DEVELOPING ETIITOPIAN SMALL BUSINESS ~~NAGERS THROUGH HANAGEMENT TRAINING A Thesis .,:.. , Presented to the Faculty of the Division of Business and Business Education Kansas State Teachers Co11ege, Emporia In Partial Fulfillment of the Requirements for the Degree Master of Science by Asheber Aberra December 1970 for the i.~I i 305834 ACKNO\'iLEDGHENTS The writer wishes to express bis gratitude to Dr •. Richard D. Brown, with a special note of recognition, and Dr. Raymond B. Russell for their valuable advice and suggestions in the writing of this study. Appreciation is also cordially extended to Dr. Robert M. Taylor for his cooperation and understanding. Grateful acknowledgment is given to the authorities of the Center for Entrepreneurship a.nd Management, the Ethiopian Government and the International Labor Organiza­ tion for their joint efforts to make this achievement possible. This study is dedicated to the noble cause of the Center for Entrepreneurship and Management. iii TABLE OF CONTENTS Page LIST OF TABLES xii Chapter 1. THE PROBLm~ AND DEFINITIONS OF TERMS USED 1 THE PROBLEt1 • • • • • • • • • • • • 3 Statement of the Problem • •••••••• 3 Importance of the Study • • • • • • • • • 4 Limitations of the Problem • • • • • • • • 5 . . . Some Assumptions • 5 DEFINITIONS OF TEP~S USED • • • • • • • 6 METHODS OF PROCEDURE • • • • • • • • • • 12 PLAN OF THE STUDY • • • • • • • • • • • • • 13 15 2. REVIEVl OF RELATED LITERATUHE • • • • • • • LIMITED RESOURCES • • • • • • • • • • • 18 Educated Elites ••••••••• 19 Ex-Military Officers • • ••••• 19 University Graduates ••••••••••• 19 High School Graduates •••••••• 20 CULTURAL DEPRIVATIOn • • • • • • • • • • • • 20 HOSTILE ATTITUDES •• • • • • • • • • • 21 MANAGEIUAL CONCEPTS • • • • • • • • • • • ,. 21 RESISTANCE TO CRITICISH • • • • • • •• 26 iv v Chapter Page · . . . . . . . · . .. Tied to the Land • • 29 · . . . . . . . . Managerial Monopoly 29 · . . . . . . . . . . . . . . . . Pricing 29 The Fair-Haired Technologists 30 • • • • • • · . . Cor~ers That Cannot be Cut • • • • • 30 . . . . . . . . . . . . . Ii. Flexible Mold 31 MANAGEMENT TRAINING AND THE SMALL BUSINESS MANAGERS IN DEVELOPING COffirTRIES • • • •• 41 The Managers and Management Training •. 42 How Does Management Training Benefit · . . the Small Business Manager? ••• 43 HOW IS THE SMALL BUSINESS MANAGERS' · . . ATTITUDE TOVlARD HANAGEHENT TRAINING? 46 What are the Specific Aims of · . . Management Training? • • • • • • • 49 EMERGING BELIEFS AND PRINCIPLES REGARDING MANAGER DEVELOPI1ENT IN PRIVATE ENTERPRISE • • • • • • • • • • • • • • •• 50 . . . . . . . . . . . . . . . . . . SUMHARY 54 . . . . . . . . . 3. UNDERSTANDING ETHIOPIA • 56 • • . . . . . . . . . . THE COUNTRY OF ETHIOPIA 56 · . . . . . . . . . . . . . . . . History 57 . . . . . . . ... . . . Government • 57 . . . · . . . . . . . . . . Geography 58 . . . . . . . . . . . . . . The country 58 . . . . . . . . . . . . . The people 59 · . . . . . . . . . . . . . . . . Economy 59 . . . . . . . . . . . . . . Agriculture 60 . . . . . . . . . . . . Industry • • 60 vi Chapter Page . . . . . . . Commerce • 61 . . . . · . . . . . . . . . Education 61 . . . . . . Miscellaneous ·63 . . ENTREPRENEURSHIP IN ETHIOPIA 63 · . . . · . . General Background • • • • • 64 . . . . . . Barriers to Entrepreneurship • 68 Cultural and sociological barriers • 68 · . . . . . . Fear in risk-taking 70 ~ · . . Lack of initiative and leadership 71 · . . Lack of economic factor--capital • 72 Lack of skill or business knowledge 73 · . . SMALL BUSINESS IN ETHIOPIA • • 74 What is a Small Business? 74 What are the Chief Characteristics of the Small Business Manager? ••• 75 The Role of Small Enterprise in tbe . Economic Development of Ethiopia • 75 . . . . . . . . Basic Problems and Needs • 79 . . . . . . . . . . . . . . . . Needs 83 . . Is There a Remedy to These Weaknesses? 83 What is There Promising for Small Enterprise Development in Ethiopi~? 84 Investment opportunity 85 · . . . . . . · . . Government policies 86 · . . Materializing the Policies • 87 • • Financial inducement for investment 87 . . . . . . . . . Government investment 88 vii Chapter Page Tariff protection • • • • • • • • • • ~ 88 · . . . . . Techno-economic services 89 · . . . . . Management training centers 89 4· DEVELOPHENT OF A MANAGEMENT TRAINING PROGRM1 FOR THE ETHIOPIAN SMALL · . . . BUSINESS MANAGERS • • • • • • • • • 91 PLANNING AND DESI GNING A HANAGEHENT · . IrRAINING PROGRAl1 • • • • • • • • • 92 . . Studying the Socio-Economic Condition 92 · . . . . Determining Training Needs • • • .93 MANAGEMENT TRAINING NEEDS SURVEY • 100 · . . . . The Survey Findings 103 . . · · . . . The number • • • • • -. 103 . . . . . . . Trade classification • 103 · . . · . . . . . Owner/managership 106 · . . . Type of business ownership • 107 . . . . . . ... . Age of the businesses 108 . . . · . . Employment force • • • • 109 . . . · . . Managers' qualifications 110 · . . . . . . . . . . Language ability. 112 · . . . . . . . . Course preference 113 . . . . · . · . . . Methods preference • 115 . . . . . . . Media preference • 116 . . . . . . . . . Time preference 117 ~ How many have attended the Center for Entrepreneurship and Management courses before? •.•••••••••• 118 How many of the interviewed managers want consultancy service? •••• 119 • • viii Chapter Page PROBLEMS OF THE ETHIOPIAN SMALL ENTERPRI SES AS TOLD BY THE OWNER/ MANAGERS • • • • • • • • • • • • • • 120 • • • · . . . . . . . Manufacturing Enterprises 120 . . . . . . Service Industries 122 • • • • • • . . . . . . . . . . . . . . . . Retailers 122 . . . . . . . . . . . . . . . Wholesalers 123 CONTm~TS OF THE MJU~AGEMENT TRAINING · . PROGRAI1 ••• • • • • • • • • • • 124 METHODS OF TEACHING MANAGEMENT COURSES •• • ?--27 . . TYPES OF MANAGEMENT TRAINING 142 • • • • . . . . . . . . . . · . . . FEED-BACK 151 ~ THE USE OF VI SUAL AIDS IN MANAGEHENT · . TRAINING • • • • • • • • •.• • • • 153 • • WHAT VISUAL AIDS TO USE, WHEN A!'ID HOW TO lJ~~ ~~}1 • • • • • • • • • • • • • • • • • 155 MANAGffi1ENT TRAINING FACILITIES IN · . . · . ETHIOPIA • • • • • • • • • • • • 157 The Institute of Public Administration (IPA) ••••••••••••••• 157 The College of Business Administration · . (CBA ) ••••••••••••••• 158 The Center for Entrepreneurship and . . . Management (CEM) ••••••••• 159 · . The objectives of the Center. 159 · . . . . . . . Fields of concentration 160 . . . . . . . . . . · . · . Services • • 160 · . . Avai1ablli t;r of services 161 • • • • • GUIDE FOR THE MANAGEMENT'TRAINEH/ · . . . . DIRECTOR • • • • • • • • • • • • 126 ix Chapter Page The Course Director and the Advisory Committee .'. • •• ••• • • • • • 163 · . . . . . . . . . The course director 163 . . . The advisory committee. 163 ... · . . . · . . . . . . PLANNING • • • • • 164 · . . . . . . INITIAL PLANNING 164 Lead Time 165 Determining Training Needs • 165 Deciding Type of Training 166 · . . . . . . . . . Scheduling Training 166 , Spread5ngtbe Word--Promotion 166 . . . . . . . Timing • . • • • • 167 · . . . . . . . . . . Promotional media 167 · . . . . . . . . . Directing promotion 169 · . . DETAILED PREPARATION • 169 · . . . . . Scbeduling • 170 · . · . . . . . Day of the week ,170 Hours of tbe day--morning •• • • • •• 170 · . . Hours of the day--evening 171 · . . . . . . . . . Time of training • • 171 . . . . Month of training 171 . . . . . . . . . . . Location 172 · . . . Choosing Instructors/Speakero 172 Briefing the Instructors/Speakers 173 Selecting Training Mat~rials and Equipment • . • • • • • • • 173 · . . . . . Planning Hospitality ••••• 173 x Chapter Page . . Achievement Dinner • 175 · . . p~Esm~TATION • • • • 175 · . . . . . . Encouraging Discussion 176 . Evaluation: Did the Training Meet the Needs of the Participants ••• • • • • 176 · . OPPORTUNITIES FOR ADDITIONAL EDUCATION • 177 . . . . . . . . . . . . Advanced Training 178 . . . . . . . . . . . Alumni Associations 178 . .. . . . · . Trade Associations • 179 ~ 5. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS • 180 . . . . . . . . . . . . . · . . SUMMARY 182 . . . . . . . . . . . . . . . . CONCLUSIONS 188 . . . . . . . . . . . . RECOMMENDATIONS 191 The Ethiopian Government and Its · . . · . Agencies • • • • • • • • • • • 192 · . Ministry of Education and Fine Arts 194 Haile Se1assie I University--Co11ege · . of Business Administration •• 194 · . . . . . . . . . Ministry of Finance 195 Ministry of Commerce and Industry 195 • • • Other concerned institutions • • • • 196 The Center for Entrepreneurship and, · . . Management • • • • • • • • • • • • 197 The Ethiopian Association of Small · . . Enterprises •• • • • • • • • • . 201 · . RECO~~DATIONS FOR OTHER STUDIES 202 • • c BIBLIOGRAPHY • • • • • • • • • • • • • • • • 203 • • • • •