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Mumias Sugar Company Limited is a sugar manufacturing company in Kenya. It is the largest economy
in the East African Community.
It is the largest sugar manufacturer in Kenya, producing about 250,000 metric tons of the estimated
600,000 metric tons annual national output. The company maintains its headquarters in the town of
Mumias, in Kakamega County, Western Province of Kenya, near the sugar plantations and factories of the
company.
The company maintains an operations center in Nairobi, the capital of Kenya and the largest city in that
country. It has a depot in all the major towns in the country that are situated in the Centre of these towns
for easy access for supplying the goods to buyers.
Mumias Sugar Company Limited has kept its position on top as the market leader in Kenya. Mumias
Sugar Company is primarily engaged in the manufacture and sale of sugar. The company grows some
sugar cane. It has also piloted the production of a hybrid high-yielding palm oil variety in areas previously
thought one of the key Competitors for Mumias Sugar Company. It is located in Bungoma County,
Kenya. They also produce sugar.
The main customer segments are supermarkets and retail stores too cool for commercial cultivation. The
products offered are white sugar, brown sugar, and also sweets. Nzoia Sugar Company Limited (NSC) is.
The supermarkets are for the people in urban areas to access our products while retail stores are for the
people in rural areas to be able to consume our products. They will get the goods through major
wholesalers.
 Question 1 20 Marks

(600 words)
Mumias Sugar Company Limited is a public limited company incorporated under the Kenyan Companies
Act. The company has adopted a legal formation of a limited liability company. This means that the liability
of the company's shareholders is limited to the amount of capital they have invested in the company.
Therefore, in the event that the company is unable to meet its financial obligations or becomes insolvent, the
shareholders are not personally liable for the company's debts or losses beyond the amount they have
invested. The limited liability clause provides protection for the shareholders' personal assets (Hoffmann,
2017).

The company has adopted a legal formation of a limited liability company. Here are ten reasons why
Mumias Sugar has chosen its legal formation:

1. Limited Liability

The primary reason for Mumias Sugar Company's legal formation is to provide protection to its
shareholders' personal assets. Being a limited liability company, the shareholders' liability is limited to the
amount of capital they have invested in the company. This provides assurance to shareholders that their
personal assets are safeguarded and not at risk in the event of the company's financial difficulties (Haskins,
2023).

2. Access to Capital

As a public limited company, Mumias Sugar can issue shares to the public and raise capital through stock
exchanges. This provides the company with the flexibility to access capital that may not be available
through traditional debt financing options (Haskins, 2023).

3. Credibility and Transparency

Being a public limited company provides a level of credibility and transparency to the company. The
company must adhere to strict regulatory requirements, which includes public disclosures of financial
statements, governance practices, and corporate social responsibility reports. This level of transparency and
accountability builds trust with stakeholders and helps to improve the company's reputation and goodwill
(Haskins, 2023).

4. Attracting Skilled Employees

The public listing of Mumias Sugar Company would attract potential employees who are looking to work
with a reputable and established company with a proven track record. This enables the company to select
and recruit highly skilled professionals who can contribute to the company's growth (Haskins, 2023).

5. Focusing on Core Business Operations

By opting for a limited liability legal formation, Mumias Sugar Company can focus on its core business
operations and growth, with the assurance that its shareholders' personal assets are safeguarded. This enables
the company to prioritize its resources and concentrate on expanding its operations and market share
(Haskins, 2023).

6. Transferability of Ownership

Being a public limited company, Mumias Sugar Company provides ease of ownership transfer. Shareholders
can easily buy and sell shares in the stock market without affecting the company's operations (Haskins,
2023).

7. Regulatory Compliance

As a public limited company, Mumias Sugar is subject to stringent regulatory compliance requirements. The
company must adhere to the Companies Act, Nairobi Securities Exchange, and Capital Markets Authority
regulations, among others. The regulatory compliance provides assurance to stakeholders that the company
is operating within the legal framework (Haskins, 2023).

8. Long-term Growth

By adopting a legal formation of a limited liability company, Mumias Sugar can focus on long-term growth
plans, with the assurance that its shareholders' personal assets are safeguarded. This enables the company to
invest in research and development, expand its operations, and diversify its product portfolio (Haskins,
2023).

9. Ability to Raise Debt

As a public limited company, Mumias Sugar can also raise debt financing through the issuance of bonds or
other debt securities. This provides the company with an additional source of capital to fund its growth
initiatives and other capital-intensive projects (Haskins, 2023).

10. Shareholder Protection

The legal formation of a limited liability company also provides protection to shareholders from potential
conflicts of interest or misconduct by company executives. The company's board of directors is responsible
for overseeing the company's operations and ensuring that it is acting in the best interests of the
shareholders. This ensures that the company's management is accountable to its shareholders and operates
within the legal and ethical boundaries (Haskins, 2023).

Question 2 20 Marks

(600 words)
A lean organizational structure refers to a structure that creates maximum value for the customer while using
fewer resources. An organization with such a structure encourages its employees to focus on value streams
and find ways to eliminate waste than an organization with a traditional structure. An organization with a
lean organizational structure also allows its employees flexibility, while a traditional structure makes its
members focus more on their respective jobs. Hence a traditional structure has more job classifications
compared to a lean structure. Accordingly, employees in a traditional structure do not interact more with
people from other departments, as in the case of a lean organization (MacLaughlin, 2023).

Mumias Sugar Company has adopted the lean structure because of the following reasons:

1. Streamlined Processes

Lean principles aim to eliminate waste and optimize processes. As such, the company's structure and
processes may need to be reorganized to achieve this goal. This could lead to a more streamlined structure
with reduced layers of management and a focus on cross-functional collaboration (Majewski, 2020).

2. Resource Optimization

Lean principles also focus on the optimization of resources, including technology and human resources. This
could lead to an increased focus on resource allocation and utilization, including the adoption of new
technology and the development of new skill sets among employees (Majewski, 2020).

3. Increased Efficiency

By eliminating waste and optimizing processes, lean principles can help to increase efficiency within the
company. This could result in faster turnaround times, increased productivity, and lower costs (Majewski,
2020).

4. Continuous Improvement
Lean principles emphasize the importance of continuous improvement. As such, Mumias Sugar may need to
develop a culture of continuous learning and improvement among its employees. This could require
investments in training and development programs to ensure that employees have the necessary skills and
knowledge to implement lean principles effectively (Majewski, 2020).

5. Customer Focus

Lean principles also place a strong emphasis on customer focus. Mumias Sugar may need to reorient its
business processes and resources to better align with customer needs and expectations. This could involve
developing new products or services, improving customer service, and adopting a more customer-centric
approach to business (Majewski, 2020).

6. Reduced Inventory

One of the key goals of lean principles is to reduce inventory levels. This could lead to a shift in the
company's supply chain management practices, including the adoption of just-in-time (JIT) inventory
management techniques (Majewski, 2020).

7. Increased Flexibility

Lean principles can also help to increase flexibility within the company. By eliminating waste and
optimizing processes, Mumias Sugar can respond more quickly to changing market conditions and customer
needs (Majewski, 2020).

8. Cultural Change

Adopting lean principles can require a significant cultural change within the company. This may involve
breaking down silos and developing a more collaborative and open work environment. It may also require a
shift in mindset among employees, who may need to embrace new ways of working and thinking
(Majewski, 2020).

9. Increased Accountability

Lean principles also emphasize the importance of accountability. Mumias Sugar may need to develop new
performance metrics and measurement systems to ensure that employees are held accountable for meeting
performance targets and achieving business objectives (Majewski, 2020).

10. Improved Sustainability

Finally, lean principles can help to improve the sustainability of the company's operations. By eliminating
waste and optimizing processes, Mumias Sugar can reduce its environmental impact and improve its social
responsibility profile. This could also lead to cost savings and other operational benefit (Majewski, 2020).
 Question 3 30 Marks

(900 words)
Strategic management

Strategic management is the ongoing planning, monitoring, analysis and assessment of all necessities an
organization needs to meet its goals and objectives. Changes in business environments will require
organizations to constantly assess their strategies for success. The strategic management process helps
organizations take stock of their present situation, chalk out strategies, deploy them and analyze the
effectiveness of the implemented management strategies. Strategic management strategies consist of five
basic strategies and can differ in implementation depending on the surrounding environment. Strategic
management applies both to on-premise and mobile platforms (Tucci & Roy, 2022).

Seven different methods by which Mumias Sugar Company is managed strategically include:

1. Business Diversification

Mumias Sugar Company has diversified its business by expanding its product portfolio. It has moved from
being a solely sugar production company to producing ethanol, electricity, and animal feed. This has helped
the company to reduce its dependence on sugar production and mitigate the risks associated with a single
product (Vaidya, 2022).

2. Joint Ventures and Strategic Alliances

The company has established strategic alliances and joint ventures with other firms to strengthen its
operations. For instance, it has partnered with Brazil's Dedini to set up a sugar factory in Kenya, which has
helped the company to improve its production capacity and competitiveness (Vaidya, 2022).

3. Innovation and Technology Adoption

The company has embraced innovation and technology to improve its operations. For example, it has
invested in modern equipment such as tractors, harvesters, and milling machines, which help to improve
efficiency and productivity. Additionally, it has adopted digital technologies such as IoT to monitor
production processes and track performance (Vaidya, 2022).

4. Market Segmentation

The company has strategically segmented its target markets to ensure that it can meet the specific needs of
each market. For instance, it produces high-quality sugar for export markets, while it also produces lower-
quality sugar for the local market (Vaidya, 2022).
5. Merger and Acquisition

The company has acquired other firms in the industry to strengthen its position. For instance, it acquired a
majority stake in West Kenya Sugar Company, which helped to increase its production capacity and market
share (Vaidya, 2022).

6. Branding and Marketing

The company has invested in strong branding and marketing strategies to enhance its brand image and
appeal to consumers. For example, it sponsors various events and runs advertising campaigns to increase
visibility and awareness of its products (Vaidya, 2022).

7. Corporate Social Responsibility

The company has adopted a strategic approach to CSR by investing in projects that benefit its stakeholders
and the wider community. For instance, it has established a community development program that focuses
on education, health, and environmental conservation (Vaidya, 2022).

Operational management

Operational management is the administration of business practices to create the highest level of efficiency
possible within an organization. It is concerned with converting materials and labor into goods and services
as efficiently as possible to maximize the profit of an organization (Hayes, 2023).

Operational management teams attempt to balance costs with revenue to achieve the highest net operating
profit possible.

Seven different methods by which Mumias Sugar Company is managed operationally include:

1. Quality Management

The company has a quality management system in place to ensure that its products meet the required
standards. This includes monitoring and controlling the entire production process, from sugarcane
cultivation to the packaging of the final product (Hayes, 2023).

2. Supply Chain Management

The company has a well-structured supply chain management system to ensure timely delivery of raw
materials and other resources. It works closely with sugarcane farmers to ensure a steady supply of
sugarcane for production (Hayes, 2023).

3. Production Planning and Control

The company has an effective production planning and control system in place to ensure that production
runs smoothly and efficiently. This involves monitoring production processes, identifying bottlenecks, and
adjusting operations as needed (Hayes, 2023).

4. Health and Safety Management

The company has established health and safety policies and procedures to protect its workers from harm.
This includes providing personal protective equipment, conducting regular safety audits, and training
employees on safe work practices (Hayes, 2023).

5. Maintenance Management

The company has an effective maintenance management system to ensure that its equipment and machinery
are kept in good working condition. This involves regular inspections, preventive maintenance, and timely
repairs (Hayes, 2023).

6. Inventory Management

The company has an inventory management system in place to ensure that it has sufficient raw materials and
finished goods to meet demand. This involves monitoring inventory levels, forecasting demand, and
managing production accordingly (Hayes, 2023).

7. Human Resource Management

The company has a well-structured human resource management system to ensure that it attracts, retains,
and develops the best talent. This involves hiring the right people, providing training and development
opportunities, and creating a positive work environment (Hayes, 2023).
 Question 4 30 Marks

(900 words)

a) Concept of organisational performance

There are possibly as many interpretations of the term organizational performance as the studies that have
used the construct. Luo et al. (2012) who conducted a meta-analysis of organizational performance
suggested that it should be measured in economic and operational terms:

Organizational performance refers to how effectively and efficiently an organization, such as Mumias Sugar
Company, is achieving its goals and objectives. It is a measure of the success of the company in achieving
its desired outcomes, such as profitability, growth, customer satisfaction, and social responsibility (Sumbul,
2021).

For Mumias Sugar Company, organizational performance can be measured using a range of indicators,
including financial metrics, operational metrics, and social responsibility metrics. Financial metrics such as
revenue, profitability, and return on investment are important indicators of the company's financial
performance. Operational metrics such as production output, quality, and efficiency are indicators of the
company's operational performance. Social responsibility metrics, such as community development
initiatives and environmental conservation programs, are indicators of the company's commitment to
corporate social responsibility.

Organizational performance can also be assessed through a variety of methods, including benchmarking,
performance scorecards, and employee feedback. Benchmarking involves comparing the company's
performance to that of its peers in the industry, while performance scorecards provide a visual tool for
tracking progress towards goals and objectives. Employee feedback, such as employee engagement surveys,
can provide valuable insights into employee satisfaction and productivity (Sumbul, 2021).

b) Different techniques and measures that could be used to monitor the performance of Mumias
Sugar Company

There are various techniques and measures that could be used to monitor the performance of Mumias Sugar
Company. Here are some examples:
1. Financial analysis: One technique for monitoring organizational performance is financial analysis.
This involves analyzing financial statements such as income statements, balance sheets, and cash
flow statements to evaluate the financial health of the company. This can help identify trends,
weaknesses, and opportunities for improvement (Mayhew, 2019).
2. Key Performance Indicators (KPIs): KPIs are specific metrics that are used to evaluate
performance against specific goals and objectives. In the context of Mumias Sugar Company, KPIs
could include measures such as revenue growth, production output, customer satisfaction, employee
turnover rates, and social responsibility metrics (Mayhew, 2019).
3. Benchmarking: Benchmarking involves comparing a company's performance to that of its peers in
the industry. This can help identify areas where the company is underperforming and provide
insights into best practices that could be adopted to improve performance (Mayhew, 2019).
4. Performance Scorecards: Performance scorecards are a visual tool that can be used to track
progress towards goals and objectives. They typically include KPIs and targets, as well as
performance data and trend analysis (Mayhew, 2019).
5. Employee Feedback: Employee feedback can be a valuable source of information for monitoring
organizational performance. Employee engagement surveys and other feedback mechanisms can
provide insights into employee satisfaction, productivity, and other performance-related issues
(Mayhew, 2019).
6. Process Improvement: Continuous process improvement involves identifying and eliminating
inefficiencies and waste in organizational processes. This can help improve performance by reducing
costs, improving quality, and increasing efficiency (Mayhew, 2019).
7. Social Responsibility Reporting: Mumias Sugar Company could report on its social responsibility
activities, such as community development initiatives, environmental conservation programs, and
stakeholder engagement activities. This can help demonstrate the company's commitment to
corporate social responsibility and track progress towards social responsibility goals (Mayhew,
2019).
8. Customer Satisfaction Surveys: Measuring customer satisfaction is an important way to monitor
organizational performance. Surveys can be used to collect feedback from customers and identify
areas where improvements can be made to improve satisfaction levels (Mayhew, 2019).
9. Supplier Performance Monitoring: Monitoring the performance of suppliers is important to ensure
that the company is receiving high-quality goods and services at competitive prices. Supplier
performance can be measured using metrics such as delivery times, quality levels, and pricing
(Mayhew, 2019).
10. Market Research: Conducting market research can provide valuable insights into customer needs,
preferences, and behavior. This can help the company identify new market opportunities and adjust
its strategy accordingly (Mayhew, 2019).
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