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With a relevant example, explain programmed decision-making with application to Eskom.

With a relevant example, explain programmed decision-making with application to Eskom.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
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With a relevant example, explain programmed decision-making with application to Eskom.

Eskom Eskom, which is under unprecedented financial strain, received another blow on Thursday when the CCMA awarded employees a further 1.5% wage increase, backdated to July 2021. The company is under unprecedented economic strain as it burns millions of litres of diesel a day to keep the lights on. This comes on top of lower sales revenue due to load shedding and its generally unsustainable position due to high debt, low-cost recovery and unpaid bills by municipalities. The award relates to the 2020/21 year in which Eskom granted a unilateral 1.5% increase to employees in the central bargaining forum. These are unionised employees belonging to NUM, Numsa and Solidarity. The CCMA has added an additional 1.5% which will be backdated to 1 July 2021. This year, Eskom employees received a 7% increase after a damaging illegal strike that triggered stage 6 load shedding. At the time, Eskom said that the wage increase would add R1 billion to the wage bill. The additional 1.5% will add about R142 million to the annual wage bill. It took a year for the arbitration to be finalised. Besides the wage bill, Eskom faces several other challenges. For example, corrupt practices are still deeply entrenched at Eskom, particularly in procurement processes, says CEO André de Ruyter.
Transcribed Image Text:Eskom Eskom, which is under unprecedented financial strain, received another blow on Thursday when the CCMA awarded employees a further 1.5% wage increase, backdated to July 2021. The company is under unprecedented economic strain as it burns millions of litres of diesel a day to keep the lights on. This comes on top of lower sales revenue due to load shedding and its generally unsustainable position due to high debt, low-cost recovery and unpaid bills by municipalities. The award relates to the 2020/21 year in which Eskom granted a unilateral 1.5% increase to employees in the central bargaining forum. These are unionised employees belonging to NUM, Numsa and Solidarity. The CCMA has added an additional 1.5% which will be backdated to 1 July 2021. This year, Eskom employees received a 7% increase after a damaging illegal strike that triggered stage 6 load shedding. At the time, Eskom said that the wage increase would add R1 billion to the wage bill. The additional 1.5% will add about R142 million to the annual wage bill. It took a year for the arbitration to be finalised. Besides the wage bill, Eskom faces several other challenges. For example, corrupt practices are still deeply entrenched at Eskom, particularly in procurement processes, says CEO André de Ruyter.
De Ruyter was speaking at News24's inaugural On the Record leadership summit in Sandton on Thursday. He relayed the challenges he faced when he joined the power utility in January 2020, including the neglect of power stations and the cumbersome procurement processes that needed to be made more efficient. He spoke of the "residue" of corruption that still persists in the organisation. "The notion that corruption ended when the Gupta plane departed Lanseria airport... that is just not true. Corruption is still part of the organisation," he said. Notably, corruption manifests in procurement processes. He recalled how Eskom paid R80 000 for a knee-guard, which must be worn when welding, when it actually retails for about R80 or R90. De Ruyter said these forms of corruption stretch from the lower levels of the organisation to senior management levels and in the past, when his predecessors were in charge, to the executive level. Sources (extracted from): Paton, C. 2022. Eskom employees get another 1.5% wage increase. Available from: https://www.news24.com/fin24/economy/eskom-employees-get-another-15-wage-increase- 20220929 (accessed 25 October 2022). Omarjee, L. 2022. Corruption 'normalised' at Eskom, but sending people to prison will help. Available from: https://www.news24.com/fin24/economy/corruption-normalised-at-eskom- but-sending-people-to-prison-will-help-de-ruyter-20220901 (accessed 25 October 2022).
Transcribed Image Text:De Ruyter was speaking at News24's inaugural On the Record leadership summit in Sandton on Thursday. He relayed the challenges he faced when he joined the power utility in January 2020, including the neglect of power stations and the cumbersome procurement processes that needed to be made more efficient. He spoke of the "residue" of corruption that still persists in the organisation. "The notion that corruption ended when the Gupta plane departed Lanseria airport... that is just not true. Corruption is still part of the organisation," he said. Notably, corruption manifests in procurement processes. He recalled how Eskom paid R80 000 for a knee-guard, which must be worn when welding, when it actually retails for about R80 or R90. De Ruyter said these forms of corruption stretch from the lower levels of the organisation to senior management levels and in the past, when his predecessors were in charge, to the executive level. Sources (extracted from): Paton, C. 2022. Eskom employees get another 1.5% wage increase. Available from: https://www.news24.com/fin24/economy/eskom-employees-get-another-15-wage-increase- 20220929 (accessed 25 October 2022). Omarjee, L. 2022. Corruption 'normalised' at Eskom, but sending people to prison will help. Available from: https://www.news24.com/fin24/economy/corruption-normalised-at-eskom- but-sending-people-to-prison-will-help-de-ruyter-20220901 (accessed 25 October 2022).
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