MASINDE MULIRO UNIVERSITY OF SCIENCE AND TECHNOLOGY

SCHOOL OF BUSINESS AND ECONOMICS

MBA 811/HRM 823

Question 1

Ikholomani plc, has said in its mission statement that it will ‘endeavour to make the maximum
possible profit for its shareholders while recognizing its wider responsibilities to society’.

Ikholomani plc has an opportunity to mine gold in a highly populated area. The mining process
proposed, in this instance, means that all vegetation will be removed from the land concerned;
after mining has finished, there will remain substantial lagoons and tunnels full of poisonous
water for at least 100 years.

The mining process is a profitable on, given the current world price of gold. However, if the
company were to reinstate the mined land, the process would be extremely unprofitable. The
company has received permission from the government to carry out the mining. The few local
residents are opposed to the mining fearing destruction of their ancestral land.

Required

a). Discuss the extent to which Ikholomani plc mission statement is contradictory. (5 marks).

b). Explain how Ikholomani plc could establish a procedure whereby its wider responsibilities
to society could be routinely considered when making strategic decision (8 marks).
c). Discuss the ethical dimensions of the decision to mine for gold (7 marks).

Question 2

Public organisations in our country have been performing poorly due to mismanagement. A
management consultant has proposed the use of turnaround strategy to save these firms but the
management disagrees arguing that what they need is a diversification strategy.

What do you understand by these two strategies and when is it appropriate to apply each (10
marks).

Question 3

The agency problem has been identified and one of the problem facing organisations today.
Many organisations have collapsed due to this problem. Explain what you understand by this
problem and how it can be resolved or minimised? (10 marks).
Question four

One of the greatest development in the world today is the outbreak of Covid 19. This had not been
factored in many of the strategic plan developed by Kenya companies. As an MBA student undertaking a
course in strategic management what threats and opportunities do you see coming from this
development and what strategies would you recommend to managers of these institutions to help
exploit these opportunities and manage threats. (10 marks)