• Internal Code :
  • Subject Code : BSG 09301
  • University :
  • Subject Name : Change Management

Ilovo Sugar Ltd.

Table of Contents

Company Overview..

Division of Labour

Bases of Departmentalization & Size of Departments.

Delegation of Authority.

ADKAR Model

Conclusion.

Introduction

The warm-hearted country Malawi is located in south-east Africa.

The country has a huge fertile land on which crops of high potential are grown. Amongst them, tobacco and sugarcane are prominently grown in Malawi. Inhabitants of Malawi prefer to set up the food processing industry as the economy is dependent on farming. 

The focus on this project will be on Sugarcane Processing Industry “ Iilovo Group” which is the largest sugarcane processing company in Dwangwa, Malawi. The industry supports the lives of thousand of the family in the country. It produces 300 thousand tons of sugar.

Sugarcane is primarily used for making sugar and some of the residues of the crop are also used to make some bye products of sugar like sugar syrup, cane sugar and even plastic. Sugarcane production is done by traditional methods of farming as farmers are indeed poor and have very low income and lack technical expertise They are mostly dependent on manual methods of farming and harvesting and even very fewer tractors or other machinery is used for production or harvesting of crops. (Chinsinga, 2017)

The main business objective of Illovo Malawi is sugarcane production, processing of sugar, and marketing and distribution of sugar in the domestic and world market. (Dubb, 2017)

In the factory of Illovo Group, sugarcane is sorted, ground and manufactured into sugar. Sugar produced is used for its home country and export. Mostly 30% of sugar is exported and rest is put in use for its inhabitants of the country. After tobacco Illovo Group earns the second biggest foreign exchange earner in the country. 

Company Overview

Illovo Sugar (Malawi) Ltd is the biggest low-cost sugar manufacturer in southeast Africa.

The company originated in the year 1891 with the name "Reynolds Brothers Limited" and later went through many phases in history and gradually converted itself into “ CG Smith Sugar Ltd. ". In 1994 the company has coined the term Illovo Sugar Limited “ and now branded as the Illovo Group with its branches operating from outside Malawi as well.

In the past decade, the company has made good profits as depicted in the following chart.

 good profits made by the company

Illovo Sugar (Malawi) Ltd runs its industry and has in its possession both the agricultural production sector and the factory production site. The industrial plant is located in the Dwangwa, Malawi.

Malawi produced 304 000 tons of sugar last year and contributed to 45% of the company's profits as the company has newer branches in Tanzania, Zambia and Swaziland.

Ian Parrot is the Managing Director of Illovo currently. He has good concern for the improvisation of the country’s economy. Hence he has collaborated with projects like “Project Solidaridad” at Dwangwa which teaches farmers the technical methodologies of farming Over the next year six years the company aims to produce more 600 thousand tons of sugar. Refined sugar, specialty sugar (for export market), cane sugar, sugar syrup, and even plastic are the main bye products of the factory. Specialty sugars are made in Malawi and a branch in Zambia is produced for favorable markets in the USA and the European Union. (Barchiesi, 2019)

EBA agreement came up recently to improvise the performance of the sugarcane industry in the country and to enhance export. The agreement terms lessen the duty levied on sugar export. It also favors less taxation duty on imports. World Bank has decided to help the country with funds and political support to improvise the economic condition of the country and this policy helps Illovo Group to trade effectively. EBA, however, needs further consultation, management and support from foreign countries so that the people of Malawi can get maximum profits from trade and thereby render the economy of the country to a better platform. (Banda et al, 2019)

Company Goals

  • Higher Yields
  • Adhering to the National issues and Policies
  • Effective Strategies and plans for growth
  • Better quality of sugar production
  • Implementation of modern techniques of farming and industry set up
  • Improved labor conditions (including farmers, cane cutters and factory laborers)
  • Improved Transport Management
  • Better profit ratio for the small scale farmers and landowners
  • Enhancement of wealth of the shareholders
  • Risk Management strategies
  • Disaster Management strategies
  • The economic development of the country
  • Less damage to the environment

(15% higher yield has been achieved last year as the industry made less use of water and pesticides due to environmental conditions and methods of vigilance of food crop) (Barchiesi, 2019)

The company has to bear more production cost of sugarcane crops as it has to invest more in several laborers or farmers as manual labor is more available than scientific, planned and machinery learned farmers. Due to this price of sugar packets is high for its countrymen. Low-cost fertilizers that farmers use are either supplied by cooperatives or directly by the company. The company has recently received 10 million Euros from European Union and a heavy sum from World Bank for the effective implementation and running of “ Project Solidaridad" to train farmers and minimize the cost of production of sugarcane.

The project also aimed to train the managers and factory workers and sugarcane processors about the improvised machinery and skills of producing a massive amount of high-quality sugar at lower costs and time and reasonable prices of productions at the factory outlet. 

The Illovo group is soon adapting to better techniques of work mode in the factory and achieving its goals at a faster pace in recent days. ( Murray, 2017)

Division of Labour

Gavin Dalgleish the Frontier Leader of Illinov Group and Manager director and has levied labor laws for the industry. His vision is to improvise the logistics of work and create prosperity with the business. With improved techniques in the production level, the company aims to achieve a reasonably profitable amount of sugar products for sale and export. He also aims to uplift social the community with this sustainable and profitable business in the country. ( Masangano et al,2017)

To explain the division of labor at the factory we need to understand that the sugar industry is broken down into several smaller sectors or tasks. They are

  • The Farming sector
  • The Transportation sector from farm to factories
  • The Record maintenance sectors including small offices to keep a track of the number of wagons transported to the factory outlet
  • The Production sector in the industry comprised of all divisions of sugar processing
  • The Product Packaging sector
  • The Management sector at the industry level
  • The Training sector
  • The Quality Assessment Sector
  • The Human Resource Sector
  • The Office Accounting and the Database Maintenance sector
  • The Product Distribution sector
  • The Storage sector
  • The Hospitality sector ( as food courts and canteens for the employees)
  • Business and Marketing Sector for in-house sale and Export

Around 5500 permanent employees are working as laborers in the factory and other outlets associated with the industry, and 4600 seasonal workers working mostly as farmers and cane cutters.

In each sector, Dalgleish has designed further hierarchy levels and defined everybody's set of tasks with clear formulated guidelines. All the laborers are supposed to adhere to the policies of the company and work under the clear guidelines of the company. 

Gavin Dalgleish believes that a proper division of labor can lower the "supply cost per unit" and can raise "output per person" as people gain experience and expertise in their work with time. Also, lower supply costs per unit would enable the lower price of the product at the market. He also believes in the raise of salary, increments and providing incentives to the seasonal workers. This is because a raise in salary brings in the higher motivational workforce and this brings better output in the work and production sector.

There are however few problems that have not been eradicated till now. Seasonal workers are paid lesser than farmers as their job is mere of harvest action although they put immense labor for it. Many farmers are being exploited by sugar industry service providers at a higher level in the hierarchy because these farmers lack enough information on strategies of the company. Farmers lack skills and are not aware of how to make better profits. 

Hence the Training Department of the industry is also helping the farmers with projects of training and education for improved methods of farming.

In the industry sector, more machinery with improved styles of sugar cube making has been bought. Improved processing styles and segregation techniques of packaging have been taught to the laborers. Labour gets paid as per wages, salary and incentives. Lesser trained employees are less efficient to meet the occupational hazards and lead to low production levels and hence each labor is regularly trained at the factory level for the enhancement of skill set and production. (Rogan & Skinner, 2017)

With improved techniques in the production level, the company aims to achieve a reasonably profitable amount of sugar products for sale and export.

Transport costs are to be minimized and individual fuel pump stations are also set up for the people dedicated to the transportation of products.

The company spends handsomely in the hospitality sector to provide subsidized food at its outlets during working hours. This keeps the workforce motivated and happy.

The product and distribution sectors are engaged wisely in its operations. (Barchiesi,2019)

The Management Sector has been efficient for the group since the time of its birth and that is the secret of its success and sustainability in the country.

The Quality assessment sector checks the product standardization codes.

The burden of the business lies in the Business and Marketing sector where the company has hired educated and experts of business to promote the best of sale and export figures in the business.

The excellent hierarchy so developed by the Frontier leader is the secret of success of the Sugarcane Industry of the Illovo Group. (Bhorat & Khan, 2018 )

Bases of Departmentalization & Size of Departments

General Administration department: This is the division responsible for tracking and managing the operations of all other departments engaged in the commercial activities of the sector. It shall take care of such items as, Document collection, Management of Private Files of Workers, Laws, Agenda, Resolutions and Procedures of the Board of Directors, Employment in all parts rendered by type machine manually; records, reception and issue of the Letters of Industry; preservation of the Registry of Nominal Representatives, Investors, list of Voters, etc.

It is also responsible for the maintenance of the vehicle movements record, receipt & spending and evaluation reports, etc. Various printing, forms, receipts, coupons, databases, etc. are also carried out in this department (Dubb, 2017).

Marketing:

The department maintains records for the sale of products such as starch, soul, hemp fibers, and scrap. It deals with government agencies such as Central / Government Excise, Sales Tax, Suppliers and so on (Dubb, 2017).

Personnel Management

This is the Unit of Industry of State, which keeps a history of changing arrangements, day-to-day participation, leave, grant fund, wage, leave compensation, over time, production rewards, bonuses, reductions, jobs, relocation, quarter assignment, retirement, complimentary, apprenticeship, identification card, details in various government wallets and so on (McKay, 2019).

 Watch & Ward department:

This unit is part of the management for the preservation of internal peace, surveillance against robbery, fire, entrance-in and entrance-out of products, guests and staff (McKay, 2019).

Dispensary:

The industry has a dispensary for the provision for first aid and the care of specific diseases to employees and farmers (McKay, 2019).

Computer Cell:

The industry has a consolidated computer room that simplifies complicated workflows, increases efficiency and allows resource management more effective.

Accounts

This section manages the records of refunds and payments received by the industry. The Office also manages the accounts of the sugarcane growers for their contracts, production loans, refunds, seed cane and sugarcane bills (Chinsinga, 2017).

Cane Production

Sugarcane is the raw material of this industry. To enhance its administration concerning planting, acquisition and plant safety, etc., this segment deals with the operation.

Components Management Purchase

 the department is responsible for purchasing all types of material and coping with providers employing the required rapid upkeep as necessary by the branches (Chinsinga, 2017).

General Store

Currently, the Office retains receipt, storage and problem information for 8699 products.

As the core product, by-products like molasses, corrected spirit, country sprit, press dirt and bagasse are also made. Country spirit is the most valuable commodity to be made from molasses.

At current, lab computations, steam estimations, evaporator measurements, other computations, and total production report, Manufacturing shift/batch/amount record-wise and Central Excise revenues are preserved (Sulle, 2017).

Engineering

The division conducts repair, renovation, implementation and building work in the fields of electrical, mechanical and civil engineering (Sulle, 2017).

It keeps track of shifts, job charts, job cards, machine products, repair, use, work order, staff results, tasks and diagrams, etc.

This company authentically selects its employees to build the strength of a formidable number, the employees are the resource of the company and they are the key to the success of the company. This company employs many rural parts of the country (Sulle, 2017).

Delegation of Authority

Board of Directors

The gathering has a unitary top administrative staff that is balanced among official and non-official Directors. The board directs the organization of the social event's industry and issues and is related to all decisions that are material to the business. In doing in that capacity, the heap up acts reliably to the best favorable position of the social occasion. The board meets on any occasion once in each quarter with additional social affairs held when appropriate. At every official assembling an all out update on the issues and business of the social event is presented by the authentic organization. Likewise, the articles of association oblige decisions taken between social affairs to be asserted by the strategy for Directors' objectives (Matenga, 2017). The occupations of the Chairman and the Chief Executive are secluded and the Chairman is a non-official Director. The board has characterized and screens levels of materiality, and has officially recorded issues which it has assigned to the board councils and the executives. The jobs of the administrator and the CEO are isolated and the director is a non-official, autonomous chief. The executive is chosen/reappointed by the board on a yearly premise, on a proposal by the Remuneration/Nomination Advisory group (Matenga, 2017).

New arrangements to the board are dependent upon the suggestion of the Remuneration/Nomination Committee and formal endorsement by the board. The arrangements of new chiefs are dependent upon affirmation by investors at the following yearly regular gathering following their arrangement (Matenga, 2017).

The board is eventually liable for guaranteeing that the business is a going concern, and to this end successfully controls the gathering and its administration and is associated with all choices that are material for this reason. The board capacities as far as a formal Board Charter which, specifically endorses that the board assumes liability for:

  • practicing authority, venture, respectability and judgment in coordinating the organization to accomplish its Strategic Intent, and objectives and targets;
  • going about as a point of convergence for and overseer of corporate administration;
  • favoring the vital course, and the objectives and targets of the organization; continually valuing that procedure, chance, execution and supportability are indistinguishable (Boudreaux and Schang, 2019).
  • guaranteeing that the business is a going concern, and being associated with all conversations which are material for this reason (Boudreaux and Schang, 2019).
  • considering and affirming every year the organization's vital arrangement and its working and capital spending plans;
  • considering and supporting every material venture, and acquisitions and removals of business exercises;
  • characterizing and observing degrees of materiality, saving explicit forces to itself and appointing other proper issues to the significant board advisory groups as well as the executives (Boudreaux and Schang, 2019).
  • deciding the terms of reference of the board councils, and selecting or suggesting the arrangement of, as the case might be, the individuals from such panels (Murray, 2017).
  • being fulfilled that suitable strategies, techniques and practices are set up and are appropriately watched (Murray, 2017).
  • recognizing and observing the non-money related manageability issues pertinent to the matter of the organization (German and Parker, 2019).
  • guaranteeing that the organization keeps up and grows great corporate administration principles;
  • the administration of hazard; recognizing and checking the organization's key dangers and key execution pointers (German and Parker, 2019).

Chairman: He is responsible for technical, business development, operational, and general management sectors, has a basic knowledge of yeast business for monitoring the production-related function smoothly and also be competent for taking some active part in Nomination/Remuneration committee (German and Parker, 2019).

Executive management: Executive management meets consistently to talk about issues material to the activities of the group. To guarantee that there is sufficient collaboration between the board and the board, three individuals from official the board are Directors.

ADKAR Model

Organizational transition typically encounters the resistance of employees. The ADKAR model is a change management tool that helps understand why change is hard and why certain changes are successful and others are ineffective. The ADKAR title is a symbol focused on 5 components that lead to positive change (Tang, 2019). The letters stand for Perception, Desire, Understanding, Power and Reinforcement. The ADKAR framework was created by Jefferson Hiatt in '03 and was launched as a realistic resource by Prosci, a respected consultant on change management and a learning center. The ADKAR model is primarily intended to be a mentoring and change management method to help and support workers via the process of change within the organization (Tang, 2019).

The ADKAR Model Steps

  1. Awareness

The result of this move that everybody has the knowledge and appreciation for the need for improvement. A growing person needs to be aware of why change is taking place and why change is needed.

Without a clear understanding of why a change is required, workers will be demotivated. That makes the move less likely to succeed (Kachian et al., 2018).

The key role of administrators in this phase is to ensure that everyone recognizes the necessity transition.

  1. Desire

The result of this move is that everybody wants to take part in and promote progress.

To achieve this result, it is important to cooperate with all persons to achieve three objectives. They feel dissatisfied with the current state of affairs. They, need to recognize the negative implications of trying to keep things the same. Third, people just have to want to be part of the transition (Kachian et al., 2018).

To order to accomplish the final goal, it is important to explain at an individual level what is in it for them. It can mean greater work security, a sense of team cohesion, career growth, or even economic benefits.

  1. Knowledge

The product of this change is a person's understanding of how to improve. People should learn what to do or what to do to influence things (Kachian et al., 2018). We need to know what to do all through the process, and even what to do after the process has taken place. There are also ways to share this knowledge through formal preparation and education, coaching and mentoring with the aid of courses.

  1. Ability

The effect of this phase is that the adult can demonstrate new skills and practices. The high quality of the Model is its differentiation between theory and reality. When the awareness of how to improve (concept) is in place, the person needs to be encouraged during the actual output (exercise).

Management approaches to promote new ways of doing things include creating a secure space (for example, the Model Office) or persisting training and coaching.

  1. Reinforcement

The result of the final touch is that the latest shift or action is strengthened inside each individual. The final step is required to sustain the transition (Goyal and Patwardhan, 2018).

There are several approaches to ensure that people do not resort to past modes of functioning or actions, including direct disciplinary action, positive reinforcement, encouragement, rewards and gratitude, celebrations that are often the most difficult step to take. The reasoning behind this is that, as soon as one shift is underway, the company has gone ahead and is now talking for the next step (Goyal and Patwardhan, 2018).

Change is always a complicated and challenging process — and that is unavoidable. The most widely cited explanation for the demise of the project is people's issues with the side of transition. Yet companies still invest more in the technological side of transition than in guiding people affected through periods of transition. The first step in handling any kind of organizational transition is to consider how to handle the change that a single person is undergoing. Effective change in people and organizations needs new philosophies, new models of change, and new methods (Goyal and Patwardhan, 2018). The Prosci ADKAR Model has been shown to help companies make the most of their change efforts. The change management methods of Prosci and the ADKAR Model have been continuously built based on research since 1998 with over four thousand and five hundred participants. Methods and models are special. They originate from actual project managers and managers focusing on what succeeded, what did not work, and what they will do better about their next plan or reform initiatives. At the core of Prosci's approach is the cumulative lessons learned around the world from all those executing reforms (Goyal and Patwardhan, 2018).

Conclusion

Business creates economic impact in a country. The sugar industry set up by Illovo has made such an effect in the country that it has better facilities of hospitals, rail, schools, banks, ATM counters in the present day than in the past decade. (Masangano et al,2017)

 Illovo group closely studies the local linkages between the various workgroups of the society so that it can cooperatively develop strategic plans to synchronize the workforce in all sectors from farming, production to processing of sugar and marketing and distribution of the finished product in the market and the cold storage chain of the products. Accuracy levels and enhancement of skills of laborers and import of improvised machinery system and training of farmers and laborers are also conducted efficiently and stringently. 

Illovo group has in its achievements much appreciation and monetary support from Europen Union and the World Bank. ( Nel et al, 2016 )

Economists still recommend that Illovo needs to spends cautiously for the growth of its industry as farmers and factory workers are in desperate need of higher wages and salary. Focus prioritization also needs to cater to the social upliftment of the community so that they remain happy and have comparable standards of living as the rest of the world. 

References

Banda, M.M., Heeren, D.M., Martin, D.L., Munoz-Arriola, F. and Hayde, L.G., 2019. Economic analysis of deficit irrigation in sugarcane farming: Nchalo Estate, Chikwawa District, Malawi. In 2019 ASABE Annual International Meeting (p. 1). American Society of Agricultural and Biological Engineers.

Barchiesi, F., 2019. Rethinking the Labour Movement in the'New South Africa'. Routledge.

Bhorat, H. and Khan, S., 2018. Structural change and patterns of inequality in the South African labour market.

Boudreaux, K. and Schang, S., 2019. Threats of, and Responses to, Agribusiness Land Acquisitions. Business and Human Rights Journal, 4(2), pp.365-371.

Chinsinga, B., 2017. The green belt initiative, politics and sugar production in Malawi. Journal of Southern African Studies, 43(3), pp.501-515.

Chinsinga, B., 2017. The green belt initiative, politics and sugar production in Malawi. Journal of Southern Africabn Studies, 43(3), pp.501-515.

Donga, T.K. and Eklo, O.M., 2018. Environmental load of pesticides used in conventional sugarcane production in Malawi. Crop Protection, 108, pp.71-77.

Dubb, A., 2017. Interrogating the logic of accumulation in the sugar sector in Southern Africa. Journal of Southern African Studies, 43(3), pp.471-499.

Dubb, A., 2017. Interrogating the logic of accumulation in the sugar sector in Southern Africa. Journal of Southern African Studies, 43(3), pp.471-499.

German, L.A. and Parker, L., 2019. The social construction of “shared growth”: Zambia Sugar and the uneven terrain of social benefit. Journal of agrarian change, 19(1), pp.181-201.

Goyal, C. and Patwardhan, M., 2018. Role of change management using ADKAR model: a study of the gender perspective in a leading bank organisation of India. International Journal of Human Resources Development and Management, 18(3-4), pp.297-316.

Kachian, A., Elyasi, S. and Haghani, H., 2018. ADKAR Model and Nurses' Readiness for Change. Journal of Client-Centered Nursing Care, 4(4), pp.203-212.

Masangano, C.M., Kambewa, D., Bosscher, N. and Fatch, P., 2017. Malawi’s experiences with the implementation of pluralistic, demand-driven and decentralized agricultural extension policy. Journal of Agricultural Extension and Rural Development, 9(9), pp.185-195.

Matenga, C.R., 2017. Outgrowers and livelihoods: The case of magobbo smallholder block farming in mazabuka district in Zambia. Journal of Southern African Studies, 43(3), pp.551-566.

McKay, D., 2019. Finding the sweet spot in the sugar industry-spotlight. finweek, 2019(23 May), pp.36-38.

Murray, J.H., 2017. The United Nations Guiding Principles on Business and Human rights: A normative account of the business and human rights norm in the Malawian sugar industry (Doctoral dissertation, Stellenbosch: Stellenbosch University).

Nel, P.S., Kirsten, M., Swanepoel, B.J., Erasmus, B. and Jordaan, B., 2016. South African employment relations: theory and practice.

Rogan, M. and Skinner, C., 2017. The nature of the South African informal sector as reflected in the quarterly labour-force survey, 2008-2014. Capetown: University of Capetown.

Sulle, E., 2017. Social differentiation and the politics of land: Sugar cane outgrowing in kilombero, Tanzania. Journal of Southern African Studies, 43(3), pp.517-533.

Tang, K.N., 2019. Change management. In Leadership and Change Management (pp. 47-55). Springer, Singapore.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Change Management Assignment Help

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