An assessment of the impacts of climate change on water resources of Senegal and Ghana - Introduction Chapter

Chapter 1 Introduction    Background of the Study Africa is one of the most vulnerable regions to the adverse effects of climate change. Countries which are already poor and under-developed lack the financial, technological and human resource capabilities needed to cope with climate change. The countries of West Africa also have a high direct dependence on their natural resources, both for food, and in economic terms. West Africa encompasses several climatic zones, from humid (along the southern coast) to arid (toward the north). The main cities are mostly concentrated towards the coastal regions. Major water resources include the Niger River, Lake Chad, the Senegal River, the Gambia River, and the Volta region of Ghana. Many of the sub-region’s ecosystems (rivers, forests, plateaus, mountains, deserts) are shared across borders. Many West Africans depend directly upon their land. Much of the population (away from cities) relies on subsistence agriculture, and migratory livestock farming is also commonplace. The vast majority (around 80%) of energy demand is met through biomass use. Agricultural export is a significant contributor to GDP for many West African countries, as well as logging, and the mining and extraction of natural resources such as metals and fossil fuels. Climate change points out the course of the worldwide and multi-year growths in atmospheric temperature and mean sea-temperature, the drop in rainfall and amount of rainfall in designated areas, and the resurgence of extreme events and natural disasters like floods and droughts. The deadly mix of global warming and an  increased variability of rainfall is resulting in the incidences of extreme events, like low flows and floods and it is expected to increase in the rate as well as in intensity all over Africa.  Current research has emphasized the growth of river flows and its effects human habitations and on the natural environment in the areas being studied for climate change impact. The extent and gravity of effect of climate change in the continent also depend on the area’s hydro-climatic conditions (Faye, 2018). The effects of climate change are already being felt by people across Africa. Evidence shows that the change in temperature has affected the health, livelihoods, food productivity, water availability, and overall security of the African people. According to the Climate Change Vulnerability Index for 2015, seven of the ten countries most at risk from climate change are in Africa. Africa has seen a decrease in rainfall over large parts of the Sahel and Southern Africa, and an increase in parts of Central Africa. Over the past 25 years, the number of weather-related disasters, such as floods and droughts, has doubled, resulting in Africa having a higher mortality rate from droughts than any other region.   There have been a series of droughts in the Sudano-Sahelian region of West Africa in the past thirty years, impacting on the Senegal, Volta, and Niger basins, hitting badly its ecosystems, particularly its water resources.  These developments have hurt the weak economies of 13 of the 16 countries in this region. Since the amount of rainfall has been decreasing through the years, and the way it hits the region is variable in terms of frequency, space and time, this has led to a corresponding decrease in river discharges as well as receding levels of the region’s freshwater sources. Serious consequences have happened and it has impacted on groundwater levels and it has accelerated the desertification process in the region. This has resulted in massive migration and crises in food security. There are many uncertainties and challenges brought about by effect of climate change and the existence of many other factors further compound the water resources.  The challenges and uncertainties associated with the impacts of future climate changes on water resources in West Africa are further compounded by including regional demographic factors, and non- existence or inadequate water policies, inefficient management strategies and lack of reliable and adequate data. This research describes the impact of climate change on the water resources in the economies and standard of living in the countries of Senegal and Ghana in West Africa. The goal is to find ways of mitigating the severity of the situation, and to reduce the severity of the impacts on the already stressed and poverty-stricken economies of West Africa (Oyebande, 2010). Purpose and significance of the topic In Africa, climate change is not a long-term scientific or technical issue, but is linked to basic human rights and poverty alleviation. In fact, the continent is at the front line of the areas being studied regarding the effect of climate fluctuations on water resources (Faye, 2018).  Scientific data on climate projections have shown solid proof that the freshwater resources are susceptible to climate change and along with it some very deadly consequences for the ecosystem it is in as well as on the human population inhabiting the area (Bates, et al., 2008). These consequences are even deadlier in areas that have arid and semiarid climate like the one in West Africa. This then makes the continent, quite susceptible to climate change due to its low adaptive capacity and high exposure (IPCC, 2014). Several impact studies in the area of West Africa have shown that water resources are significantly impacted by climate change (Aich et al., 2014). Unfortunately, the information dissemination within the continent is weak and knowledge about the impact of climate change on the continent has been restricted due to feeble climate tracking, and chinks in the reportage have been identified (IPCC, 2014). The well documented droughts in the 1970s have resulted in decreased water flows in numerous African river basins. The Senegal River Basin, located in West Africa, has been at the epicenter of these droughts. Based on the records, its annual average flow at one of its reference stations in Bakel fell from 1374 m3 /sec over the period 1903-1950 to 840 m3 /sec in the period 1950-1972 and continued to worsen to only 419 m3 /sec in the period 1973-2002 (ENDA-TM, 2007). The drought has affected rain-fed agriculture, reduced the occurrence of seasonal flooding in the wetlands, slowed down economic development, and consequently caused poverty in the area (Oyebande & Oyunuga, 2010). The lack of water has affected many human activities and sectors of the economy like hydropower generation, fishery and agriculture. Since water is front and center in the impacts of climate change to the economic sectors of society, like in the transport, agriculture and energy sectors (Osorio & Galiano, 2012), it is imperative to find out how climate change will affect this valuable resource in the future. The purpose of this study is to do an assessment on the impact of climate change on the water resources system in west Africa. This topic is significant in that the result acquired from this investigation will narrow the existing research gaps and give an insight of the magnitude of the impact of climate change to the already vulnerable sub-region and will help to map sectors that are more vulnerable to climate change. This study will also benefit scientists from all over the world who are studying similar water resource systems in their part of the world, as a reference and a benchmark on where the other water resource systems are standing. By sharing information with each other, the scientists as well as the governments they are advising can take concrete steps in fighting climate change and formulating legislation that can slow it down as well as improve the situations in their country’s respective water resource systems. Finally, this study will be useful to students of government policy, public administration, public health as well as the environmental sciences since it will show governments, local authorities, and the people in that environment coped up with the problem of climate change, and document as well, the efforts of the people in those affected areas to cope up with the problems presented to them.

t

2. Research background and development tendency in the world There is general agreement that Africa, moving forward, will warm at a rate greater than the global annual mean; projections for the continent show a median temperature increase of between 3°C and 4°C by the end of the century (Christensen et al., 2007). The impacts of this temperature increase for West Africa are unclear, a result of the limited understanding experts have for the natural processes that drive the region’s climate, including the movement of the Inter-tropical Convergence Zone, the occurrence of the West African monsoon, and the El Niño-Southern Oscillation (Conway, 2009). Gaps in regional climate observations (due to an underdeveloped meteorological system in Africa), limited regional modeling of West Africa’s climate, and a limited capacity to provide accurate, high resolution projections for the region compound these challenges (Boko et al., 2007; ECOWAS-SWAC/OECD, 2008; SWAC, 2009). The impact of climate change on regional precipitation patterns is unclear; however, there is broad expectation that the African continent will become drier (Conway, 2009) and of the potential for a greater number of extremely dry and wet years in the Sahel region throughout this century, and for more severe droughts (Boko et al., 2007). The impact climate change will have on other extreme weather events (tropical cyclones, storm surges) is unclear. Sea levels along the coast of West Africa could also rise by between 0.13 to 0.56 meters over the course of the century (Meehl et al., 2007: 813; McSweeney, New & Lizcano, 2008). West Africa’s vulnerability to climate change stems from: a high regional reliance on climate-sensitive economic activities such as rain-fed agriculture, livestock rearing, fisheries and forestry; the presence of large population clusters (approximately 40 percent of the regional population) in coastal urban areas (Boko et al., 2007); the low capacity of region’s social and ecological systems to cope with climatic extremes; and existing strains on ecosystem services due to processes such as loss of productivity and deforestation. As such, climate change is broadly expected to adversely affect West Africa’s future development.  Across West Africa, much of the population relies directly on the land for survival. In Gambia for example, over 72% of the population are part of the rural economy, dependent on natural rainfall to grow food, some crops for selling, and to breed livestock. Changes in the climate therefore have a very immediate impact. An overview of the major impacts of climate change being experienced now across West Africa is given below on a sectoral basis. 1. Impacts on weather pattern Flooding is the most prevalent disaster in North Africa, the second most common in East, South and Central Africa, and the third most common in West Africa (AWDR, 2006). In North Africa, the 2001 disastrous flood in northern Algeria resulted in about 800 deaths and economic loss of about $400 million. In Mozambique, the 2000 flood (worsened by two cyclones) caused 800 deaths, affected almost 2 million people of which about 1 million needed foods, 329,000 people were displaced and agricultural production land was destroyed (AWDR, 2006). Between July 2011 and mid-2012, a severe drought affected the entire East Africa region and was said to be “the worst drought in 60 years. 3. Impacts on Water Supply and Quality Projections of how climate change will affect freshwater resources in West Africa are still highly uncertain, and future availability will be strongly influenced by a number of factors including population growth, migration and agricultural development (deWit and Stankiewicz, 2006). As less than half of the population of West African countries has access to a clean drinking water (Afouda et al., 2007), many communities in the region have a low capacity to cope with the additional water stress that may arise due to climate change. Observable effects of climate change on water resources in Africa include flooding, drought, change in distribution of rainfall, drying-up of rivers, melting of glaciers and the receding of bodies of water. In West Africa, the entire economies suffer when the water levels of Africa’s huge rivers drop. Ghana, for example, has become totally reliant on the hydro-electric output of the Akosombo dam on the river Volta. Mali is dependent on the river Niger for food, water and transport. However, great stretches of the river is now facing environmental devastation as a result of pollution. In Nigeria, half the population has no access to clean water. The gradual yet dramatic disappearance of the glaciers on Mount Kilimanjaro is a result of climate change (IPCC, 2001). The glaciers act as a water tower and several rivers are now drying up. It is estimated that 82% of the ice that capped the mountain, when it was first recorded in 1912, is now gone. (IPCC, 2001) 4. Impacts on Agriculture and Food Agriculture generates 25 to 30 percent of the Gross Domestic Product (GDP) in most West African countries and employs between 50 to 90 percent of the population. Changes in seasonality, intensity and amount of rainfall could compromise agricultural production in the region, with the Intergovernmental Panel on Climate Change (IPCC) projecting a reduction in the cropping season of more than 20 percent could occur in the Sahel and Sudano-Sahelian ecological zones by 2050 (SWAC, 2009). Across Africa the landscape is changing. Droughts, heat stress and flooding have led to a reduction in crop yields and livestock productivity. East Africa is facing the worst food crisis in the 21st century. According to Oxfam, 12 million people in Ethiopia, Kenya and Somalia are in dire need of food. Rainfall has been below average with 2010/2011 being the driest year since 1950/1951, a serious problem for a continent almost entirely dependent on rain for its agriculture. Pastoralism plays an important role in the economies of many West African countries. Altered temperature, precipitation and extreme event patterns could to lead to the outbreak of climate-related animal diseases (Garba, 2010). Pastoralists may also need to change their migratory patterns, as they have done in the past in response to climatic extremes (SWAC, 2009). 5. Impacts on Human Health  The health systems of many West African countries are weak and could face additional pressures due to changes in the distribution of water- and vector-borne diseases resulting from climate change. Conversely, a large part of the region is expected to become unsuitable for malaria transmission (Boko et al., 2007). Climate-sensitive diseases and health impacts can be high in poor countries that have minimal resources to treat and prevent illness. Examples of climate related health impacts include: Frequent and severe heat stress linked to sustained increases in temperature. The reduction in air quality that often accompanies a heat wave can lead to breathing problems and worsen respiratory diseases. The spread of Malaria may increase in areas projected to receive more precipitation and flooding. Increases in rainfall and temperature can cause spreading of dengue fever  5. Impacts on Shelter Severe flooding and intense droughts have led to the destruction of many homes, shelters and villages across Africa. Conflicts over resources also exacerbate these impacts and, in turn, contribute to the ongoing migration within and between countries in Africa. Extreme events displace large amounts of people, especially those who are unable to respond and rebuild after disasters, due to lack of resources. S 6. Impacts on Vulnerable Population Women, children and the elderly are more vulnerable to climate change impacts across Africa. Women labourers often experience additional duties as caregivers and as well as from societal responses to climate change after extreme weather events (eg, male migration). The water scarcity places an additional burden on African women, who walk hours and sometimes even the elderly face graver risks due to susceptibility to infectious diseases, such as Malaria, limited mobility and reduced intake of food. The elderly face physical danger and even death due to droughts, heat stress and wildfires. Children often die from starvation, malnutrition, diarrheal diseases and flooding. (IPCC, 2014) 7. Impacts on National Security Climate change impacts have the potential to exacerbate national security issues and increase the number of international conflicts. Conflicts often occur over the use of already limited natural resources, fertile ground and water. Access to consistent and dependable sources of water is greatly valued in many African regions. However, changes in the timing and intensity of rainfall have threatened water availability and are causing conflicts over this limited resource (IPCC, 2014). 8. Impacts on ecosystems The coastal areas of West Africa support rich fisheries, agriculture, coastal tourism, oil and gas industries, and transportation corridors. Rising sea levels could damage coastal infrastructure, lead to flooding and the intrusion of saltwater into low-lying areas, and the loss of coastal agriculture due to soil salinization and inundation (Boko et al., 2007). Fisheries are central to food security and an important source of revenue and employment for coastal West African countries. Changes in sea temperatures and currents could impact the productivity and position of key fisheries (Boko et al, 2007). Climate change has already led to changes in freshwater and marine ecosystems in eastern and southern Africa, and terrestrial ecosystems in southern and western Africa. The extreme weather events have demonstrated the vulnerability of some of South Africa’s ecosystems. The migration patterns, geographic range and seasonal activity of many terrestrial and marine species have shifted in response to climate change. The abundance and interaction among species has also changed (IPCC, 2014). Despite the fact that the African continent has contributed the least to anthropogenic factors causing climate change, Africa is the worst hit.

4. Main research contents and methods Fundamental research content: The fundamental research content of this study is in line with the goals of the study as highlighted below, a. To come up with an objective assessment on the impacts of climate change on the water resource systems in Senegal and Ghana b. To identify the regions in Senegal and Ghana with the highest impact levels of climate change, do a correlation and a comparative analysis c. Identify the adverse impacts of climate change in the livelihood of the people in Senegal and Ghana d. Point out activities that could mitigate the impact of climate change on the water resources systems in Senegal and Ghana This study will also focus on regions in Senegal and Ghana that are well known for their high climate change impacts on water resources and its overall adverse effects.

BRIDGING THE SKILLS GAP BY ASSESSING THE PROMOTION OF 21ST CENTURY SKILLS AMONG UNIVERSITY STUDENTS IN PAKISTAN

Abstract

Background: The Higher Education Commission (HEC) and the Pakistan Institute of Engineering and Applied Sciences (PIEAS) instituted the STEM Careers Program to inspire potential youth of the country to pursue careers in Science, Technology, Engineering and Mathematics (STEM). Their two-fold mission is to inspire the Pakistani youth to opt for careers in science, mathematics and engineering and come up with innovative solutions to problems of national interest. To ensure that the graduates of Pakistan’s education system are certified against a singular scale, a scale recognized in every country around the globe, the HEC and Microsoft have set up and appointed status to the Microsoft Imagine Academy to all private and public sector universities and Certiport Testing Center to all public universities across Pakistan. The goal of the Microsoft IT Academy is to provide a complete IT education solution that would bridge the gap between what the world of education provides and what the world of work actually needs.  The program is designed to help boost employability, digital literacy, technical and STEM-focused training and certification and 21^st century workforce development for students.  Studies have suggested that in the next 5 to 10 years, there will be a significant shortage in the supply of skilled IT professionals. It is the goal of the Microsoft Imagine Academy to bridge the skills gap by providing institutions the curriculum for technology education and the learning tools that will enable students and educators to achieve success.

Objectives: This study wants to assess if Pakistani universities are giving the university students 21^st century skills, thus bridging the gap between what the technology industries require and the quality of graduates the Pakistani universities are producing. More specifically, the research wants to know the following: 1) assess the technology curriculum from the point of view of the employers; 2) gauge the employability of the university graduates; and 3) appraise the current technology curriculum from the point of view of the educators.

Methods: The study will employ a sequential explanatory design. The data-gathering tools for this study will be semi-interviews and a pre-designed survey questionnaire. The respondents for the interviews will be top technology human resource officers of the country’s top technology companies and the top Pakistani university officials in the fields of engineering and the sciences. Moreover, 100 university graduates majoring in engineering and computer science who are now working in the technology industry, will answer the survey questionnaire which will assess if their skills are what is expected in the technology industry.

Expected Results: The researcher expects the current technology curriculum to meet the needs of the employers especially that it was based on what the Microsoft Imagine Academy is teaching to the university students. The researcher will find out that the human resource officers will be satisfied with the current graduates and that these graduates will meet the needs required by the companies. The researcher also sees the employability of the current crop of university graduates since they have been through a very thorough and relevant curriculum. The researcher expects the problems to come from a gender imbalance in the university graduates, skewed largely towards men and with only a few women graduates. Furthermore, the researcher should find the number of graduates as still insufficient to fulfill the needs of the country’s technology industry. The researcher should find out that the country’s basic education system is still hobbling to provide topnotch basic mathematics and science education to a caliber that would attract many intelligent students to pursue a STEM career. And even if they do choose a STEM career, many of them lack the basic skills needed to be successful in their university studies, resulting in many dropouts.

.

Expected Conclusions: The researcher expects the following conclusions. First, there is still a huge number of unfilled job postings in the technology industry by the few number of university STEM graduates annually.  There is a need to encourage more Pakistani youth to consider a STEM career. The researcher will find favorable reviews regarding the university technology curriculum and the quality of the university graduates the Pakistani universities are producing. The researcher will find out that there is a huge mortality rate in the Pakistani universities of students being kicked out of the program due to academic deficiencies brought about by lack of basic knowledge in the maths and sciences.

Key Words: skills gap, 21^st century skills, employability, STEM, technology curriculum

MBA Business Report - Case Study on Global Automobile Industry

 Introduction

            Companies grow and are increasingly making its way into the global business environment. However, there are profound challenges being encountered, necessitating these companies to focus on developing effective strategies. Hence, these challenges are requiring organisations to explore the various opportunities available to them in the global business setting. Strategies are key in achieving sustainability thus contemporary organisations are working at either growing fast ahead of the competition, growing in line with the industry where it belongs or catching up and defending an existing status. In developing key strategies to combat the threats imposed by the internal and external environment, Honda Motors is implementing reconciliation of dichotomies. Since its inception in 1948, Honda Motor had become one of the largest and leading automakers in the global automobile industry.  In this report, the global automobile industry will be analysed through the spectrum of Honda Motor. It is the goal of the discussion to focus on the critical analyses of different strategies adopted and implemented by Honda Motor.    

Strategy and managerial dichotomies

Business level strategy vs corporate level strategy

            There are strategic choices that can provide an organisation bases for its decisions on what approaches, directions or methods can be used for achieving business level and corporate level objectives. Business level strategies create an environment of better competition since this is a core strategy that the company forms to describe how it intends to compete in a certain market (Hough, 2006, p. 47). In business level strategy, integrated and coordinated set of commitments and actions are used to gain competitive advantages by exploring core competencies (Mankins and Steele, 2005, p. 68). Choices of business level strategy are important as it impacts long term performance of the firm. Nonetheless, given the complexity of successfully operating in the global economy, these choices are typically difficult to decide upon. Hough (2006) noted that the purpose of a business level strategy is to create differences that will distinguish the firm’s position with that of its rivals.

            As firms move beyond their traditional business level focus, corporate level strategies are developed. These strategies specify the actions the firm takes in gaining the competitive advantages. This requires that the firms should adopt a long-term perspective and how the changes taking place within the industry will affect its current business model, its future strategies and its sustainability (Bowman et al, 2002, p. 676). As such, the purpose of having corporate level strategies is central on enabling the company to sustain and further promote its competitive advantages as well as profitability. Simply, corporate level strategies are created to drive the business model over time and determine which business and functional level strategies should be created to drive long term profitability. Corporate level strategies therefore deal with plans for the entire organisation and change as the industry and specific market conditions warrant.    

Reconciling dichotomies at Honda Motor

            Mair (2004, p. 671) presented various dichotomies relating to Honda Motor’s operations. Nevertheless, Honda Motor is keen in developing internal core competencies and capabilities by virtue of products and processes. Product-wise, Honda is known as the engine leader because of its technological innovation named the compound vortex controlled combustion (CVCC) engine and the variable valve timing and lift electronic control (VTEC) family of engines. In leveraging the core competency, Honda understands that there is a need to combine engine with efficiency, and efficiency for Honda meant to integrate ‘environmental’ element. Such an element is evident on engineering engines that do not create pollutants while not also sacrificing the performance (power) of the engine. These technologically innovative engines enabled the creation of excellent products in a variety of markets.

            As agile as a company can get, there are two reasons by which Honda delivers superior engine designs. First, is because of its organisational approach to developing products with the sales-engineering-development (SED) teams as the key driver. Although not all processes are in-housed, the SED teams are performing different functions from marketing, product engineering down to manufacturing. Such a practice enables Honda to correlate the functions together, reducing development lead times in the process. This is crucial especially because of the ever-changing requirements of the consumers and nature of the automotive industry itself.

            To address the changing needs of the consumers while also tapping on new technologies, Honda is making use of a model replacement system. Honda was able to provide consumers with different versions of car models every four years, allowing new technologies to be incorporated into the new versions such as new engines, gearboxes and braking systems. The model, however, was criticised by global competitors, saying that what Honda is making could only pass as ‘cosmetic facelift’ of modern-looking old car models (Mair, 1996, p. 452). Honda refutes these criticisms, arguing that components of old models including the lights, exterior body shape and internal design are officially replaced. To wit, the model is an iterative process -- and also a proactive process -- whereby manufacturing systems and whole model design configurations are already pre-planned, allowing expected evolution on components and models. Iteratively, model evolution is time-bounded, practiced laterally and geographical wherein new models are offshoots of old models being roll out to places where old model were initially offered.   

            Not only that Honda had a core competence on engine designing, Honda is also critically capable of manufacturing and associated processes. Within Honda’s production chain such as logistics, planning and marketing, there are systematic processes. From its free-flow assembly line, Honda had combined productive efficiency and being humane where the dignity of the workers was uplifted. Workers are dignified in the manner that they are given sense of ownership over production processes. Further, Honda reduced cost while also maximising product variation through the combination of large-lot mass production and one piece flow production system. While Honda is making its production even more productive internally, externally, the firm is successful in more product development for consumers and in creating workplace effectiveness for the workers. This would be difficult considering that the operational and people aspects of an organisation are not easily reconcilable.

            For Honda, the key is to integrate both the push and pull systems which can be regarded as fusion of Westernised and Japanese business ideals. Westernised because it deals with the market and marketing orientations and Japanese since it small-scale planning system. Although it cannot be said that Honda is veering away from its Japanese roots through Westernising the internal processes, it is unJapanising specific processes. Basically, if Honda is going to compete globally it has to discard culture-based management of operations especially since it seemed that the Japanese model is a direct opposite to the Western model. Honda combated the adversities of culture-oriented operation by striking a balance on both models dichotomously.       

Global mergers and acquisitions (M&A)

Too much debt and risk of bankruptcy

            When it comes to capitalism and interdependencies, the differences is primarily evident on the type of debt used rather than the relative importance of debt. The financial aspect of any organisation includes financial distress cost, moral hazards, tax deductions, profitability and growth and size among others. Financial distress states that in the presence of bankruptcy there is a higher cost in earnings. As such, the higher risk of bankruptcy leads to less debt. Also, there are dangers of engaging in risky investments or under investments after acquiring debt. Nevertheless, the high expenditures on intangible assets such as research and development (R&D) are supposed to decrease long term debt (Rugman and Verbeke, 2005, p. 151).

            Further, presence of tax deductions other than those related to debt may reduce firm level needs for tax deductions through debt. Higher profitability is expected to lead to lower debt. Firms with high sales growth are also assumed to use less debt. Larger firms, nonetheless, may face lower transaction costs when issuing long term debt than their smaller counterpart and can therefore be expected to have higher debt (Rugman and Verbeke, 2005, p. 151).

            While this may be the case, capital reserves typically provide a financial buffer in the organisation (Anderssen, 2006, p. 17). It is therefore utilised to absorb the adverse economic impact of exogenous shocks especially those imposed by the unexpected event such that the most recent financial tsunami. Critically, these unexpected events that affect the conduct of the business particularly at the international level, firms should be able to reduce variability in periodic cash flows and reported earnings so as to veer away from debt and eventually being bankrupt.

            This is active risk management which can lower the business risk in general (Anderssen, 2006, p. 17). All the same, there is a need for firms to provide management with an opportunity to increase financial risk associated with a higher debt load. As such, when firms are able to impose effective risk management practices in reducing the volatility of corporate earnings, there is a reduced need for capital reserves. Basically, effective risk management reduces the risk of bankruptcy and makes it possible to increase financial leverage.

            It was in the 1953 when Honda was on the verge of bankruptcy. While the company’s manufacturing systems were being refined, there was a major change in the way Honda sold its products. Honda halted all sales of engines to outside motorcycle assembly makers, pushing distributors that sell the company’s products into purchasing finished motorcycles. As it is a decision that strangled several rival companies’ production lines, the move drew angry reactions and distributors abandoned the Honda brand. Honda reacted by establishing new network of excusive distributors. Aside from the fact that purchasing exclusive retail territories was rather difficult then, Honda products often met with complaints from the users resulting to poor sales and piling up of inventories. Honda responded to this by securing advance payments while simultaneously deferring payments (Alexander, 2009, pp. 115-123).

            To analyse, there are two ways the actions of Honda can be explained. Firstly, Honda demonstrated an effective risk management capability which was then associated to eventual higher financial leverage. Secondly, Honda demonstrated the capability which was then resulted in eventual higher economic performance. However, the problem had dampened the volatility of Honda’s corporate cash flows thereby increasing the potential of financial distress. This affects the unimproved debt capacity of the organisation hence they came up with alternative risk transferring solution. In this way, Honda can diminish the need for capital reserves. What had happened is that the funding available for payments was readily extended thus making it more attractive to engage in good incremental business activities. Plainly, improved risk management capability within Honda tends to reduce under investment problems (Andersssen, 2006, p. 18).

Potential for product synergies

            Synergy is simply defined as the joint effect basing on the assumption that the process of combining resources may yield an output that is greater than the sum of those input resources. Being positive, the achievement of synergy is one of the key objectives of business development strategies. Synergy could be also achieved by increasing the capital or resource base of the enterprise. Some of the examples of positive synergy is scaling effect or moving down the experience curve, enhancing capability for competing in wider markets, entering markets that were hitherto inaccessible, employing more highly specialized and productive capacity personnel and increasing investments in knowledge management, competence development and R&D (Morden, 2007, p. 557).   

            Generally speaking, the opportunity to create synergy is reduced when an acquisition combines firms or business units that are both strong and/or weak in the same business activities. Newly created firms exhibits same capabilities although the magnitude of either strength or weakness is greater. Synergy leads to integration of value-enhancing activities. Operations synergy and marketing synergy would be able to link strategic activities including management synergies which then result in increased competitive edge (Hitt et al, 2001, p. 395). 

            As such, the word synergy is irrelevant when applied to a firm that makes only one product or offers a single form of service. The advantage is comparatively with competitors who do not have that particular attribute. Considering that Honda pursued a related diversification strategy, it is able to synergise across a range of products such as motorcycles, diesel generator sets and gardening equipments among others. The internal combustion engine is the common denominator of its operation. Competitors engaged in each individual product line would be able to capture this synergy and thereby would have a disadvantage while competing with Honda (Phansalkar, 2005, p. 108; Harrison and St. John, 2009, p. 118).    

Access to new technologies and emerging markets

            There is an increasingly accepted view that technically appropriate technologies should be widespread. But the problem is that these technologies are not available everywhere. While there are modernisation projects in corporations, the integration strategy is costly and often fails and the necessary additional funding is required (Tallman, 2007, p. 87). Noteworthy is the fact that new technologies will be indispensable. However, while new or emerging technologies are critical, few of the needed new technologies are available to those who need them most.     

            When it comes to accessing emerging markets, the question is beyond their still developing home market how they can become globally competitive. With the advances of technologies, for instance, corporations can quickly displace domestic companies from the segment of emerging markets. Because emerging market companies often cannot access experienced research talent from their home markets, it is difficult for them to invest in large sums such as R&D which is a critical investment if these companies aim to effectively compete against global giants (Khanna et al, 2010, p. 129).

            For Honda, before 1969 it was believed that the only way to reduce the impact of internal combustion engines on the environment was by means of end-of-pipe technology. Car manufacturers widely believed that there was a trade-off among the various pollutants emitted from internal combustion engines (as cited in Nel, 2007, p, 428) which could only be solved by means of the add-on process of catalytic conversion. Honda, however, designed the CVCC engine during the years 1969-1971. With this engine, Honda engineers tried not to produce pollutants in the first place, thereby reducing the need for later clean up. In similar way, Honda overcame the traditional trade-off between fuel economy and engine power by means of their VTEC technology.

            Belonging to an emerging itself in itself, Honda’s considered home market is Japan which is a major source of its revenues. Japan auto sellers are dominated by a series of large dealerships that are typically owned by one of the large Japanese business groups. Often the large dealerships are owned by companies other than Honda although the large dealerships are still part of a business group (Alstrom and Bruton, 2009, p. 404).   

Corporate social responsibility (CSR) and competitiveness

CSR in the global automotive industry

            Kotler and Lee (2005, p. 3) define corporate social responsibility (CSR) as a commitment to improve community wellbeing through discretionary business practices and contributions of corporate resources. They continued that corporate social initiatives are major activities undertaken by a corporation to support social causes and to fulfill commitments to CSR. Kotler and Lee (2005, p. 4) also noted that they key trends in CSR include increase in corporate giving, increase in corporate reporting on social responsibility initiatives, establishment of a corporate social norm to do good and an apparent transition from giving as an obligation to giving as a strategy.

            Anderson (1999, p. 7) further noted that the concept of “doing good by doing well” or progressing from “doing good to doing better” in area of CSR simply means that social responsibility is and should be handled as a corporate investment that will result in a long-run corporate profit and not a corporate expense. While most businesses would probably like to achieve this goal, for many businesses this may be easier said than done. As such, as Hawkins (2006) put it, CSR has become a watchword for ethical governance in different industries that has its roots on sustainability, encompassing social responsibility alongside environmental and economic drivers (p. 256).

            CSR in the global automotive industry means actively safeguarding jobs while assuming social and ecological responsibility at every production site. The industry manufactures a product that is associated with various environmental, social, health and safety impacts. All manufacturers, regardless of their country of origin, thus face a number of challenges in managing such a product responsibility (Richter, 2010).

            Since the automotive industry is also consisting of a complex network of global suppliers, uniform standards must prevail for all suppliers within the supply chain which is a difficult endeavour. Issues of fuel economy takes on increased significance against the backdrop of a climate change, rising oil prices and the r\rowing dependency on politically unstable oil exporting countries (Richter, 2010). Nevertheless, whether an automotive company will succeed in the future depends largely on how well they perform in balancing conventional product requirements such as performance, safety and comfort on one side against ecological and social challenges on the other (Richter, 2010). 

Comparison of Japanese and Western strategic leadership models

Since Honda is an international organisation, it is exposed to different management systems: western management and the Japanese management system. The western and Japanese management systems differ in many ways. One of the aspects that western management and Japanese management vary is in terms of leadership aspects. Leadership comprises the aptitude and ability to inspire and influence the thinking, attitudes, and behaviour of other people. Leadership is a process of social influence in which one person is able to enlist the aid and support of other individuals in the achievement of a common task. The achievement of corporate success can only be accomplished by people who have broader knowledge in leadership.

            In terms of leadership styles, it can be said that the western management system uses authoritarian style of leadership. This states that the leader in western industries has the authority over his subordinates.  In this manner the authority have the right to do the decision making without asking the opinion of the followers.  The leader in this type of leadership tends to tell the followers what must be done in order to achieve the goals or objectives of the organization. On the other hand, the leadership styles used in Japanese management system is the democratic style of leadership.  In this type of leadership, the leader and the selected subordinates are involved in the process of the decision making. Herein, the subordinates have the right to voice out their ideas and thought which they think would be helpful for the leader in making the final decision. On the other hand, in this style of leadership the leader is still in control or has the authority for the final decision. 

            In line with the mission of Honda in providing quality products at an affordable cost in the world market, the company must be able to have strategic decision making for the future to continuously sustain the strength of the company. Good decision making can be attributed as one of the vital factors that will help the business to achieve its core mission and objective. This alternative is helpful in a way that it can make the company more competitive and survive in the marketing environment.

            This can be done by choosing the most appropriate leadership style for the company and ensuring that this style reconciles with the production process of the organisation. Strategic decision making refers to the activity of an organisation which involves generating alternative strategies and choosing particular strategies to pursue. The degree of discretion or strategic choice an organisation has will be determined to a large extent by leadership style, national culture, commitment to past and continuing strategies, the success of certain symbolic actions, and the nature of its systems and processes. The perspective of strategic choice reverses the emphasis by concentrating on the responsibilities of the management teams in shaping the conditions and processes of the strategic management from both internal and external environment of an organisation. 

            In addition, strategic action draws upon the social activities and strategic management concept to improve the view that any managerial actions can influence or affect performance in the world market.  The range of strategic actions is very broad.  In environmental context, strategic choice comprises the selection of the product/market realm in which a certain organisation will engage in the future like what is expected for the year 2006 for Honda.

Conclusion

Successful strategy requires the firm to choose the markets in which its
distinctive capabilities yield competitive advantage. But the adaptive,
incremental nature of strategy means that the starting-point is where the
firm is now.  Strategy is the direction and scope of an organisation over the long term: which achieves advantage for the organisation through its configuration of resources within a changing environment, to meet needs of the markets and fulfil stakeholder expectations. Hence, it can be concluded that through this analysis, it shows that Honda has been able to use a unique and effective strategic management system along with its core competencies. This management system has been the key factors for the success of the organisation both in the domestic and international market.

References

Alexander, J W 2009, Japan’s Motorcycle Wars: An Industry History, UBC Press.

Alstrom, D & Bruton, G D 2009, International Management: Strategy and Culture in the Emerging World, Cengage Learning.

Anderson, J W 1999, Corporate social responsibility: guidelines for top management, ABC-CLIO.

Anderssen, T J 2006, Perspectives on strategic risk management, Copenhagen Business School Press.

Bowman, C, Ward, K & Kakabadse, A 2002, Congruent, Divergent and Incoherent Corporate Level Strategies, European Management Journal, vol. 20, no. 6, pp. 671-679.

Hawkins, D E 2006, Corporate social responsibility: balancing tomorrow's sustainability and today's profitability, Palgrave Macmillan.

Harrison, J S & St. John, C H 2009, Foundations of Strategic Management, Cengage Learning.   

Hitt, M A, Freeman, R E & Harrison, J S 2001, The Blackwell handbook of strategic management, Wiley-Blackwell.

Hough, J R 2006, Business segment performance redux: a multilevel approach, Strategic Management Journal, vol. 27, pp. 45-61.

Khanna, T, Palepu, K G & Bullock, R J 2010, Winning in Emerging Markets: A Roadmap for Strategy and Execution, Harvard Business Press.

Kotler, P & Lee, N 2005, Corporate social responsibility: doing the most good for your company and your cause, John Wiley and Sons, New York.  

Mair, A 1996, Honda Motors: a paradoxical approach to growth, in C Badden-Fuller & M Pitt, Strategic Innovation: An International Casebook, pp. 435-461, Routledge, London.

Mankins, M C & Steele, R 2005, Turning great strategy into great performance, Harvard Business Review, vol. B3, no. 7, pp. 65-72.

Morden, T 2007, Principles of strategic management, Ashgate Publishing Ltd.

Nel, W 2007, Management for Engineers, Technologists and Scientists, Juta & Company Ltd.

Phansalkar, S J 2005, Opportunities and strategies for Indian business: preparing for global India, Sage Publishing.

Richter, K 2010, ‘Automotive Sector,’ in W Visser, D Matten, Pohl, M & N Tolhurst, The A to Z of Corporate Social Responsibility, John Wiley and Sons, New York.

Rugman, A M & Verbeke, A 2005, Analysis of multinational strategic management: the selected scientific papers of Alan M. Rugman and Alain Verbeke, Edward Elgar Publishing.  

Tallman, S B 2007, A new generation in international strategic management, Edward Elgar Publishing.