives
(The Chamber of Mines, 2010).
It is important to note that the social interventions by mining companies are not fully
accounted for in Zimbabwe’s officially published statistics(The Chamber of Mines,
2010). Some notable achievements are that Zimbabwe is a mining settlement
dominated economy, with several towns having commercial activities that are directly
linked to mining (The Chamber of Mines, 2010). Hwange, Mhangura, Mashava,
Kwekwe, and Zvishavane are such mining-based settlements.
Due to direct benefits derived from having a mining company closes by, ignoring
some negative side effects, mining-based communities are basically better off than
their other rural folks who do not enjoy proximity to a mining activity (International
Council of Mining and Metals, 2007). The benefits are supported by the Marange
community in Zimbabwe which in interviews the community appreciates the
development brought by diamond mining companies to the community’s
livelihood(The Chamber of Mines, 2010).
1.1.2.4 Employment creation
8
An estimated 65 000 people were directly employed by the mining sector in
processes directly related to mineral extraction (The Chamber of Mines, 2010) during
the peak period of 1997/98. In 2011, the figure was estimated to be at 45 000 in the
main stream and a further 15 000 down stream jobs. Downstream jobs are those that
provide service to mining industry (The Chamber of Mines, 2010).
In addition, the mining sector contributes to the economy through payment of taxes,
levies. Such taxes include Pay As You Earn (PAYE) for employees as well as Value
Added Tax (VAT) and import taxes.
1.2 Maranatha Ferrochrome Private Limited
Maranatha Ferrochrome (Pvt) Ltd is a mining company that produces ferrochrome.
The company was established in 1998 by a group of local Zimbabweans led by Dave
Butcher, as a Christian business to assist Christian education. The company was
partnered by a financially stable company, Gurta AG, an Italian company through
which Maranatha Ferrochrome sells its products. Maranatha was erected from a
dormant ferrochrome smelter that was owned by Rio Tinto at Eiffel Flats, in Kadoma
some 140 kilometres west of Harare. The original plant was comprised of a single
furnace, day Bins for Raw Material, and one 15-ton Overhead Crane.
The plant in Kadoma has an installed capacity to produce 28 000 metric tons of High
Carbon Ferrochrome annually. The chrome ores used at the Smelter are drawn from
mining claims in Mhondoro (East Dyke), Darwendale (North Dyke), Mapanzure, and
Mashava (South Dyke). Chrome ore is mined and transported to Kadoma, where
smelting takes place using a combination with reductants (coke and coal) and flux
(quartz) to produce high carbon ferrochrome alloy.
Smelting operations are based in Kadoma and in various mines, while administration
work and sales are housed at the Head Office in Harare. Most of Maranatha’s work
is done via electronic communications which connect the plant, mines, head office
and other stakeholders. The main market is Europe, United States of America,
Zambia, and South Africa, with only approximately 0.1% of total production being
sold locally.
9
1.2.1 Employment Structure
The company employs a total of 323 permanent employees and seasonally variable
contract workers. The company is private and has a seven member board of
directors, of which two are executive.
1.2.2 IT at Maranatha Ferrochrome
Over the years, the company operations have developed and have gained significant
ground in utilization of IT as a backbone to sustainable operations, albeit in a highly
dynamic and economically stringent environment. The mineral commodities price
boom that started around 2002/3 and peaked in the 2006/7 season resulted in a
fierce global competition for skills in the mining sector. The effect resulted in massive
loss of labor, especially in Zimbabwe. According to Hawkins (2009), the Zimbabwe
Chamber of Mines estimated that more than half the industry’s skilled personnel had
migrated by 2007. It further estimated that by early 2008, there were about 1116
vacancies within the mining sector in Zimbabwe(Hawkins, 2009). To this end, the
use of IT through proper governance of IT systems could act as a bridge to ensure
the labor lost is mitigated by IT.
In 2011, a growth rate of about 25.8% was observed in the mining sector in which
mining exports growing by about 38.7% contributing about half of the exports in
2011(Ministry of Finance, 2011). The leading exports by name and percentage
contribution wereplatinum, contributing 45% and gold contributing 24% of the
exports, and diamonds came third, contributing 10%. According to African
development Bank (2012), Zimbabwe’s mining sector was estimated to grow by
about 15.9%. Chrome products were predicted to fall by about 50% on 2013
forecasts (Ministry of Finance, 2012). The estimated growth in the industry needs
mining firms to align their strategy to the general national picture.
The local metals industry has been having problems with pricing and market
unpredictability trends. Metal prices fluctuated several times in 2011, however
ending the year on a weak note with the exception of gold. Between January 2011
and December 2011, gold is the only mineral that firmed in pricing, going stronger by
13% (African Development Bank, 2012). The other minerals like platinum, copper
10
and, nickel declined by an estimated 22%, 22% and 27%, respectively, during the
period of January to December 2011(African development Bank, 2012).To this end,
forecasting that has most been manual needs to be revisited and addressed by other
means that may include IT processes.
More so,minerals resources are perishable, to this end, unmonitored, and
extravagant utilizations of such resources can be catastrophic to mining operations.
Organizations that do not effective governance suffer are identified by poor
performance, higher exposure to risk, and an inappropriate and arbitrary resource
allocation (Norbrand & Blome, 2007).
General observations discovered a high level of health risks associated with mines
that must be monitored constantly. For instance, while children enjoy new versions of
video games, African children get killed or injured in the mines of Katanga during
extraction of metals to be used in the gaming industry (Norbrand & Blome, 2007). In
the event that game brand companies acknowledge and accept the negative side
posed by mining, the response by consumers would be different(Norbrand & Blome,
2007). This indicates that the levels of accountability are still low in Africa and some
mitigation measures need be in place.
Some research reports, including that of Norbrand and Blome (2007) were published
addressing the relationships between the demand for metals by electronic
companies and the social and environmental mishaps of mining platinum group
metals and other related metals(Poyhonen & Simola, 2007). A common message
permeated these documents: brand electronics companies should apply their
responsible supply practices. In effect, the messages highlighted lack of good
governance imbedded in IT in metals mining companies like Maranatha
Ferrochrome. There has been increasing pressure from several groups on how
metal producing mines and plants are run. In February 2009, two international
associations of companies from the electronics andinformation communication
technology sector issued a public statement acknowledging of their consent about
poor socio-environmental practices observed in some mining areas within the metals
supply chains(GeSI & EICC, 2007). The pressures for responsible and sustainable
operations havebeen on the rise in Zimbabwe being championed by the Environment
Management Agency (EMA). These pressures have created a vacuum that needs
address in the technologically dynamic business world. NGOs have been playing
11
catalytic roles in the new global politics of sustainable development. Their efforts are
leading to undeniable advancements in multilateral regimes, environmental
standards, and corporate behavior(Young, Fonseca, & Dias, 2010).
Considering most standards, as acknowledged by The Economist (2009), Africa’s
knowledge economy is the last comparing with other continents. However,
technological revolution and leapfroggingespecially in the innovative use of cell
phones in evidently in progress in Africa (Economist, 2009). Africa is home to a very
larger proportion of the world’s poor, yet, the continental economy is on a recovery
path (Economist, 2009). This cascades to nationaleconomies that also exhibit traits
of recovering and expose the potential for economic development and involvement
of the local populations(Mahajan, 2009). In most countries, there are perennial
conflicts that cause institutions of national governance to be insubstantial, e.g., some
countries like Zimbabwe and Somalia were on a path of collapse(Gatune & Najam,
2011). The general backwardness of Africa may render products and systems in
Africa poor quality or at least perceived so.
Given a number of complexities, organizations in business face a number of
setbacks like, globalization, knowledge economy, and even disasters. At the same
time, IT governance is a way to assist organizations mitigate risk and to protect IT
assets from losses, as part of corporate governance requirements(Mohamed, Kaur,
& Singh, 2012).
1.3 Statement of the problem
Maranatha Ferrochrome temporarily stopped operations in December 2011 due to
unforeseen market turbulences and competition from international and regional
superior producers(Maranatha Ferrochrome Limited, 2011). As the company restarts
operations in 2012, a rise in awareness of IT importance in the firm’s survival seems
evident.
After years of existence, Maranatha’s information is unconsolidated and there is
uncertainty in most cases relating to IT related issues. This has had both financial
and operational implications to the company.
Evidently with budget and organisational structures, IT and IT governance seem
peripheral phenomenon to the firm, amid the highly turbulent business environment.
Information systems were regarded mere enablers to business, but have now
12
become inevitable and more important because they are now integrated into the
strategy of the business (King, 2009).
The emergence and evolution of the Internet, e-commerce, online trading and
electronic communications have made it possible for companies to do business
electronically and do transactions in real time(King, 2009). As a result, large threats
are realized and thus need proper controlling as well as adequate governance.
The use of Enterprise Resource Planning (ERP) or supply chain software remains
due to be implemented at Maranatha (Maranatha Ferrochrome Limited, 2011). This
is unlike at other prospering mines which have IT software and visible departments
in their organisations. For instance, Zimplats uses SAP system and has a well-
defined IT department and responsibilities on IT within top management (Zimplats,
2011).
It is an objective of this research to conclude on the question, “Are mining companies
in Zimbabwe are adequately implementing IT governance structures to achieve
sustainability.” This study shall assess the IT governance compliance as well as its
implementation at company level, its involvement with all concerned stakeholders,
and its assistance to sustain mining operations. Maranatha has little grip over IT
systems and utilities. Resultantly, IT threats are attended to after a massive breach
or tangible collapse or failureas in the case of the current state of ‘care and
maintanance’.
Many organizations have limited or no ways to measure or monitor their IT results
and performance (Institute of IT Governance, 2003). Maranatha Ferrochrome, as
part of the metals producing firms finds itself in a world where all stakeholders are
becoming aware of proper governance. By such it needs to have in place IT
governance to ensure compatibility with both local and international stakeholders in
the supply chain.
Maranatha’s customers are mostly in developed world where technology is
advanced(Maranatha Ferrochrome Limited, 2011). By such, the move from manual
processes to electronic processes need to be assessed and reviewed in a
systematic manner, which warrants IT governance frameworks. This also implies
that its employees and local stakeholders must be in the fold of the governance in
13
place, to ensure operations survival and sustainability(Institute of IT Governance,
2003).
Maranatha Ferrochrome has been losing some vital skills, and by such, the company
has to mitigate and avoid loss of intellectual rights as well as knowledge assets to
rival companies or other industrial sectors. The company needs to have protection,
especially of information and IT infrastructure, an attribute that is part and parcel of
IT governance.
1.4 Research Objectives
1.4.0Primary Research Objective
To investigate the adequacy of IT governance at Maranatha Ferrochrome (Pvt) Ltd.
1.4.1Secondary Research Objectives
• To establish if IT assets can yield value for the organization.
• To establish how the organization views IT governance.
• To establish if the use of IT and IT governance can replace the lost labor
force.
• To establish IT Maranatha Ferrochrome has an IT governance system well-
known to all employees.
• To establish the key critical factors for IT governance.
1.5Research Questions
The research questions for the study are as follows
• Can the company realize better performance and returns from IT
governance?
• How does the company and employees view IT governance?
• Can automation replace manpower?
14
• How many employees are familiar with Information Systems governance?
• How many employees are in the critical path of IT systems?
• What are the key critical factors for IT governance implementation?
1.6 The Research Proposition
The research assumes thatthere exists a scope for a more efficient and sustainable
operational ferrochrome mining practice for mines with emphasis on Maranatha
Ferrochrome, after certain IT governance values are implemented. The research
also proposes that ifcertain IT governance values can be observed in the
ferrochromium sector, with particular reference to Maranatha Ferrochrome, mining
operations would be more efficient and sustainable.
1.7Justification of Research
This study will benefit different stakeholders in the following ways;
The results of this research will provide adequate insight into the link between an
organization’s IT governance practices and its sustainability. To this end,
ferrochrome producing companies can establish strategies to survive in the highly
dynamic mining environments and mitigate the adverse effects of Information
Systems neglect. The research finding can assist in fostering IT/IS governance in
corporate governance structures and practices. The study uses some information
derived from other stakeholders and other related companies because some of the
issues raised are not peculiar to Maranatha Ferrochrome only.
This study will add to the stream of knowledge of knowledge in that findings
discovered will yield an enhanced understanding of the link between IT governance
and sustainability of operations. This will help marry the concepts, unlike silo
approaches of viewing the two as different and mutually exclusive disciplines. This
15
comes in the light of postulations that gaps still exist in IT governance understanding
(Brown & Grant, 2005).
IT governance knowledge should not be confined, but should be cascaded through
discussion, dialogue and collaboration between industry and the academic world
(van Grembergen & de Haes, 2005). To this end, this research can be noted as a
starting point in dissemination of information in the mining sector.
This study also contributes to the researcher’s acquisition of business research
skills. This study assists the researcher in the fulfilment of the Master’s in Business
Administration degree requirements.
1.8Scope of Research
The limitation of the research is the organization under study, Maranatha
Ferrochrome (Pvt) Ltd and will not necessarily generalize the findings and results to
other mining organizations in Zimbabwe. In addition the research confined limited to
a larger part, the qualitative description of the existence of the relations between
sustainability of operations, and IT governance in an organisation.
Further study areas cover the extension of the study to cover other mining
subsectors. The extension of this study to the whole industry in its entirety is also an
area of possible further study, in the form of quantitative research in IT governance
and sustainability. The use of a bigger sample could be a starting point.
1.9 Chapter Summary and Organisation of the Researc h
This chapter introduces the study, and it provides the history of mining sector in
Zimbabwe within the context of national developments. It also touches on the
importance of mining to the economy as well as IT governance importance to the
mining sector. The problem statement was defined as well as research objectives,
and questions,which were also introduced.
Chapter 2 critically digs into literature review whereas Chapter 3 details the research
methodology. The Fourth Chapter is about data analysis presentation and
16
interpretation. Chapter 5 provides the conclusions and recommendations of the
study.
17
Chapter Two
Literature Review
2.0 Introduction
This chapter provides the definition, overview of the concept of IT governance, and
the importance of IT governance to industry, in particular mining sector, zeroing in on
the Ferrochrome industry. In effect this chapter attempts to highlight the literature
relevant to this study area. The literature highlights the principles of IT governance in
general, and goes on to examine the frameworks upon which IT governance is
based. Using some regional and international examples, the literature tries to look at
IT governance in the mining sector as well as IT growth and the challenges.
2.1 Industry Factors for Success
Key success factors in any environment vary among industry location and vary with
time within the same industry (Thompson, Strickland, & Gamble, 2010).
Success factors can be generalised to be those economic factors that have an
influenceon an industry’s capability to thrive on the market (Thompson, Strickland, &
Gamble, 2010). The assessment of critical success factors in key. The focus in
choosing critical success factors in project selection in the mining industry is on
choosing those factors deemed key by investors (World Bank, 1992). In addition,
mining being a global industry and due to inadequate investor base in Africa, mining
growth thus relies on ability to lure foreign investors. To this end, African mining must
battle out for investment in the highly risky capital markets (World Bank, 1992)
Maintaining sustainable operations and maintaining investor confidence is vital to
retaining already present investors as well as attracting new ones. The success
factors should get due attention or an industry risks being obsolete. Top
management has discovered the extent that IT can influence the success of an
organization (Institute of IT Governance, 2003).In most organizations, IT has
assumed the role of corner-stone part of doing business (King, 2009). IT has
become a vital element to support, sustain and grow business making it a vital
18
strategic asset for opportunity creation as well as for gaining market competitive
advantage (King, 2009). In addition only about 29% of well-funded IT projects
succeed in bringing a positive return on investment (Bowen, Cheung, & Rohdeb,
2007). To this end the governance of IT has been chosen as one of the factors to be
assessed for the study to investigate how businesses can achieve sustainability, and
better performance.
2.2IT Governance Defined
IT governance is associated with IT decision making authority, organization
processes, structure and processes, and relational mechanisms that result in
business unit and ITalignment(Simonsson & Johnson, 2006).In the last decade, the
prominence of IT governance gained popularity both in theory and in practice(Korac-
Kakabadse, N; Kakabadse, A, 2001). The rise of IT governance can be credited to
the Basel II, SOX 2002, and the acceptance that IT needs to be protected(Mohamed,
Kaur, & Singh, 2012). Generally, IT governance is about decision making,
capabilities of an organization as well as organisational processes that would result
IT-business alignment. An understanding of the IT governance concept is essential
as it establishes the boundary and the scope within which IT governance
functions(Ko & Fink, 2010).
IT governance is a responsibility of the board, top management and other
stakeholders(Institute of IT Governance, 2003). The Institute of IT Governance
expands that governance of IT is a crucial component of corporate governance that
is made up of leadership, structures and organizational processes (Institute of IT
Governance, 2003). The processes, structure and leadership ensure that the
adopted IT extends and sustains organizational strategies (Institute of IT
Governance, 2003). In addition, The Institute of IT Governance (2003) summarises
that IT governance to be fundamentally concerned about the delivery of value from
IT, and IT risk management.
To this end, IT governance has five focus areas that are all driven by stakeholder
value (Institute of IT Governance, 2003). Resource management, performance
measurement as well as strategic alignment are some of the drivers. The remaining
19
two are outcomes and these are value delivery as well as risk management as
detailed in figure 2.1.
As indicated in Figure 2.1, IT governance is a cycle so flexible that it can beadopted
at any point with continuous monitoring and measuring of results, reporting, and
acting upon them (Institute of IT Governance, 2003). It should be noted that other
externalities influence the cycle and such externalities include stakeholder values,
industry practices, legal framework, mission, and vision as well as company ethics
and community surrounding.
Figure 2.1: Focus Areas of IT Governance
Source: Institute of IT Governance (2003)
Coming up with a clear universally accepted definition for IT governance has been a
challenge for both the information system control and audit communities (Van
Grembergen, De Haes, & Guldentops, 2004). However, all definitions agree on the
theme that IT governance guarantees that investment in IT generates value for the
business and contains and regulates risk(Van Grembergen, W, 2004).
IT Value
Delivery
IT Strategic
Alignment
Perfomance
Measurement
Risk
Management
Stakeholder
Value Drivers
IT Resource Management
20
2.3Principles of good and effective IT Governance
Based on constructive relationships, the success of IT governance needs the
existence of effective communication among parties(Johnson & Lederer, 2005).
Shared commitment to an adopted IT governance system as well as a universally
understood language in IT policing are some of the factors to consider for an
effective and successful IT governance system(ITIG, 2002).
As outlined in King III report of 2009, IT governance has several principles that
should be observed which are detailed as follows:
• There should be alignment between IT and the performance and sustainability
objectives of an organization.
• IT governance should be the board’s responsibility.
• Implementation of an IT governance framework is the responsibility of
management as tasked by the board.
• Monitoring and evaluation of substantial IT investments and expenditure
should be done at board level.
• An organization’s risk management framework should be closely tied to IT.
• IT assets should be effectively managed at board level.
• A risk and audit committees must assist the board in IT related functions and
responsibilities.
The following subsections will look at principles of IT governance in detail as adopted
from the King Code of Governance of 2009 otherwise referred to as The King III
Report(Instutute of Directors South Africa, 2009).
2.3.1 Board Responsibility for IT governance
According to the King Report (2009), the board should assume the responsibility for
IT governance and should be on the board’s agenda. In the process, the board
should make sure there is establishment and implementation of both the IT policies
as well as IT charter policies. Under this principal, the board should solicit and
21
receive assurance on the effectiveness of IT internal controls. The assurance should
be independent and should be sought after the adoption and implementation of an IT
internal framework. The King report furthers that it is the board’s responsibility to
promote an ethical IT governance culture.
2.3.2 IT adherence to sustainability and performanc e objectives
The board should ensure that IT there exist integration between a company’s
business and strategic processes. In addition, the board should ensure there exist a
process of IT of identifying and exploiting arising opportunities to enhance the
organization’s sustainability and performance.
2.3.3 Management Role in Implementation of IT gover nance framework
The management assumes the responsibility for the implementation of an IT
governance framework. This responsibility is delegated by the board. By this
principle, implementation of the IT governance framework, processes and structures
becomes a task for management. In the same sense, a steering committee of similar
function to assist the governance of IT may be appointed by the board. According to
the King Report (2009), a Chief Information Officer (CIO) responsible for the
management of IT should be appointed by the Chief Executive Officer (CEO) or
Managing Director (In the case of Maranatha Ferrochrome). The CIO would be
responsible for interaction and collaboration with the board or executive
management on IT issues strategic to the organization(Institute of directors in
Southern Africa, 2009). The literature on use of IT strategically narrates that the
appointment of a system champion, e.g., CIO, is a crucial stage in the
implementation of an IT system (Ewusi-Mensah, 1997). Such examples where CIO’s
where appointed is the Fortune 1000 companies (Bowen, Cheung, & Rohdeb, 2007).
2.3.4 Board monitoring of IT investments and expend iture
The principle recommends that the board should oversee the delivery of value of IT.
The principle also recommends monitoring the return on investment from significant
22
IT projects should be done at board level. In addition, the board should see to it that
there is protection of intellectual property. For outsourced IT services, the board
should obtain independent assurance of IT governance.
2.3.5 IT as part of risk management
This principle recommends that management should display to the board on a
regular basis the organization’s adequacy in business resilience arrangements for
disaster recovery purposes. The arrangements can be in the form of periodic reports
such as annual reports. The board should also ensure that IT laws are abided by, as
well as the company’s adherence to rules, codes, and standards.
2.3.6 Effective management of information assets
This principle recommends each board to make surethat are systems in place for the
management of informationinclude information security, management, and
information privacy. In addition the board is recommended to treat as assets all
personal information. Furthermore, the board should oversee and ascertain that a
security management system is developed and implemented. Last, the principle
recommends that the board should approve a strategy on information security as
well as to task and empower the company’s management for
strategyimplementation.
2.3.7 Risk and Audit Committee involvement in board IT functions
By this principle, the recommended practice is that the risk committee must make
sure that ITthreats and risks are properly and adequately addressed. The risk
committee must also ensure that controls are in place to effectively address IT
threats and risks. The audit committee of an organization must uphold IT seriously
because it relates to financial reporting and organization’s going concern. In addition,
King (2009) elaborated that it is best practice that the audit committee should
consider fostering IT and their function to improve audit coverage and efficiency.
23
2.4.0Frameworks of IT Governance
2.4.1 COBIT
IT governance has different frameworks of which the COBIT(Control Objectives for
Information and Related Technology), is one of them. COBIT developed by ISACA in
1996. COBIT is a control and process oriented governance control framework (Ko &
Fink, 2010).The alignment of IT and business is COBIT’s core aim, so as to optimize
benefits realizes from the use of IT in use and allocation of resources as well as to
manage threats associated with IT (Ko & Fink, 2010).
COBIT generally providesmanagers with detailed and updated guidance to IT
governance (Bowen, Cheung, & Rohdeb, 2007). To this end, organizations that seek
to implement COBIT must identify a subset of processes critical to the organization
as their initial subset of IT control framework. As resources and experience permit,
COBIT allows for more processes to be included in the control framework (Bowen,
Cheung, & Rohdeb, 2007).
2.4.2 ITIL
The other framework is the Information Technology Infrastructure Library (ITIL). The
ITIL is a framework to assist in the improved use of IT resources and services, i.e., it
is a service management framework(Ko & Fink, 2010). The framework was moulded
in the 1980’s by the Office of Government Commerce in United Kingdom(Ko & Fink,
2010). Ko and Finch (2010) go on expand that the framework was developed into a
lifecycle-centric approach in itsrecent release (Version 3). The ITIL differs from
COBIT in that COBITfocuses on what needs to be done, while the ITIL focuseson
how and by whom something is done(Ko & Fink, 2010).In brief the ITIL provides
clear guidelines for IT service providers to improve on IT efficiency and effectiveness
as well as on the quality of IT services in an environment of imposed cost constraints
(Mohamed, Kaur, & Singh, 2012).
24
2.4.3 International Organisation of Standardisation
ISO17799:2000 is a security management framework published by the
InternationalOrganisation for Standardisation (or ISO) that was derived from the UK
government’sBS17799(Institute of IT Governance, 2003). ISO approaches to IT
governance are risk management focused and on risk mitigation in particular.
ISO 27001 is also one of the information security frameworks. This framework
provides a formalised set of conditions and specifications for organizations to
manage the threat of information security risk and seek certification for their
Information Security Management System (ISMS) (Mohamed, Kaur, & Singh, 2012).
On the other hand, there exist the ITGI-developed VallT, a framework that assists
organizations to view IT from a financial viewpoint (ITGI, 2006). The need to realize
value from investment on IT resulted in the development of the VallT (Ko & Fink,
2010).
To this end, some, if not all frameworks need to be considered in assessing the
extent of governance in an organization. This study shall consider all the frameworks
in assessment of Maranatha Ferrochrome.
2.5.Dimensions of IT Governance
To fully appreciate the concept of IT governance, the basic dimensions have to be
identified and outlined. Several scholars and organizations have come up with
dimensions. Ko and Fink (2010) agreed on the dimensions with Keynes-Pearce
(2002). IT governance can be viewed as structure-orientedor process-oriented
(Keynes-Pearce, 2002). Emphasis of each dimension relies on the point of view,
e.g., emphasis can be on control if the dimension is structure oriented(Keynes-
Pearce, 2002). The people-orientation to encapsulate the human element, such as
leadership, as previously indicated is also a dimension that needs consideration in IT
governance.
25
2.5.1 Structure
How the IT function is performed is the basis of structure, for example, through
tasking of independent auditors to monitor the IT governance process(van
Grembergen & de Haes, 2005).
The IT function needs structure and the discretion on location of IT decision-making
power in a company(van Grembergen & de Haes, 2005). If any organization needs
to deliver value from IT, IT governance structure needs to be prioritized(Ko & Fink,
2010). To this end, the structure of an organization echoes the power structure and
the structure do dictate the type of relationships in the organization.
In most organizations, committees are a way that organization utilises in the
management of IT. As an example, the risk committee approves and periodically
reviews IT strategies that related to IT risk mitigation and the protection of IT
assets(Ko & Fink, 2010). However, to avoid a robust and complicated system, a
company needs to restrict the populace of its governance mechanisms (Ko & Fink,
2010).
2.5.2 People
The other dimension is that of people. As in all other corporate governance arms,
people leadership to steer IT activity that is sustainable to achieve organizational
goals is required (Ko & Fink, 2010).
Ko and Fink 92010) added that a key success factor in IT governance lies in the
organizational capacity as performed by the board and management as a whole. The
roles relating to IT function has to be discrete and clear for both board and
management levels, without doubt or prevarication (van Grembergen & de Haes,
2005).
To this end, it is thus vital to note that the human aspect in the effectiveness of IT
governance cannot be superfluous. By such, it is vital to ensure that there is
human/people aspect in the dimensions of governance to ensure effectiveness and
organizational sustainability. The adoption of a process at senior organizational
levelusually yields a similar wave adoption effect among the lower ranking offices in
an organization. The ability of senior ranked staff in an organization to correctly
26
outline IT governance approach is a vital estimator of the performance of IT
governance.The ability of senior management to describe their IT governance
approach accurately is an important predictor of governance performance.
Recent studies have shown that there still lacks proper understanding of IT
governance at all organizational levels (Brown & Grant, 2005). Basing on such
studies, this study wishes to investigate if in fact, mining companies in Zimbabwe do
lack the governance of IT. The loss of manpower has retarded or halted most mine
operations. For instance, Morafe resources Loss of key and skilled employees,
particularly to competitors could result in financial loss and reputational. To mitigate
such, there is investment in locking employees in through delayed bonuses as well
as investing in suitable technologies that safeguard information(Marafe Resources
Limited, 2011).
2.6 IT Governance Process
IT governance also entails that IT strategy drives the IT processes. The processes
report should be compared either to performance, resources consumed, process
outcomes or risk accepted (Institute of IT Governance, 2003). The comparisons
should reveal if there is proper strategy execution or at least provide route map if
strategic realignment is required (Institute of IT Governance, 2003)
In essence, most or allcomponents, aspects, and processes of an
organizationinclude some kind of automation that caused companies to rely on IT
systems (King, 2009). The process of ITY governance and its constituent
subcomponents can be presented and summarized as in Figure 2.2 overleaf.
27
Figure 2.2: IT Governance Process
Source: Institute of IT Governance (2003)
2.7 Determinants of IT Governance effectiveness
There are some determinants of IT governance effectiveness, which however vary in
impact from company to company. The determinants are; organizational
demographics, information intensity, IT functions, external environment
characteristics, and organizational culture (Mohamed, Kaur, & Singh, 2012).
2.7.1 Organisational demographics
Organisational demographics are determined by age and size of an organization, in
which size of the organization refers to the number of employees or sales revenue
realized by the organization(Ein-Dor & Segev, 1978).
In past studies, it has been discovered that in large organizations, Enterprise
Resource Planning System (ERP) success increases if top management
commitment to IT governance increases (Bernroider, 2008). In addition previous
research and literature exhibit that there exist a positive relationship between
Strategy
Results
• Out
Processes
Resources Stakeholder
Value
Drivers
Confirm or
Change
Improve
Report
Measure
Use
Directs
Drive
28
organizational size and information system security effectiveness (Kankanhalli, Teo,
Tan, & Wei, 2003). Furthermore, a positive relationship has been discovered to exist
between an organization’s size and information systems planning effectiveness
(Elbanna & Child, 2007).In the 1990s a research concluded that there existed no
relationship between size of an organization and innovation adoption at an
organization (Premkumar & King, 1994). However latter studies on Chinese
companies revealed that there is a positive relationship between innovation adoption
and size of an organization (Lee & Xia, 2006). To this end, the size of the
organization was taken into consideration for this study.
The age of an organization is the duration for which the organization has been
functional (Mohamed, Kaur, & Singh, 2012). In Canadian studies of Internet
assimilation, CEOs of younger organizations were discovered to be more likely to
exercise IT systems formalisation than CEOs of older organizations (Mohamed,
Kaur, & Singh, 2012). The discovery emanated on the back of earlier studies on
Chinese companies that discovered that age was a vital factor in determining the
decision on adopting new technologies (Parhi, 2007).
2.7.2 Information Intensity
Industries that use IT to support core activities and those that identify strategic
opportunities are said to be information intense (Teubner, 2007). Information intense
industries are more reliant on IT for business operations, e.g., banking sector
(Mohamed, Kaur, & Singh, 2012). Information intensity is defined by such attributes
like accuracy, timely updates, frequency of information use in production, and
pervasiveness(Kearns & Lederer, 2004). According to studies carried out in the USA,
intensity positively relates to effective SISP (Mohamed, Kaur, & Singh, 2012).
Industries can be categorised into three segments of information intensity (Sohal &
Fitzpatrick, 2002). The segments are as below;
i. High tier industries: organizations that use IT as part of their core functions.
ii. Medium tiers: organizations that use IT as a business building block.
iii. Low tier industries: organizations that use IT for automated support.
29
To this end, there is a gap in literature to identify industries that have mixed
characteristics and how such organizations can implement adequately IT
governance for sustainable operations, as the case of Maranatha Ferrochrome.
2.7.3 IT function characteristics
Generally IT functions reflect in factors like size, budget and, IT maturity in an
organisation (Mohamed, Kaur, & Singh, 2012). IT budget relates to spending on IT or
investment on IT initiatives. Past studies discovered that low investment in IT
normally results in retarded progress toward IT governance(Ray, Muhanna, &
Barney, 2007). The size of IT department relates to the number of employees and
normally size of a department predicts the level of IT initiatives adoption (Lee & Xia,
2006). Last, IT maturity relates to top management involvement in planning, and IT
manager familiarity with business objectives(Mohamed, Kaur, & Singh, 2012).
Literature does not include African examples in their studies and thus the need to
investigate the adequacy of IT governance in Zimbabwe’s mining sector.
2.7.4 External environmental characteristics
Environmental uncertainty describes the external environment within which an
organization operates, i.e., the environment beyond the organization’s control
(Mohamed, Kaur, & Singh, 2012). The environment in which businesses operate can
be stable or unstable, simple or complex, and concentrated or dispersed (Aldrich,
1979).
Business environments are vital to IT governance as there is need to comply with
new legislation in addition to the always increasing complexity of doing business
(Mohamed, Kaur, & Singh, 2012). Environmental uncertainty in research work may
be taken as a control variable that realizes an association with export performance
(Zhang, 2005). In brief there exist a positive correlation between organizations in a
hostile environment and their IT governance effectiveness (Mohamed, Kaur, &
Singh, 2012).In addition, there exist a positive correlation between an organization in
heterogeneous environment and governance effectiveness. Furthermore, there exist
30
a positive correlation between organizations in dynamic environments, and IT
governance effectiveness in the organizations (Mohamed, Kaur, & Singh, 2012). To
this end, the conclusions of previous study were derived from different environments,
it would leave literature gaps that this study would need to ascertain with this study.
2.7.5 Organisational Culture
A popular and simple way to defining culture is: ‘how things are done around here’
(Mullins, 1993). Organisational culture extends the definition of culture to mean the
underlying values beliefs and principles that serve as a foundation for as
organization’s management system as well as the set of management practices and
behaviors that both exemplify and reinforce those basic principles (Denison, 1990).
Organizational culture has four categories or dimensions of mission, consistency,
adaptability, and involvement (Fey & Denison, 2003).
Basing on previous studies conducted in China, Taiwan, and Russia, discovery was
made that there exist a positive correlation between each of the four dimensions of
organizational culture as categorised by Fay and Denison (2003) and effective IT
governance (Mohamed, Kaur, & Singh, 2012). In addition there was observation that
organizational culture had a significant influence on IT governance structure. To this
end, literature still has gaps for Zimbabwe research alternatives. This study would
use the gaps to get an insight of IT governance in Zimbabwe.
2.8 IT existence, growth, and challenges
The business community has widely acknowledged the potential and inevitability of
information and communication technologies (ICTs) application for growth, and
development of countries, businesses, and leisure,and sports organizations(Iyanda
& Ojo, 2008).Furthermore, the inclusive and effective use by every resident of a
country of ICT is a key boost in achieving MDGs (Mutula, 2008). Both authors agree
that information technology should be all inclusive. Moreover, the concept of
universal access is related and tied to the concept of universal service, which is
taken to mean that ICT should, in addition to being accessed by all, should be used
31
by all people irrespective of their physical abilities(Mutula, 2008).At each level of the
organizational hierarchy, IT function has different IT governance needs. To this end,
IT governance includes governance structure, processes, leadership, and relational
functions that tackle performance yet enduring protection of IT assets from
risk(Mohamed, Kaur, & Singh, 2012).
ICT infiltration is altering how organizations operate and compete. New ventures are
created while existing businesses are evolving and undergo modification(Carbonara,
2005). A promising geology combined and recent advances in IT and related
technologies are critical to the development of a successful mining production sector
(Cooksey, 2011). Attention thus needs to be directed to IT governance.
The Inclusive government in Zimbabwe acknowledged that access to information
communication technology (ICT has become an indispensable part of the world
economy, providing large opportunities for every citizen to participate in socio
economic activities as well as an improved access to markets, jobs, business,
education, and training (Ministry of Finance, 2012).
2.8.1 IT Issues in Botswana and South Africa
Botswana’s National Development Plan Nine (NDP 9) aims at promoting Botswana’s
economic growth and development by means of economic diversification,
employment creation, poverty reduction, continued macroeconomic stability, and
financial discipline among other things. In addition, Botswana’s Vision 2016
envisions an educated, informed, innovative, prosperous, and compassionate nation
(Botswana Government, 1998). The adoption of ICTs is viewed as the bridge way to
achieving the objectives (Iyanda & Ojo, 2008). To this end, information technology is
supported to lead to sustainability of operations. This, however, comes with its
problems. Contrary to the perceived opinion that IT governance converts to positive
organisational results and sustainability, the contribution of IT governance varies in
how it is utilised and in its applications(Korac-Kakabadse & Kakabadse, 2001). In
addition, the use of technology can be a wild card. In agriculture, technology in
history failed to yield the anticipated results, in some instances yielding even
negative consequences(Gatune & Najam, 2011).
32
In agriculture, the promised positive yields of technology did not directly translate to
increased food security, however, some negative consequences were observed. For
example, pesticide use in South Africa’s agriculture resulted in a variety of ill-health
situations that included cancer and respiratory ailments resulting from inhaling and
ingesting intoxicants(Naidoo, London, Burdorf, Naidoo, & Kromhout, 2008).
In Botswana, the need to beat competition, the need to please customers, and the
need to lock in suppliers constituted the highest sources of pressure to computerize.
The adoption of computerization is of interest to both suppliers and customers
because it affects the nature of inputs ads well as the characteristics and pricing of
outputs (Iyanda & Ojo, 2008). Stimulation of ICT awareness within an organization
should be done internally and externally. Each player contributes differently to the
adoption of ICT in an organization (Iyanda & Ojo, 2008). To this end, the issue of
information systems governance becomes critical as it affects many stakeholders.
Any attempt to address digital gaps within a country and between countries should
focus on the quality and adequacy of networks available, the bandwidth sustainable
and the value derived from use of such ICTs to enhance the status of individuals or
the population in a country (Gerhan & Mutula, 2007). To this end, the type of IT
governance in a geographical area or organization becomes central as it affect the
status of individuals and organizations.The democratic gains of the African continent
are constantly threatened by institutional governance lapses, despite the
enhancements in ICT adoption(Rotberg & Gisselquist, 2009).Although globalization
and technological revolution are helping Africa to consolidate the gap that exists with
the rest of the world, the essential knowledge challenges still dog the continent. To
this end, in the absence of mobilization of knowledge and education drivers, any
gains from other drivers of change could be lost(Gatune & Najam, 2011). To curb for
such losses, the need for IT governance becomes imminent.
2.8.2 IT issues in Zimbabwe
Zimbabwe as a nation has seen some advancements in technology with mobile tele-
density estimated at 80%. The country acknowledges the need for improved ICT
infrastructure and policies as well as governance (Ministry of Finance, 2012).
33
The government noted the developments in fibre optic backbone projects underway;
however, the issue of parallel infrastructure need to be addressed. The Posts,
Telecommunications Regulatory Authority (POTRAZ) is responsible for addressing
such issues to ensure optimal use of resources (Ministry of Finance, 2012).
Ensuring value delivery from resources is an aspect of IT governance (Institute of IT
Governance, 2003).
Zimbabwe since 2012, through Transmedia, has been upgrading broadcasting
infrastructure in line with SADC Broadcasting Digitalisation target of 2015 (Ministry of
Finance, 2012). To this end, companies must to upgrade their governance as well as
IT infrastructure to match regional standards. A case to highlight is the adoption by
enterprises IT governance, which was first discussed in detail in King III (2009).
To exhibit the rising awareness of IT as well as IT related topics, the government
launched e-learning at primary school level in Chogugudza in March 2012 (Ministry
of Finance, 2012). This was an attempt to create better ICT knowledge. This initiative
by the government was a way the government is taking responsibility of IT
governance and a way to ensure that there is IT awareness and promotion of a
common IT language as prescribed by King III report (2009).
Zimbabwe in a phased approach is setting up an E-Government project valued at
US$26 million. The project aims to achieve e-governance that will catalyse
administration functions like permit applications, company registration, and passport
applications (Ministry of Finance, 2012). Such initiatives are indicators of the lack of
IT infrastructure, and IT governance at national level. In IT if one is playing a game
and not keeping the score, it is only practice (Institute of IT Governance, 2003).
By that virtue, companies that use IT products and not evolve with time, risk sinking.
In addition, an Industrialisation Policylaunched in 2009, had focus to address revival
of manufacturing, rebuilding domestic value chains, cluster initiatives, and South-
South cooperation (Ministry of Finance, 2012). Value chains are highly embedded in
ICT (Moen, Madsen, & Aspenlund, 2008). By that virtue, the trends of IT governance
practices are visible; however not well defined as listed in King III (2009).
34
2.9Ferrochrome Industry Structure
2.9.1 Industry Defined
Industry is a term that broadly means a collection of firms offering goods or services
that are close substitutes to each other (Kluyver, 2000). Another definition from the
same author generalises an industry to be constituted by competing firms.
2.9.2 Industry Structure
In brief, industry structure relates to the number and size distribution of firms in an
industry (Scherer, 1996).
A fragmented industry is one in which all firm are small in size with respect to
industry size (Oster, 1994). On the other hand, a consolidated industry is one with a
few firms controlling a large part of the industry in terms of output (Scherer, 1996).
The proper analysis of industry structure is important in observing industry
components behavior, competition threats of new entries as other attributes, which
become the basis for formulation suitable governance structures.
With reference to above definitions, the ferrochrome industry in Zimbabwe is
consolidatedas well as on global platforms, basing on the above definitions, and a
general assessment of available data. The table overleafshows some of the world
major contributors to the ferrochromeindustry:
35
Ferrochrome Capacities and Additions
Country 2008 2009 2010E 2011E 2012E 2013E
Europe 1.07 1.07 1.12 1.2 1.28 1.36
South Africa 3.74 3.89 4.10 4.20 4.27 4.27
Zimbabwe 0.25 0.25 0.25 0.25 0.25 0.25
Brazil 0.20 0.20 0.20 0.20 0.20 0.20
China 1.75 1.45 1.52 1.62 1.72 1.82
India 1.07 1.04 1.16 1.41 1.48 1.58
Iran 0.05 0.05 0.05 0.05 0.05 0.05
Kazakhstan 1.15 1.15 1.15 1.24 1.32 1.32
Total Capacity 9.27 9.10 9.54 10.15 10.56 10.84
Cap. Utilisation (%)* 80.5 62.7 81.0 83.6 88.1 92.2
*Based on genegic production vs. total production
Table 2.1: Ferrochrome Production Capacities
Source: Pariser (2010)
Europe, South Africa, Zimbabwe, China, India, and Kazakhstan are among the major
controllers of the Ferrochrome industry (Pariser, 2010). A few players dominate the
industry with respect to production levels and production capacities.
The table below shows the major participants in the ferrochrome industry in
Zimbabwe based on tonnage sold with Maranatha Ferrochrome at the top of the
2011 year at 18 748mt chart (Minerals Marketing Corporation of Zimbabwe, 2011).
Company Metric Tonnes Exported Maranatha Ferrochrome 18 748.00 Wel Mining 3 212.00 ZimAlloys 2 195.00 Xin Yu Mining 2 370.00 Monawood 2 290.00 China Nanchang 480.00 Tufrate Services 112.00 Total 29 407.00*
*Based on export sales recorded through MMCZ
Table 2.2: Ferrochrome Export Sales 2011
Source: Minerals Marketing Corporation of Zimbabwe Annual Report (2011).
36
From the tables on previous page, it is visible that few players are in the ferrochrome
industry, thus making it a consolidated one basing on the definition by Scherer
(1996).
Ferrochrome markets are externally influenced with respect to African companies.
The markets aremostly determined by European market forces for stainless steel
with theproducer having little to say(Marafe Resources Limited, 2011). South African
companies also face the same problem. Marafe Resources in operates in South
Africa, yet the price they receive for theferrochrome is determined by the Venture
Produces based on the Europeanbenchmark ferrochrome price. The prices are
determined quarterlyand are influenced by global market conditions and the
marketfor stainless steel(Marafe Resources Limited, 2011).
2.10Liberalisation and Globalisation
The issue of trade liberalisation and globalisation have led to increasing integration
of markets, thus reducing the importance of market size as the most significant
success factor in mining operations (Blomstrom & Kokko, 2003). To this end
liberalisation exposes industry to trade risk and exposure due to reliance on IT as a
pillar. By such, there is need to emphasise the importance of IT security, including
the components of confidentiality, integrity, and availability (Instutute of Directors
South Africa, 2009).
Governments use incentives to attract foreign investors with expected outcomes to
benefit the industry. For instance there is an expectation of transference of
managerial expertise, and IT for an accelerated industrialisation motive. In addition,
some development effects are expected to be derived from liberalisation (Shah,
2003). To this end, proper IT governance becomes necessary for an industry in an
environment with changing legislation and external environment effects to stay
afloat.
2.10.1 Tanzania and liberalisation
In the period 1967 to 1895, Tanzania’s large-scale mining was put under the control
of the state through the State Mining Company (STAMICO) (Cooksey, 2011).
37
Tanzania did not benefit from this stance of gold price liberalisation due to
STAMICO’s failure to deliver as well as the failure to lure foreign investment
(Cooksey, 2011). This was in part failure by the state to gain an insight of world
trends in their myopic approach that was largely manual.
Since 1986, Tanzania experienced a large boost in gold production due to
liberalisation and investment in technology as well as government incentives (Magai
& Marquez-Velazquez, 2011). By such, the management of information and
technology assets comes to light although not as the only major contributory factor.
2.11Benefits of IT Governance
The benefits derived from adequately and efficiently implementing IT governance
systems may vary geographically and over time(Kay, T, 2009). Nevertheless, some
benefits can be generalized.
IT governance as an extension of corporate governancereinforces controls over
enterprises and their public accountability at the same time conserving the ambience
and organizational spirit(Institute of IT Governance, 2003).Stakeholders expect that
current business ventures be sustainable with growth into new business voyages
(ITGI, 2006). The expectation of various stakeholders can be harmonized and
realized through the effective governance of IT (ITGI, 2006). For example, IMB
implemented supply chain improvements that saved the organization some
US$2billion through the reduction of stock levels and the UK mail also adopted
business and accounting systems that resulted in a positive profitability of £3million
per day (ITGI, 2006).
The use of IT governance with a risk-based approach provides a process that links
technology and business functions, albeit driven by the organization’s mission and
priorities holding those accountable to a standard for producing the necessary
performance to satisfy the internal and external stakeholders (Getter, 2007). In
addition, the proper governance of IT assets by the United States Capitol Police
(USCP) ensured the community to understand the USPC and have confidence in its
operations and ensured that the Capitol be safe from crime, terrorism, and
disruption(Getter, 2007).
38
With better ICT infrastructure and proper management, the potential for innovation,
economic development and, better public service delivery in the country (Zimbabwe),
becomes possible (Ministry of Finance, 2012).
Despite the growing importance of IT governance in corporations, research work in
the past focused on the links and relationships between IT governance and its
determinants, and its impact(Mohamed, Kaur, & Singh, 2012). To this end the link
between IT governance and sustainability of mining organizations as well the extent
to which it was implementedto assist operations has been left out warranting this
study.
2.12 Demerits of IT Governance Investment
Investment into IT governance initiative meet resistance because past experiences
exhibit some disappointments, failures, and unfulfilled commitments linked to IT
investment which proved to be hefty (Bowen, Cheung, & Rohdeb, 2007). A case that
shook the world was on that involved Nike. Nike invested ina supply chain software
that did not yield and resulted in a massive loss of US$200million (Songini, 2001). In
addition, CIO’s of Fortune 1000 companies estimated that about 40% of their IT
projects yielded a negative return on investment(Watters, 2004).
In comparison, the demerits associated in investing in IT governance are outweighed
by the benefits, thus this study focused on investigating the adequacy of IT
governance.
39
Chapter Three
Research Methodology
3.0 Introduction
This chapter details the method(s) used in tackling the research. It also outlines the
sources referred to in the research process. The chapter outlines research design,
data collection methods as well target population, sampling methods, and research
instruments. The chapter also outlines pre-testing methods, validity, and reliability of
research instruments as well as data presentation and analysis.
3.1 Research Design
The term “research design” translates to mean “ the overall configuration of a piece
of research: what kind of evidence is gathered from where, and how such evidence
is interpreted in order to provide good answers to basic research question”
(Easterby-Smith, Thorpe, & Lowe, Management Research: An Introduction, 2002).
The purpose of the study for this research is to determine the extent of IT
governance at Maranatha Ferrochrome. In addition, the research wishes to view the
inclusivity of the governance pillars to all stakeholders and if indeed it leads to
sustainable operations.
The survey research method will be the basis of the research design. According to
Zikmund (2003), a survey is a research technique that involves the use of a
questionnaire or interview in gathering information from a sample of people through
a method of data collection based on communication with a representative sample of
individuals. The survey utilises samples as the total group of possible interviewees is
too large to be visited in totality.
3.1.1 Research Philosophy
There are basically four research philosophies identified as positivism, realism,
interpretivism, and pragmatism (Saunders, Lewis, & Thornhill, 2009).
40
3.1.1.1 Pragmatism
This philosophy type is one that comprises of an external multiple view that focuses
on practical applied research thatassimilates different viewpoints to aid in the
interpretation of data where the researcher is liberal and adopts both the subjective
and objective viewpoints (Saunders, Lewis, & Thornhill, 2009).
3.1.1.2 Positivism
Positivism assumes and holds that a correct, accurate, and value free knowledge of
things is possible and that the intention of positivism is to create basic general rules
and laws that can be used to predict behavior, at least in terms of probability if not in
actual terms (Fisher, 2010). In addition positivism assumes that humans are studied
as objectively as the natural world producing rules or generalisations similar to the
ones produced by physical and natural scientists (Remenyi, Williams, Money, &
Swartz, 1998).
The positivism approachhas had its own critics. First, Saunders, Lewis, and Thornhill
(2009), argue that a total freedom and liberty from our personal values and
predispositions as researchers is not realistic. This is in line with the school of
thought that research into the institutional and social world cannot be value free and
that desire for social researchers to become hard scientist is not
accomplishable(Robson, 2002).
The other line of criticism lies in that as much as the generation of laws to define
social phenomena can be valuable, it should be noted that such generated models
can only define an average behavior and not the discrete behavior of individuals. On
the other hand, in reality, in specific instances understanding particularities is just as
vital as understanding the average.
41
3.1.1.3 Realism
Realism concurs with much of positivism; however deviating a bit as it recognises
that the subjective nature of research and the preordained role of values in it (Fisher,
2010). This approach is scientific-oriented; however, it makes less claims of
knowledge that perfectly reflects the objects of study.
There are two types of realism (Saunders, Lewis, & Thornhill, 2009); direct and
critical realism. Critical realism entails that our knowledge of reality is a result of
social conditioning that cannot be understood independent of the social actors
involved in the process of deriving the knowledge (Dobson, 2002). Direct realism
portrays that what one sees is what one gets: what one sees though his or her
senses accurately portrays the world (Saunders, Lewis, & Thornhill, 2009).
The direct realist viewpoint argues that the world is relatively unchanging and that it
operates on a solo platform, while critical the realist assume the multi-platform
viewpoint (Saunders, Lewis, & Thornhill, 2009).
With respect to business research, the realist approach seems more aligned to the
ever-changing world.
3.1.1.4 Interpretivism
The approach narrates that it is vital for the researcher to grasp the concept and
understand the differences that exist between humans as social factors or social
players (Saunders, Lewis, & Thornhill, 2009). Fisher (2010) narrates that
researchers, in fact, believe reality is a function of social construction. In essence,
reality is formed by people through their interpretation of reality, other people’s
interpretations as well as through compromises and agreements that arise out of
negotiations between the first two (Fisher, 2010).
Summarising the above definitions of interpretivism, it can be noted that
interpretivism does not acknowledge the existence of a standard interpretation of any
particular topic but rather emphasises plurality, relativism, and complexity. The
researcher has to adopt a compassionate approach with the challenge being to enter
42
the world of the subject of our research and to understand their world from their
viewpoint (Saunders, Lewis, & Thornhill, 2009).
This approach is ideal for most research work as business environments are vitally
and largely unique and complex and definitely have individual peculiarities. For
reason given above, this approach has been chosen for this study.
3.1.2 Research Approach
Research approach basically has two branches, namely induction and deductive
approaches (Saunders, Lewis, & Thornhill, 2009).
3.1.2.1 Induction Approach
In the inductive approach, theory development succeeds data collection and analysis
(Saunders, Lewis, & Thornhill, 2009). Basically, induction thus involves data
collection and analysis with an objective to develop an insight of relations that may
exist between occurrences.
The induction approach differs from deductive approach in that the former focuses
on context in which events occur, while the latter’s concern is imbedded in causal
relationships.
3.1.2.2 Deductive Approach
Robson (2002) listed five stages in which to carry out the deductive research
approach. The deductive approach essentially involves the testing of a theoretical
proposition through the employment of a research strategy constructed uniquely for
the purpose of its testing (Collins & Hussey, 2004). In addition, deduction owes much
to scientific research and the resultant outcome of deduction is a set a
generalisations about regularities in human social behavior (Saunders, Lewis, &
Thornhill, 2009).
The five stages for this approach as staged by Robson (2002) are as follows:
43
• Hypothesis deduction.
• Hypothesis operationalizing.
• Hypothesis testing.
• Examining the outcome of the inquiry.
• Modifying of hypothesis in line with findings (where necessary).
The rigid methodology that disqualifies alternative reasons for events on which this
approach pillars on has been the basis for most criticism.
For the purpose of this study and research, the researcher will adopt an induction
approach. This is because the researcher believes that to have a complex
understanding IT governance in the ferrochrome mining sector with particular
emphasis on Maranatha Ferrochrome, an inductive approach is more suitable. The
inductive approach is also more attractive as it permits an understanding of the
values people put to occurrences.
In addition,the study opted for inductive approach was chosen as the topic under
study is relatively new and would thus be more difficult to postulate a hypothesis
forehand.
3.1.3 Research Strategy
A research strategy is a clear roadmap by the researcher that allows him or her to
answer a particular research question so as to arrive at intended research
objectives(Saunders, Lewis, & Thornhill, 2009). The research questions, and
objectives would thus direct the choice of the strategy.
A number of strategies, including archival research, case study, survey, experiments,
action research, and grounded theory are some of those identified by Fisher (2010).
3.1.3.1 Grounded theory
To investigate a wide range of business and management issues, the grounded
theory can be used(Saunders, Lewis, & Thornhill, 2009). In addition the grounded
44
theory is handy for predictive research and to explain behavior with emphasis on
building theory (Goudling, 2002).
The grounded theory qualifies to be called an inductive deductive approach with
theory grounded in continual reference to data (Collins & Hussey, 2004). However, a
different school of thought argues that the grounded approach is an inductive
process and that should be treated by a researcher as a highly creative one
(Sudday, 2006).
3.1.3.2 Case Study
The case study approach is a strategy for conducting research that incorporates a
pragmatic investigation of a unique solo contemporary phenomenon through the use
of several evidence sources in the real life context(Robson, 2002). According to
Zikmund (2003), a case study is a method used toacquire information from some
scenariossuiting the researchers’ problem situation in a research.
The use of a case study strategy can be ideal for investigating existing theory or
challenging existing theory orcan be a portal of new research questions
too(Saunders, Lewis, & Thornhill, 2009).
In addition the case study method permits triangulation for data collection.
Triangulation refers to the use of varied data collection strategies and ways within a
study to verify what the data is entailing (Saunders, Lewis, & Thornhill, 2009).
The case study method shall be the origin for the research and shall use qualitative
methods of enquiry, which are interviews, observations, and questionnaires. In
addition, the population, sample, and sampling procedures used to carry out the
study shall be derived from the case study. Basically, the core functional area of a
case study is to understand circumstances under investigation plus situations in-
depth (Leedy & Ormrod, 2005).
45
3.1.3.3 Ethnography
Ethnography involves participant observation (Saunders, Lewis, & Thornhill, 2009).
For the above mentioned reason, ethnography was disqualified for this study. In
addition, archival research is not suitable for this study because it uses historical
data.
3.1.3.4 Experiment
The purpose of an experiment is to study casual links between situations or
elements. The experiment tries to discover if a change in one independent variable
can trigger change in a variable that is believed to be dependent(Hakim, 2000).
According to Zikmund (2003), an experiment involves a research that includes
controlling conditions such that one or more variables can be adjusted so as to test
hypothesis.
Experiments may be costly to conduct in genuine business situations and some
participants may decline to cooperate, making the sample unrepresentative of the
population. For this reason, experiment method was not used in this study.
3.1.3.5 Action research
Action research narrates that the only way a researcher can improve their
understanding is through learning from experience (Fisher, 2010). Basically, action
research is defined as trying out ideas in practice as a means of empowerment and
as a means of increasing knowledge (Kemmis & McTaggart, 1982).
Action research is important in answering ‘how’ questions, as it involves action focus
and promotion of change in an organization. The researcher in this process is a
member of the organization in which the process of change, the investigation, and
study are taking place(Coghlan & Bannick, 2005).
3.1.3.6 Survey
Zikmund (2003) defined a survey as a research technique that uses a questionnaire
or interviews to gather information from a sample of people. Robson (2002) identifies
46
features of a survey to include selection of samples and the collection of data from
the sample units. Surveys have been popular because surveys allow the collection of
data from a sizeable population an economically sustainable way. More so, surveys
are authoritative to people and data collected is of large quantity(Saunders, Lewis, &
Thornhill, 2009).
The survey method was chosen because it provides quick, inexpensive, efficient,
and accurate means of assessing information about the population, as reiterated by
Zikmund (2003). The researcher wants to solicit attitudes and responses of a large
number of people within a given scenario. The time-frame to collect the opinions as
well as financial resources allocated to the research are limited, thus warranting the
researcher to choose the survey approach. To this end, the survey through
provisions of sampling methods provides the most practical and acceptable way to
capture the responses and opinions of the target population.
3.2 Population
Zikmund (2003) defines a population to mean a totality of entities that share some
common behavior or characteristics. A collection of a random variableunder study
and about which one is trying to draw conclusions in practice can also define what a
population is(Wegner, 1995).
A population is important to a research because a researcher can only be in a
position to generalize basing on the study of the population or typical sample
(Saunders, Lewis, & Thornhill, 2009). For this reason, the proper definition of the
correct sample becomes critical.
Defining the population thus assists the researcher in sample selection. For the
purpose of this research, the population shall be all Maranatha Ferrochrome
employees (managerial, shop floor permanent and contract employees), including
the Board and service providers.
47
3.3Sampling
According to Zikmund (2003), a list from which the sample is drawn is known as a
working population or sampling frame. By this definition, for this study which focuses
on an organizational setting in the form of Maranatha Ferrochrome (Pvt) Ltd,
employeesof the company constitute the sampling frame. The idea behind sampling
is to allow the researcher to draw conclusions about the whole population through
selection of a representative of the population(Cooper & Schindler, 2006).
Sampling is cost cutting, collects vast information timely and can be sufficiently
accurate (Zikmund, 2003). For the purpose of this study 80 general employees, 10
management level employees, and five board members will constitute the sample.
3.3.1 Sampling Techniques
Several sampling techniques that can be used in research work. Nonprobability
sampling involves a process of selecting sample units basing on personal judgement
or convenience while probability sampling isinvolves using chance selectionmethods
in selecting samples(Zikmund, 2003). The chance selection reduces the bias
inherent in the nonprobability techniques. Thus, probability sampling technique will
be used for this study.
3.3.1.1 Probability sampling
Probability sampling involves all the methods that guarantee equal selection chance
from the population for all the elements to be included in the sample(Wegner, 1995).
Under the probability sampling methods also exist several subcategories.
Zikmund (2003) identifies the types of probability sampling techniques that exist as
below;
48
• Simple random sampling is a procedure that ensures each element in the
population has an equal chance of inclusion in the working sample.
• Systematic sampling involves selection of the initial starting point by a random
process, and then every nth number on the list is selected. When the
population is mostly homogenous, and samples are selected at regular
intervals from the sampling frame (Saunders, Lewis, & Thornhill, 2009).
• Stratified sampling is a probability sampling procedure in which simple
random subsamples are drawn from within different strata equal on some
characteristic. This method is more suitable where the population is mostly
heterogeneous with respect to a variable under study (Wegner, 1995)
• If the primary sample unit is not the individual element in the population but a
largecluster of elements it becomes a cluster sample. This method is
employable where the population is large and geographically spread out
(Saunders, Lewis, & Thornhill, 2009).
• Multistage area sampling involves using a combination probability sampling
techniques.
The sampling method used for this research is the stratified random sampling for all
the employees different authority levels. The stratified random sampling was
selected because there is prior knowledge of the management level employees,
shop floor employees, suppliers list, customers list as well as members of the board.
The stratified random sampling method ensures that the sample will adequately,
sufficiently, and consistently reflect the population characteristics basing on criterion
used in stratification(Saunders, Lewis, & Thornhill, 2009). The random sampling
method is unbiased; however in the situation of Maranatha Ferrochrome, a simple
random sample could yield a sample of operative workers only that would not be a
true reflection of the population at large.
3.4 Sources of Data
Data sources may be grouped into secondary/primary or external/internal (Sudman
& Blair, 1998). Both sources are vitally complementary in practical problem solving.
49
3.4.1 Internal Versus External Data Sources
External data is available is found from outside an organization and used for other
purposes (Schiffman & Kanuk, 2000). External data can be found from other
organizations like The Nurses Council of Zimbabwe. On the other hand, internal data
is that which is generated and available within an organization, e.g., production data
(Wegner, 1995).
3.4.2 Primary data
Primary data is as data gathered fresh; it comes from sources such as
interviews(Sudman & Blair, 1998). In other words data gathered first time for the
problem at hand qualifies as primary data. Although gathering primary data may be
relatively expensive in terms of financial and time resources, for this research
primary data was elected as the better source for this study, through the use of the
questionnaire.
3.4.3 Secondary data
Data that had been collected for use and for the purpose other than the one at hand
is referred to as secondary data (Zikmund, 2003).
Secondary data is less expensive to extract than getting primary data. However
secondary data does not always meet researcher’s needs (Zikmund, 2003).
Moreover, secondary data at times is outdated, thus rendering it unsuitable (Wegner,
1995). In addition, data manipulation may be impossible. For the limitations
mentioned above, primary data collection was selected for this study.
3.5 ResearchInstruments
Normally the type of research design calls for the choice of instruments. Primary
data collection can be done using a number of instruments (Fisher, 2010). The
50
researcher has the options to use group discussions, experimentation,
questionnaires, interviews, and observations as prescribed by corresponding
research objectives.
3.5.1 Focus Group Discussions
Focus group discussions are typical group interviews that focus on a particular issue
and embraces interactive discussions among the participants (Saunders, Lewis, &
Thornhill, 2009). Focus group discussions were utilised in the research to gather
peripheral insight of the study at hand.
3.5.2 Observation
Observations are a tool used in a survey method. Naturally the art of observation is
human. It is a direct link to on the ground events. One advantage of this method is
that the respondent is not aware of the process, therefore behaves naturally
(Wegner, 1995). This tool was utilised to acquire direct information on Maranatha
Ferrochrome considering adequacy of IT governance in sustainable operations.
3.5.3 Interviews
Wegner (1995) described interviewing methods as a way to solicit for responses
through direct questioning, and they are the most common instrument of data
collection.
Interviews may be conducted via postal, telephone, and face-to-face means. The
postal questionnaire is used to get information respondents who are far off
geographically. The main disadvantage of the postal means is that of a low response
rate (Wegner, 1995).
Face-to-face interviews allow for information other than that solicited for, like facial
expressions to be noted. The method has an advantage of high response rate,
51
however it may be costly in if respondents are located sparsely in a geographic area
(Wegner, 1995). In this
A combination of interviewing methods was used for the purposes of this
study.Interviews were by appointment and conducted during off-work hours like
lunch hour to ensure convenience for employees.
3.5.4 Experimentation
In experimentation involves primary data generation through variable manipulation
(Fisher, 2010). Control effects are administered on factors that act as influents while
the variables are monitored.
3.5.4Questionnaire
A questionnaire is a document designed and inserted with questions to solicit for
relevant information to the research. Generally, a questionnaire is relevantif
collection of necessary information prioritised and if the information requiredsolving
the business problem is obtained(Zikmund, 2003). Questionnaires work better with
standardised questions. The researcher has to be confident that the questions will be
interpreted the same way by all respondents (Robson, 2002).
A questionnaire has its own disadvantages, one because there is a tendency for low
response rate as some questionnaires are completed in the absence of the
researcher (Foddy, 1994). In addition some questions may be complex to an extent
that respondents find the questions to interpret (De Vaus, 2002).
Questionnaires do, however, have their own pros. For instance, questionnaires
require less skill and sensitivity to administer compared to semi-structured interviews
(Jankowicz, 2005). In addition, questionnaires can be administered to many
respondents at the same time(Saunders, Lewis, & Thornhill, 2009).
52
For this study, both structured, and unstructured questions were used. This was to
give a balance to the instrument and to ensure that the information sought was
wholly extracted.
Simple language used in question drafting enable easier understanding by the
respondents. The questions are of a nature that they precisely address research
questions and objectives (Saunders, Lewis, & Thornhill, 2009). The questionnaire
shall be self-administered. This is because it is relatively cheaper, and it eliminates
interviewer bias. In addition, the self-administered questionnaire allows for pre-
coding of responses to enable ease of analysis.
Both self-administered, and post administered questionnaires were utilised for this
study because geographic flexibility is enabled, and cost cutting achieved, and there
is convenience as advocated for by Zikmund (2003). The questionnaire was also
chosen because it permits the collection of data in a structured way and when factual
information is required (Wegner, 1995).
Data collection was done using a number of ways. To minimise on costs, the
questionnaires were posted via email. Those without email addresses will get the
questionnaires through hand deliveries.
A cover letter accompanied each questionnaire sent to assure respondents of
confidentiality of responses as well as to highlight the importance of the research
and responses being solicited for.
3.6Data Analysis
According Zikmund (2003), the analysis of data comprises of summarizing, ordering,
and rearranging of data. Indeed analysis is a pivotal part of the research or study
cycle that enables transition to research findings (Miles & Huberman, 1994).
In this study, data collected was presented using simple tables for summarisation
prior to chart creation and graphic presentation. Graphic presentations range from
simple graphs to multiple line as well as compound graphs. The findings from the
data analyses are detailed in the fourth chapter.
53
Standard editing and coding shall apply to the data to summarise it and simplify it.
Qualitative analysis was used through qualitative analysis, both manually and
electronically. In addition, quantitative techniques will be used with the assistance of
epi-info and SPSS, Excel, and presented using tables, graphs, and charts.
3.7 Reliability and Validity
The quality of data needs to be checked and verified at each stage of the research,
so as to meet stakeholder expectations and attaining objectives (Robson, 2002).
According to Saunders, Lewis, & Thornhill (2009), reliability and validity are two
particular aspects that need emphasis in research design.
3.7.1 Validity
According to Saunders, Lewis, & Thornhill(2009),validity is concerned about matter,
that is, if findings are truly what they appear to be. Like as for reliability, validity has
its own share of threats challenges and drawbacks. These are maturation and
ambiguity about causal direction, mortality, testing, and history (Robson, 2002).
The issue of generalizability also comes to light under validity. Generalizability
(external validity) relates to the degree to which research findings can be applied to
other settings (Saunders, Lewis, & Thornhill, 2009). The remedy to external validity
issues is for a researcher not to claim external validity, such as in the case of this
research.
3.7.2 Reliability
The extent to which data collection techniques and analysis produce consistent
results relate to the reliability of the research(Saunders, Lewis, & Thornhill, 2009).
Reliability also can be expanded as the extent to which measures are free from error
and therefore produce constant results (Zikmund, 2003).
54
Reliability is threatened by a number of factors according to Robson (2002).There
can be subject error a resultant of mood swings, participant bias. Then observer
error and bias(Robson, 2002).
There are, however, checks for reliability through question assessment (Easterby-
Smith, Thorpe, Jackson, & Lowe, 2008). Such questions are;
• Willsimilar observations be realized by other researchers?
• Using other occasions, will similar results be realized?
• Was there transparency in rationalizing the raw data?
For this research study, the issues relating to validity and reliability were addressed
via an exhaustive questionnaire. Pre-test of the questionnaire assisted in addressing
such issues.
55
Chapter Four
Research Findings, Analysis, and Discussions
4.0 Introduction
This chapter focuses on the presentation of research results as well as to analyze
the results and to discuss the findings. The intention of this chapter is to discover
and evaluate to what extent the findings do address the research objectives and
questions. The information gathered through the use of questionnaire administering
was presented and analyzed in this section of the study based on literature review.
Presentation of the data will take a descriptive manner with the aid of graphs, tables,
and charts.
4.1 Response Rate
Data collection was done through the use of questionnaires. This response rate is
high enough to warrant validity and reliability for research findings. Out of the 52
questionnaires that were sent out to respondents, only 31 were completed and
returned to the researcher. This presented a response rate of 60%, which is high
enough to guarantee reliability and validity of the study findings.
4.2. Research Findings
4.2.1 Age Distribution
To have an insight of the general age distribution of the company, the researcher
included on the questionnaire a section to solicit such information was. Table 4.1
below shows the age distribution.
Age Class <20 20-29 30-39 40-49 50-59 60+
56
Frequency 0 3 11 11 4 2
Table 4.1: Age Distribution
The exhibits dual modal at age classes 30-39 and 40-49, each with a frequency of
11. The company has no employees below the age of 20 years and only two (6.45%
of total respondents) with 60years and over. In essence, the company has more of
middle aged adults who should have moderate post qualification experience by age;
thus the labor force is quite a positive in terms of training potential.
4.2.2 IT usage
One of the study objectives was to unveil how many employees or what proportion of
employees used computers or related equipment in their line of work. Among the
surveyed respondents 74.2% showed that they used IT equipment in their duties
while the remaining 25.8% did not use computers or related equipment as shown in
the chart below.
Figure 4.1: Ratio of computer users against non-use rs
The comparison concurs with the assertion that there is increasing use of IT, and
ICT equipment in Zimbabwe’s companies(Ministry of Finance, 2012). The findings
would lead to the conclusion that Maranatha Ferrochrome is a high tier category
industry in line with information intensity categories by Sohal and Fitzpatrick (2002).
74.2%
25.8%
Yes
No
57
In general the more the users
its development (Moen, Madsen, & Aspenlund, 2008)
expect Maranatha Ferrochrome to
factor can exist in isolation to determine IT performanc
IT Governance, 2003).
4.2.3 Security on Computers
One of the key components of IT governance is to ensure security and protection of
key IT assets, both physical
research investigated if Maranatha Ferrochrome has basic security features like
password for internal controls as prescribed by King (2009).
the findings.
Figure 4.2: Availability of security passwords
The findings echo the statement that IT governance is a relatively new concept
(King, 2009). It is evident that the majority of 61% from this study do not have
password, barcode, or unique pin number to protect their IT infrastructure.
total respondents, 39%, mostly at managerial level do have a password on thei
machines. Basing on the check
IT Governance (2003), security password
judge IT security. By the findings, it is evident that IT security at Maranatha
Ferrochrome is far short of ISO 27001 requirements
61%
the more the users, the better the satisfaction a company shou
(Moen, Madsen, & Aspenlund, 2008). To this end,
Ferrochrome to be satisfied with its development
factor can exist in isolation to determine IT performance and processes
4.2.3 Security on Computers , and IT equipment
One of the key components of IT governance is to ensure security and protection of
key IT assets, both physical, and intellectual (Institute of IT Governance, 2003)
research investigated if Maranatha Ferrochrome has basic security features like
password for internal controls as prescribed by King (2009). Presented
Figure 4.2: Availability of security passwords
The findings echo the statement that IT governance is a relatively new concept
. It is evident that the majority of 61% from this study do not have
ord, barcode, or unique pin number to protect their IT infrastructure.
mostly at managerial level do have a password on thei
machines. Basing on the checklist for assessing governance adequacy by Institute of
(2003), security passwords, and barcodes are a good indicator to
IT security. By the findings, it is evident that IT security at Maranatha
far short of ISO 27001 requirements.
39%
the better the satisfaction a company should be with
. To this end, literature would
be satisfied with its development; however no
e and processes (Institute of
One of the key components of IT governance is to ensure security and protection of
(Institute of IT Governance, 2003). The
research investigated if Maranatha Ferrochrome has basic security features like
Presented overleaf are
The findings echo the statement that IT governance is a relatively new concept
. It is evident that the majority of 61% from this study do not have a
ord, barcode, or unique pin number to protect their IT infrastructure. Of the
mostly at managerial level do have a password on their
list for assessing governance adequacy by Institute of
and barcodes are a good indicator to
IT security. By the findings, it is evident that IT security at Maranatha
Yes
No
58
4.2.4 Electronic mails and Internet
One of the key objectives of this research was to unveil what proportion of the
company respondents were using electronic mailing as well as to discover how many
had access to Internet. The table below summarizes the findings.
Emails Total
Yes No
Internet Yes 13 4 17
No 3 11 14
Total 16 15 31
Table 4.2: Emails and Internet availability
From the table above about 42% of the respondents have access to both Internet
and emails 35.5% do not have access to both emails and Internet. The number with
emails is almost similar to those without emails. The use of ICT through emails and
Internet can boost performance in new markets (Moen, Madsen, & Aspenlund,
2008). However, there is no association with the use of ICT and a firm’s international
performance (Moen, Madsen, & Aspenlund, 2008). Performance is in part a result of
adequate IT governance.
4.2.5 IT information dissemination
The research sought to investigate the adequacy of IT governance implemented at
Maranatha Ferrochrome. One of the best practices of proper IT governance is to
have a Chief Information Officer who has regular interaction with other stakeholders.
The figure overleaf presents findings on meetings attended.
59
Figure 4.3: Frequency of IT meetings attendance
From the findings, an overwhelming 87% of the respondents do not attend any single
meeting, while the remaining 13% attend on monthly basis. The findings sought the
researcher to investigate more through interviews some respondents. Of the 87% all
of them confirmed that there is no IT department to steer meetings at Maranatha
Ferrochrome. The 13% of the respondents that attend meetings are managers and
discuss IT issues as an agenda in other meetings.From the findings it is clear that
there is no effective communication and common language, which is a success
factor of effective IT governance as explained by ITGI (2002).
This implies if using the King III principles as a yard stick, the company is not
adequately governed in terms of IT. The Institute of IT Governance (2003) narrates
that different levels of management and users perceive IT differently. In addition the
higher one goes up the corporate hierarchy the more dilution occurs in terms of
application of IT. Therefore, meetings relating to IT should be held, especially at
lower-levels where it is easier to measure impact (Peter & Broadbent, 1998).
0
5
10
15
20
25
30
None Daily Weekly Monthly Annualy
Fre
qu
en
cy
IT meetings attendance
Attendance
Attendance
60
4.2.5 IT Services and Maintenance
The research study sought to uncover i
the IT governance principles that recommend the implementation on internal controls
and accountability. To discover
grassroots an inquiry on the handling of computer
done. Presented below are findings of the investigation.
Figure 4.4: Source of IT sol
From the findings in the research 61.3% of the respondents
on outsourced consultants for assistance in their IT problems, in the absence on an
IT department. 25.8% indicated that they had no need for assistance because they
did not use it equipment at all in their line of duty. Only 12.9% indicat
relied on their workmates and superiors for assistance if face with problems. The
findings echo the sentiments that most firms do not attach value to IT investment as
the returns on investment are difficult to measure
appears that the internal staff that assist in solving IT problems are
although they were not trained or qualified to do so, which might in fact yield an IT
risk area in terms of governance.
helps the board to act in obtaining independent assurance on
Internal Staff
Superior from Department
Outsourced Consultants
N/A
So
urc
e o
f IT
Ass
ista
nce
Source of IT Solutions
4.2.5 IT Services and Maintenance
The research study sought to uncover if the handling of IT assets was
the IT governance principles that recommend the implementation on internal controls
and accountability. To discover if there was internal control and ownership fro
grassroots an inquiry on the handling of computer, and IT related
Presented below are findings of the investigation.
Figure 4.4: Source of IT sol utions
From the findings in the research 61.3% of the respondents indicated
on outsourced consultants for assistance in their IT problems, in the absence on an
IT department. 25.8% indicated that they had no need for assistance because they
did not use it equipment at all in their line of duty. Only 12.9% indicat
relied on their workmates and superiors for assistance if face with problems. The
findings echo the sentiments that most firms do not attach value to IT investment as
the returns on investment are difficult to measure(Tan, Chong, Lin, & Eze, 2009)
the internal staff that assist in solving IT problems are
although they were not trained or qualified to do so, which might in fact yield an IT
risk area in terms of governance. In addition, knowledge of sources of IT services
helps the board to act in obtaining independent assurance on
05
1015
20
Internal Staff
Superior from Department
Outsourced Consultants
N/A
Frequency
Source of IT Solutions
IT assets was imbedded in
the IT governance principles that recommend the implementation on internal controls
if there was internal control and ownership from
and IT related problems was
indicated that they relied
on outsourced consultants for assistance in their IT problems, in the absence on an
IT department. 25.8% indicated that they had no need for assistance because they
did not use it equipment at all in their line of duty. Only 12.9% indicated that they
relied on their workmates and superiors for assistance if face with problems. The
findings echo the sentiments that most firms do not attach value to IT investment as
Tan, Chong, Lin, & Eze, 2009). It
the internal staff that assist in solving IT problems are multi-tasking,
although they were not trained or qualified to do so, which might in fact yield an IT
In addition, knowledge of sources of IT services
controls and IT
20
61
governance relating to outsourced IT services
Africa, 2009).
4.2.6 Automation vs. Human workforce
The research also sought to investig
human workforce. The investigation
governance at the firm. The findings of the investigation
Figure 4.5: Automation preferred over manpower
From the findings, there was
done job functions IT innovations. Of the total respondents, 48.4% strongly agreed
that some work may be
departments. On the other hand 51.6% agreed to a lesser extent that automation
could take over their functions.
awareness in Zimbabwe (Ministry of Finance, 2012)
The use of Internet and the increased national tele
Finance, 2012) exposes people to the outside world and raises awareness on IT
developments in business.
to it that a process for opportunity identification and exploitation is
0
2
4
6
8
10
12
14
16
Strongly Agree
Fre
qu
en
cy
Automation over Human workforce
outsourced IT services (Institute of directors in Southern
Human workforce
The research also sought to investigate if automation systems could substitute
The investigation would be valuable in determining the level of IT
ance at the firm. The findings of the investigation are summerized
Figure 4.5: Automation preferred over manpower
findings, there was agreement that automation could replace some hand
job functions IT innovations. Of the total respondents, 48.4% strongly agreed
may be automated, especially in the production and security
departments. On the other hand 51.6% agreed to a lesser extent that automation
could take over their functions. The assertion that there is increasing IT and ICT
(Ministry of Finance, 2012) is supported by the findings
nternet and the increased national tele-density to about 80%
exposes people to the outside world and raises awareness on IT
developments in business.Best practices of IT governance that the board
for opportunity identification and exploitation is
Agree Not Sure Disagree Strongly
Disagree
Automation over Human workforce
(Institute of directors in Southern
ate if automation systems could substitute
would be valuable in determining the level of IT
are summerized below.
automation could replace some hand-
job functions IT innovations. Of the total respondents, 48.4% strongly agreed
especially in the production and security
departments. On the other hand 51.6% agreed to a lesser extent that automation
assertion that there is increasing IT and ICT
is supported by the findings.
density to about 80%(Ministry of
exposes people to the outside world and raises awareness on IT
est practices of IT governance that the board must see
for opportunity identification and exploitation is in place to
Strongly
Disagree
62
improve the performance and
IT(Institute of directors in Southern Africa, 2009)
exploitation in their duties if IT provisions were in place.
4.2.7 IT Governance for better
Respondents were asked if they thought
performance and sustainability of the company. Below presented in the figure is a
summary of responses.
Figure 4.6: Proper IT Governance
According to the findings, 48.4% of the respondent
the implementation of proper IT governance, Maranatha Ferrochrome could
better and more sustainable. A further 48.4 of the respondents agreed to the
assertion although to a lesser ex
predominantly general hands was not sure.
by King (2009) that through effective
perform better and more sustainably.
improved IT governance yields bett
Singh, 2012). This also goes on to exhibit that there is a general appreciation and
awareness among employees of the
Agree, 48%
improve the performance and sustainability of the organization through the use of
(Institute of directors in Southern Africa, 2009). Respondents identified
exploitation in their duties if IT provisions were in place.
better performance
Respondents were asked if they thought IT governance if could improve both
ainability of the company. Below presented in the figure is a
Figure 4.6: Proper IT Governance
findings, 48.4% of the respondents strongly believe
proper IT governance, Maranatha Ferrochrome could
better and more sustainable. A further 48.4 of the respondents agreed to the
assertion although to a lesser extent. A section of only 3% consti
predominantly general hands was not sure. The findings are in line with assertions
by King (2009) that through effective governance of IT assets, a company could
perform better and more sustainably.The findings support the assertion that
improved IT governance yields better value for an organization (Mohamed, Kaur, &
This also goes on to exhibit that there is a general appreciation and
awareness among employees of the necessity of IT governance at the firm.
Strongly
Agree, 48%
Not Sure, 3%
Disagree, 0%
Strongly
Disagree, 0%
through the use of
. Respondents identified a gap for
IT governance if could improve both
ainability of the company. Below presented in the figure is a
s strongly believed that through
proper IT governance, Maranatha Ferrochrome could perform
better and more sustainable. A further 48.4 of the respondents agreed to the
tent. A section of only 3% constituted by
The findings are in line with assertions
governance of IT assets, a company could
the assertion that
(Mohamed, Kaur, &
This also goes on to exhibit that there is a general appreciation and
necessity of IT governance at the firm.
63
4.2.8 Accountability for IT Assets
One on the pillars of proper governance is accountability
South Africa, 2009). This research sought to investigate in there existed
accountability for IT assets as prescribed by The Institute of IT Governance (2003).
The findings to the investigation are in the figure
Figure 4.7: Accountability for IT Assets
The findings exhibit that 48% of the respondents believed that they were
accountable for the protection of IT assets. A further 16% strongly agreed that they
were responsible for IT assets ownership and that it was their responsibility to
protect and preserve the asset
agreement of their role in protection of IT assets. On the othe
while a further 7% strongly disagreed that they were responsible for IT assets
protection. In addition, 10% of the responde
IT assets protection.
The findings derail from principles o
a total appreciation of accountability and undivided ownership of governance
policies. The findings go aga
0 0.05
Strongly Agree
Agree
Not Sure
Disagree
Strongly Disagree
4.2.8 Accountability for IT Assets
One on the pillars of proper governance is accountability (Instutute of Directors
. This research sought to investigate in there existed
accountability for IT assets as prescribed by The Institute of IT Governance (2003).
to the investigation are in the figure below.
Figure 4.7: Accountability for IT Assets
exhibit that 48% of the respondents believed that they were
accountable for the protection of IT assets. A further 16% strongly agreed that they
were responsible for IT assets ownership and that it was their responsibility to
protect and preserve the assets. In total 64% of the total respondents were in
agreement of their role in protection of IT assets. On the other hand 19
while a further 7% strongly disagreed that they were responsible for IT assets
protection. In addition, 10% of the respondents were not sure of their role in terms of
The findings derail from principles of governance that recommend there
a total appreciation of accountability and undivided ownership of governance
The findings go against effective IT governance success factors
0.1 0.15 0.2 0.25 0.3 0.35 0.4
16%
10%
19%
7%
(Instutute of Directors
. This research sought to investigate in there existed
accountability for IT assets as prescribed by The Institute of IT Governance (2003).
exhibit that 48% of the respondents believed that they were
accountable for the protection of IT assets. A further 16% strongly agreed that they
were responsible for IT assets ownership and that it was their responsibility to
s. In total 64% of the total respondents were in
r hand 19% disagreed
while a further 7% strongly disagreed that they were responsible for IT assets
nts were not sure of their role in terms of
recommend there should exist
a total appreciation of accountability and undivided ownership of governance
inst effective IT governance success factors that
0.45 0.5
48%
64
stipulate that shared commitment to procedures and policies
2002).
4.2.9 Adequacy of IT services
The research sought to discover
respondents. The satisfaction of IT services can denote a certain level of IT
governance adequacy (Institute of IT Governance, 2003)
question asked are summerized in the figure below.
Figure 4.8: Satisfaction of IT Services
In the investigation, 55% disagreed that the services they were getting were
satisfactory. On the other hand, 32% of the respondents agreed t
satisfaction from the service
undecided if the services were satisfying or not. IT
continually monitored after implementation to ensure satisfaction as directed by
governance principles (Getter, 2007)
framework in use at Maranatha Ferrochrome.
0
0.1
0.2
0.3
0.4
0.5
0.6
Strongly Agree Agree
0%
shared commitment to procedures and policies be ensured
Adequacy of IT services
e research sought to discover if the current IT services were satisfactory for the
respondents. The satisfaction of IT services can denote a certain level of IT
(Institute of IT Governance, 2003). The responses to the
e summerized in the figure below.
Figure 4.8: Satisfaction of IT Services
In the investigation, 55% disagreed that the services they were getting were
satisfactory. On the other hand, 32% of the respondents agreed t
the services they were getting, while 13% were not sure or
vices were satisfying or not. IT services and policies should be
after implementation to ensure satisfaction as directed by
(Getter, 2007). The findings also exhibited that ITIL was not a
framework in use at Maranatha Ferrochrome.
Agree Not Sure Disagree Strongly
Disagree
32%
13%
55%
0%
be ensured(ITIG,
if the current IT services were satisfactory for the
respondents. The satisfaction of IT services can denote a certain level of IT
responses to the
In the investigation, 55% disagreed that the services they were getting were
satisfactory. On the other hand, 32% of the respondents agreed to getting
s they were getting, while 13% were not sure or
services and policies should be
after implementation to ensure satisfaction as directed by IT
The findings also exhibited that ITIL was not a
Strongly
Disagree
0%
65
4.2.10 Factors for production decline in 2011
In a quest to investigate, which factors were among
production in 2011, to an extent of stagnantation,
factors and IT governance was added as the fifth for the sack of meeting research
objectives.
4.2.10.1 Lack of IT Governance
The respondents were asked to rate if they thought lack of IT gove
Maranatha ferrochrome was one of the contributing factors to the failure
production performance. The summary of
Figure 4.9: Lack of IT governance as a factor of pr oduction decl
From the findings, 45% of the respondents indicated that they thought the lack of IT
governance was a contributing factor in
proportion did not view IT governance as a contributing factor while only 10% were
not sure in indeed lack of IT governance could be a production factor.
are in line with the Ministry of Finance (2012) that listed lack of adequate information
technology vehicles as one of the contributing factors to industry
4.2.10.2 Other factors
No
45%
for production decline in 2011
, which factors were among the cause for decline in
production in 2011, to an extent of stagnantation, the researcher identified four
and IT governance was added as the fifth for the sack of meeting research
4.2.10.1 Lack of IT Governance
asked to rate if they thought lack of IT gove
was one of the contributing factors to the failure
production performance. The summary of responses is below.
Figure 4.9: Lack of IT governance as a factor of pr oduction decl
s, 45% of the respondents indicated that they thought the lack of IT
ance was a contributing factor in the decline in production in 2011. An equal
proportion did not view IT governance as a contributing factor while only 10% were
not sure in indeed lack of IT governance could be a production factor.
are in line with the Ministry of Finance (2012) that listed lack of adequate information
technology vehicles as one of the contributing factors to industry performance
Yes
45%
No
45%
Not
Sure
10%
the cause for decline in
the researcher identified four
and IT governance was added as the fifth for the sack of meeting research
asked to rate if they thought lack of IT governance at
was one of the contributing factors to the failure in
Figure 4.9: Lack of IT governance as a factor of pr oduction decl ine
s, 45% of the respondents indicated that they thought the lack of IT
the decline in production in 2011. An equal
proportion did not view IT governance as a contributing factor while only 10% were
not sure in indeed lack of IT governance could be a production factor. The findings
are in line with the Ministry of Finance (2012) that listed lack of adequate information
performance failure.
66
The respondents had different takings on other factors that they viewed to cause the
decline in ferrochrome production as presented below.
Figure 4.10: Factors affecting production
From the factors above, 93% of the respondents regarded
the low ferrochrome pricing
ferrochrome production. Indigenisation issues and the factor of manpower exodus
received mixed feelings form
put forward by The Institute of IT Governance that IT governance
operate in a vacuum, but in a business environment with other controlling
The findings thus lead to a conclusion th
any way, apart from IT governance
4.2.11: IT Information to the Board
The research sought to discover
board as well as to discover
Respondents were questioned
awareness. Overleaf presented are t
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Production Cost Ferrochrome
Pricing
3%
The respondents had different takings on other factors that they viewed to cause the
decline in ferrochrome production as presented below.
Figure 4.10: Factors affecting production
93% of the respondents regarded high production costs and
e low ferrochrome pricing as the most influential factors that led to the decline of
Indigenisation issues and the factor of manpower exodus
received mixed feelings form the respondents. The findings reveal what has been
put forward by The Institute of IT Governance that IT governance
m, but in a business environment with other controlling
The findings thus lead to a conclusion that Maranatha Ferrochrome is not unique in
any way, apart from IT governance issues; it is also affected by other factors
to the Board
discover if there was any conveyance of IT information to the
as well as to discover if there was board awareness of IT developments
Respondents were questioned if in their view there was evidence of such
Overleaf presented are the research findings.
Ferrochrome
Pricing
Indegenisation Manpower
Exodus
7%
45% 26%
The respondents had different takings on other factors that they viewed to cause the
high production costs and
as the most influential factors that led to the decline of
Indigenisation issues and the factor of manpower exodus
the respondents. The findings reveal what has been
put forward by The Institute of IT Governance that IT governance (2003) does not
m, but in a business environment with other controlling factors.
at Maranatha Ferrochrome is not unique in
it is also affected by other factors.
if there was any conveyance of IT information to the
board awareness of IT developments.
if in their view there was evidence of such
Not sure
No
Yes
67
Figure 4.11: Board Awareness of IT developments
From the findings 55% of the responden
informed of IT developments from perspective. Thirty
agreed that the board was aware. Those who agreed that the board was aware
assume managerial and office positions. Only 7% of the respondents and 3%
disagreed and strongly disagreed respectively. This brings the researcher to
conclude that the majority of respondents are not aware of IT related issues that
concern the company.
From the interviews conducted, most respondents were not sure if
aware ofIT requests and inputs at the company, and if there was serious
consideration of the inputs
assurance of IT reports and follow up on them
2009).
0 0.1
Strongly Agree
Agree
Not Sure
Disagree
Strongly Disagree
0%
7%
3%
Awareness of IT developments
the findings 55% of the respondents were not sure if the board were
velopments from perspective. Thirty-six percent of the respondents
agreed that the board was aware. Those who agreed that the board was aware
nd office positions. Only 7% of the respondents and 3%
disagreed and strongly disagreed respectively. This brings the researcher to
conclude that the majority of respondents are not aware of IT related issues that
onducted, most respondents were not sure if
aware ofIT requests and inputs at the company, and if there was serious
consideration of the inputs. The board is should gather independent and correct
assurance of IT reports and follow up on them (Instutute of Directors South Africa,
0.1 0.2 0.3 0.4 0.5
36%
55%
ts were not sure if the board were aware or
of the respondents
agreed that the board was aware. Those who agreed that the board was aware
nd office positions. Only 7% of the respondents and 3%
disagreed and strongly disagreed respectively. This brings the researcher to
conclude that the majority of respondents are not aware of IT related issues that
onducted, most respondents were not sure if the board was
aware ofIT requests and inputs at the company, and if there was serious
gather independent and correct
(Instutute of Directors South Africa,
0.5 0.6
68
4.2.12 Industry best practice in line with IT
The research sought to discover if Maranatha Ferrochrome was adhering to industry
best practice in terms of value, risk, and resource management. There respondents
were asked to grade the company in relation to what they deemed or knew what best
practice was. The responses to questions asked are summarised in the below figure.
Figure 4.12: Industry Practice at Maranatha Ferroch rome
The findings exhibited that 45% of the respondents did not agree that the company
was observing industry best practice. In addition 3% strongly disagreed that there
was adherence to industry best practice. Notable points were in the absence of
ERPs and software, such as SAP and online management of inventory. There is also
manual ferrochrome grading system that does not suit metals processing standards.
In addition, the absence of electronic and computerised work hours clocking systems
led most respondents to disagree.
Of the respondents, 29% agreed that Maranatha Ferrochrome was adhering to
industry standards, while 23% of the respondents were not certain of the position of
the company with respect to industry standards.
The findings lead to the conclusion that the company is not adhering to standard
practice. The company is not adhering to recommendations on IT governance as
stipulated in the King III report (2009).
0%
29%
23%
45%
3%
Strongly Agree
Agree
Not Sure
Disagree
Strongly Disagree
69
4.2.13: IT reporting
The research sought todiscover
commensurate with IT Importance. This would
exist IT strategic alignment. The respondents’ views were capture
the figure below.
Figure 4.13: IT reporting commensurate with IT Importance
The findings as presented in the above figure
were not sure how to rate IT reports.
strongly disagreed that there was IT reporting
company. The respondents
never to have come across an IT report.
that IT reporting expressed the importance of IT. The respo
reporting were generally of managerial level.
The findings lead to conclusions that there is lack of adequate IT reporting at
Maranatha Ferrochrome. The Institute of IT Governance (2003) revealed that to
ascertain IT strategic align
with the importance of IT. Furthermore, there is need for
ensure understanding at all levels of corporate hierarchy.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Strongly Agree Agree
0%
discover if there was IT reporting and if the repo
commensurate with IT Importance. This would assist the research to unveil if there
exist IT strategic alignment. The respondents’ views were captured
reporting commensurate with IT Importance
as presented in the above figure exhibit that 71% of the respondents
were not sure how to rate IT reports. Ten percent disagreed and a further 7%
strongly disagreed that there was IT reporting exhibited the importance of IT to the
The respondents not sure, and mostly shop-floor employees revealed
never to have come across an IT report. Thirteen percent of the respondents agreed
that IT reporting expressed the importance of IT. The respondents who agreed to IT
reporting were generally of managerial level.
The findings lead to conclusions that there is lack of adequate IT reporting at
Maranatha Ferrochrome. The Institute of IT Governance (2003) revealed that to
ascertain IT strategic alignment, there is need for IT reporting to be commensurate
with the importance of IT. Furthermore, there is need for circulation of the reports
at all levels of corporate hierarchy.
Agree Not Sure Disagree Strongly
Disagree
13%
71%
10%
if there was IT reporting and if the reporting were
assist the research to unveil if there
and presented in
exhibit that 71% of the respondents
disagreed and a further 7%
exhibited the importance of IT to the
floor employees revealed
of the respondents agreed
ndents who agreed to IT
The findings lead to conclusions that there is lack of adequate IT reporting at
Maranatha Ferrochrome. The Institute of IT Governance (2003) revealed that to
ment, there is need for IT reporting to be commensurate
circulation of the reports to
Strongly
Disagree
7%
70
4.2.14 Disaster Recovery Plans
The research sought to discover
respondents at the company. This would assist in rating if there is adequate
implementation of IT governance framework as prescribed by King (2009). This
comes on the back of the assertion tha
implement IT will be left behind
investigation are in the figure below.
Figure 4.14: Existence of disaster recovery plan
It is evident that the majority of respondents with a proportion of 42% disagree that
there is strong disaster recovery plan at the company. The investigat
back up was done on removable
stored on site. In the event of disaster occurring some critical company information
would be lost. More so, the company lacks audit systems with a one
audit department.
The investigation also discovered
was a disaster recovery plan. Some sighted ignorance while some claimed not to
have seen initiatives of backing up
hand, 19% agreed that there was disaster recovery plans and backing up of data at
the company.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
Strongly Agree Agree
0%
4.2.14 Disaster Recovery Plans
discover if there was a disaster recovery plan know
respondents at the company. This would assist in rating if there is adequate
implementation of IT governance framework as prescribed by King (2009). This
ck of the assertion that organizations that fail to strategically
IT will be left behind (McCredie, 2000). The summary of
in the figure below.
Figure 4.14: Existence of disaster recovery plan
evident that the majority of respondents with a proportion of 42% disagree that
there is strong disaster recovery plan at the company. The investigat
done on removable memory sticks, hard copies, and on compact disks
site. In the event of disaster occurring some critical company information
would be lost. More so, the company lacks audit systems with a one
The investigation also discovered that 39% of the respondents were not sure if ther
was a disaster recovery plan. Some sighted ignorance while some claimed not to
have seen initiatives of backing up, and IT risk mitigation implemented. On the other
hand, 19% agreed that there was disaster recovery plans and backing up of data at
Agree Not Sure Disagree Strongly
Disagree
19%
39%
42%
if there was a disaster recovery plan known to the
respondents at the company. This would assist in rating if there is adequate
implementation of IT governance framework as prescribed by King (2009). This
ations that fail to strategically
summary of findings from the
evident that the majority of respondents with a proportion of 42% disagree that
there is strong disaster recovery plan at the company. The investigation unveiled that
, and on compact disks
site. In the event of disaster occurring some critical company information
would be lost. More so, the company lacks audit systems with a one-man internal
that 39% of the respondents were not sure if there
was a disaster recovery plan. Some sighted ignorance while some claimed not to
implemented. On the other
hand, 19% agreed that there was disaster recovery plans and backing up of data at
Strongly
Disagree
0%
71
The findings from the research would direct to that the company is still lacking in
terms of disaster recovery. Ideally the risk and audit committeesmust assist the
board in its IT responsibilities (Institute of directors in Southern Africa, 2009).
4.2.15 IT Governance Policy Familiarity
One of the fundamental recommendations by IT governance principles is to have a
properly implemented and well communicated IT governance policy. By such, the
research sought to discover if there was an IT governance policy properly cascaded
to all levels and departments of the company. The findings of the investigation are in
the figure below.
Figure 4.15: IT Policy Popularity
From the investigations none of the respondents knew the IT policy very well, while
only 16%, mostly at managerial level knew the policy well. A moderate 29% of the
respondents knew of IT policy contents fairly. The majority of the respondents,
however, were not familiar with the IT policy or its existence. The investigations
unveiled that there was an outdated policy that was, however, not properly
documented and not part of induction for new employees.
It is evident that the company is not adhering to IT governance principles that require
that an IT governance policy be in place and that it be implemented and
Very well
0% Well
16%
Average
29%
Not Known
55%
Very well
Well
Average
Not Known
72
communicated. The findings thus contradict effective and successful IT governance
practices that recommend IT policies and procedures be shared (ITIG, 2002).
73
Chapter Five
Conclusions and Recommendations
5.0 Introduction
The chapter presents the research’s major conclusions and findings. Basing on
researching findings from respondents who participated in the survey, some
conclusions were drawn and recommendations generated. The response rate,and
the composition of respondents included in the sample for the study validate the
conclusions drawn. The respondents came from different departments in the
company and assumed different functional levels enough to give valid conclusions.
5.1 Conclusions
First the study concludes that Maranatha Ferrochrome (Pvt) Limited has a strong
reliance on the use of IT as a backbone to do business. The conclusion compares
well to the state average on ICT prevalence and usage. The research also
concluded that at Maranatha Ferrochrome, ICT benefits were realized in terms of
electronic mailing as well as Internet services, however there was limitation to
benefits received. This was due to limited resources as well as the general poor ICT
infrastructure of Zimbabwe.
The research discovered that Maranatha Ferrochrome has over reliance on
outsourced IT services, with about 72% of its services being external. This is on the
background of the non-existence of an internal IT department. It also concluded that
the company also relies on the general knowledge of employees to troubleshoot IT
problems. The research also concluded that the general end users of IT services
were not satisfied with the service they were receiving. This generallycreates a
number of loopholes in terms of IT governance, by such rendering IT governance at
the company inadequate.
The research also concluded that there was little communication at all levels to
warrant the required levels of IT governance awareness at Maranatha Ferrochrome.
There was general unfamiliarity with IT reporting. Discovery was made that the
communication of IT issues was not being all inclusive with IT meetings being an
agenda for management meetings only. This comes short of recommended IT
74
governance issues that require continuous and 360 degree feedback communication
system. In addition, the research also concluded that the board position on IT
developments from a business perspective was unclear. By such, the research
concluded that there was still inadequate IT governance practice at Maranatha
Ferrochrome.
The decline in ferrochrome production since 2011 was due to a number of factors.
The world decline in ferrochrome prices, high production costs as well as lack of
proper IT governance were among the leading factors that contributed to
ferrochrome production downfall. The research also concluded that there was
general appreciation that automation can to some extent be a substitute for
manpower. The company is generally aware of the threat IT has to operational
sustainability and has thus caused a rise in awareness on the need to automate
some functions.Conclusion was reached that there was general agreement that
there was a deficit in IT governance and that proper IT governance would better the
company’s performance and sustainability. The failure torealize the need for proper
IT governance structures at the company is a shortcoming in terms of IT governance
principles.
Fourth, research also concluded that there was no official IT governance policy at
the company. The company relied on generic guidelines to IT practice that were
however not documented. There was no general appreciation or knowledge of the
policy. The limited role played by the board and executive management in IT policy
issues was one of the conclusions. In addition, the research concluded that
Maranatha Ferrochrome was not adhering to industry best practice in terms of IT
related issues. The conclusions drawn indicate there is little IT governance in
practice and a much more on IT governance has to be done.
Last, the research concludes that Maranatha’s IT assets were not well catered for.
The level of responsibility acceptance was not a totality as expected in proper
governance. It also concluded that there was no adequate disaster recovery plan at
the company. Most of the information is backed up on unsuitable devices and fragile
sources.It also concluded that protection of assets was not to the level of
expectation. There was generally no proper accountability and a system of access
levels, in the absence of passwords, and restrictive, and control measures. The
conclusions can identify holes in terms of IT governance, thus concluding that in
75
terms of IT assets protection, little was done, rendering IT governance at the
company inadequate. On the overall view, the research concluded that there is
inadequate IT governance that is at play at Maranatha Ferrochrome.
5.2 Research Proposition
The research proposition that there is an opportunity for better performance and
sustainability of ferrochrome production if there was adequate implementation of IT
governance principles has been adopted and accepted. This is because the
research concluded that there existed many factors that influence production,
however; there was inadequate IT governance at Maranatha Ferrochrome. The
acceptance of the proposition also relied on the that the study concludes that most
functions, especially in production could be automated. Moreso, there is general
appreciation at the company of the need to address IT related issues for alignment to
company objectives and strategy. This shows that IT governance adequacy needs to
be addressed with equal weight to other priority areas to ensure sustainable
operations and to realize value from resource utilisation at Maranatha Ferrochrome.
5.3 Recommendations
First, the research recommends that the board at Maranatha ferrochrome should
form an IT committee, which would oversee IT governance at the company. There is
need to take ownership of IT governance by top management and cascade the
values down the hierarchy. There is need to formulate an IT policy that is all inclusive
and well disseminated to all stakeholders. The reform effort should aim to
benchmark any IT reforms against standard guidelines stipulated by recognised IT
government institutes like Institute of IT Governance or King III report.
Second, Maranatha Ferrochrome needs to assume a learning organization objective.
The exposure of all employees to ICT facilities, such asInternet email services and
knowledge management systems to ensure that there is sustainable management of
IT assets and operations.
76
Last, the research recommends that the companyshould invest in IT risk
management. There is need to have fire fighting systems like offsite back up, cloud
computing, and servers. The research also recommends the company to adopt
control systems that have a success history, such as COBIT in a phasing manner.
COBIT allows improvement of IT services critical to achieving business objectives.
The company should also seek to have IT ISO 27001 certification for information
security. The company should also base reforms on industry standards, for instance
the adoption of ERPs like SAP.
Areas of future study cover the extension of IT research to other mining subsectors
like gold mining. In addition, the study can be extended to cover the whole industry in
its entirety, in the form of quantitative research in IT governance and sustainability.
The use of bigger samples in further research could be a starting point in research.
77
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APPENDICES
Appendix I – Letter of Intent
Graduate School of Management University of Zimbabwe P O Box MP 167 Mt Pleasant HARARE
1 December 2012
Dear Sir/Madam
RE: Questionnaire on “An Investigation into the Adequ acy of Information Technology Governance in Zimbabwe’s Mining Sector: The Case of Maranatha Ferrochrome (Pvt) Ltd”
I am a student at the University of Zimbabwe (UZ) carrying out a research study entitled, ‘An Investigation into the Adequacy of IT Governance in Zimbabwe’s Mining Sector: The case of Maranatha Ferrochrome (Pvt) Ltd’. The dissertation is being done in partial fulfillment of the requirements of the Graduate School of Management Master of Business Administration (MBA) degree program.
Please find attached to this cover letter a questionnaire, which is strictly meant for academic purposes. All information provided will be in strict confidence and your identity shall remain anonymous.
It would be greatly appreciated if you completed the questionnaire and that the completed questionnaire be returned to the researcher as soon as possible. This will help the researcher to timely compile the information gathered so that it can be forward submitted to the UZ Graduate School of Management within the required time.
Please kindly note that ifyou require any clarification, kindly contact the researcher on the contact details given below.
Thank you very much for your cooperation.
Yours faithfully
Winston Ndichaona E-mail: [email protected]; Cell: 0733 511 406
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APPENDIX II: Research Questionnaire RESEARCH QUESTIONNAIRE
Date:___________________ Questionnaire No.
1. Age (Please tick one category) Less than 20years 20-29 30-39 40-49 50-59 60 and above
2. Department: _________________ 2b)Title/Position:__________________
3. Number of years employed by Maranatha Ferrochrome ( Please tick one) Years of service (Years)
0-5 6-10 10<
From the following statements please kindly tick the box that matches your situation or your view point most closely.
4. Do you work on a computer?
5. Do you own/have a unique password to your business computer?
6. Do you have a Maranatha email address?
7. Do you have access to internet at work?
8. How many times do you attend IT meetings in your department? None Daily Weekly Monthly Annually
9. Who attends to your IT and computer related problems?
Yes No
No Yes
Yes No
Yes No
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Internal IT Staff
Self Superior from the department
Consultants N/A
10. Some of the work you do or in your department can be done better using machines and technology.
Strongly Agree
Agree Not Sure Disagree Strongly Disagree
11. The use of Information Technology Governance can assist the company to produce better results.
Strongly Agree
Agree Not Sure Disagree Strongly Disagree
12. You are responsible for the protection of IT assets.
Strongly Agree
Agree Not Sure Disagree Strongly Disagree
13. The IT service you receive are satisfactory and covers all of your needs.
Strongly Agree
Agree Not Sure Disagree Strongly Disagree
14. From the factors provided, please tick for each factor whether you agree (Yes), you disagree (No) or are not sure (Not Sure).
The decline of the Ferrochrome industry from 2010 can be attributed to:
Factor Yes No Not Sure Lack of IT Governance Drop in Ferrochrome prices Indegenization of companies Manpower exodus High Production costs
15. The board is aware or informed of IT developments from a business perspective.
Strongly Agree
Agree Not Sure Disagree Strongly Disagree
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16. Maranatha Ferrochrome is doing industry best practise in line with IT and compares well in terms of value, risk and resource management.
Strongly Agree
Agree Not Sure Disagree Strongly Disagree
17. The reporting of the most senior IT guy is commensurate with the Importance of IT.
Strongly Agree
Agree Not Sure Disagree Strongly Disagree
18. Information is backed up and there is a strong disaster recovery plan at the
company?
Strongly Agree
Agree Not Sure Disagree Strongly Disagree
19. How familiar are you to the current IT Policy at Maranatha?
Very Well Well Average Do not know
20. As a potential IT governance practitioner, in brief, what is the main thing you would change or implement to enhance IT assets and governance at the company? i)…………………………………………………………………………………………………………………………………………………………………………………….
End of Questionnaire: Thank you Very Much
