Wednesday, December 17, 2008

What Kenyan Institutions Can Learn From the Van Andel Institute!

The Van Andel Research Institute - Organizational Analysis

The Van Andel Research Institute (VARI) has a strong corporate culture that is seen in all levels of culture: artifacts, values and basic assumptions. VARI has both visible manifestations of its culture as well as strong currents beneath the surface. At first glance it is clear that culture of VARI places a very high importance on the outside perception of others. Additionally, there is a culture of collaboration although this is clearer at the artifact level than throughout the organization. The personal beliefs and values of the scientists also provide a strong sense of individual achievement and a culture of autonomy amongst the scientists.


Artifacts, or observable symbols, architecture, behaviors and slogans are apparent at VARI from the moment an individual approaches the building. The building architecture was designed to give the impression of a high tech, cutting edge facility, a notch above others. The building façade provides an impressive image along the Grand Rapids Medical Mile. By breaking away from a traditional square building, VARI sets itself apart from others and creates a culture of elitism. This supports the culture at VARI that the scientists are world-class and utilize the most recent and newest technologies in support of the mission of improving human health. The culture of VARI is one of sending a strong image into the community of cutting edge science and high tech experiments – the building clearly shows this.

In addition to the interesting building structure, upon entering the lobby of VARI an individual is greeted with a large expansive space and a hanging exhibit by Dale Chihuly. The exhibit and the large space again support the culture of being an exclusive group and successful institution. The front lobby area has an expensive look and feel which furthers the culture of elitism.

In addition to the building and lobby area the culture of being an advanced science facility and again, separate from the other entities on the Medical Mile is exhibited through the number of security checkpoints in the building – even to enter the office space and elevators security badges are needed. The front desk is staffed by security rather than a receptionist. Theses artifacts support the notion that Van Andel Research Institute is a step above the others and also that is highly values that others have that perception as well.

Values are the levels of a corporate culture that are shared by members. They are the underlying values, assumptions, beliefs, attitudes and feelings that members of a group have. At VARI the values of the staff are diverse due to the wide variety of ethnic backgrounds but they area few values that are shared by all. The main value shared by all employees at VARI is the strong desire to improve human health and advance scientific research. This is a value that is held by scientists and administration. This is a value that began with the founding of the Institute and the formation of the endowment to further life sciences. It is the strong value of Dave Van Andel and of the found Jay Van Andel to improve human health. The nature of the work at VARI – medical research – is evidence of the value. Scientists are very focused around their specific areas of expertise all with the same goal. The publications and discoveries scientists produce are artifacts that exhibit this value.

However, although all scientists and employees have the same value of improving human health and clearly exhibit that in their work there is also a value of personal success. Scientists are recognized and awarded based on individual achievements – not over VARI success. The more publications, grants and funding as well as internationally recognized discoveries the more successful the scientist. This value of individual success is reflected in the lack of interdependence and lack of group efforts between the 18 individual labs. The scientists work independently from one another and are more likely to collaborate with an outside partner that with another scientist in the Institute. While artifacts such as press releases and joint authorship on articles gives an impression of collaboration the underlying value is still to build individual credit and esteem.

Basic Assumptions
Basic assumptions are the underlying beliefs that individuals have – and may not even realize – yet they can greatly influence the culture of an organization. At VARI there are basic assumptions that are illustrated in the demographics of the employees. The management of VARI is dominated by white males; additionally the majority of the PIs are male as well. Whether or not this was a purposeful decision it is still an underlying aspect of the culture at VARI. Additionally, VARI has conservative values at its core from the Van Andel family. While it is harder to see the basic assumptions in artifacts and actions the support of Senator McCain and opposition to embryonic stem cell research by the majority of leadership are two recent examples of the conservative nature of the organization.

Mechanistic vs. Organic Structures

The Van Andel Research Institute operates primarily in an organic structure. The administrative group operates in a more mechanistic way but also works on changing project teams and on task-adjusted working groups and teams which is characteristic of an organic structure. In an organic structure employees contribute to a common task of a department and work on task adjusted projects through team work. Additionally there is less hierarchy of authority, less control and fewer rules. Finally knowledge and control of tasks is distributed throughout the organization and communication is horizontal. These are all characteristics of VARI.

Scientific labs each have a Principle Investigator however the scientists collaborate within the lab planning their own experiments and making adjustments based on continual findings. For example, if an assay produces an unexpected result the scientists work as a team to determine what happened and plan subsequent experiments to prove or disprove hypotheses. This highlights the distributed control of tasks and horizontal communication that is key to an organic structure. Additionally, due to the exploratory nature of the work there are very few rules implemented through vertical communication. While the scientists are required to act in fiscally responsible ways they have flexibility in spending lab budgets, are able to design experiments as they see fit rather than following strict rules and may publish or collaborate with any partners or publications. As previously mentioned, the administrative side is slightly more mechanistic and has rules with regard to accounting and information technology procedures but employees still have discretion in activities and are encouraged to join project teams and help where their skills can be best utilized even if outside the department. This encouragement of cross-function collaboration and task adjusted work adds to an organic feel.

Organic structures work best in uncertain and complex environments. The area or scientific discovery and research is highly uncertain and complex – new discoveries are being made daily that challenge conventional thought and require adjustments to research efforts. The uncertainty in the success of experiments and the low probability of success in research and drug development further the need for a structure based on teamwork.

From a structural design perspective, the Van Andel Research Institute operates in a cross between a divisional structure and a matrix structure – while still maintaining its organic nature. From the divisional perspective, each lab could be seen as a division operating independently from other laboratories. However, each lab does not have its own HR, accounting, purchasing and IT functions – these are centrally housed. With the core administrative services and core technology labs servicing multiple labs or projects a matrix structure could be applied. In the matrix structure each lab would be a product or project that utilizes the core services as needed. The matrix approach encourages innovation and creative thought but takes a significant amount of time to coordinate. As VARI is still a relatively new organization (only 10 years old) it will be interesting to observe changes in structural organization as the Institute grows and matures.

Technology, Differentiation, and Integration

Technology is much more than the computer and electronic technologies utilized in office and homes and it is also more than the scientific equipment used at the Van Andel Institute. Technology encompasses all the tools, techniques, machines, processes and actions used to transform inputs into outputs in a system. Looking at VARI technologies from multiple approaches will provide greater insight into the operations of VARI.

Joan Woodward classified technologies based on systems of production – small batch and unit production, large batch and mass production and continuous process production. Each method of production is a technology used to create a product. At VARI small batch and unit production is the technology used. Scientific experiments and trials are used to create output specific to customer specifications. Often the customer is the scientist seeking results but in some cases service work is done for pharmaceutical companies where each project is custom designed. A recent example is was a project for a major pharmaceutical company in which human lymphomas were implanted into mice in order to test an experimental new treatment. This highlights the customer specific nature of the projects. The scientific experiments are not mechanized and require highly skilled human workers to complete; additionally as previously mentioned there are few formalized rules or procedures and they operate in an organic manner.

A second aspect to analyze technologies from is from departmental technologies framework presented by Richard Daft and Norman Macintosh. Looking at the variety and analyzability of the tasks performed different technologies are needed. Analyzability refers to the extent in which a task can be reduced to predetermined steps and variety refers to the frequency of unexpected and novel events. The tasks at VARI have high variety and low analyzability. While the steps in a set process, centrifugation for example, are high analyzable the overall experiments are always different and changing due to the high variety and uncertainty of what the results will be. An interesting aspect of scientific research is that the results are not known prior to starting a task or activity – this is extremely high variety. These factors require nonroutine departmental technologies. The majority of the tasks at VARI fall into this category with the exception of the administrative support functions such as accounting, purchasing and contracts which are much more analyzable and have lower variety. The administrative functions require routine departmental technologies.

In looking at the relationship of department technology to structural and management characteristics, as expected, nonroutine departmental technologies are related to organic structures with low formalization, low centralization, an importance of training plus experience (at VARI PIs all have Ph.D.s and have completed post-doctoral fellowships to gain experience).

Differentiation and Integration

In order for the Van Andel Research Institute to have success individual laboratories and individual scientists need to have scientific discoveries that will lead to the award of federal funding or to revenues from outlicensing technologies to pharmaceutical, biotech, diagnostic or device organizations. To do this coordination and workflow interdependence is essential.

As discussed in an earlier analysis, VARI is increasing differentiation in job function with the addition of more specialized core services and the addition of new scientists. With this increased differentiation in job role integration through coordination is needed. The Van Andel Research Institute operates in a reciprocal interdependence model as described by Thompson. What makes VARI a reciprocal model rather than a sequential model is the mutual adjustments that are required throughout a research program. While there are sequential steps to follow each step creates an output that may require a change in course or the repeating of early steps. Additionally, this reciprocal coordination extends to the relationship the labs have with the administrative team. Depending upon discoveries or research needs continual adjustments to agreements and budgets are made. There are cross-functional teams made up of scientists within a lab and scientists from core labs and potential individuals from the external environment as well – these complex relationships require face-to-face communications often through unscheduled meetings and a focus on integrating the pieces. An example of a reciprocal interdependence is in VARI’s relationship with Spectrum Health. At any given time multiple projects are occurring with many individuals – recently a new protocol was initiated to obtain tumor samples from surgical patients – as patients entered surgery a team was called together to properly obtain and transport the sample and then scientific experiments began and were continually adjusted with input from both researchers and physicians.

In addition to the coordination and workflow interdependence, VARI also should consider the sociotechnical system model to design for joint optimization. For the most success organizations need to combine the characteristics of the social system, analyzed in organizational behavior with the technical system seen through organizational design.

The writer is a graduate Management student in USA.

Tuesday, December 16, 2008

Kenyan President heckled over Media Bill during Independence Celebration!

Tuesday, 16th December 2008. 3:47pm

By: Manasseh Zindo.

Nairobi: The Government of President Mwai Kibaki in Kenya is slowly losing touch with the people since his disputed controversial re-election in December 2007 that plunged Kenya into deadly post-election violence. The coalition government has angered the public by the refusal of Members of Parliament to pay tax and passing of a draconian Bill to muzzle the Media.

On Friday December 12, Kenya marked 45 years of self-governance since it gained independence from Britain but the celebrations at the Nyanyo National Stadium in the capital, Nairobi, was marred by protests, and arrests of journalists, and activists.

The journalist and civil rights activists were protesting a bill passed by Parliament on Wednesday December 10, which gives the government powers to control the media. The bill known as the Kenya Communication (Amendment) Bill 2008 has caused outcry from media practitioners who have declared that the media is under attack.

Protests over attempts to muzzle the media, rising food prices and failure by MPs to pay taxes forced the President to cut short his speech during the Friday’s Jamhuri (Independence) Day celebrations. More than 70 people, among them journalists, were arrested and locked up at various police stations in Nairobi.

Radio presenters Walter Mong’are popularly known as “Nyambane”, Kiss FM personality Carolyne Mutoko were among those held by police. Mr Mong’are, who had been seen earlier mingling with other journalists at the venue, changed his clothes and donned a white and black stripped shirt and pants, the official attire in the country’s jails.

He made an attempt to access the podium where President Kibaki, the First Lady, Prime Minister Raila Odinga and Vice President Kalonzo Musyoka were seated, but security agents quickly pounced on him. Mr Mong’are was wrestled to the ground and kicked by senior police officers as he made his way into the stadium dressed in clothes resembling those worn by prisoners to symbolize impending imprisonment of media if the controversial bill passed by Parliament is signed into law.

A section of the crowd tried to hurl plastic water bottles at the security agents who were carrying the comedian out of the stadium but failed to stop them. Ms Mutoko was arrested as she arrived at the stadium dressed in a black T-Shirt with the inscription “No Tax, No Tax Uta Do? (What will you do)?”

The crowd remained unexcited as President Kibaki went round in his ceremonial military Land Rover, in protest against the arrest of comedian-cum-journalist Walter Mong’are. At one time, a crowd at the one of the terraces attempted to break the gates, demanding to take a petition to the President. Chaos followed as the police struggled to restrain the unruly crowd. But even after succeeding, a section of them continued shouting “tuna njaa” (We are hungry), disrupting the speeches. Moment after President Kibaki had finished his official address in English and turned to Kiswahili he was forced to cut short his speech when one protester who had sneaked his way into the VIP dais shouted the president down. Mr.

Frederick Odhiambo, a member of the Bunge la Mwananchi, (Parliament of the People) had managed to make his way into the VIP area and sat about 10 meters away from President Kibaki, Prime Minister Raila Odinga amongst a bevy of invited leaders and envoys. His arrest among VIPs shocked the country and VIPs themselves who, ostensibly, never expected such an incident to occur in their midst.

Questions were asked how he made his way there and sat on a seat reserved for an assistant minister. Shortly before the incident, an angry President Kibaki who had apparently been appalled by heckles and shouts of “hunger, hunger, we want food and MPs must pay taxes” had said: “Let those who want to fight do so”. The President had made the remarks after a section of the crowd shouted at him when he started giving his Kiswahili speech.

Before forcing the President to cut his Mr Odhiambo who was just 10 metres away shouted: “The rich are oppressing the poor, MPs are not paying taxes and Kibaki has not said anything”, as the presidential elite security descended on him. The incident became more dramatic when the president told-off the heckler: “If you are out of your mind, blame yourself,” Kibaki to the heckler in Kiswahili and hastily ended his speech. The President, First Lady Lucy, Prime Minister Raila Odinga and Vice-President Kalonzo Musyoka immediately left the podium with other VIPs in tow.

Following the arrest of Odhiambo, members of Bunge la Mwananchi (The Parliament of the People) in a letter addressed to Kenyans and friends of Kenya, said that Mr. Odhiambo was descended on by the security. “They descended on him and mercilessly carried him off, covering his mouth so that he could not be heard,” the civil society organization said in a letter signed by George Nyongesa and e-mailed to media houses.

Mr Frederick Odhiambo was taken to the hospital the following day (Saturday) under tight security but he told the press that he was tortured in police cell with his private parts injured. He was admitted at the Nairobi Women Hospital where he is being treated.

At the Friday celebrations, Prime Minister Raila Odinga, a darling of the people, was also shouted down as he tried to calm the public. Also arrested at the celebration was Mwalimu Mati and his wife Jayne, both of Mars Group, a human rights non-governmental organization based in Kenya.

Police targeted people who wore T-shirts that bore messages of dissatisfaction with the recently passed Communications Bill, which is designed to curtail the freedom of the press. The T-shirts also had messages denouncing the high food prices, failure to tax MPs’ salaries as well as failure to implement the Waki Report. The T-shirts bore messages like, ‘Tumechoka (We’re tired)’, ‘Enough is Enough’, ‘No MPs Tax Uta Do (What will you do?)’

Early on Thursday evening, a day before the celebration Kenya Television Network Managing Editor, Linus Kaikai iced it with a personal letter to President Kibaki, urging him to correct the wrong done by Parliament. Mr Kaikai reminded Kibaki of a recent tête-à-tête they had at Maasai Mara Game reserve. Kaiaki reminded the president of his past pledges to protect the media and took him through instances when journalists and media houses had been unlawfully raided and harassed by State authorities.

Last year, Kibaki had assured the country the protection of freedom of expression and the Press. He said his Government would continue to work with the media to ensure Press freedom is respected and enriched. Kibaki, one of Kenya’s longest serving politician said this was essential not only because it is a basic right but also because it is vital for development of democracy.

In Mombasa, journalists covering the celebrations had tape strapped around the mouth as a way of protesting the law allowing a government-appointed commission to determine broadcast content, and giving the Minister for Internal Security powers to raid media houses. Two years ago Kenyan security agent and wife of President Mwai Kibaki in separate incidents invaded media houses in Nairobi and hold the media houses hostage for several hours.

The Friday arrest of journalists in Nairobi and members of the civil society received immediate condemnation from a section of leaders in Kenya. Kenya Editor’s Guild chairman Macharia Gaitho condemned the government for carrying out the arrests. He said: “We’ve had very sad happenings today. Journalists and members of the civil society have been arrested for expressing their opinions.” Mr Gaitho said the arrests were as a result of the media’s campaigns for MPs’ taxation. He said the media fraternity demanded an apology from President Kibaki and Prime Minister Raila Odinga for the arrests.

Kenya’s renowned lawyer and former MP Paul Muite criticized the actions saying it was regrettable that 45 years after independence, Kenyans still face dictatorship. "It is a violation of freedom of expression and this must be condemned," Muite said while visiting the detained journalists and civil right activists at Langata police station.

Wife of Prime Minister Mrs Ida Odinga was among the first to condemn the bill and offered the media her support. She also denounced the arrest of journalists and activists. Mrs Odinga, an advocate of democracy in Kenya, said in the past when she was facing tribulations, it was only journalist who were listening to her and writing her stories.

“I have walked along a rough path in the politics of Kenya. During that journey, most of the times, friends deserted me when I was viewed as bad company for holding certain views. In all those moments, the only people who were willing to listen to me and tell my story were journalists. They did it either as professionals or as friends. My conscience therefore cannot allow me to keep quiet when the media is under attack,” she said.

She termed the arrests of journalists by the police as outrageous. “How can the police arrest people who were demanding the right to do their job?” Ida posed in a letter faxed to media houses.

Student Organization of the University of Nairobi chairman Dan Mwangi said the MPs were against the campaign by media to have their allowances taxed. “They are trying to apply the same thing they did on former Finance minister Amos Kimunya to silence any voices calling for taxation of their salaries,” Mwangi said.

Centre of the Kenya for Law and Research International chairman Morris Odhiambo said the MPs were revenging after the media waged a campaign to push them to pay tax. Mr Odhiambo said the “media were on the forefront on the tax issue and this has been seen as a threat to these MPs”. Labour Union Secretary General Francis Atwoli described the actions by Parliament as a big step backward in the war against dictatorship. He termed the bill as archaic, draconian, and retrogressive. Atwoli accused MPs of betraying the media.

Women Rights advocate and former Nominated MP Njoki Ndungu trashed the draconian media law as ‘unconstitutional’. Njoki advised the media to move to court to quash the clauses that bestow overwhelming powers on the Internal Security Minister and the Communication Commission of Kenya. "The court has the power to invalidate the sections which are unconstitutional," said Njoki.

Lands Minister James Orengo, a member of Odinga’s Orange Democratic Movement (ODM) joined in and said the Kenya Communication (Amendment) Bill 2008 was unconstitutional and negates section 79 of the constitution that guarantees freedom of expression. “The position of ODM as far as the media bill is concerned is that it is should not have been there. As a party we do not support it because it reduces the democratic space,” Orengo, one of Kenya’s most respected lawyer said.

Mr Orengo said ODM was not party to the new media bill as it was approved by the cabinet before the formation of the Grand Coalition Government. “If the president assents to the bill, we still have a right to go to court though I do not think we want to go that direction,” he said.

The Lands Minister who represented Prime Minister Raila Odinga at a press conference in Mumias Western Kenya, said Information Minister Samuel Poghisio from the rivalry ODM-Kenya Party of Vice President Kalonzo Musyoka took the bill to parliament when other MPs were meeting President Mwai Kibaki and Prime Minister Raila Odinga on the formation of a special tribunal to try suspects on the post-election violence.

“Many of us were not in the house when the bill was going through,” Orengo reiterated. “The media had made frantic efforts to intercept the Bill before it got to the floor of the House. But MPs, angered by a parallel campaign to have their allowances taxed, saw in this Bill a weapon to hit back and punish the media. Without minding the consequences, it took only 25 out of the 222 MPs to pass it this week,” said The Standard Newspaper.

Lands Minister Orengo noted that there were sufficient laws in place that needed only slight modifications if any to give the media more democratic space. “This bill takes us back many years democratically. But I want to assure the media fraternity that the Prime minister is right now engaged in discussing the matter further,” he told the press on Saturday.

Mr Orengo confirmed that the Prime Minister Raila Odinga was scheduled to meet with media owners association where he'll receive a petition from the media owners. “There are things one must stand and speak against without hesitation. With all good intentions this bill is going to fail,” Orengo assured the media fraternity.

The Minister said that it was embarrassing to see the state resort to coercion to limit the freedom of expression which he said consisted of the freedom to hold peaceful demonstration. “I feel a little ashamed that people like Nyambane (Walter Mong’are), Mati (Mwalimu) and Caroline Mutoko could be arrested for doing what is right,” said Mr. Orengo.

Mr Orengo said that ODM has listened to the public outcry and would announce some kind of agreement to remit their taxes. The party also pledged to rally legislators to reach a compromise to allow their salaries and allowances to be taxed. The Lands Minister, a former political prisoner said there was need to review the draconian Bill.

Other MPs who condemned the bill and arrest of journalists included Budalang’i MP Ababu Namwamba who said the arrest of journalists, signaled the return of repression in the country. His Cherengany counterpart Joseph Kutuny accused Information Minister Samuel Poghisio of habouring a hidden agenda against the media. Local Government Assistant Minister Njeru Githae said, if put in the wrong hands, the Bill was draconian but added the Bill would only put restrictions to those who do not want to remain professionals.

Anglican Church Maseno South Diocese Bishop Mwai Abiero said passing the Bill was an affront of Media freedom. Abiero read mischief in the move and accused the Ministry of Information and Communication of hiding something from Kenyans. The National Council of Churches of Kenya (NCCK) also condemned the bill and arrests.

Kitale Catholic Bishop Maurice Crowler urged President Kibaki not to assent to the Bill. The Council of Imams and Preachers in Kenya (CIPK) said Kenyans were losing faith in the Tenth Parliament. “It is quite true now that they are not happy following heightened coverage by the media on their failure to pay taxes,” said CIPK National Organizing Secretary General Sheikh Mohamed Khalifa. Communication and Information Minister Samuel Poghisio says the Government has no interest in muzzling the media or to control their content, but the Media in Kenya says history show that, there is every legitimate reason to express reservations.

Kenyan bets KSh100m on digital printing!

By JUSTUS ONDARI Posted Monday, December 15 2008 at 16:37
Ensconced on the right wing of the second floor of Rehani House on Nairobi’s Koinange Street is an innocuous sign announcing the address as the home of Liberty Graphics and Print Ltd.

No big deal. In any case, what would be so special about a graphics design and printing press in a country where every nook and cranny is teeming with all manner of printing outfits?

Nothing could be further from the truth. Liberty Graphics and Print Ltd is no ordinary printer. If anything, it is the nerve centre of what promises to be the first phase of a multimillion investment by a Kenyan, Mr Wilfred Saroni, returning from the Diaspora.

“We are bringing the very latest in cutting age digital and online on demand printing technology to Kenyans. Unlike other printers, we are not using plates,” says Mr Saroni, who is seeking to replicate a model perfected by American giant, FedEx Office, formerly FedEx Kinko’s.

Vice President Kalonzo Musyoka is expected to officially open the business tomorrow. The 2005 New Hampshire Businessman of the Year says he is going for the high-end printing market, which is currently served by printers based in South Africa and China.

The investment, in which the entrepreneur has already pumped Sh100 million, could have been a franchise of FedEx Office if things had worked out as planned.
Impressed by the success of the seventh largest printing company in North America, Mr Saroni dreamt of being allowed to establish a franchise of the chain store in Nairobi.

However, as it turned out, his was just that — a dream. The chain store’s management rejected his proposal, saying Kenya was a small market.
They politely informed him that they were already operating in Africa’s biggest economy, South Africa, providing printing, photocopying and binding services as well as video conference facilities.

It was then that it dawned on the Caplan University, USA, MBA graduate that he could go it alone.

“It has always been my plan to invest in Kenya and East Africa after doing business in the US for ten years,” says Mr Saroni, who was awarded the Ronald Reagan Republican Gold Medal in 2006 by senior members of the US Congress for his hard work and entrepreneurial acumen.

At a time when the Government is making every effort to attract foreign investors, including offering them incentives such as tax waivers, Mr Saroni feels the same should be extended to Kenyans in the Diaspora.

His call for the support of Kenyans in the Diaspora and the decision to return to the country coincides with the release of government statistics showing that local investors are more effective in fighting high rate of unemployment in the country compared to the much sought-after foreign investors.

Official statistics show that whereas the locals invest less than the foreign counterparts in the economy, they create more jobs.

According to the latest Kenya Investment Authority statistics, local investors pumped about Sh9.1 billion into the economy in the first three months of the current fiscal year compared to Sh27.6 billion in foreign investments.

This saw the country attract investments worth Sh36.7 billion against a target of Sh23.5 billion as KenInvest issued 34 investment certificates out of the 37 investors who applied over the period.

The locals created 1,343 jobs compared to 95 jobs by their foreign counterparts during the period, which ran between July and September this year. Mr Saroni already has 25 employees on his payroll.

“It shows that, if well promoted, local investors cannot only contribute to the fight against employment, but also spur economic growth,” says Ms Susan Kikwai, the KIA managing director.

Mr Saroni, who has every reason to understand what it takes to not only run but sustain a business having seen one of his business in the US go bust, says the cost of doing business in the region is much lower than in the US.

The New Hampshire Board of Nursing withdrew the operating licence of his Nashua Nursing School in New Hampshire mid this year after it ran into financial problems, a development that he attributes to the turmoil that is facing the US economy.

“It was a painful experience but big multinational companies like AIG, Ford, Crystler and GM are facing problems and Wall Street is crumbling. My business was not an exception,” says Mr Saroni whose other two other schools – Holden Medical Institute – are still operating.

Mr Saroni, who went to Kimana primary and secondary schools, does not rule out divesting from the business, saying that when the right time comes, he will consider an “appropriate exit strategy”.

He is currently liquidating his equity and interest in one of the investments, Holden Centre, a 300,000 square feet property. Since the past sometimes determines the future, how sure can one be that Liberty Graphics and Print will survive?
“My business approach is never to look back on lost business but to focus on the success of new and ongoing ventures,” he says, adding that, “The closed school is only relevant to the extent that it taught me a lesson on business management.”
Using funds from minority partners and personal savings, he is in the process of setting up four retail outlets around the city centre at a cost of between Sh40 million and Sh50 million each.

“We expect our state-of-the-art printing press on Mombasa Road to be up and running at a cost of Sh100 million,” he says, adding that already he has sealed a number deals for the two months old business.

Using his networks, the entrepreneur aims to tap into the fast growing graphics outsourcing business in the US market where the company is also registered to operate.

With the proposed fibre optic cables expected to reach the country by mid next year, the entrepreneur who received the Head of State Commendation from President Kibaki this year says the cost of communication will go down significantly.

“This will enable us to link up with our clients abroad at a cheaper rate and faster,” he says, while urging the country to adopt appropriate technology.
“It is easier for Kenyans to adopt, say, wireless technology communication than the US, which had to grapple with what to do with thousands of landline telephone cables already laid in the ground,” he adds.

Another bolster to businesses like Mr Saroni’s is a bandwidth subsidy that the government initiated this year and which is being administered by the ICT Board.
Maintaining that the country’s business environment has improved, he calls for a reduction in the amount of paperwork involved in registration of a business.
For instance, in line with the proposed reforms being pursued by the Kenya Revenue Authority, only one form should be used in the registration for things like the PIN and VAT (Value Added Tax).

Similarly, he feels the proposed amendment of the Companies Act to allow for an individual to set up a business will make the country a better investment destination.

Yet, like a sore thump, infrastructure remains a major challenge and he cites the port of Mombasa, the road network and power supply as some of the areas that need immediate attention.

“It is time we amended our laws to allow dual citizenship,” says Mr Saroni, whose ambition is to expand the business across the East African region and take it to the public by listing at the Nairobi Stock Exchange in five years.

Wednesday, December 10, 2008

Global Mind Change

Graft: Top Leaders Look The Other Way!

There is an interesting heading on the East African Standard that says “Graft: Top leaders look the other way” http://www.eastandard.net/politics/InsidePage.php?id=1144001288&cid=289&

I am of the opinion that corruption, poverty and the poor in Africa pose a tremendous danger to the security of the world today than some of the previously perceived enemies of world peace. I fully agree with those who have asserted that the most potentially explosive force in the world today is the frustrated desire of poor people to attain a decent standard of living. I speak as an African who has experienced both poverty and affluence. I grew up in poverty. I have worked in the slums and I have had the opportunity of visiting different parts of Africa and the Western world where I have experienced the two contrasting lifestyles-poverty and affluence.

In a 1992 address, former U.N. Secretary General Boutros Boutros-Ghali stated that the deepest causes of conflict are "economic despair, social injustice, and political oppression”. I was a student at that time so I started to examine his statement from a theological and social point of view. Later on I discovered that I needed to examine it from an economic view point and I have been doing that for some time now.

By choosing to ignore the deteriorating economic state of most Africans, the religious bodies in general and the developed countries in particular, may in essence be mistaken to be endorsing the plight of the poor as a noble affair. If this matter is not addressed adequately, it could also enhance the conception by many people that the Gospel of salvation through Jesus Christ is irrelevant to the modern person. Or that God is dead, as some erroneous thinkers like Friedrich Nietzsche have claimed in the past. Let me hasten to add that I have keenly analyzed what the world leaders like former British Prime Minister Tony Blair and President George W. Bush together with their colleagues from the developed countries have done to reduce the debt that African countries owe to the Western financial institutions and nations, but I believe that a lot more needs to be done collectively if poverty in Africa is to be eliminated.

I am convinced that the religious bodies and the Free Society institutions are in possession of the most effective remedy for a holy and equitable reconstruction of the economic order in Africa, which as to force, comprehensiveness and results is unsurpassed. The remedy is the unabridged and unmutilated message of personal virtues, when applied, not only to the individual, but also to all and every relation of social life. This will address the moral issue which is at the core of Africa’s economic woes. If the African leaders were to have their morals refined so that they respect and live virtuous lives, corruption would become history on the continent of Africa within months and the economies of most African countries would begin to grow tremendously.

I am fully convinced that the key to the rejuvenation of the African economies lies in the stakeholder’s formulation, implementation and evaluation of economic policies and strategies both at the local and national levels. I am fully convinced that the stakeholders (Government, private and civil society organizations) in Africa must be strongly concerned and involved in every charitable endeavor that is predisposed to improve humanity’s welfare not merely in its way to paradise, but also in its hunt for happiness, holiness, harmony and joy here on earth. I disagree with those who propagate a futuristic Gospel which calls on the African people to suffer just for a little while for they are going to enjoy in heaven.

It is my strong call to religious people to have the courage to seek economic justice for the poor, even if that means disapproval by those in positions of authority. This is where I fully concur with one Mohandas Karamchand Mahatma Gandhi. Let them torture your body, break your bones or even kill you, but do not compromise human dignity for anything!

I also fully believe that it is time for the religious organizations in Africa to acquaint themselves on available and productive economic intervention measures. The Rev. Todt once said, whoever would understand the social question and would contribute to its solution must have on his right hand the works of political economy; on his left those of scientific socialism and before him must keep the New Testament.

I can only add to Rev. Todt’s statement that such a person should have the Old Testament too because it contains valuable insights on economic justice issues. Until now, the religious organization’s approach to social and economic justice challenges has been pitiable and disappointing. Dietrich Bonhoeffer's important question still echoes in many of our minds when we think of the issue of economic justice in Africa. Dietrich like many African scholars today, ask, who and where is Jesus Christ for us today?

Dietrich may have lived at a time of great persecution in his native land, Germany, but many in Africa today still identify with him when it comes to economic deprivation. So as one preaches and teaches about a God who listens to the cries of His people, many Africans must be wondering who and where that Jesus Christ is for them today.

I am constantly irritated when so much phony socio-economic knowledge and strategy for African modernization is presented to Africans. The religious bodies in Africa find themselves immersed in a swimming pool of challenges that Africa has never been confounded with before. This is why I feel that the subject of faith and economic systems deserves individual treatment in the wider context of international planning, strategizing, formulation, implementation and evaluation of economic growth policies. How I wish our institutions of higher learning would revise their curriculums and address this crucial need.

We who are in institutions that are advocating and fighting for a free society see that the opportunity to be in this world in this century presents us and the religious bodies with equally a colossal advantage and a challenge like has never been perceived by any other generation past. It is a difficult but great era with multitudes of opportunity for bettering the well being of mankind. We observe that human kind is transiting through another of its historical crises on its frontward march on the road to a more ideal spiritual, social and economic order.

I always feel bad when people, especially politicians in my own mother country think that neither the religious books nor the religious bodies have an authority on the particulars of supporting economy, lawmaking and business methods. This is something that ought to be straightened by all means. Both the religious bodies and their faiths must tell the humankind by what standard he should be directed. They have a duty to guide the leaders to expel selfishness from a person’s motives and put brotherhood at the front as his determining principle. The religious bodies need not to be a passive observer in a world that is characterized by identity syndromes. The religious bodies in Africa need to be radically developing and readjusting or re-evaluating her theology on current issues like economic systems. No one is claiming that the religious books can solve technical economic problems. Let the technical problems be handled by the technicians who have the expertise in this field. However, it is obvious that the religious bodies need to become a dynamic force in Africa as far as the running of the economic system is concerned. Let the faiths influence the paradigms of the economic system.

I also believe that purity opens up the purse. St. John speaks of perfect love in his epistle, and he says: One ought to lay down our lives for the brethren. But whoso hath the world’s goods, and beholdeth his brother in need, and shutteth up his compassion from him, how doth the love of God abide in him? (1 John 3:16-17). I know some of you are already beginning to brand me a socialist. Such acts do not make one necessarily a socialist or a liberal or a conservative, but it does create in one an active sympathy with social needs. My call on the religious bodies here is to get people where they can have pure hearts. Let them be free from sin and they will be able to sympathize and empathize with their economically disadvantaged brothers.

As to the present wage and profit system of business, only a few leaders in the religious bodies realize that it will eat up the whole continent if it is allowed to obey its own greed, while the religious bodies look with distrust on those of their members who try to unearth and apply religious social ideals. The religious bodies need to help come up with economic policies that will check the growth of this vice. The religious bodies need to take up the work of social and economic reconstruction as a definite policy and on a large scale. We need Africans to be entrepreneurial but they should also be considerate so that those who are endowed with more riches do no compete unnecessarily with their poor bothers. They should instead create some space and give leverage to those who need to uplift their economic status.

I also call upon governments in the developed countries to consider working with the Free Society institutions on the African continent to equip the Africans with the right economic policies. Let them go further and equip them with virtues, skills, tools and resources that will enable them to produce resources, manage them and utilize them on their continent for the glory of God. Otherwise, if African Governments continue to be given economic aid yet their people lack virtues, skills and tools to take advantage of the resources that they have on their continent, Africa will continue to wallow in poverty and it will continue to be a threat to world peace especially now that Africans have discovered that they can be enlisted in terror groups like Al Queda and the Somali pirates!


If Kenya were a cake to be shared out,Kenyans would only lay claim to 31 per cent of the country’s total wealth. The rest would go to foreigners. Agriculture,tourism and banking,which combined bring in the country’s largest earnings,are in foreign hands. Last year,tea,tourism,flowers and coffee earned the country Sh140 billion,nearly half of the annual national budget. Of this money,only 31 per cent ended up in the country - as tax and real earnings to the nationals. And shareholding in the richest 20 companies that trade at the Nairobi Stock Exchange is foreign. The skewed distribution of wealth between foreigners and Kenyans puts paid to all efforts since independence to hand control of the country to its citizens.

Tea growing,which earned the country Sh43.5 billion last year,is concentrated in the hands of six leading agricultural companies whose shareholding is largely foreign. Up to 78 per cent of earnings from tea went,therefore,to foreigners - leaving the balance for Kenyans. The Big Six in the tea sector are Unilever Tea Kenya,Kakuzi Ltd,Williamson Tea Company,Kapchorua Tea,Limuru Tea Company and Sasini Coffee and Tea. The British-owned Brooke Bond Group holds 43.1 million shares of the total 48.8 million shares issued in Univeler Tea Kenya . The same group owns 54 per cent of the total 3.9 million shares issued in Limuru Tea Company. In Kakuzi Ltd,foreigners have a total shareholding of 68.3 per cent of the total 19.6 million shares issued. They hold the shares through Bordure Ltd and Lintak Investment Ltd,with 35.1 and 33.2 per cent shareholding,respectively.

Britain’s Williamson family has a controlling majority shareholding in both Williamson Tea and Kapchorua Tea companies. In Williamson Tea,it holds 67.2 per cent of the total 8.8 million shares issued through their company,Ngong Tea Holding PLC. In Kapchorua tea,they hold 40 per cent of the 3.9 million shares issued. Sasini Tea and Coffee Ltd is 87.3 per cent owned by business magnate Naushad Merali,a Kenyan. Merali’s companies hold his shares in these businesses: Legend Investments Ltd (51.7 per cent),East African Batteries (18.7 per cent), Yana Towers (15.9 per cent) and Swan Estates (1.04 per cent).

The reinvigorated tourism sector,which earned Sh42 billion last year,is also foreign-owned. And just as the Sh43.5 billion earnings from tea sector ended up in foreign pockets,so did the Sh42 billion that came from tourism. Tourism earnings went into three directions: Hotels,airlines,and travel/booking agents,in that order. Of Kenya ’s 290,000-plus tourist hotel bed spaces,foreign hoteliers own 74.3 per cent of it. Tour flights to Kenya are entirely in the hands of foreign airlines. It is all the more foreign-dominated in the traditional tourist peak periods of Easter and Christmas,when there are no scheduled flights to Kenya ’s tourist hub of Mombasa . During the two seasons,tourists arrive in Mombasa in chartered jets arranged by European tour operators.

Foreign companies stationed in European and American capitals also entirely control hotel bookings and transfers. Where internal travel is concerned,foreigners too,dominate by owning 7 of the 11 leading local tour travel firms. At the end of the day,tourism in Kenya remains a foreigners’ enclave with indigenous Kenyans left to scratch the surface on petty trades like selling curios and prostitution. After years of lobbying,last year the European Union set aside Sh250 million to economically empower indigenous Kenyans to get a fair share of the lucrative industry. Seven projects were targeted to tilt the balance in a programme called Tourism Diversification and Empowerment Project. But a spokesman at the Nairobi EU office said the money is yet to be released as project proposals submitted are still under evaluation. The only hotel chain listed on the Nairobi Stock Exchange is the TPS Serena. The Aga Khan Fund for Economic Development holds the company’s majority shareholding through its company,TPS Holdings Limited.

Horticulture,which earned Kenya Sh28.2 billion last year,is the country’s third largest foreign exchange earner. It,too,is a foreigners’ affair. Indigenous Kenyans mainly come in as casual labourers on the flower farms. Of the 44 certified companies dealing with horticulture products,26 are foreign-owned. But an even bigger irony is that the leading 10 players in the industry - all foreign-owned - bag 83 per cent of the total income from the sector. Flower farming (floriculture) is the key plank in Kenya ’s agriculture sector. Seventy six per cent of Kenya ’s total flower production is concentrated in foreign-owned flowers farms around the Naivasha area. The big three are Homegrown,Sulmac and Oserian. Late last year, Kenya overtook Israel and Columbia as leading exporters of cut flowers. But you would not know that from the world’s leading flower auctions in Amsterdam and London . Why?

Foreign flower exporters in Kenya have registered their companies abroad - mainly in Amsterdam - and sell flowers they have grown in Kenya under a foreign label. In that case,while flowers from a local company are sold in Amsterdam as flowers from Kenya ,Dutch companies growing their flowers in Naivasha sell theirs as flowers from Holland . The consequence of it is that flowers owned by Dutch companies receive preferential treatment at the auction,including exemption from the strict EU-imposed export rules. Flower auctions in Amsterdam and London account for 65 and 25 per cent of Kenya flower sales respectively. Of the approximate 60,000 tonnes of flowers exported from Kenya last year,37,000 tonnes were sold in Amsterdam and London auctions as flowers from Holland . The statistics can make it look like the entire flower industry in Kenya is one big conspiracy against indigenous people. Foreign air charters,the only ones used in flower transport,charge the highest rates in Nairobi . Freight charges on flowers from Kenya are twice those in the capitals of Kenya ’s nearest competitors Israel , Columbia and Costa Rica . There are also 40 to 45 per cent higher than in Egypt and South Africa , Kenya ’s two biggest competitors on the continent. At $400 a day,inspection and storage charges at Jomo Kenyatta International Airport are the highest in the world. So is the freight charge of $1.85-$2.2 per stem.

Flowers sold in Kenya ’s name are inspected stem by stem at the JKIA at the cost of 12 Euro cents a stem. Those grown in Kenya but marketed by overseas-accredited companies are only inspected in bulk. On average,it costs upwards of $1 million to set up a typical flower farm on a half acre spread,which in turn brings in a $50,000 a year. Kenya’s fourth leading export earner,coffee,is equally depressing on the ownership scale. The majority of small-scale coffee growers in Kenya sell coffee raw from the farm,earning less than 10 per cent of what the finished end product earns in foreign markets and in a foreign label. Though touted as an agricultural country,the other large-scale agricultural activities in Kenya are also foreign-owned. Rea-Vipingo Plantations,which deals mainly in sisal and dairy farming is 77 per cent owned by the Robinson family of England . They hold the shares through REA Holdings PLC,Unibuckle Holdings Ltd and REA Trading Ltd.

Del Monte,world famous for pineapple products,is entirely a French affair and sells its products with the label “Made-in-France”. The question of who owns Kenya ’s wealth sticks out like a sore thumb in the banking sector. The leading two banks with a combined market share of 71.4 per cent are Barclays Bank of Kenya and the Standard Chartered. They are foreign-owned. Barclays Bank plc of London owns 68 per cent stake in Barclays Bank of Kenya . Standard Bank Africa,a London outfit,in turn owns 81 per cent shareholding in Standard Chartered Bank. To avoid domination by foreign banks, Nigeria and South Africa enacted laws on percentages of shareholding a foreign bank could own. Foreign ownership is also the same cord that runs through key blue chip companies listed on the Nairobi Stock Exchange. At the East African Breweries,British-owned Guinness plc holds 63.5 per cent of the total equity,leaving Kenyans to scramble for the rest. Guinness shares are held in the names of Diageo Kenya Ltd and Diageo Netherlands B.V.

In the Nation Media Group,the Aga Khan holds 28.2 million shares of the 35.6 million shares issued. The Aga Khan’s shares are held in the names of the Aga Khan Fund for Economic Development and Amin Nanji Juma. In Kenya Airways,Dutch company,KLM,holds 40.6 per cent equity. In Total Kenya Ltd,French companies Total Outre-mer and Elf Oil Kenya Ltd,own 77 per cent of the total shareholding,while in BAT Kenya Ltd, Molensteegh Investment BV of London ,holds 68 per cent of the total shareholding. The question of who owns Kenya ’s wealth generated a national debate in 1968 when the National Council of Churches of Kenya published a paper entitled: “Who Owns Kenya ’s Industry?” In the paper,the late Anglican Bishop,the Rev Henry Okullu,regretted that five years into independence,”the compass needle had not moved in the direction of indigenous ownership of Kenya ’s wealth.” Thirty-seven years later,the Rev Okullu would turn in his grave to note that the needle has drifted even further away.

Sunday, December 07, 2008

An Open Letter To Hon Ababu Namwamba!

Your Excellency,
As much as we detest this method of communication, we are obliged by the prevailing circumstances to use this medium to express to you our feelings and aspirations.

Your excellency, we have been your ardent admirers and supports right from the beginning. We love and respect you as our leader. We know you are not perfect so we do not expect you to be without blemish.

However, we would like to let you know that you are our selected candidate for presidency in Kenya in 2012 so we would like you to start working on your Kenya General Election Team for 2012 as soon as possible. We have the will, the ability and the opportunity to transform Kenya into a Developed nation with you as our President. We have the resources, the connections and the international support to achieve this noble goal.


Gerald Baraza, Ph.D Candidate.