Group Assignment Managerial Economics

ARBA MINCH UNIVERSITY SCHOOL OF POST GRADUATE STUDIES COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF MANAGEMENT Course title: MANAGERIAL ECONOMICS

Title: ASSESSING PROBLEMS IN ARBAMINCH TOWN MUNICIPALITY Name

ID No.

1. Mahedre Zenebe

PRBE/047/11

2. Iyasu Samuel

PRBE/042/11

3. Mengistu Markos

PRBE/056/11

4. Mesfin Sakato

PRBE/061/11

5. Negash Fantahun

PRBE/066/11

6. Samuel Bekele

PRBE/070/11

Submitted to: D/r. Mebratu Alemu(Phd) March, 2019

Contents ABSTRACT ............................................................................................................................. iii CHAPTER ONE ........................................................................................................................ 1 1. Introduction ..................................................................................................................... 1 1.3 Objective of the Study ..................................................................................................... 4 CHAPTER TWO ....................................................................................................................... 5 2. LITERATURE REVIEW ............................................................................................... 5 2.1 Urban Land Management ................................................................................................ 5 2.1.1 Land management in Arba Minch .............................................................................. 5 2.1.2 Aspects of land management in Arba Minch ............................................................ 5 2.1.3 Management of land information system ................................................................. 5 2.1.4 Methods of Land Acquisition by Residents .............................................................. 6 2.1.5 Informal settlement and land management ............................................................... 6 2.2 Infrastructural development ............................................................................................. 6 2.1 Type of infrastructure: ................................................................................................. 7 2.1.1 Infrastructural Development of Arba Minch Municipality....................................... 7 2.3 Employee turnover ........................................................................................................... 8 2.3.1 Voluntary turnover Vs. Involuntary turnover ........................................................... 9 2.3.2 The Relationship between Working Environment and Turnover ........................... 10 2.3.3 The Relationship between Compensation/Reward and Turnover .......................... 10 CHAPTER THREE ................................................................................................................. 12 Discussion and analysis part: ................................................................................................... 12 3.1

Urban Land management problem: ........................................................................... 12

3.2

Infrastructure Development....................................................................................... 15

3.3

Employee Turnover ................................................................................................... 18

CHAPTER FOUR .................................................................................................................... 21 4. CONCLUSION AND RECOMONDATION ...................................................................... 21 4.1Conclusion: ......................................................................................................................... 21

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ABSTRACT The more the development of the economy, the more the significance of managerial economist. To keep pace with this increasing economy, it becomes imperative for the organizations to adopt new management economic principle and techniques. It is also important for the organizations. This paper seeks to obtain an overview of managerial problem and their solution in Arba Minch municipality. Data has been gathered by primary and secondary sources. this trend continues, organization will lag behind in the race of National competitiveness and comparative advantages. It is therefore, some policy recommendation has been made to improve and fasten the managerial economics.

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CHAPTER ONE 1. Introduction Arba Minch Municipalities primarily regulate land use and environmental protection, public order, control of the implementation of municipal by-laws, the provision of public services and municipal authorities. Good governance is important to smoothly running any types of activities to achievement a set or certain objectives. In Arba Minch town there is different activities which is related to distribution of resources that means the expansion of infrastructural service and administration of land and fairly distributed to the community of the town. In general good governance is the base for countries sustainable development and growth. Good governance means that processes and institution to produce results that meet the need of society while making the best use of resources at their disposal. The concept of efficiency in the context of good governance also covers sustainable use of natural resource and the protection of the environment. Arba Minch Municipality is important to the society of the town by keeping environment condition, service offered to the society like urban land management, infrastructural development, house administration, healthy management, fire-fighting, waste management and transportation etc. AMM regulate good governance by keeping the meet needed of the society. Urban land management is closely linked with planning for management of land. It means that the manager assign; which land is conformable for housing, enterprise and also investments. It is the process of managing the use and the development of land resource. In Arba Minch town, consist of four sub-cites like; nechesar, abaya, sekela, and secha. Among different roles and responsibilities of the municipality or the central issue of municipal task is the management of urban land. These is the most challenging task of land planning and managing bodies because there are competing and conflicting interests with respect ownership and use of urban land. From other aspect service offered by municipality is infrastructure development. Infrastructure development involves fundamental structures that are required for the functioning of community and society. This is usually refers to structure like rods, water supply, sewers, electrical grid, telecommunications, renewable energy and so on. This structure tends to be high-cost investment; however, they are vital to a country's economic development and prosperity. The infrastructure investment can boost the economic growth. And the reconstruction of public infrastructure is an important ingredient for recovery, sustained

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economic growth and poverty reduction. It helps improvised affected communities by improving their access to essential infrastructure like indoors cobblestone rug easing, access to water supply schemes; this are also called social over head capital. . In Arbaminch municipality urban land management has become a serious challenges face obstacle to serve the society and promote growth. The problems land management in Arba Minch town such as land related conflict and management, archaic land information management, informal land acquisition, illegal squatter settlement, supply of land, budget and employee turnover. These problems are the causes for serving the society and support the socioeconomic condition given by the municipality. Among the problem we emphasis or solve the problem of lack supply land, because land has become a serious challenges since it is the space over all human activities carried out and use conformable for housing ,enterprise and also investments. Illegal squatter settlement, informal land acquisition, archaic land information, those create lack of land supply. The other problem like budget and employee turnover is indirectly affecting the land supply. Due to this, solving the problem of land supply is indirectly solving the other problem exit in urban land management. 1.2 The major problems which are selected to be decided on it by using the decision making steps:  Problem-1, shortage of land supply is seriously affecting the organization to serve the society. Infrastructure is the fundamental facilities serve to the society. Despite monumental contribution, as like urban land management, Arba Minch Municipality faces some problem that hinders the expansion of infrastructure in the town. AMM unable to fulfill the development accessible of land utilize and infrastructure to the society. The problem like do note expose cobblestone carpet around all areas, there is lack of external lamp and sanitation control. The reason why AMM has not expose infrastructure service to the city is; because, lack of available supply like cobblestone peppermint; the acute shortage of skilled man power and employee turnover. And Shortage of budget or fund those are the main problem to reach the objective. From the above problem, this paper was taken to solve problem lack of supply cobblestone peppermint as the main problem. Lack of supply cobblestone was the major problem to serve

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the public community and to promote the economic growth. So to solve this issue is the main point of this paper.  Problem-2, Lack or shortage of supplying cobblestone peppermint is hindering the Organization to serve the society in appropriate manner,  Problem-3, higher rate of employee turnover existing in the organization.

Throughout the world, every organization faces a high degree of employee turnover or in other means, the movement of employees from one organization to another organization increases from time to time. Therefore, employee turnover harms /costs the organization why because when one employee leaves the organization another new employee will be hired to fill the position of the previous employee. In addition to that, it reduces the moral of the existing employee and it reduces the productivity of the organization. So in order to reduce employee turnover human resource manager of any organization should develop a retaining strategy in order to stay an employee within their organization. Specifically we have observed/visited Arba Minch town municipality by applying unstructured interviews and majority of the employees of the municipality told us that, every year the municipality were facing a high degree of employee turnover. The employee leaves the municipality because of different reasons. Among the reasons some of them are; inadequate salary/ compensation and benefits, the working environment is not suitable for the employees, seeking for additional opportunity and lack of promotion and the like. As we know municipalities should play the significant role in the development of the town, but employee turnover is the serious problem facing arbaminch town municipality to achieve its success. Even if it is difficult to avoid employee turnover at all; know by considering the impact of turnover on the municipality we are going to decide how to reduce employee turnover. As we know arbaminch town municipality has so many functions in order to gain sustainable development of the town, For instance; land development, fire-fighting, waste management, infrastructures, transportation, water and sewer and so on are the main functions of the municipality. While rendering this service for the community arbaminch town municipality faces an employee turnover and in return, this reduces the services to the people by the employees and finally leads to poor governance.

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So we will follow the decision making process to decide on how to reduce employee turnover in arbaminch town municipality. Before we are going to the decision making process we should set our objective why we are conducting such kind of study. Our objective is to know why the employee of the municipality leaves their organization and knowing how to reduce the out flow of the employees. 1.3 Objective of the Study Assessing the problems and solving the existing problems in Arba Minch municipality in order to enhance the good governance to the society. Specifically, the objective of this study is: 1. To recommend the municipality of Arba Minch town to minimize its problem of land shortage and advice to practice on fair distribution of land to the community of the town. 2. To enhance the supply of cobblestone peppermint and expand infrastructural service to the community by creating social benefit and lasting good governance in the town. 3. How to reduce employee turnover and its related cost within the organization.

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CHAPTER TWO 2. LITERATURE REVIEW 2.1 Urban Land Management Urban land management is closely linked with planning for management of land. Which means that the manager assign; which land is conformable for housing, for enterprise and also for investments, it is the process of managing the use and the development of land resource. 2.1.1 Land management in Arba Minch Arba Minch is a town in south nation’s nationalities and people’s regional state. It consists of four administrative

sub-cities.

These

are

seklla,

shecha,

abaya

and

nechsar.

Among different roles and responsibilities of the municipality or the central issue of municipal task is the management of urban land. These is the most challenging task of land planning and managing bodies because there are competing and conflicting interests with respect ownership and use of urban land . 2.1.2 Aspects of land management in Arba Minch There are some aspects of land management in Arba Minch town. These are land management information system, land related conflict and management, method of land acquisition by resident, informal settlement and land management and also informal land transaction 2.1.3 Management of land information system The management of land information system is a major and integral component of land management and administration for urban center a in particular. Land related information is important resources that must be manage efficiently in order to maximize potential benefit that can be obtained from land. (UN-ECE 2005). According to Lanba (2005) land information management strategies are concerned with the effective management of land information resource to achieve specific objective and improve decision making in urban centers. Land registration in the town has started two years after

its establishing as a town in

1965.However; the problem is that the exact number of plots in the registration was unknown. This clearly shows that poor registration and documentation and data management system of the town owing to weak technical financial and human resource, Lack of coordination and commitment of the town of the municipality. Even at present data on land in Arba Minch municipality are disorganized and not standardized; So that it is difficult to making a decision and also it happens a conflict between a community because of poor land administration.

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2.1.4 Methods of Land Acquisition by Residents Method of land acquisition is an important element to study land management aspects of the town. The method by which land is acquired by the town of Arba Minch community is through land allocation by municipal, informal allocation of land, inheritance and gift from relatives and also renting. From this method of land acquisition informal land acquisition is the most practiced activities in Arba Minch town is 2.1.5 Informal settlement and land management Informal settlement in the form of squatters and illegal settlement has been observed in Arba Minch town particularly in sikella, secha, and abaya sub cities. The extent of informal settlement in the remaining one city of the town was minimal Expansions of illegal settlement in the town one of the major emerging land use planning and measurement problem facing the municipality. An informal settlement is taken to mean a residential area where houses are developed/constructed without seeking approval/permission from the concerned local authorities to build resulting into having inadequate infrastructure and services in that settlement. They are the unplanned residential areas which are usually inhabited by the urban poor who may or may not have direct legal claims on the land that they occupy. 2.2 Infrastructural development Infrastructure is the basic physical system of nation. Infrastructure development involves fundamental structures that are required for the functioning of community and society. This is usually refers to structure like rods, water supply, sewers, electrical grid, telecommunications, renewable energy and so on. This structure tends to be high-cost investment; however, they are vital to a country's economic development and prosperity. The infrastructure investment can boost the economic growth. And the reconstruction of public infrastructure is an important ingredient for recovery, sustained economic growth and poverty reduction. It helps improvised affected communities by improving their access to essential infrastructure like indoors cobblestone rug easing, access to water supply schemes; this are also called social over head capital. Social overhead capital contributes to enhancing productivity and assists in the realization of the potential ability of human capital, and creates situations in which that potential can fully function. It also contributes directly and indirectly to improving the safety and quality of people’s lives. Within the scope of infrastructure, electric power, ports, roads, and telecommunications are often used as the services and intermediate goods that are essential for

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the productive processes of private sector. These do not directly produce good and service but induce production in agriculture, industry and trade by generating external economies 2.1 Type of infrastructure: Broadly speaking infrastructure can be divided in two categories: Economics infrastructure and social infrastructure. Economic infrastructure means those basic facilities and service which directly benefit the process of the production and distribution of an economy. Irrigation, power, transportation are the example of economic infrastructure on the other hand means those basic activity and service which, in addition to achieving certain social objective, indirectly help in the economic activity. For example education does affect economic activity like production and distribution but indirectly helps in the economic development of the country by producing skilled man. So education, health service, sanitation and water supply etc are the example of social infrastructure. Type of Infrastructure

Economic Infrastructure

Social Infrastructure

 

 

Transportation Communication. etc

Water supply Sanitation. etc

Figure 1 Type of infrastructure 2.1.1 Infrastructural Development of Arba Minch Municipality Arba Minch municipality urban land development and management in support of socioeconomic growth has long been recognized. Arba Minch municipality gives the provision of infrastructure service to meet the demand of business, households and other users. The municipality of serve the community by giving sanitation, greenery, access to clean water, Indore cobblestone carpet and electricity (Exterior lighting). The infrastructure services in urban development contribute high to poverty reduction and improvement in living standard in several ways. First, these services have strong and direct linked to improve healthy income. Water-related illness account for a very substantial burden of disease in the city, exacting high cost interims of death, malnutrition, stunting and reduce productivity. Improving water and sanitation facilities reduce this cost substantially. Electricity

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permit improved healthy service deliver in several way; electric function of healthy permit safe storage of vaccines and medication and modern energy source permit substantial reduction in morbidity associated with indoor use of wood fuels for cooking. The indoor cobblestone and transport service has been shown to permit women and children better access to health care service. Second, access to infrastructure services is also often associated with improved educational outcomes. Electricity is strongly associated with improvement in adult literacy as well as primary school completion rates, as it permits reading and studying in the evening and early morning hours. Lack of improved water facilities can work against educational outcomes, especially for girls who do not attend school for lack of adequate sanitary facilities or because of the demands of household chores like collecting water. Access to all-weather roads has been shown to be a strong factor in increasing primary school attendance, particularly in rural areas. Arba Minch Municipality utilizes economic growth of the country by developing infrastructural service. Infrastructure services also contribute to improved productivity of business, households and government services. The time spent obtaining water and fuel or traveling to markets and service centers is often significant. When household connections are available and transport and telecommunications services are accessible, household members, particularly women and children, can engage in more productive activities. The expansion in quantity and improvement in quality of infrastructure services also lowers costs and expands market opportunities for businesses. This contributes to increased investment and productivity which is essential for sustaining economic growth. 2.3 Employee turnover First, let as define the terms like - employee, turnover and employee turnover in general. Employee: is an individual who works part-time or full-time under a contract of employment and has recognized rights and duty. Turnover: turnover means the out flow of employees from the organization/it is the termination of a membership between an individual who was employed by the company (Mobley). Employee turnover: it refers to the number or percentage of workers who leave an organization. Employee turnover exists in most of the organization throughout the world and it is the ratio comparison to know that how much employee turnover affects the performance of the organization and a company plans to replace in a given time period. It is one them which is to

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be considered in today’s competitive business world (Bowman, C and Asch, D., 1996)), it is considered to be an important task to manage employee turnover for any organization. Naturally, people want diversifies in his/her everyday life; for instance; seeks for new and challenging jobs and good working environment in job place. To provide these things to employees in an economic way it is very difficult cumbersome (Campion MA, 1999). Human resource is one of the most important value assets of the organization, and without human resource there is no an existence of organization however achieving its objective employee turnover is probably the problem falling human resource management in today’s work environment (Raymond Anoa, 2004). Employee turnover increase due to a number of factors, such employees turned over in large scope when the management is failed to fill the gap of handling such in appropriate mechanisms. Actually, the Couse of turnover was; illness, low morality, lack of job satisfaction, lack of effective leadership, when the working environment is not sustainable, personal problems, lack of promotion and adequate salary, workload and disciplines. Except illness, the rest Couse is controllable by the management. All the factors can result in high turnover and again it reduces productivity even up to shot down of a given organization (Raymond Anoa, 2004) 2.3.1 Voluntary turnover Vs. Involuntary turnover Voluntary turnover describes the amount of employee turnover that occurs due to the decision of employees to resign from their positions and voluntarily leave their employers. There are different reasons why voluntary turnover occurs. Employee might choose to vacate their job for a variety of reasons. They may feel dissatisfied with their position or their compensation, they may be seeking a career change, or they may have accepted another offer. One way to limit the voluntary turnover rate is to put forth effort in the hiring process to determine an applicant’s “job fit “or job suitability for a particular position. Employers should try to assess the likelihood that their future employees will feel satisfied and fulfilled their positions. (Wikipedia). Involuntary turnover is the type of turnover that occurs when an employee terminated from a position. Employee may be late go for a wide range of reason, including unsatisfactory job performance or inappropriate behavior or often called counter productive work behavior (Bozarth, C. (2006), Many of the issues that cause involuntary turnover can be minimized; by

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administering pre-employment tests in the hiring process. For example, one of the main causes for involuntary turnover is that new employees do not digest and apply the training they were given in a satisfactory manner; aptitude and skills test can predict learning ability and the likelihood that an applicant will successfully complete training (Wikipedia). According to Mike Foster (2002), it is clear that having prober retaining strategy is the key in order to retain employee within the organization. Working environment should motivate and stimulate employee, manager need to incorporate motivation puling practice in to their corporate culture. These practices include; listening to employee and respecting their opinions, basing reward on performance, and being available to them with their career advancement. 2.3.2 The Relationship between Working Environment and Turnover Working conditions defined as the working environment and all existing circumstances affecting labor in the work place, including job hours, physical aspects, and legal rights and responsibilities. According to Branson, R. (1999)), key motivational variables that may influence employee turnover decision are competitive salary, good supervision and interpersonal relationships, job autonomy, better working environment, training and development and job security. Research on employees health and safety is long been the main interest of the issue of working conditions, moreover employee motivation and performance also become more and more important in every industry. In fact, the quality of employees working environment will directly and positively influence the safe working conditions. Hence, the sufficient work force for any organization can be maintaining by creating a good working conditions. 2.3.3 The Relationship between Compensation/Reward and Turnover When high performers are inadequately rewarded, they quit, It is their opinion that, the jobs which able to provide adequate financial incentives are more likely to make employees stay with the organization (Mbah, 2012). There for, desire to leave and ease of leaving the organization is affected by the reward. Besides that, kind and level of reward, an organization offers influences who are attracted to work the organization and who will continue to retain in work. The organizations, which gives the most reward to attract and retain most people (Milkovich, 2006). This means that high reward levels will lead to; high satisfaction, individual who are satisfied with their job expected to continue to be satisfied and stay with the same organization, which will lead to lower turnover.

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A survey of labor turnover, published in December1997, by the institute of Personnel and Development indicated that the cost of replacing staff has increased significantly in the UK in the last twelve months. Taking a detailed look at the available data on the labor in the UK the independent employment researchers, industrial relations services argued in 1997 that the economic recovery in the UK is leading to increasing numbers of resignations and skill shortages, which in turn are leading to substantial resourcing problems for employers. At the same time labour turnover is being adopted by many organizations in the UK as a “bench mark” indicator of performance and business efficiency (Branson, R. (1999) Griffin, (2000) argues that remuneration strategy influences key outcomes like job satisfaction, attraction, retention, performance, skill acquisition, co-operation, motivation and turnover intent of employees. Retention and motivation of personnel has become a major concern for HR especially in the Indian Retail industry. Compensation & Benefits have been described to be one of the factors responsible for the high attrition rate. A study of remuneration strategy and turnover intent shows that there is a negative relationship between the two factors. Emma, (2007) notice that base pay is an employee's initial rate of compensation, excluding extra lump sum compensation or increases in the rate of pay. An employee's base pay can be expressed as a base hourly rate of pay or as an annual salary. Extra forms of compensation that are excluded from base pay typically include shift differential pay, on-call pay, pay for special assignment or incentive-based pay and bonuses and these types of compensation lead to low staff turnover.

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CHAPTER THREE

Discussion and analysis part: Using different decision making steeps we can solve different problems. This chapter discusses the detail of the problems existing in arbaminch town municipality as they are organized in a sequential order, so first we have decided on how to solve the problem of urban land management, second problems related to infrastructural development, and lastly how to reduce employee turnover within the organization 3.1 Urban Land management problem: As we have stated above; arbaminch town municipality faced the problem related to land and its management. So by following the decision making steps we have decided on the problems of land. Step 1: Establishing the Objective The main objective is to recommend the municipality of Arba Minch town to minimize its problem of land shortage and advice to practice on fair distribution of land to the community of the town. Step 2: Defining the Problem The second step in decision making process is identifying or defining the problem. As we conducted interview on the employee of Arba Minch town municipality there is a major problem in the town which is shortage of land supply for housing, establishing enterprises and investment. As we know house is one of the essential human basic needs that means that it is difficult to life without having a house so lack of land to build house is a serious problem in the town. Small scale enterprises have a vital contribution for decreasing unemployment to the town as well as the country at large. In fact, in most countries, the number of new job created by small business is significantly higher than created by large business. This shows that enterprises are the back bone of one’s country development. But in Arba Minch town there is shortage of land to establish those enterprises. At the same time this land problem affects investment activities that can provide contribution for the growth and development of the city.

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As the manager of the municipality said one of the main cause of the shortage of land is illegal settlements that means some peoples in the town settled illegally in the way that they own the land temporarily that means only for some periods until they become capable to acquire the land illegally or until some ones come and ask the land to build. But after that they control and exercise illegal ownership rights to the land. So this becomes the cause for the shortage of land in the town. The other reason for the shortage of land is illegal acquisition and expansion of land by the residents this implies some peoples acquire land illegally by buying the land without the consent of the municipality. Some peoples also expand their boarder by violating the consent that the government legally gives or someone sale to them legally. The third reason for this shortage of land is the rapid growth of population. In the town the number of peoples growing rapidly the main reason is migration of peoples from the rural areas to the town. This migration leads to the shortage of land. Step 3: Developing alternative solution After defining or identifying the problem as decision maker we try to develop possible alternative solution for the shortage of land supply in Arba Minch town. To providing fair distribution or allocation of land and to minimize the shortage of land resource of the communities of the town, so we develop the following alternatives.  Establishing social housing strategy  Release lands from illegal land holders  Building saving housing to the communities Step 4: Evaluating Alternatives Once we developed a set of alternatives, then we evaluate them to see how effective each would be. Each alternative must be judged in light of the goals and resources of the organization and how well the alternative will help solve the problem. In addition, each alternative must be judged in terms of its consequences. I.

Establishing Social Housing Strategy

Social housing is a house by which peoples make combination or association with the aim of get affordable house focused on disadvantaged group such as low income earning, civil servant and so on. As we know social housing strategy is the strategy that helps low income individuals

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and civil servants cooperating themselves and saves some amount of money and by using this amount of money the municipality build houses and distribute them to the members. In this Strategy the members of the social housing is more beneficiary because they only devote money they save their time and effort the municipality or the association build the houses and finally distribute the house to those members of the strategy of social housing. When we see the type and costs of those social houses they are depend on the contribution of members. The more the individual paid he/she gains better house. The following table shows the contribution of the members and the type of house the gained in return of their contribution. No

Type of House

Estimated Contribution

Area

1

G+1 with two bed rooms

381,739. 90

90 square meter

2

G+1 with one bedroom

243,590.09

90 square meter

3

G+0 with two bedrooms

129,312.14

90 square meter

4

G+0 with one bedroom

109,549.09

90 square meter

Source: from Arba Minch Municipality So by this data the municipality can minimize the land shortage problem by social housing strategy. Because without social housing strategy the land that is required to given to the one person is around 200 square meter and when we see this social housing strategy the maximum area of land given to the individual is 90 square meter. So by this reason the municipality can handle is land shortage problem at same time the individual also become more benefited. II.

Release Illegal Land from Holders

As we stated earlier there are individuals whose hold land illegally either by boarder expansion or temporary settlements which are not recognized legally. Therefore the organization can take this land and can give to the community. In this case the municipality may face challenges when releasing the land means that some peoples may built better houses which are costly then this leads to strong grievance from the peoples. The main advantage of this strategy is that the municipality can minimize its land shortage problems easily by release from those illegal owners and redistribute it to the society and it enhances good governance.

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But even if it has an advantage there is also shortcomings which we try to stated above which is grievance or complaint raise from those holders because they are devoting their money, effort as well as time to build those houses. III.

Build Saving/government House to the Community

Saving houses are houses that built for elder and disable groups that built by the government and rented for those minor communities with maximum of 10 birr. When we see this is frankly speaking it is gift for those communities. This strategy is applicable in our country Ethiopia to encourage disables, low income and old aged individuals because they haven’t ability to build their house. So the municipality can built those saving houses and rent them to the community with minimum cost. The role of government houses is that within few resource/land, huge number of residents comported and government uses land resource in proper way. This strategy is not as much appropriate because it requires huge cost and in return there is not tangible benefit to the municipality. IV.

Select the Best Alternative Course of Action

After the evaluation or analyzing step is over the next step is select the best alternative. In trying to select an alternative or combination of alternatives, managers find a solution that appears to offer the fewest serious disadvantages and the most advantages. The purpose of selecting an alternative is to solve the problem so as to achieve a predetermined objective. Managers should take care not to solve one problem and create another with their choice. A decision is not an end by itself but only a means to an end. So as a decision making, we try to select that we say best alternative because decision making is choosing best alternative from listed options. In this case we select social housing strategy to better minimize the problem of land shortage because when we see this alternative it is better than others that it uses the municipality to proper and efficient allocation of land and the members of the housing strategy are also highly beneficiary since the invest only their money they can devote their time and effort to other jobs. Generally speaking we conclude that social housing strategy is better than other alternatives.

3.2 Infrastructure Development Let us follow the same steps of making decision:-

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

Setting objective

The main aim of the Arba Minch Municipality is to expand and bring infrastructural service to the community by creating social benefit and to crate lasting good governance in the city. The municipality is to promote socio-economic development and poverty reduction in Arba Minch through improved to the town zone infrastructural networks and service. 

Define the problem

After setting the objectivity, the decision maker should know and understand the problem or situation which is connected to decision making. Despite the role, Arba Minch Municipality was insufficiently and inadequately addressed infrastructure to the community. What is the problem? Why unable to fulfill the objective of municipality? To define the existing problem the reason is, lack of supply raw material is the main task. As we interview from the staff, lack of supply cobblestone peppermint is factor to adders the Indore cobblestone carpet for the society in the town. For this reason the municipality faces shortage of supply in quality, quantity and timely cobblestone peppermint to serve the Indore road carpet. Unless the problem of the cobblestone supply solved, does not bring infrastructural service to the community by creating social benefit and to crate lasting good governance in the city. 

Develop Alternative

As far from define the existing problem, the decision maker is discovering the solution to the shortage or lack of supply cobblestone peppermint. To solve existing infrastructural supply problem, they have two alternatives. The first one is search or diagnose supplier (create enterprise) within the town to supply the cobblestone peppermint in timely and quantity. On the other hand to solve the supply problem, import or supply from outside the town is one of them. These two alternatives can solve the problem of the cobblestone peppermint supply and to address adequately infrastructure to the community. 

Analyze Alternative

Once developed alternative to the supply problem, the next step is evaluate the alternative course of action. Every alternative entails pro and cons. to choose the best alternative the decision makers evaluate the two alternative based on cost-benefit relationship and certain criteria or condition. Cost-benefit (cost of the unit) is used to evaluate the alternative bases on cost of unit criteria. The principle of these criteria is to choose the best alternative from other alternative by making low-cost optimization.

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Cost Unit Cobblestone Peppermint Unit

Supply within the town

supply outside the town

Price

ETB1.3 cent

ETB1.3 cent

fright in

-

0.3 cent

wage to worker

0.2 cent

0.2 cent

Total

ETB1.5 cent

ETB1.8 cent

Source: From Arba Minch Municipality The above data show that supply cobblestone peppermint within the town is best alternative regard to low-cost optimization. The supply within the town cost of one unit is 1.5br compare to supply outside the town i.e. 1.8br. From other side we want to compare the two alternative based on different criteria to select the best one between the supply from within or outside the town. The criteria like creating job opportunity for enterprise; available in timely, quality and quantity, Evaluation Criteria Job

opportunity

Supply within the town to

the Advisable

Supply outside the town Inconvenient

communities Available on time

Advisable

kill time

Available in quality and quantity

Convenient

Convenient

From the evaluation criteria, supply within the town is better to create job opportunity to enterprise, available in time, and convent required quantity and quality as compared to supply outside the town or import the peppermint.



Select the best alternative

The decision maker decides which is best alternative based on analyzed evaluated data from previous step. From above comparing alternative, Arba Minch municipality decides to solve the problem of insufficiently and inadequately addressed infrastructure to the community due

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to supply of raw material, particularly cobblestone peppermint. Bases from the data, decision maker decide that the supply cobblestone peppermint within town enterprise. 3.3 Employee Turnover We will follow the decision making process to decide on how to reduce employee turnover in arbaminch town municipality. Before we are going to the decision making process we should set our objective why we are conducting such kind of study. Our objective is to know why the employee of the municipality leaves their organization and knowing how to reduce the out flow of the employees. Identifying the problem: while providing the service for the community, arbaminch town municipality faces a serious problem what we called it employee turnover. As we have mentioned employee turnover is the problem that hinders the organization to achieve its objective. The problems are identified, and the next step is defining the problem. As we have interviewed some of the employees of the municipality, their interview indicates that there were some problems within the organization. Those are;  Absence of promotion for employees: As we know employee promotion means the advancement of an employee from one job position to another that has a higher salary range, a higher-level job title, and often, more and higher-level job responsibility in an organization. While the absence of promotion for employees in arbaminch town municipality leads to higher employee turnover and in return it have a great impact on good governance; for instance, services cannot rendered to the community in appropriate manner and this leads to lack of good governance in advance.  Working environment is not suitable: when working environment is not suitable for employees, they may quite the organization and the degree of employee turnover within the organization increases. Working conditions can be affected by factors including health and safety, security and working hours. Poor working condition can damage health and safety at risk. So the working environment of arbaminch town municipality is not such much suitable for the employees and the municipality faces a high degree of employee turnover. There for in order to maintain good governance; the working environment could be suitable and employee turnover should be reduced to achieve the goal.  Inadequate salary/compensation and bonus: higher the salary/compensation and bonus the lower is employee turnover. Organizations that pay high salary/compensation and

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benefits for their employees have low level of employee turnover. Therefore, in order to reduce employee turnover for arbaminch town municipality is better to pay balanced compensation to enhance good governance. Developing the alternative: After the problems are identified, then the next step is developing the alternatives. Therefore, we have developed the three alternatives: - Giving promotion for employees who are high performers: when employees are given promotion or when high performers have got promotion they may happy and interested in their job to continue with in the municipality. Making the working environment conductive for workers; organizations having suitable working environment retains their employees for a long period of time. Since creating conductive working environment plays a significant role in reducing employee turnover and to enhance good governance arbaminch municipality will create such kind of environment in order minimize the risk of employee turnover. Increasing salary and bonus for the employees: when employees paid high salary and bonus the level of turnover will reduce. Analyzing the alternatives After developing the alternatives, the next step is analyzing the alternatives. Let us see the above alternatives in terms of their advantages and disadvantages. 1. Giving promotion for employees who are high performers Our basic argument is that, overall; employees with a record of past promotions are less likely to quit the organization. This argument emphasizes the importance of rewards, particularly promotion, in creating an employment environment that induces workers to remain employed in the organization. Promotions confer benefits such as status, skill development, and job satisfaction, which may be contingent on the individual’s staying in the same organization. Therefore, other things being equal, such as education and position in the hierarchy, the more the individuals perceive opportunities for further promotions in the current organization, the less desirable and likely their voluntary quitting becomes. Individuals, who have already been promoted, may be particularly more likely to be promoted again in the future. Past promotions can reinforce the expectation of the individual that the firm will repeat its behavior in the future. Assuming that a promotion ceiling has not been reached and that their qualifications and performance are satisfactory, employees may expect the firm to provide

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them with future promotions. This is particularly true when employees believe that their future promotions are also of value to the firm. Advantages

Disadvantages

 It creates motivation and initiatives  High achievement  Increase the emotion of belongingness

 it may be biased/ low performers  may be promoted wrongly  it may cause unethical competition

 Increase individual performance among employees 2. Creating conductive working environment Working conditions defined as the working environment and all existing circumstances affecting labor in the work place, including job hours, physical aspects, and legal rights and responsibilities. For example, organizations having rigid rules and regulations may lose their hard working employees, so that working environment has a direct influence on employee performance. On the other hand, it means that bad working environment/condition can enhance the number of employees that leaves their organization. In fact, the quality of employees working environment were directly and positively influence the safe working conditions. Hence, the sufficient work force for any organization can be maintaining by creating a good working conditions  Advantages :- It enhances efficiency and effectiveness by the aid of technology •

Increase the emotion of belongingness

•

Giving attention to the need of individuals

•

Keeping the safety of the employees

•

It increases employees job satisfaction

3. Increasing salary/compensation and bonus for the employees who are high performers Organizations, which bays better salary or compensation and benefits to their employees can have a capability to retain their employees rather than that of baying less salary/compensation and benefits. Griffin, (2000) in his study argues that remuneration strategy influences key outcomes like job satisfaction, attraction, retention, performance, skill acquisition, cooperation, motivation and turnover intent of employees. Retention and motivation of personnel

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has become a major concern for HR especially in the Indian Retail industry. Compensation & Benefits have been stated to be one of the factors responsible for the high attrition rate. A study of remuneration strategy and turnover intent shows that there is a negative relationship between the two factors. Advantages •

•

Any organization may

It increases job

have no a mandate to

satisfaction and

increase salary but

motivation

benefits

It increases employee initiative

•

•

High achievement

•

Even if possible, it may cause inflations/economic imbalances.

Disadvantages Selecting the best from the alternatives: The alternatives are already analyzed then the next step is selecting the best among the alternatives. So depending up on the above alternative analysis, alternative two was chosen why because before fulfilling the rest alternatives, the priority should be given to the creation of conductive working environment and then the other alternatives will be satisfied gradually in order to reduce employee turnover in arbaminch town municipality and to enhance good governance. Note: all the above-mentioned alternatives can reduce employee turnover in arbaminch municipality, but we can select the second alternative, why because priority should be given to the working environment to be suitable for employees. Even if the other alternatives are fulfilled employees may steal leave the organization, but when they make their working environment conductive, it helps employees to stay in their organization and the rest alternatives will be fulfilled gradually.

CHAPTER FOUR 4. CONCLUSION AND RECOMONDATION 4.1Conclusion: In the analysis section detail investigations were presented and discussed. In this section we have to conclude that which alternative are best and effective among the different set of

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alternatives to solve the problems of arbaminch town municipality in order to render quality services for the society and to enhance good governance in their organization. As it is stated in chapter three the municipality faced three major problems like shortage of land supply, infrastructural problems and high employee turnover rate. In order to decide on the problems facing the organization the following points were forwarded as the solution for the problems.   

In order to solve the shortage of land for housing purpose; social housing strategy is taken as a solution regarding the problem. According to our decision infrastructural problems will be solved by forming enterprises who supply cobblestone peppermint in order to solve the shortage of supply. Creating good or conductive working environment for employees was taken in order to reduce employee turnover and enhance good governance.

3.4

Recommendations:

As we know every municipalities in every city plays a significant role toward the development of the town/city by providing quality service for the society. While rendering those services for the community arbaminch town municipality faced a lot of problems. So we have forwarded the following recommendations for the municipality in order to minimize the degree of the problems. 1st – it is better for arbaminch town municipality to develop retaining strategy in order to retain their employees within their organization to reduce employee turnover. For instance creating conductive working environment for the employees is the better strategy why because the rest problems come after when employee leaves their organizations. 2nd – it is advisable for the municipality to build social housing/ condominium houses as much as possible to solve the shortage of land supply. 3rd – we recommended that it is better for the municipality to form enterprises who are engaged by supplying row materials of road infrastructure

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