Business- Advanced Management Development- Portfolio Of Evidence Report PDF

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ENERGY OFFICE 3rd Floor, Smart Exchange, 5 Walnut Road, Durban, 4001 P O Box 1014, Durban 4000 Tel: +27 31 322 2634, Fax: +27 31 311 1089 Email: [email protected] www.durban.gov.za

PARTFOLIO OF EVIDENCE

CANDIDATE: SIBUSISO NTSHALINTSHALI PROGRAMME: ADVANCED MANAGEMENT DEVELOPMENT (AMDP) DUE DATE: 01 FEBRUARY 2019

2

Unit

Development Planning, Environment and Management

Document Type

Assignment Document

Title

Portfolio of Evidence for AMDP

Revision

1.0

Effective Date

01 February 2019

Purpose of Document

The purpose of this document is to provide a comprehensive portfolio of evidence for Advanced Management Development Programme.

CONTENT

Introduction: Strategic Management Summary of Durban Climate Change Strategy: Energy (also see annexure 1) Module 1: Strategic Management Module 2: Knowledge Management Module 3: Policy Management & Public Accountability Introduction (Block 2) Module 4: Public Finance Management Module 5: Project Management Module 6: Enhancing Service Delivery Introduction (Block 3) Module 7: Results Through Leadership Module 8: People and Performance Management Conclusion List of references Annexures: Annexure A: Durban Climate Change Strategy Annexure B: Constitution of the Republic of South Africa Annexure C: Electricity Regulation Act (ERA) Annexure D: Public Finance Management Act (PFMA) Annexure E: Municipal Finance Management Act (MFMA) Annexure F: National Treasury Regulations Annexure G: Project Management Body of Knowledge Annexure H: Batho Pele Principle Annexure I: Human Resource Policy Annexure J: Auditor – General Report (AGR)

Pg. 3 4 4 – 14 15 – 17 18 - 21

22 – 35 36 – 42 43 – 52

53 – 60 61 - 75 76 77 - 78 79

3 --------------------------------------------------------------------------------------------------------------------------INTRODUCTION: STRATEGIC MANAGEMENT (BLOCK 1) --------------------------------------------------------------------------------------------------------------------------Strategic management is defined as “deliberately choosing a different set of activities to deliver a unique mix of value “and through this gaining competitive advantage (Porter, 1996: 64). This is the process of directing and strengthening an organization to remain competitive in the market. It involves process of thinking strategically, setting objectives for the organization, planning and implementing the necessary changes, and measuring the outcomes. There are various definitions of strategic management and its processes in the context of achieving organizational goals and vision. Leibold et al. (2002) further recognize the critical strategic management challenges in the first decade of the 21 st century to become how organizations can continually adapt, shape, change, innovate, create and network. Strategy presents how far the organization in meeting its targets and remain competitive. Most companies fail because of poorly articulated vision and mission as strategic tools in organization management, positioning and differentiating, and creating corporate reputation. Peters (1997: 12) claims that company can survive only if all of its employees are aware of the importance of vision for the company’s success, whereas Kotter (1996: 46) puts emphasis on the motivational influence of a vision upon the employees. To introduce the work context and specific approach, there has been a variety of work covered under strategic management process which include contextualizing the strategy, differentiating strategic levels, implementing approaches and monitoring and evaluation. Strategic management analysis tools can be used for managers and employees to be able to see the big picture and to identify critical factors affecting the organization (David, 1998: 20). These strategic tools can also be seen as a mean of encouraging the creativity and innovation of the organization. This section analyses the tool based on the corporate that I work for, its organizational structure, industry and market. The summary of the departmental strategy selection is covered in details in the next chapter. There are different strategic approaches that would be utilized in the next chapter to adequately analyze the selected strategy, communicate it to Sub Directorate and align it with broad strategy outlook. The first strategic analysis include PESTEL model to assess the external macro environment factors that are relevant to strategic decision. The second strategic analysis include Porter’s five forces model to assess micro environment factors and the last strategic tool involve SWOT analysis to assess wider internal and external environment.

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--------------------------------------------------------------------------------------------------------------------------MODULE 1: STRATEGIC MANAGEMENT --------------------------------------------------------------------------------------------------------------------------Cities such as Durban need to respond by adapting to the impacts of a changing climate while reducing their contributions to climate change. To address this challenge, the eThekwini Municipality has developed the Durban Climate Change Strategy (DCCS) as part of the Municipal Climate Protection Programme, with the aim of defining a city-wide approach to adapting to climate change and mitigating Durban’s contribution to climate change. Durban, like other cities across the world, contributes to the emission of greenhouse gases (GHG) globally. The inventory of 2012 compiled for Durban had the total amount of greenhouse gas emission averaging at 29,360,395 tons of carbon dioxide equivalent (tCO2e). The transportation and industrial sectors are the largest contributors to eThekwini’s GHG emissions, with transportation making up 37% of the total GHG, and industry reaching an emissions of 32%. Other significant contributors to eThekwini’s GHG emissions are the residential sector, the commercial sector and the eThekwini Administration. The business as usual (BAU) approach seems to be inappropriate if these amounts are contributing to the environment on yearly bases. The way in which Durban operates its business has to change in order to reduce impact on climate, hence by heavy reducing the carbon footprint. Energy become the vital starting point to strategically assess the business models, the upstream and downstream processes of production, and the impact of generating energy derived from Coal-fired plants. Durban has set strategic goals, objectives and responses for the energy sector generation within the jurisdiction of eThekwini Municipality. The details of the strategic mandate is discussed in section 3. Theme Energy

Strategic Goal Durban has a thriving sustainable energy sector. Where appropriate, renewable energy supplies a significant proportion of Durban’s energy needs, and energy is used efficiently by all sectors. All sectors have access to safe and affordable energy sources.

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--------------------------------------------------------------------------------------------------------------------------1. STRATEGIC ANALYSIS --------------------------------------------------------------------------------------------------------------------------1.1

Analyze the strategy of your department organization

A highly dynamic and challenging context for strategic management is that of emerging industries (Macdonald, 1985: 160). The renewable energy industry is often very new to the local government in South Africa. A proper assessment on the broader economic outlook and affordability would need to be determined in order to set clear strategic initiatives. The vision of the Durban Climate Change Strategy is: “To transform Durban’s governance, social, development and economic systems in order to effectively respond to climate change.” The following mission statement has been developed to support the Vision: “By 2020 there must be a fundamental change in Durban’s governance, social, development, and economic systems in order to contribute to the goal of limiting global average temperature increase to less than 2°C, minimizing dangerous climate change and adapting to climate change impacts. This will be achieved by increasing the adaptive capacity of the city, enhancing the integrity of the city’s environment and building a low carbon economy that provides sustainable livelihood opportunities and ensures wellbeing for all. All organizations and residents of Durban should be empowered to respond to climate change causes and its impacts.” The following objective has been developed to support the Vision in the context of energy: “Approximately 40% of Durban’s electricity consumption is supplied from renewable energy by 2030 in line with the national long term mitigation targets.” “Energy in Durban is used efficiently by all sectors” “All Durban’s energy users have safe access to suitable and sustainable energy forms to meet their needs”

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SRATEGY

Object iveOBJ ECTIV E

% of eThekwini Municipality’s electricity consumption is supplied from renewable energy by 30 in line with the national long terms mitigation targets

Develop and implement a road map for the supply of 40% of electricity from appropriate renewable energy technologies.

Create an enabling environment for local energy generation that allows for connection of local generators to the grid.

Develop dedicated institutional structures and capacity within the Municipality that can support the uptake of renewable energy.

2030

2030

2030

Figure 1.1: Durban Climate Change Strategy: Goals & Objectives 1.1.1

Strategic Management Process and Analysis

Public sector organizations have traditionally been responsible only to the government which established them, rather than the full range of stakeholders that a private sector may be exposed to. There are strategic challenges in the public sector in terms of deploying both large and small scale energy generation. In the context of eThekwini Municipality, the value chain process is long, which requires broader stakeholder engagements in order to make informed decisions. The strategic management process of any organization would include planning phase, implementation phase, and evaluation phase. Strategic analysis takes up a central role of the strategy process. It is a dynamic way of handling information about the internal and external environments of the company to cause and react on changes.

In the context of eThekwini Municipality, the Durban

Climate Change Strategy is formulated as the central document for all departments. A robust stakeholder group which include internal stakeholders is happening bi-monthly to test the market situation.

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EThekwini Municipality is the sphere of Government and the renewable energy sector is regulated by central organization (National Energy Regulator of South Africa). The output of strategic management process (Electricity) is the highly regulated commodity in South Africa. The strategic analysis of the DCCS will focus heavily on renewable energy and the models will include PESTEL, Porter’s Five Forces, and SWOT analysis. 1.1.2

PESTEL Analysis

The PESTEL analysis is the most useful tool for analyzing the external environment in the context of Political, Economic, Social, Technological, Environmental and Legal against the strategic goal of the organization. In the context of eThekwini Municipality, the Durban Climate Change Strategy is analyzed below taking into consideration the market situational analysis and other external factors. Political: Political factors likely to affect the strategy Government policies  Internal administration issues   Internal political issues Corruption  Technological: Technological changes that may affect the strategy Selection of technology  Maturity of technology  Research and development  4th Industrial revolution 

Economic: Economic factors likely to affect the strategy Capital intensity of the  strategy  Changes in inflation / interest Technical recession   International exchange rates Legal: Current and legislation that likely to affect the strategy International legislation  National legislation  Local regulatory framework   Industry specific regulations

Sociological: Cultural aspects likely to affect the strategy Public acceptance / opinions  Ethical leadership   Demographic  Consumer affordability Environmental: Environmental consideration that likely may affect the strategy Environmental Impact issues  Reduction of carbon footprint  Ecological regulations   Sustainability

Table 1.1: PESTEL Analysis

1.1.3

Porter’s Five Forces Analysis

Porter’s five forces model presents all the significant micro external environmental factors in a convenient framework. The purpose of this analysis is not simply to identify the presence of these forces, but to understand how they affect a particular organization (Grant et al., 2014). In relation to eThekwini Municipality, the porter’s five forces is extremely important to identify competitive industry and strategically make informed decisions. According to Grant et al., 2014, organizations that use this framework as the way to analyze competition and implement corporate strategy succeed significantly in the planning phase of the strategy. However, one might argue about this framework in relation to government strategic goals because by nature government can be somehow

8 be treated as nonprofit sector, hence, the collection of revenue remains in the gray area. Below is the PFF’s diagram:

Figure 1.2: Porter’s Five Forces Model 1.1.3.1Competitive rivalry within the industry: 

There are many players within the jurisdiction of eThekwini Municipality



Competitive tariffs from different key market players

1.1.3.2Threat of substitutes: 

Global energy trends in the renewable energy industry is becoming cheaper



Brand loyalty of customers

1.1.3.3Bargaining power of supply: 

Power purchase agreement has fixed costs over certain time



Our customers are encouraged to install Solar PV in their homes

1.1.3.4Bargaining power of customers: 

Establishment of solar calculator to encourage customers to learn about product



The product is simple and not related to high costs

1.1.3.5Threat of new entrants: 

Affordability of exercising capital and investment intensity



Obtaining licenses and adhering to regulations

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1.1.4 SWOT Analysis The SWOT (strength, weakness, opportunities, threat) analysis is very familiar to most people. The opportunities and threats component of this tool overlaps with the objectives of an external environmental analysis. The other two components (strengths and weaknesses) of a SWOT analysis consider the internal conditions in the organization (Grant et al., 2014). Strong points: What are our advantages? Adequate electricity grid infrastructure network  Corporate governance (Legal compliance)  Supply chain management policy and process   International strategic initiatives and leadership Governance for local communities and  accountability

Weak points: What are our drawbacks? Grid infrastructure for new developments  Skills and capacity issues for energy plants  Renewable energy is often new technology   Assessment of private grid connection on municipal network, revenue loss

Opportunities: What can we use? Optimizing revenue generation through  partnerships Inter-governmental relations framework and  processes Research and development focusing on clean  energy Implementation diversification strategy for  electricity

Threat: What can jeopardize us? Inadequate resources to deal with energy  Private business selling electricity to  municipal customers at the cheaper price Long lead times with procurement process   Slow Investment due to policy uncertainty

Table 1.2: SWOT Analysis As discussed in section 1 under vision, mission, and strategic objectives. The overall goal of the eThekwini municipality is outlined below: EThekwini Municipality Vision: To promote a safe, reliable, effective, efficient, coordinated, integrated, and environmental friendly land passenger transport system in South African urban and rural areas, and the southern African Region, managed in an accountable manner to ensure that people experience improving levels of mobility and accessibility. Mission

Motto Departmental mandate and linkages

To provide and manage a world-class transport system with a public transport focus, providing high levels of mobility and accessibility for the movement of people and goods in a safe, sustainable and affordable manner. Livable City by 2030 To develop the eThekwini Municipality as a leading local authority in promoting and implementing energy management to achieve a sustainable energy future for our business and residents of eThekwini Municipality. Other strategic linkages: Durban Climate Change Strategy: 40% of Durban’s electricity  consumption is supplied from renewable energy by 2030. EThekwini Integrated Development Plan: Due diligence use of  renewable energy and capacitating the areas of energy, climate change mitigation and adaptation National Waste Management Strategy: Act (No. 59 of 2008) states that  waste disposal must be minimized to reduce waste going to landfill and convertible waste to energy processes International Sustainable Development Goals: Goal 7of SDG highlights  the importance of supplying clean and affordable energy for all

10 residents and further encourage electricity consumption.

government

to

reduce

global

--------------------------------------------------------------------------------------------------------------------------1.2 STRATEGIC COMMUNICATION ---------------------------------------------------------------------------------------------------------------------------

1.2

Communicate

the

Department’s

strategy

to

your

division

(Sub-

Directorate) Strategic planning and communication is important in any organization in order to achieve quality of the planning. It is recommended that organization plans has to be agreed, time-framed and a lead team is assigned before the process begin. In the context of eThekwini Municipality, the technical task team (TTT) has been established to oversee the entire strategic management process. It consist of both political and administration team. 1.2.1

Strategic planning process

Step # Action Description of Step 1. Preparing to The DCCS is the very broad strategy that talks to different thematic areas. The plan communication process with other department must be transparent and be clearly understood. In this step of the planning process, eThekwini Municipality discuss the kind of plan needed and set specific time frame to achieve strategy objectives. Further, the resource effectiveness, internal & external stakeholder engagement groups are outlined. The decision making process related to strategic development is discussed with key decision makers of the affected department. The project management tool such Primavera is used to plan timeframe for each activity allocated to the specific stakeholder. An assessment of technical ability within the eThekwini Municipality is taken into consideration and human resource issues in terms skills and capacity is discussed. Most importantly, th...