Organisational decline and turnaround : a qualitative case study of RIOZIM Limited (2008 - 2012)

Abstract

The study sought to provide deep insights into RioZim Limited business decline and turnaround experience between 2009 and 2012. Premised on an interpretive research paradigm, primary data were collected using semi-structured interviews of four senior managers of RioZim Limited and questionnaires distributed amongst the company’s middle level managers. Furthermore, secondary data were collected extensively from relevant company documents in company’s archives and public domain. The research found that RioZim’s viability problems stemmed from internal problems which were exacerbated by macroeconomic environment that prevailed Zimbabwe. The main internal factors were poor financial management, operational inefficiencies at Empress Nickel Refinery and Renco Mine, lack of strategic direction and weak corporate governance across the RioZim group. External factors such as the unavailability of flexible and cheap sources of capital, non-remission of foreign currency earnings from gold deposits by the Reserve Bank of Zimbabwe; challenges in supply of key inputs such as matte, electricity, oxygen and water and increasing costs of key inputs such as electricity also contributed to the company’s decline. The study found that RioZim’s response to the decline included the following: Cost reduction through measures such as reduction of labour numbers; improvement of productivity and operational efficiency; organisational restructuring such as top management and board changes; debt reduction and restructuring; increased revenue generation and long term growth and development initiatives. The study noted the following challenges in the implementation of RioZim’s turnaround strategy: lack of a strategic blue print, lack of stakeholder engagement and non performance of some revenue generation initiatives. Further studies can be done to evaluate the effectiveness of RioZim’s turnaround initiatives.