ORGANIZATIONAL LEADERSHIP VS GOVERNANCE

Leadership is increasingly being discussed as part of the wider conversation on
governance in both private and public sectors. The notion of leadership being property contained within one individual by looking at ways in which leadership is necessarily integrated with governance structures, systems and processes is paramount.

While rules, systems and structures are certainly important, they are primarily the vehicles by which crucial values and behaviours are applied.
Good governance is therefore primarily a function of the behaviours and values of the organisation’s leaders and of theoverall culture of the organization.
Transparency and public scrutiny are tantamount points as far as leadership within a public sector environment is concerned.

The interconnectedness of leadership and governance are crucial in organizational management. Government administration, operating a democratic mandate as it does, requires governance structures that demand accountability. An external auditor and governance systems provide reliable frameworks from which to operate.
There are many examples within the public sector where leaders steer an organization not from “somewhere to somewhere greater but from somewhere to something that no longer existed”.
So governance is not merely about getting the structures right, it is about promoting culture and the behaviours of leadership.

There are governance challenges faced by an organization comprised of both elected representatives and ministerial appointments. The challenge of leading an organization that administers a huge budget requires a “hands off” approach. This calls for a consultative organization, with transparency, trustworthiness and a sense of shared risk at its centre. Issues of integrity, fairness and courage are essential is such organizations.
To succeed here one needs to act with responsibility, fairness, wisdom, care and respect are the behavioural issues that back up structural governance frameworks, hence leadership and good governance are things that organizations must talk about in order to achieve the organizational mission, vision a and objectives.
Types of leadership qualities demanded by public/private sector collaborations such as that undertaken by Manpower are important. The distinction between management and leadership as the difference between doing the same things but more efficiently (management) and taking the organization from one place to another (leadership).
The process of decision making, deciding the right things to achieve and the right way to do them, are the key to understanding an organization. Critical to success is communicating the agreed vision to all stakeholder groups and making sure that all the constituents align. Providing services for the public sector means working within legislative frameworks.
The crucial factor for success in this environment is transparency. In setting up the framework for working together, there is need of concerted effort in developing the vision “because the vision sets the direction for the leaders to talk about what is the right thing and how to set about doing that so that every single person in the organization understands how their job contributes to that success.”

For example understanding the governance structures of each of the organizations provides a means of working together and developing synergy rather than tension and conflict.
The nature of leadership is not static but a dynamic interchange between leaders and followers that travels along a continuum, offering opportunities for leaders to emerge within various forums at various times. The uniting factor in all leadership situations is the ability of leaders to role model good behaviour and to “not lose sight… of true north on the [moral] compass”.

Within any leadership tenure, problems will arise and it is the ability to take on difficult feedback and to welcome diversity of viewpoint that marks a successful leader. Further, the governance structure has to be fit for purpose, designed to work within the context, whether that be a political, community or corporate compliance context.
Communication is crucial in organizational management. By listening to personnel, the flow of information is maintained. A sign of an organization that’s struggling is where information is over-controlled, where inputs are not sought from a sufficient number of people.
An effective leader is one who may not be immediately identifiable. The best leaders are the ones you would not know were there. It’s the bad leaders that are always remembered.
The point in leadership is centred on trustworthiness, values and a sense of inclusiveness for the success of organizations across the spectrum of public, private and not-for-profit sectors.

The Secret of Innovation

"The biggest secret of innovation is that anyone can do it," says inventor, lecturer and author Scott Berkun. "By the end of this essay, you'll have all the secrets needed to do it yourself."
· Innovation
Today, America.gov discusses innovation and what it means for voters and America’s presidential candidates.Bringing Ideas to Life
§ Innovation starts with an idea. But not every idea is ready for market. Some work. Some don’t. And some need to be refined. The secret of bringing an idea to life is hard work.
§ Step One: Developing Ideas
Innovation is rooted in the belief that nothing is impossible. Innovators are not content to accept the way things are. They use their imagination to make the impossible possible.
An innovator asks, “Why do we do it this way? Can I come up with a better solution?”
Anyone -- from a scientist to a young student -- might identify something to improve the world or simply make life easier. But the idea is only the first step to innovation!

One of the most common reasons organizations create collaborative portals is to create ways to leverage the collective knowledge of the organization – avoid reinventing the wheel, ensuring that “we know what we know,” and all that. Truly innovative organizations – those poised for success in the global economy – recognize the importance of extending their collaborative portal to include what I call the “extended enterprise,” which includes not just the organization, but suppliers, partners, and customers as well.

Building Designers of Indigenous Leader Development

Building Healthy Leaders
In our last Letter, we looked at “Three Approaches to Leader Development”: the three ways that a leader development ministry might work with indigenous leaders. The third of these, and the most recommended for achieving true indigenization and contextualization, is the “Build the Designer Approach.”
In this approach, the outside leader development ministry serves indigenous leaders along these lines:
We will come and explore with you the basic, biblical principles of how leaders are built, and, on the basis of those principles, we will then work with you as you develop the strategies, methods and tools that you will use as you build your own leaders.
The following are the six specific things that the leader development ministries can do as they seek to build designers among indigenous leaders:
1. They should build them in their own spiritual lives, marriages, families and ministries.
There are two reasons for this. First, one of the greatest current needs of many Christian leaders – including those with the most leadership responsibility, and especially in areas of fast church growth – is for their own personal nurture, encouragement and strengthening. It can be challenging for them to receive this help from inside their own groups; so, this can be an appropriate and beneficial role for an outsider to play. Second, as the leader development ministries work personally with them, it provides an example for them to follow as they personally build their own leaders. Thus, the leader development ministries must be committed to genuine, caring relationships with the indigenous leaders and help them build their own lives. These personal relationships then become the foundation for healthy leader development partnerships.
Such relationships cannot be forced. Neither can they follow preset patterns, plans or timetables. Trust and respect must be earned and this comes through a sincere commitment to listening and learning. The leader development ministries must first get to know the indigenous leaders, hear what they have to say, and learn the current situation in their churches, their vision, and their genuine needs and struggles. This can be done through time spent together during meals or while visiting for several hours or days. It will take time for relationships to be built and trust to be established. Moreover, the exact manner in which relationships are nurtured may vary considerably culture to culture.
When the leader development ministries are sincerely committed to the indigenous leaders, and not merely trying to use them to fulfill their own agendas and expand their own influence, they will find that one relationship quickly and naturally leads to another, as the indigenous leaders introduce them to other leaders in a pattern of relational-networking that is deep, open, effective and lasting.
2. They should explore with them the core biblical principles of leader development.
This is quite different from imposing a particular curriculum or preplanned leader development “package” on the indigenous leaders. Instead, this involves working with them conceptually to enable them to internalize the fundamental biblical principles of leader development.Universal biblical principles, rather than established curricula, are the foundation of indigenous leader development. For example, one core biblical principle is, “Leaders build leaders.” Two practical implications of this principle are:
Leaders must take personal responsibility for building new leaders, and not only fulfilling their ministry responsibilities. Jesus personally built His emerging leaders, while He conducted His ministry; He did not delegate that responsibility to some “expert” institution.
It takes personal interaction with mature leaders to build emerging ones, and not only academic work in classrooms. Jesus took His emerging leaders “with Him.” His disciples’ personal interactions with Him in life and ministry profoundly transformed their lives and made them strong leaders.
While biblical principles will work in any culture or context, the specific application of the principles (the appropriate curriculum, etc.) will vary considerably. Consequently, the leader development ministries should not impose the form of application but, instead, explore with the leaders what those forms might be. The leaders themselves must design their own leader development forms. In short, the leader development ministries should “bring seeds, not potted plants.”
During this building process, the leader development ministries must nurture the indigenous leaders’ abilities to think and design. This could be done through specific training that is designed for this purpose, as well as through the personal examples of the teachers and mentors who model the thinking-designing process. The leader development ministries can also give the leaders challenging assignments to stretch them and cultivate their abilities to think about how leaders are formed and to design their own leader development processes.
This should be all done in a face-to-face context of much encouragement and prayer.
This exploration must, of necessity, be highly flexible, so it can accommodate not only cultural differences, but also maturity levels and even philosophical differences found among the indigenous church leaders.
It is also beneficial to create “design teams” – both within and across church networks – consisting of indigenous leaders and teachers who work together to design their own leader development.
3. They should coach them on an ongoing basis as they form and implement their own designs in their own environments.
This will happen in individual meetings with the leaders, in which the leader development ministries will discuss what the indigenous leaders are doing in their leader development, their specific designs, the problems they face, and possible solutions and strategies.This includes encouraging them, giving them “permission” to take risks and try new things, connecting them with others from whom they can learn, and debriefing with them their failures as well as their successes.
4. They should resource them with printed materials, examples and case studies of effective leader development in a variety of contexts, and other pertinent resources.
This is a different kind of resourcing than simply supplying the curriculum to use. The indigenous leaders are the ones who always must be in control of their own leader development. If they own it, they will implement it, use it and support it – they will take responsibility for it. Many leader development ministries have been genuinely puzzled when indigenous leaders initially embrace their materials and approaches with apparent excitement but never follow through with a systematic and enduring implementation. It was because they never truly owned it.
The leader development ministries cannot simply supply the indigenous leaders with the package that will do the job for them; instead, they must build their internal capacity to design.
5. They can network them with leaders from other groups and church planting movements, with whom they interact regarding leader development.
This can be done within their own nation or culture, or it could involve leaders from other nations or cultures. A vigorous sharing of models, ideas, applications, successes and failures is greatly beneficial to all participants in such networking.
In addition, new “design teams” spanning multiple movements and even nations can be established.
This kind of networking is not intimidating to the indigenous leaders since no one is trying to get them to “join” something or to embrace a specific doctrine or specific form of leader development – all the leaders are responsible for their own leader development work. Thus, deep friendships and even working relationships can be forged across the Body of Christ.
6. Finally, they can encourage them to conduct their own research and development of foundational models of Christian leadership and leader development, appropriate to their own culture and context.
In some cases, the indigenous leaders have been so convinced by the outside “experts” that they will never be capable of such a thing; so, this may require a lot of encouragement.
This is the ultimate expression of indigenization and contextualization – when the indigenous leaders create their own foundational models of leader development.
Throughout all this work, the leader development ministries must:
Aspire to an attitude of true servanthood, refusing to ever use the indigenous leaders in any way.
Strive to come as learners, not as experts.
Dialogue with the leaders, asking questions, learning from them, studying their culture, history, struggles.
Bring resources rather than agendas, principles rather than forms.
Embrace flexibility, since healthy leader development will look very different place to place. Moreover, it will change over time.
Honor the local leaders, never doing anything that would undermine them or their authority.
Affirm the local leaders’ right to all decision-making regarding their own leader development work.
Help the leaders, from the beginning, to be self-governing, self-supporting, self-propagating and self-designing in their leader development work.
Clearly, to do all the above will take considerably more time and involve more complex challenges than an outside leader development ministry showing the indigenous leaders “how to do it,” or simply doing it for them. This, however, is a true partnership of equals with neither domination nor dependency, and it is an appropriate answer to the current need of the church in much of the world.

Communication Networks

Network Functions
Organizations have their origins in communication networks. The functions of communication networks include:
Providing the means for coordinating the activities of individuals, relationships, groups and other subunits within the organization.
Providing mechanisms for directing the activities of the organization as a whole.
Facilitating the exchange of information within the organization, and
Ensuring the flow of information between the organization and the external environment in which it exists

Network size
One important differentiating characteristic of organization is the size. An increase in the number of individuals in a social unit dramatically increases the number of reciprocal communication linkages that are possible and necessary to connect the persons involved. This is a problem of major proportion within large organizations.
In small groups, people can generally talk to whom they wish, about what they wish.

Internal Networks: Message flows within organizations
Downward Message Flows formalized the lines of information that flow within organizations correspond closely with the lines of authority. The most familiar pattern of formalized information flow is from management to employees. Messages flow downward from persons in positions of relatively greater authority to others in the organization who report to them directly or through others. Messages transmitted downward generally serve one or more of the following functions:
1) Specifying a task to be performed
2) Providing instructions about how to perform a task
3) Providing information about the reason for a particular task that needs to be performed
4) Providing information about organizational policies or practices
5) Providing information about an employee’s performance and /or
6) Providing information about the organization and its mission.



Upward Message Flows
It is channeled from subordinates to superiors. Upward communication has several functions, including :
1) Providing input for decision making
2) Advising about subordinates’ information needs
3) Providing information regarding subordinates
4) Providing a potentially constructive outlet
5) Allowing superiors to assess the effects of previous downward communication and,
6) Helping subordinates cope with problems and facilitating their involvement

Horizontal Networks
Horizontal communication networks refers to the connection between individuals at the same level of authority within an organizational group, department, or division. Functions of horizontal information include:

1) Coordinating planning and execution of tasks
2) Providing for collective problem solving
3) Facilitating common understanding
4) Resolving differences and
5) Developing supportive and productive work relationships

Informal Networks
Other informal or emergent networks inevitably develop among individuals and subunits in any group or organization. These informal networks serve to link individuals to one another in much the same way as do formal networks. Informal link- ages come into being primarily because of the personal and social needs of the members.
Informal communication networks correspond closely in structure to the formal systems. For instance, a supervisor and his or her subordinate may regularly have lunch together and discuss personal and professional matters.
Informal networks:
1) Are generally face-to-face
2) Are less constrained by organizational and political restraints
3) Move messages rapidly
4) tend to be more the result of the situation than the people or their roles
5) Tend to develop more often within organizational workgroups, departments , or divisions than between them and
6) Generally transmit information that is accurate, though often somewhat incomplete, leading to misinterpretation.

External Networks: Relating to other organizations and publics
Inflow: Research and surveillance. All groups depend on various constituencies, stakeholders, or publics in the larger environment for their survival. External networks connect and respond appropriately to environmental change, threat opportunity or challenge. Organizations receive information necessary to identify and respond appropriately to environmental change, threat, opportunity or challenge.
Outflow: Advertising, Marketing, and Public Relations refer to activities that involve the transmission of messages into the environment with the aim of informing and systematically influencing these publics.

Mediated Communication Networks
Therefore, in most enterprises, mediated communication is essential. The traditions of the mail and telephone are now supplemented by fax, teleconferences, on-line computer systems, electronic mail e.t.c.

Organizational Communication Networks in Action
In actuality, the functioning of communication networks is exceptionally complex, often unpredictable, sometimes uncontrollable, and frequently chaotic. The message a manager or a subordinate thinks he or she is sending in a memo or through face-to-face conversation is often quite different than the message others receive. Distance generally increases the likelihood of message loss, distortion and the likelihood of distrust and suspicion.

It has been said that:
If communication can fail, it will
If a message can be understood in different ways, it will be understood in just the way that does the most harm
There is always somebody who knows better than you what you meant by your message
The more communication there is the more difficult it is for communication to succeed.

Organizational Culture
An organizational culture, is the sum of its symbols, events, traditions, standardized verbal and nonverbal behavior patterns, “folk tales”, rules, and rituals that give the organization its character or “personality”.


Origins of Organizational Cultures
Symbols are one important element of the culture of many organizations. Trademarks, buildings, office furnishings, and uniforms are examples of symbols that are often a visible facet of an organization’s culture.
Space is another important organizational symbol. In many organizations, rules are developed for use in allocating space to employees, such that the location, and décor of an employee’s office or workspace reflect his or her position.
Events like “the annual picnic”, “ the senior prom”, “the annual Christmas party” , or “the management retreat” also contribute to and reflect an organization’s culture.
The language used to talk about an organization is also a reflection of, and at the same time an influence on, its culture. One framework distinguishes between corporations based upon whether their cultures are like academies, clubs, fortresses, or baseball teams, based on the language used by its employees.

Organizational “folk tales” or “stories” are another important facet of an organization’s culture. Most organizations have a collection of “ favorite” stories about notorious past and present personnel, organization achievements of failures, and memorable moments in the life of the organization.

Functions of Organizational Cultures
Organizational cultures serve many important communication functions for those who create and participate in them, including:
Providing people within these units with a sense of individual and collective identity
Contributing to the establishment of structure and control
Aiding with the socialization of members to the customs and traditions of the organization, and
Fostering cohesiveness among members of the organization

Assimilation, Socialization, and Innovation in organizations
Becoming a member of an organization requires an initiation into the culture through processes referred to as socialization and assimilation. The formal communication networks play a role in this process, but informal networks are even more to “ learning the ropes”. Stability within organizations is fostered when members of the unit carry cultural traditions forward with them in time. Innovation and change call for departures from tradition. Cultural continuity and cultural innovation are equally necessary to the survival and prosperity of organizations over time.

Organizational Climate
An organization’s climate is the atmosphere or tone members of the organization experience as they go about their daily routines. In very general terms, we can talk about climates being ‘positive” or “negative”. Positive –supportive-climates have been described as having the following characteristics:
Supportiveness of superior-subordinate communication
Perceived quality and accuracy of downward communication
Perceived openness of the superior-subordinate relationship
Opportunities and degree of influence of upward communication and
Perceived reliability of information from subordinates and coworkers.

Generally speaking, a positive climate and high levels of satisfaction will be reflected in the positive treatment of clients and consumers, as well as colleagues. Organizational climates, whether “positive” or “negative”, are self-perpetuating.

Implications and Applications: Organizations and their Publics
Organizations have multiple constituents, or publics. In many respects, an Organizations’ most important constituents are internal. Each staff member, work group, or division has contribution to make to the organization as a whole. Organizations also have a number of external publics-customers and suppliers. Organizational quality can be evaluated based on: a) technical quality b) administrative quality and c) relationship quality.
“Insider” assessments of the quality of a college for example are generally based on an evaluation of administration, research, teaching, and service, using quality for granted, or are unable to assess it.
The image of an organization with its external publics is influenced by mediated communication and by face–to-face contact with representatives of the organization. From this perspective, every contact between an employee and a “constituent” is an encounter that either contributes to or detracts from the perception and the reality of organizational quality. Interactions between representatives of an organization and its external publics are critical communication links that are vital to the continued viability of any organization.

Organizational Control
Management Functions
Organizational systems need a mechanism for planning, decision making, financial oversight, monitoring the activities of the organization, coordinating activities of its component parts, evaluating the organization’s functioning in comparison with other organizations and the environment and so on. These are typically termed management functions. Management functions may be very centralized, or authority can be diffused in varying degrees among members of the organization, providing for what is termed participatory management.

Human Nature and Organizational Communication
Traditionally scholars have identified three main schools of thought regarding human nature. Each of the three suggests a set of principles and assumptions about how individuals behave in organizations, and each has its own implications regarding the function management and communication should serve.

The scientific Management School
In this view, humans in organizations are seen as being motivated primarily by a desire for money and material rewards. A clear and specific organizational structure, job specialization, fair rewards, defined rules, and distinct lines of responsibility and authority are regarded as basic. The purpose of communication is to provide information to employees that will clarify the tasks they are to perform and to reward them monetarily, according to their accomplishments.

The Human Relations School
In this school of thought, communication is seen as a means to facilitate social interaction and participation in organizational decision making. Achieving this objective is regarded as the primarily function of management.

The Systems School
Human behavior in organizations is seen as being shaped by the organization- its goals, roles, rules, culture, climate, networks, and so on. Communication is viewed as the process through which organizations emerge and evolve and the basis upon which individuals, relationships, groups, and organizations relate to their surroundings and to one another. Communication also serves in decision making and control of the system as a whole in its efforts in its efforts to adapt to its environment. In this perspective, management functions emphasize the need for effective communication and information systems to facilitate interaction, coordination and adaptability.

Organization and Organizational Communication: Definitions
The Organization

An organization may be defined as a group of individuals organized for the achievement of specific goals. What is important is that these individuals operate within a defined structure. Each person’s role and position within the hierarchy is clearly defined. Others are more loosely structured: roles may be interchanged, and hierarchical status may be unclear and relatively unimportant. The goal of most organizations is to make money, but a variety of subordinate goals must be achieved if this ultimate goal is to be reached. Goals of both the organization as a whole and the individual workers are achieved largely through the formal and informal communication that takes place within the organization.

The Communications
Organizational communication refers to the messages sent and received within the organization’s formal and informal groups. As the organization becomes larger and more complex, so do the communications. In a three-person organization communication is relatively simple, but in an organization of thousands it becomes a highly complex and often specialized function.
Rogers and Rogers have identified four crucial communication roles:
The gatekeeper is the person who controls the messages that get into the system or that get to any one member of the organization.
The liaison is the person who connects two subgroups within the organization but does not belong to either.
The opinion leader is the one to whom others look for guidance and direction. This is the person who influences others.
The cosmopolite is the one who communicates often with many individuals from various subgroups throughout the organization.

Formal and Informal Communications
Organizational communication may be both formal and informal. The formal communications are those sanctioned by the organization itself and are organizationally oriented. The informal communications are socially sanctioned, they are oriented not to the organization itself, but to the individual members.

Approaches To Organizations
The Scientific Approach
This approach holds that scientific methods should be applied to organizations to increase productivity. Scientifically controlled studies will enable management as the science in order to identify the ways and means for increasing productivity and ultimately profit. Communication is viewed as the giving of orders and the explaining of procedures and operations. Only the formal structure of the organization and the formal communication system are recognized.

The Human Relations Approach
The human relations’ approach developed as reaction against the exclusive concern with physical and the exclusion of psychological and social factors in measuring organizational success. One of the principal assumptions of the human relations’ approach is that increases in worker satisfaction lead to increases in productivity; a happy worker is a productive worker. Management’s function therefore is to keep the workers happy. The major problem was that the approach was based on an invalid assumption- namely that satisfaction and productivity were positively related. They were in some cases, but certainly not in all.

The systems Approach
The systems approach combines the best elements of the scientific and human relations’ approaches. It views an organization as a system in which all parts interact and in which each part influences every other part. The organization is to be viewed as an open system; open to new information, responsive to the environment, dynamic and ever changing. A closed system in contrast is closed to new information, unresponsive to the environment, and static or unchanging. Communication is what keeps the system vital and alive. If a system is to survive and if its parts are to be coordinated and its activities synchronized, communication is essential.

The Cultural Approach

A contemporary approach to organizations holds that a corporation should be viewed as a society or a culture. Much as a social group or culture will have various norms or rules of behaviors, roles, heroes, and values, for example, so does an organization. In this approach, then an organization is studied to identify the type of culture it is and its specific norms or values. The aim of such an analysis is to enable us to understand better the ways the organization functions and the ways in which it influences and is influenced by the members (workers) of that organizational culture. The corporation is here viewed as a social group or culture, organized around a similar set of values and goals with workers who have a kind of citizenship in the corporation. Communication in this approach in fact defines and constructs the organization, its structures, and its functions.

Excellent companies do the following:
They have a bias for action
They stay close to the customer
They encourage leaders who are autonomous and entrepreneurial
They achieve productivity through people
They encourage hands-on management
They stick to what they know
They have simple organizational structures and are lean at the top
They are decentralized (loose) and centralized (tight)

Communication Networks
By a network, we mean the channels through which messages pass from one person to another. These networks may be viewed from two perspectives: First, small groups left to their own resources will develop communication patterns resembling these several network structures. Second, these networks may also be viewed as formalized structures established by an organization for communication within the company.

The Network Structures
The wheel: The wheel is characterized by the centralized position of a clear leader, who is the only one who can send messages to all members and the only one who can receive messages from all members.
The Y: The y pattern is somewhat less centralized than the wheel, but more centralized than some of the other patterns.
The Circle: The circle has no leader; here there is total quality. Each member of the circle has exactly the same authority or power to influence the group.
The Chain: The chain is similar to the circle except that the end members may communicate with only one person each.
The All-Channel: The all-channel or star pattern is like the circle in that all members are equal and all have exactly the same amount of power to influence others, except that each member in this pattern may communicate with any other member. This pattern allows for the greatest member participation. Communication through these networks occurs often but not always face-to-face. Messages may be written in informal memos or in formal letters and reports.

Communication flow in organizations
It is useful to discuss communication in organizations in terms of the direction in which it flows. There are upward downward communication where (also called vertical) lateral and serial communication where (also called horizontal).
Upward Communication
Upward communication refers to messages sent from the lower of the hierarchy to the upper levels for example, line workers to manager. Problems with upward communication is extremely difficult to handle. One problem is that messages traveling up the ladder are often messages higher-ups want to hear.
Downward Communication
Downward communication refers to messages sent from the higher levels of the hierarchy to the lower levels, for example, messages sent by managers to workers. Perhaps the most obvious example of downward communication is the giving of orders. Problems with downward communication are that management and labor often speaks different languages, and a lot of managers simply do not know how to make their messages understandable to workers.

Lateral Communication
Lateral communication refers to messages sent by equals to equals- manager to manager or worker to worker. One obvious problem with lateral communication is the specialized languages that divisions of an organization may develop. Such languages are often unintelligible. Another problem is the tendency of workers in a specialized organization to view their area as the one crucial to the health and success of the company.
Serial Communication
Serial communication refers to messages sent along a chain of people. Problems with serial communication have to do with leveling, sharpening and assimilation. In leveling the number of details is reduced. At the same time that details become omitted in leveling, other details become crystalized and heightened in a process called sharpening. Assimilation at the end refers to the tendency of our own attitudes, prejudices, needs and values.

The Grapevine

Grapevine messages is a type of serial communication but having some additional properties that merit its separate consideration and do not follow such formal lines. Often it is difficult to discover the source of the original message, which is why it is so difficult to ascertain the truth or falsity of grapevine information. The grapevine, according to organizational theorist Keith Davis seems most likely to be used when a) there is great upheaval or change within the organization b) the information is new and no one likes to spread old and well-known information 3) face-to-face communication is physically easy. Keith Davis observes and advocates that “a lively grapevine reflects the deep psychological need of people to talk about their jobs and their company as a central life interest. Without it, the company would literally be sick”.

Information Overload

In nowadays, with the explosion of technology, information overload is becoming one of our greatest problems. Information is being generated at such a rapid rate that it is becoming extremely difficult to keep up with all that is relevant to one’s job. Invariably, each person must select certain information to attend to and other information to omit. Another major cause of overload is that many organizational managers disseminate information as a substitute for doing something about a problem or issue.

BANKING IN UGANDA

Government-owned institutions dominated most banking in Uganda. In 1966 the Bank of Uganda, which controlled currency issue and managed foreign exchange reserves, became the Central Bank. The Uganda Commercial Bank, which had fifty branches throughout the country, dominated commercial banking and was wholly owned by the government. The Uganda Development Bank was a state-owned development finance institution, which channeled loans from international sources into Ugandan enterprises and administered most of the development loans made to Uganda. The East African Development Bank, established in 1967 and jointly owned by Uganda, Kenya, and Tanzania, was also concerned with development finance. It survived the breakup of the East African Community and received a new charter in 1980. Other commercial banks included local operations of Grindlays Bank, Bank of Baroda, Standard Bank, and the Uganda Cooperative Bank.
During the 1970s and early 1980s, the number of commercial bank branches and services contracted significantly. Whereas Uganda had 290 commercial bank branches in 1970, by 1987 there were only 84, of which 58 branches were operated by governmentowned banks. This number began to increase slowly the following year, and in 1989 the gradual increase in banking activity signaled growing confidence in Uganda's economic recovery.
BANK OF UGANDA
The Bank of Uganda was established on 16 May 1966 as the bank of issue, undertaking the function previously served by the East African Currency Board in Nairobi. The government-owned Uganda Commercial Bank (UCB) provided a full commercial banking service, complementary to and in competition with other commercial banks in the country. Uganda was rocked by a banking scandal in 1989. Lack of public confidence in the system was compounded by a prolonged period of high inflation, which caused rapid erosion in the value of money, and by the liquidity and insolvency problems of some banks. These problems remained unresolved through the 1990s.
In 1998, the financial sector included the Bank of Uganda together with 18 commercial banks, 2 development banks. In addition to the UCB, major commercial banks included Crane Bank Limited, Stanbic, Bank of Baroda, Standard Chartered Bank, Nile Bank, and Barclays Bank. The Uganda Development Bank is a government bank that channels long-term loans from foreign sources to Ugandan businesses. The East African Development Bank, the last remnant of the defunct East African Community, obtains funds from abroad for Kenya, Tanzania, and Uganda.
The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $517.6 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $938.8 million. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 9%.
The government supported the establishment of a stock exchange in Kampala, and it inaugurated the Capital Markets Authority in 1995/96. The initial stage of capital market development concentrated on the interbank market and the sale of Treasury bills, which the Bank of Uganda started selling in 1992 at weekly auctions. The exchange was officially opened in 1997, but in 1999, had not been active since inception
Uganda's formal financial system is improving after undergoing a significant shakeout. The system includes Uganda's central bank (the Bank of Uganda, or BOU) sixteen commercial banks, and two development banks. Basic problems leading to the shakeout included insider lending, loose supervision, and excess supply. Significant banking oversight lapses occurred, and the BOU has sought to build its capacity for review of commercial banking operations. The Uganda commercial bank was sold to stanbic bank of South Africa. New investors allowed entry into the sector must offer completely new financial services or take over existing banks. A deposit insurance fund with contributions from the GOU and banks has been put in place to protect depositors. The soundness of this fund is unknown.
Up to the early 1990s, Uganda’s financial structure was characterised by government controls and instability, leading to financial repression and lack of development in the sector. The sector was, as a consequence, dominated by commercial banks, which are mainly concentrated in urban areas. Financial intermediation was restricted to the mobilisation of short-term savings and advancing credit to low-risk businesses with quick returns. In 1993, The Bank of Uganda Statute and The Financial Institutions Statute were passed by Parliament, requiring, among other things, commercial banks operating in Uganda to have a minimum paid up capital of Uganda shillings (Ushs) 500,000 (for the locally-owned banks) and Ushs 1bn (for the foreign-owned banks). The new capital requirements were made effective from the end of December, 1996. Between 1998 and 1999, however, four commercial banks (three of them locally owned), were closed because of insolvency originating from a number of causes. It is not clear whether the new capital requirements played a part in setting off or precipitating the crisis. The results of this study show that whereas there was impressive improvement for the banking system as a whole, it seems that these new guidelines had a different impact on foreignowned and locally-owned commercial banks. Performance of the foreign banks remained quite steady or even rapidly improved while the local banks suffered massive declines in their profitability and accumulated more non-performing loans.
Keywords: Banking crisis, Financial repression, Uganda, Uganda shillings