Effect of managerial skills on operational performance in national cement share company

Effect of Managerial Skills on Operational Performance:
In the Case of National Cement Share Company
Zelalem Mengistu Limenih
Master of Business Administration
Dire Dawa University, Dire Dawa, Ethiopia
August, 2020

i
Effect of Managerial Skills on Operational Performance: In
the Case of National Cement Share Company
Zelalem Mengistu Limenih
A Thesis Submitted to the Department of Management,
College of Business and Economics, School of Graduate
Studies, Dire Dawa University, Dire Dawa, Ethiopia
In Partial Fulfillment of the requirements for the Degree of
Master of Business Administration

ii
CERTIFICATION
The undersigned certify that he has read and hereby recommends for the acceptance by the
Dire Dawa University, school of graduate studies, College of Business and Economics,
Department of Management, master of business administration program a thesis titled;
―Effect of Managerial Skills on Operational Performance in the case of National Cement
Share Company‖ in partial fulfillment of the requirements for degree of master of business
administration.
.............................................................
Aschalew Mulugeta (Assistant Professor)
(Advisor)
...........................................
Date

iii
DECLARATION
I, Zelalem Mengistu, do hereby declare that this MBA thesis is entirely my own work and it
has not been presented to any other Institute of higher learning for a similar or other academic
award. In addition, all the sources that I have used or quoted have been indicated and
acknowledged my means of complete references..
Name of Student: Zelalem Mengistu Limenih
Signature: ______________________ Date _______________
This MA thesis has been submitted for examination with my approval as the appointed
University supervisor.
Name of major advisor: Aschalew Mulugeta (Assisstant professeor)
Signature: _____________________ Date ____________________
Place of Submission: Dire Dawa University
Date of Submission: _________________________________

iv
Dire Dawa University
School of Graduate Studies
Thesis Readiness to Submit Form
Student’s Particular
Name of the Student:- Zelalem Mengistu Limenih ID No. GSE/0051/10
Year of Admission:-2010 E.C. Semester of admission ____
Type of Admission:-Weekend /Extension/
Institution/College:-Business and Economics Department: Management
Level of Study:-MA
Specialization: Master of business Adminstration(MBA)
Research Title:- Effect Of Managerial Skills on Operational Performance in the case of
National Cement Share Company
Thesis Credit Hour: 6
As thesis advisor/s, I hereby certify that I have read and evaluated this thesis prepared under
my guidance. I recommend the student to submit his thesis.
__________________________________/ ___________________/ _______________
Main Advisor Signature Date
__________________________________/ ___________________/ _______________
Co-Advisor Signature Date
Office Use
__________________________________/ ___________________/ _______________
Department Head Signature Date

v
Thesis Approval
Board of Examiners
We, the undersigned members of the board of examiners of the final Thesis, open defense by
Zelalem Mengistu Limenih, ID No. GSE/0051/10 have read and evaluated his thesis entitled
―Effect of Managerial Skills on Operational Performance in the National Cement share
company. This is therefore, to certify that the thesis has been accepted as partial fulfillment of
the requirements for the degree in Master of Business Administration (MBA)
_____________________________/ ______________/ _______________
Major advisor Signature Date
_____________________________/ ______________/ _______________
External Examiner Signature Date
_____________________________/ ______________/ _______________
Internal Examiner Signature Date
_____________________________/ ______________/ _______________
Chair Person Signature Date
Official Use Only
Department Head: Name & Signature____________________________________________
Date: __________________________
Seal: ___________________________
SGS/DDU: Name &Signature___________________________________________________
Date: _______________________Seal: _______________________

vi
ACKNOWLEDGEMENT
First and foremost I would like to thank God Almighty for the strength, guidance and the
abundant grace he gave me throughout the course and the completion of this thesis and all he
has done for me.
Second, I would like to express my appreciation and gratitude to my advisor Aschalew
Mulugeta(Assistant Professor) for his rational and constructive advice throughout the
development of thesis, i.e. concept guidance, technical support, practical advice from his rich
experiences, valuable comments and ideas his fatherly treatment accorded me served as an
inspiration to completion of this piece of work. The strength, guidance and the abundant
grace he gave me throughout the course and the completion of this thesis
Third, I also owe a great deal of gratitude to Staff of National Cement Share Company for
their assistance with necessary data and providing useful information.
Last but not least, my thanks also go to my dear father, Mengistu Limenih, for his
understanding, support and contribution throughout the period of my studies. I would also
like to appreciate my parents and my intimate friends for being there for me all the time.

vii
Table of Contents
CERTIFICATION .....................................................................................................................ii
DECLARATION..................................................................................................................... iii
ACKNOWLEDGEMENT........................................................................................................vi
Table of Contents.....................................................................................................................vii
List of Table...............................................................................................................................x
List of Figures...........................................................................................................................xi
ABBREVIATIONS .................................................................................................................xii
ACRONYMS...........................................................................................................................xii
ABSTRACT........................................................................................................................... xiii
CHAPTER ONE........................................................................................................................1
1. INTRODUCTION .................................................................................................................1
1.1 Background of the Study.............................................................................................1
1.2 Statement of the Problem............................................................................................3
1.3 Research Questions .....................................................................................................6
1.4 Research Hypotheses: .................................................................................................6
1.5 Objectives of the Study ...............................................................................................6
1.6 Significance of the Study ............................................................................................6
1.7 Scope of the Study.......................................................................................................7
1.8 Limitations of the study...............................................................................................8
1.9 Operational definitions of Terms ................................................................................9
1.10 Organization of the study ......................................................................................10
CHAPTER TWO .....................................................................................................................11
LITERATURE REVIEW ........................................................................................................11
2.1 Introduction...............................................................................................................11
2.2 Theoretical Literature Review...............................................................................11
2.2.1 Management.......................................................................................................11
2.2.2 Managerial Skills ...............................................................................................11
2.2.3 Operational performance: ..................................................................................12
2.2.4 Competitive priorities/key performance indicators ...........................................13
2.2.5 Relationship between Managerial Skills and Operational performance:...........14
2.2.6 Katz Theory of Managerial Skills (Three-Skill Approach) ...............................14
2.2.7 Mintzberg Managerial Roles Classification Model...........................................15
2.2.8 Approaches to Analyzing Management.............................................................15
2.2.9 Management Functions......................................................................................16
2.2.10 Management Roles.............................................................................................16

viii
2.3 Empirical Literature Review .................................................................................16
2.4 Conceptual Framework of the Study.....................................................................23
2.5 OPERATIONALIZATION OF VARIABLES .....................................................23
CHAPTER THREE .................................................................................................................25
RESEARCH METHODOLOGY.............................................................................................25
3.1. Research Design and Approach.............................................................................25
3.2. Description of the Study Area ...............................................................................25
3.3. Source of Data .......................................................................................................26
3.4. Sampling Methods and techniques........................................................................27
3.4.1. Population ..........................................................................................................28
3.4.2. Sample Size........................................................................................................28
3.4.3. Sampling Frame.................................................................................................29
1.1. Data Collection Methods.......................................................................................29
3.6. Data Analysis Methods..........................................................................................30
3.7. Research Model specification:...............................................................................31
3.8. Reliability and Validity Test..................................................................................33
3.9. Research Ethics Consideration ..............................................................................34
CHAPTER FOUR................................................................................................................35
RESULTS, ANALYSIS AND DISCUSSION ....................................................................35
4.1 Introduction...............................................................................................................35
4.2 Reliability Test ..........................................................................................................35
4.3 Descriptive statistical Analysis .................................................................................36
4.3.1 Demographic Profiles of Respondents ..................................................................36
4.3.2 Respondents perception towards Operational Performance..................................40
4.3.3 Respondents perception towards Managerial Skills..............................................42
4.3.3.1 Conceptual Skill.................................................................................................42
4.3.3.2 Human Skill .......................................................................................................46
4.3.3.3 Technical Skill ...................................................................................................49
4.3.4 Comparisons of Respondents perception towards Managerial Skills ..................52
4.3.5 Level of respondent agreement and extents .........................................................53
4.3.6 Existing performance trends..................................................................................56
4.4 Inferential Statistical Results.....................................................................................60
4.4.1 Test of Model.........................................................................................................60
4.4.1.1 multicollinearity test ..........................................................................................60
4.4.1.2 Model Fitting Information .................................................................................61
4.4.1.3 Goodness of fit test ............................................................................................61
4.4.1.4 Pseudo R-Square................................................................................................61

ix
4.4.1.5 test of parallel lines ............................................................................................62
4.4.2 Logistic Regression Parameter Estimates..............................................................63
4.4.3 Influence of managerial skills on Operational Performance .................................65
4.4.4 Relationship between Variables ............................................................................66
4.4.5 Testing the Hypothesis ..........................................................................................67
CHAPTER FIVE .................................................................................................................70
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION ..................70
5.1 Summary of Findings................................................................................................70
5.2 Conclusion.................................................................................................................71
5.3 Recommendation.......................................................................................................72
References................................................................................................................................73
Appendix-I: QUESTIONNAIRE.............................................................................................84
Appendix-II: Map of the study Area........................................................................................89

x
List of Table
Table2.1: Summary of key performance improvement areas for the last six years in NCSC .59
Table2.2: Summary of empirical literature review..................................................................21
Table2.3: Operationalization of the variables..........................................................................24
Table3.1: Sample Size Determination .....................................................................................29
Table3.2: Cronbachs alpha internal consistency Ranges.........................................................33
Table4.1:- Cronbach‘s alpha value ..................................................................................... 35
Table4.2: Demographic Characteristic of Respondent employees..................................... 36
Table4.3: Respondents perception towards Operational Performance.............................. 40
Table4.4: respondent‘s perception towards Conceptual Skill............................................ 42
Table4.5: respondent‘s perception towards Human Skill................................................... 46
Table4 6: respondent‘s perception towards Technical Skill............................................... 49
Table4.7: Comparisons Respondents perception towards Managerial Skills..................... 52
Table4.8 : Respondents level of agreements-extents.......................................................... 54
Table4. 9: Multicollinearity Test ........................................................................................ 60
Table4. 10: Model fitting information ................................................................................ 61
Table4.11: Goodness-of-Fit................................................................................................ 61
Table4. 12: Pseudo R-Square............................................................................................. 62
Table4.13: Test of Parallel Lines........................................................................................ 62
Table4.14 : Parameter Estimates......................................................................................... 63
Table4.16 : the association between variables.................................................................... 66
Table4.17: Relationship between Managerial skills and Operational Performance........... 67
Table4.18: Summary of hypothesis .................................................................................... 69

xi
List of Figures
Figure2.1: Plant availability (in days)......................................................................................57
Figure2.2 : Clinker Production (in ton) ..................................................................................57
Figure2.3: Cement Production (in ton)...................................................................................58
Figure2.4 : Energy consumption..............................................................................................58
Figure2.5: Generalized performance improvement chart ........................................................59
Figure2.6 : Conceptual Framework .........................................................................................23
Figure2.7: Operationalization of research variables ................................................................24
Figure4.1: Gender of respondents 37
Figure4.2: age of respondents..................................................................................................38
Figure4. 3: work experience of respondents...........................................................................39
Figure4.4: educational levels of respondents...........................................................................40
Figure4. 5: Respondents Conceptual skill means score rating ................................................45
Figure4. 6: Respondents human skills mean rating .................................................................48
Figure4. 7: Respondents Technical skills mean score rating...................................................51
Figure4. 8: Respondents perception towards managerial skill ................................................52
Figure 4.9 : Respondents level of agreements -extents............................................................55
Figure4. 10 : respondents Operational Performance mean rating scale extent level...............56

xii
ABBREVIATIONS
CS- Conceptual skill
DDAC-Dire dawa Admiration City
HS- human skill
MCS-Management controls system
MS-managerial skill
NCSC-national cement share company
OP- operational performance
TS- Technical Skill
ACRONYMS
ANOVA- Analysis of Variance
CCIIDI- Chemical and Construction Inputs Industry Development Institute
GDP-Gross Domestic Product
HR-Human resource
HRM-Human resource management
ICT-Information and Communication Technology
IT- Information Technology
MBO-Management by objective
MOI -Ministry of industry
OLS- Ordinary Least Square
OPC-Ordinary Portland cement
OP-Operational PerformancePM-Performance management
PPC-Portland Pozzolana Cement
SPSS- Statistical Package for social Sciences
TAT-Turnaround Time

xiii
ABSTRACT
The objective of this thesis was to investigate the effect of managerial skill on operational
performance in National Cement Share Company. A combination of descriptive&
explanatory research designs were used to quench the objectives of the study. A quantitative
research approach methods via cross-sectional survey was employed. 317 managerial and
non-managerial employees were taken through census and proportionate Stratified random
sampling technique respectively as study respondents to collect questionnaire among
different departments distributed for managers and non-managers. For the purpose of data
collection, the researcher used closed-ended questionnaires. Both descriptive and ordered
logistics regression (O-Logit) were used to satisfy the specific objectives of the study. The
descriptive and T-statistics result revealed that there is statistically significant perception
difference between managerial and non-managerial employees’ perceptions towards
technical, human and conceptual skills. In addition, respondents rated operational
performance of the company as high performance. The O-logit indicated that the three types
of managerial skills have a significant influence on operational performance of NCSC.
Therefore, the company should give due attention towards technical, human and conceptual
skills to boost the operational performance of the company
Key words: Managerial skills, operational performance, National Cement share company

1
CHAPTER ONE
1. INTRODUCTION
1.1 Background of the Study
Kamau (2016) defined Operational performance as the backbone of organizational
performance. Operational performance is the performance of an organization against its set
standards such as waste reduction, productivity, cycle time, environmental responsibility
and regulatory compliance (O‟Brien, 2009).
The operations of a firm in a manufacturing organization should be efficient and effective
in order to achieve organizational goals. Effectiveness is the expanse to which customers‟
needs are fulfilled, while efficiency is defined as a measure of how economical firms‟
resources are employed. In order to accurately enhance accessibility and evaluation of
operational performance, the correct measurement systems should be planned, developed
and implemented. Performance measurement networks are hence developed in order to
monitor and maintain operational control. Operational Control is the process that ensures
an organization is able to pursue action with the aim of achieving the overall goals and
objectives. Achievement of these goals is a manifestation of excellence in organizational
performance (Hubbard, 2009, Jahmani et al., 2018).
According to Leis (2011:12) management is the organization and coordination of the
activities of a business in order to achieve defined objectives. Management consists of
interlocking functions of creating corporate policy and organizing, planning, controlling
and directing an organization‘s resources in order to achieve the organizational goals and
objectives. In this study, management was measured in terms of planning, budgeting and
communicating.
According to Njaramba and Ngugi (2014), Managerial skills influence owner‘s perception
regarding their enterprises. Inadequate managerial training and skills lead to failure of an
enterprise which is facilitated by inexperience and culture of the organization which act as
a hindrance to growth of small and medium enterprises.
Govender and Parumasur (2010) noted that business managers need to more and more
learn new skills to manage challenges and also for the growth of the organization.
Development of managerial skills is important for an organization to accomplish its
objective (Camphor, 2008). Martin and Staines (2008) in their study on competencies in
management of small firms noted that lack of personal qualities; managerial skills and
inexperience were the main reasons why small firms fail. The researcher further noted that
high growth of firms and low growth of firms is determined by education, experience and

2
training of senior manages.
Chirita (2016) defined skill as being the individual‘s abilities to behave in a way that meets
the requirements of the workplace in given environmental parameters- and to obtain
desired results. As competitions getting intense, the study on managerial skills is very
important thus managerial skills play today an important role in different types of
organizations for better operational performance (Krajcovicova et al., 2013).
The operational performance indicators(quality, cost, flexibility and delivery) can be
defined as the physical values which are used to measure, compare and manage the overall
operational performance (Razak et al., 2014, Heckl and Moormann 2010).
Jones and George (2009) provide the following definitions for human, technical, and
conceptual skills: Technical skills are job-specific knowledge and techniques. The specific
kinds of technical skills depend upon the manager‘s position in the organization. Human
skills include the ability to understand, alter, lead, and control the behavior of people and
groups. The ability to communicate, to coordinate and motivate people, is the principal
difference between effective and ineffective managers. Conceptual skills include the
ability to analyze a situation and distinguish between cause and effect. Senior level
managers require high conceptual skills because their primary responsibilities are planning
and organizing the long-term vision of the organization.
Managerial Skills associated to operational performance in that it contributes in improving
the operational performance of manufacturing companies. Managerial Skills plays an
important role in the operational performance of an organization for strategy formulation,
achieve its goals and objectives. Therefore, it appears that Managerial Skills are important
for boosting operational performance and also helps to have competitive advantage in the
global market (Noe et al., 2017).
This study in the NCSC will help to produce & distribute cement products that
exceedingly meet customer requirements by adopting modern technology, qualified
manpower, eco-friendly and socially accountable operation and thereby create sustainable
value for stakeholders. To accomplish the desired goal, management skill with abilities
and knowledge needed to perform specific tasks (NCSC Strategic Plan, 2016-19).
The study is significant to NCSC to improve their managerial skills and solve problems
associated with managerial skills on the operational performance. Furthermore, the study
wasa good catalyst for researchers, who are interested to study about positive or negative
relationship between managerial skills and operational performance in cement industries.

3
1.2 Statement of the Problem
Managerial skills are the key determinants of operational performance (Bandiera et al.
2013; Mullins and Schoar, 2016). Unquestionably, only skillful managers could become
effective managers, and effective managers are crucial for organizational success.
Management effectiveness and efficiency require managerial skills (Mostafa et al., 2012).
An effective manager is the one who should have an extensive set of developed skills in all
essential areas of management (Bulog et al., 2016).
Zang (2017) in his study entitled ‗the responsibilities and attributes of managers today‘
with 197 respondents concluded that 54% respondents think conceptual skills are the most
significant for the manager,34% of people chose human skills as the most critical ones,
while only 17% of persons think technical skills are important for a manager.
Hawi (2018) on the study effect of knowledge management practice on organizational
performance noted that knowledge management accounted for 67.5 percent of the variance
in organizational performance.
According to Farah, (2017) on the study analysis of managerial competencies and their
influence on staff productivity noted that majority of the respondents 74.5% for technical
skills , 68.7% for human skills and 77.90% for conceptual skills disagreed with the
statement that those in management positions within the county government had enough
and proper training on their area of work.
According to Braddy (2012), Conceptual skill is most essential for upper-level
executivefunctions, technical skill is most critical for first-line supervisors, and human-
relation skill is most essential at the intermediate levels of the hierarchy. Conceptual skill,
human skill and technical skills were significantly important predictors, accounting for
39%, 32%, and 15 % of the predictable variance in managerial effectiveness of the
operational performance.
Slack et al. (2004) argue that excelling at one or more of the operations performance
objectives can enable an organization to pursue a business strategy based on a
corresponding competitive factor. Excellent Operation performance in cost, quality,
delivery and flexibility gives the ability to compete on low price, high quality, fast delivery
and wide range of products.
Yet, the current actual cement production in Ethiopia is estimated to be 5.47Million Ton,
which is around 50% of the capacity. Cement price is higher compared to global Cement
price level due to high production cost mainly due to relatively higher energy cost; high

4
inbound and outbound logistic cost; high initial investment cost, and most importantly
lower level of production capacity utilization among others (MOI and CCIIDI, 2014).
NCSC brought changes in the operational performance for the last decades due to
improvements in managerial skills that enable production of cement from 500 of
3000TPD. The company utilizes 54% of its production capacity; however more efforts
need to be exerted to use the company‘s full manufacturing capacity. Costs incurred to the
company also reduced by 20% through minimize cost by reducing cost of purchase of
various production inputs; reduce heat & power consumption, increasing volume of
production, reducing cost of distribution and other measures. The company produces OPC,
PPC and clinker variety products and uses 46% own transport to deliver to the destination
(NCSC Strategic Plan, 2016-19).
Ethiopia is well set up geologically for cement production and has large limestone
reserves. Poor infrastructure has previously prevented this from being exploited. Ethiopia
had historically low cement consumption, as low as 35Kg/capita/yr. However, mainly due
to the fast growth of the Ethiopian economy and the government‘s aggressive investment
in the infrastructure and housing development sector, this figure has significantly increased
over the last couple of years and recent forecasts indicate that this number has increased by
two fold to about 62 Kg/capita/yr. But, this level is still behind the global average of
500Kg/capita/yr (NCSC strategic plan2016/17 — 2018/19).
Lack of skilled management weakens the operational activities of the company. Today‘s
organizations operate in challenging and uncertain circumstances, consequently, more than
ever before, their success or a failure is the result of managers‘ ability to adopt their way of
managing to contemporary business environments (Bulog et al., 2016).
The NCSC‘s challenging situation is in the case of achievement of competitive priorities
and performance indicators which determines the skills of the managers. Plant operation of
the company is concerned with the transformation of a range of inputs into the required
outputs (clinker & cements) having the requisite quality level. In the process of cement
production, inputs and utilities are found to be costly .The production cost of products can
be minimized through maximum number of production quantity, efficient utilization of
heat energy and power, maximizing additive utilization percentage and above all
capacitating the work for the required level (NCSC Strategic Plan, 2016-19, Iveta, 2012).
The motivation behind conducting this research thesis is to describe and investigate the
effect of managerial skill on operational performance in the case of National cement Share
Company using primary and secondary data collection, descriptive & inferential statistics

5
data analysis methods and reviewing related relevance literatures.
The gap between the current problem state of managerial skill and desired goal state of
operational performance is not yet achieved. The research thesis has a gap in that it does
not consider the operational performance triggering factors like time schedule, cost,
quality, deliverable and milestones and the research methods and was make at different
locations.
Kontez believes that in addition to the three skills stated by Katz, manager must have the
fourth skill so- called the design skill (Seng, 1999).
Schermerhorn (2002) reached to conclusion that managers in their work need skills such as
self-management, critical thinking, teamwork, communication skills, and leadership and
professional skills. Peterson and Van Fleet (2004) also found that managers should have
the following skills: diagnostic, technical, human- analytical, cognitive, communicative,
interpersonal, administrative skills, decision making and flexibility skills.
Managerial skills improvement made by arranging supervisory management system and
conducting training weak performers and reward best performers. Improving the
supervision skill of managers through training &experience sharing through need based
&open training will create motivated &satisfied employees for better operational
performance of the cement manufacturing company.
Cement manufacturing company sustains in the business by employing the right and up to
date managerial skills to effectively and efficiently run the business and remain strong.
Apparently there is a possibility of a cement industry to get out of the market or dipped
into bankruptcy if it fails to remain strong competitor with the required managerial skills
set up and all other required key performance indicators. The skills of managers at all
stages are vital to the success of a given organization. This study is based on national
cement Share Company and is amid at finding effect of managerial skill profile (technical,
human and conceptual skills) on the operational performance of the production system
explained by in terms of quality, cost, delivery and flexibility.
So far, there has been little discussion about the effect of managerial skills on operational
performance in Ethiopia. In addition, no research has been found that surveyed in Dire
Dawa. It should be noted from the above literature review, however, that limited studies
are available on the effect of managerial skills on operational performance and this has
motivated the present study.
There is a lack of research designs in literature that resembles the effect of managerial

6
skills on operational performance in NCSC. Some of these sub-populations have been
unexplored and under researched. The managerial positions appear to be important and
worthy of investigation in the context of research topic though the study will not include
customers for questionnaire distribution and data collection.
1.3 Research Questions
The research thesis will seek to answer the following research questions:
1) What is the perception of managerial employees towards technical, human and
conceptual skills in NCSC?
2) What is the extent of operational performance of NCSC?
3) How do technical, human and conceptual skills influence operational performance
of NCSC?
1.4 Research Hypotheses:
1) H1: Technical skills of managers have not a significant association with
operational performance of NCSC
2) H2: Human skill of managers have not a significant association with
3) H3: Conceptual skill of managers have not a significant association with
4) H4: Managerial skills of managers have not a significant association with
1.5 Objectives of the Study
The general objective of the research thesis;
The general objective of this study was to examine the effect of managerial skills on
operational performance of NCSC.
The specific objective of the research thesis is;
1) To assess the perception of managers towards technical, human and conceptual
skills in NCSC
2) To assess the extent of operational performance in NCSC
3) To examine the influence of technical, human, and conceptual skills on
1.6 Significance of the Study
The significant of this study is to examine effect of managerial skills on operational
performance of National Cement Share Company whether or not these skills help and
enhance Managers to function more effectively in all ever-changing organizational

7
environments.
Thus, the study can help Ethiopian cement industry to get insight on what it will take to
improve their managerial skills and tackle problems associated with managerial skills and
Cement industry performance, Particularly National Cement Share Company (NCSC) to
provide useful suggestions and recommendations regarding the effect of managerial skills
on the operational performance measured in terms of quality, cost, delivery and flexibility.
The study used to help the management of NCSC to examine it policy and designing
effective way of appointing / hiring a skilled manager and to show the National Cement
Share Company managers themselves were they are or where they should be.
In addition, the study contributed to the existing body of knowledge regarding the
impact of managerial skill in Cement industry motivating further research on Ethiopian
Cement industry.
The research results would provide assistance to the National Cement Share Company
management to better satisfy their customers, respond to their needs efficiently and on
timely manners.
The study provides perceptiveness on the importance of managerial skills on operational
performance of National Cement Share Company for cement manufacturing sectors.
The study fills the geographical gap since there are very few empirical assessments of
studies on the effect of managerial skills on operational performance in Ethiopia,
particularly in Dire Dawa City administration in cement manufacturing.
To sum up, the result of the study will be a good catalyst for researchers who are interested
to study about positive or negative relationship between managerial skills and operational
performance in cement industries in dire dawa, Ethiopia. The result of this study will offer
valuable inputs and directions for the cement industries to consolidate their marketing
strategy, organizational productivity, and knowledge management in order to increase their
organizational performance.
1.7 Scope of the Study
The study was restricted to the NCSC level. The scope of the study was limited to the
effect of managerial skills on operational performance in the National Cement Share
Company at the factory premises located at Dire Dawa Company by using cross sectional
survey in September-November, 2019. Therefore it will not take into account other cement
manufacturing industries in the country. The skills of managers towards enhancing
operational performance and productivity to the company have been investigated. A
quantitative methods strategy was used for the research approach. Proportional Stratified

8
sampling and judgmental sampling techniques have also been used at different levels
accordingly.
Cross-sectional descriptive study was used, employing both primary and secondary
sources of data. The Scope gaps are for the boundary or limits or the research in terms of
content (i.e. managerial skills and operational performance variables to be investigated),
geographical area and methodology of the research. The questionnaire survey was limited
to managers and non-managers that do not include the customers to collect relevant data.
The target population of this study was measures in terms of their self-perceived
evaluation tools. The study only considers three Katz model operational variables and was
used descriptive and explanatory research designs. Additionally the study used stratified
sampling design for data collection to select samples from different departments.
The delimitations are those characteristics that limit the scope and define the boundaries of
the study. The choice of objectives, the research questions, variables of interest, theoretical
perspectives that the researcher will adopt (as opposed to what could have been adopted),
and the population the researcher choose to investigate. The first delimitation was the
choice of problem itself; implying there are other related problems that could have been
chosen but were rejected or screened off from view. The researcher purpose statement
explains the intent that clearly sets out the intended accomplishments, and also includes
implicit or explicit understanding of what the study will not cover.
The study will explicate the criteria of participants to enroll in the researcher study, the
geographic region covered in your study, and the profession or organizations involved.
The selected methodology and variables in your study also set a boundary on what the
researcher findings can ascertain.
1.8 Limitations of the study
The study covered only the main plant in Dire Dawa. Thus other parts not included in the
study. As it is cross-sectional survey it focused on single time data collection. There are a
few limitations of the study that has been identified. The first limitation is the respondent‘s
commitments to return back the questionnaire on time. The respondents for this study are
the employees in the National Cement Share Company. The genders, years of experience
and the length of periods that they have been working in that company might affect their
perceptions of managerial skills effect on operational performance. The second limitation
is that this research thesis topic is not yet researched so much in the Ethiopian context.
This makes the thesis having gaps in the related materials. The third limitation is time. The
study was conducted over a certain interval of time (cross sectional survey) is a snapshot

9
dependent on conditions occurring during that time. In order to not to affect the outcome
of the study, the researcher examined the data carefully. Besides, the fourth limitation is
the place of the study conducted. The survey was conveyed in National Cement Share
Company. Consequently, the results cannot be applied to exemplify the relationship in the
whole state of country.
Finally, to minimize the effects of above mentioned problems, it was overcome by treating
the information with high confidentiality the researcher uses maximum effort through
spending more time and giving more attention.
1.9 Operational definitions of Terms
Conceptual skill: it is an ability to view the organization as a whole and see how the parts
of the organization relate and depend on one another (Katz, 2009).
Effectiveness: is the extent to which the principal influences his followers to achieve
group objectives (Dhar & Mishra, 2001).
Human skill: ability and judgment in working with and through people, including an
understanding of motivation and an application of effective leadership (Katz, 2009).
Leadership: it has been defined in terms of traits, practices, influences, interaction pattern,
directing the activities of the group toward a shared goal, the ability to bring change
through more adaptive, articulating vision, values and creating the environment for
employees that can accomplish effectively (Northouse, 2018).
Management: is the organization and coordination of the activities of a business in order
to achieve defined objectives (Leis, 2011). This can be defined as an act of controlling and
directing people so as to coordinate and harmonize the group thereby accomplishing
goal(s) within and beyond the capacity of people being directed (Drucker,
2012). Operational performance: comprises the actual output or results of an
organization as measured against its intended outputs / goals /objectives (Inman et al.,
2011).
Managerial skill: basic skills that enable managers to accomplish their duty (Katz, 2009).
Skill: defined skill as being the individual‘s abilities to behave in a way that meets the
requirements of the workplace in given environmental parameters- and to obtain desired
results (Chirita, 2016).
Technical Skill: the ability to use the processes, practices techniques and tools of the
specialty area a manager supervises (Katz, 2009).

10
Quality: Quality is the key to success of every organization which mainly focused on low-
defect rate, product performance, reliability, certification, and environmental concern
(Heckl and Moorm 2010).
Cost: the ability to manage effectively production cost, including its related aspects such
as overhead and inventory, and value-added (Razaq , 2013).
Flexibility: represents the ability to deploy and/or re-deploy resources in response to
changes in contractual agreements which are initiated primarily by customers (Zhang et al.
2003).
Delivery/. Time: Delivery: this is considered as a time-based issue that addresses how
quickly a product or a service is delivered to customers (Razaq, 2013).
1.10 Organization of the study
The research thesis was categorized into five chapters. The first chapter entailed the
introduction which highlighted the background of the study, problem statement, purpose,
study objectives, research questions, and significance of the study, delimitation, limitations
and basic assumptions of the study. Chapter two presented a review of literature on effect
of technical skill on operational performance of National Cement Share Company. The
subsection of this chapter includes theoretical literature and empirical literature. These are
introduction, review of variables, theoretical framework, conceptual framework, gaps in
literature reviewed and summary of the literature. Chapter three is on research
methodology that are used, research design, population, sampling procedures, sample size,
data collection instrument, pilot test of the research instruments, procedures of data
collection, techniques of data analysis, ethics considerations and operationalization of
variables. Chapter four includes the data analysis, presentation and interpretation of the
findings as well as discussion of the findings. Chapter five present the summary of the
findings, conclusions, recommendations.

11
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter discussed in line with literature review includes five sections in our study.
These are conceptual definitions, theoretical literatures, empirical literature studies,
research gap for the study and conceptual framework.
2.2 Theoretical Literature Review
2.2.1 Management
Management is a form of work that involves coordinating an organization‘s resource (land,
labor and capital) toward accomplishing organizational objectives.
Managerial concepts apply equally to public, privet, not for profit and religious
organization. Management development in itself is a huge field of study and there are
professionals who have dedicated their lives towards studying it and commenting on it, but
the true essence of managing comes from effective people skills. It basically involves
gathering the right people to do a certain job, and to show them the right way to do it, and
to motivate them to do so constantly,(Thadani, 2010).
2.2.2 Managerial Skills
Are set of qualities and attributes in a personality of the managers that enable them to
effectively manage the working of the organization, (Kamble: 2011).
Managerial skills also can be defined as specialized technical knowledge in certain jobs
that managers should possess to perform their duties and roles by education where by
people can be equipped with skills, (Analoui and Al-Madhoun :2002). Managerial skills
are acquiring and learning abilities. In other words, we can say that managerial skills are a
set of behaviors that lead to effective job performance and without them in many cases the
knowledge of managers do not have any effects, (Katz :2002) defined managerial skills as
the managers‘ ability to transform information and knowledge into practice.
1.Technical skills consisted of knowledge of and proficiency in a particular area of
specialization such as engineering, computers, financial and managerial accounting, or
manufacturing and these skills were normally more crucial for lower levels of management
since these managers were directly involved or dealing with employees doing the
organization's work.

12
2. Human skills represented the ability to work harmoniously with other individuals both
at the individual or group level. These skills were very important because managers dealt
directly with the people and therefore managers who had good people skills were able to
get the best out of their employees. These managers knew how to communicate, motivate,
lead, and inspire enthusiasm and trust (Gana, &Ifah, 2012). Therefore, these skills were
equally needed at all levels of management.
3. Conceptual skills are the skills managers needed so as to think and conceptualize about
abstract and complex situations. Using these skills managers were able to see the
organization as a whole, understand the relationship among various subunits, and visualize
how the organization fitted into its broader environment. These skills were the most
important at top level management. These views have been supported by the work of other
scholars such as (Caproni, 2001) who asserted that managers at different levels needed to
be more proficient at some skills than others. For instance, as one moved up in an
organization (e.g., upper level executives), conceptual skills were needed to a greater
extent than at lower managerial levels. It was also shown that human skills (i.e., ability to
listen, verbally communicate, show patience and empathy, and understand a subordinate's
needs) were most important to success at any managerial level (Whetten& Cameron,
2002). This theory therefore formed the basis of the study since it highlights three
important managerial skills that affect the effectiveness of managers or anyone in
managerial position which also impact employee productivity.
2.2.3 Operational performance:
The performance indicators can be defined as the physical values which are used to mea-
sure, compare and manage the overall organizational performance (Gosselin 2005). The
performance indicators may include the quality, cost, time, flexibility and delivery. Most
of the organizations use these performance indicators for measuring and managing their
performance. The measures are the factors which are used to determine the organization
performance in terms of performance indicators (Heckl and Moormann 2010).The
operation function of an organization is the part that produces the organization‘s products.
The product may be physical goods or services. This function performs several activities to
‗transform‘ a set of inputs into a useful output using a conversion process. The conversion
process is the process of changing inputs of labor, materials, capital and management into
outputs of goods and services.

13
2.2.4 Competitive priorities/key performance indicators
According to Phusavat and Kanchana (2007) identify criteria which act as competitive
priorities: quality, cost, delivery and flexibility. They defined these criteria as follows:
1. Quality
Quality: low-defect rate, product performance, reliability, certification, and environmental
concern. Quality is the key to success of every organization. Now days the customers are
demanding quality products and the organizations that are able to produce quality products
at lower cost win the game. The quality is checked mainly at three levels input, output and
throughput or process quality. Most of the organizations focus on quality because they
have made promises to their customers about quality of their services and products (Heckl
and Moorm2ann 2010).
2. Cost
Cost: the ability to manage effectively production cost, including its related aspects such as
overhead and inventory, and value-added. (White, 1996) has proposed the external
stakeholders have more concern with the cost based measures of the performance, so that
is why the organizations use cost accounting system which include measures of efficiency
and effectiveness, represent an effort to relate internal performance measures to external
ones (Razaq , 2013).
3. Delivery reliability
Delivery: this is considered as a time-based issue. Delivery addresses how quicklya
product or a service is delivered to customers. It also incorporates the time-to market for a
new product. White (1996) has proposed the perceived relative reliability, reliability
relative to competitors, percentage on-time delivery, due date adherence, percentage
increase in portion of delivery promises met. Percentage of orders with incorrect amount,
schedule attainment, average delay, percentage reduction in lead time per product line,
percentage improvements in output, percentage reduction in purchasing lead time and
percentage reduction in average service turnaround per warranty claim as the measures of
the delivery reliability. There is little discrepancy between researchers about the measures
of delivery reliability (Razaq, 2013).
4. Flexibility
Flexibility: the term represents the ability to deploy and/or re-deploy resources in response
to changes in contractual agreements which are initiated primarily by customers. Several
features are included in this term such as adjustment on design/planning, volume changes,

14
and product variety. Flexibility is defined as the ability of the organizations to perform
multiple tasks at given level of resources like, labour, machine etc(Zhang et al. 2003).
Neely and Platts(2005) has discussed material quality, output quality, new product,
modified products, deliverabil- ity, volume mix and resource mix are the most valid
measures of flexibility. Flexibility is a way to express the competitive advantage in an
unstable market and to minimize instability with a clear capacity of adaptation to new
challenges. The levels and the type of required flexibility, in real time are influenced by
the competitors of this market (Todorut, 2008). With a greater number of manufacturing
operations, implies a greater ability to respond to changes in customer orders, reduced
pressures and assumes a prominent position in the market (Slack, 2005).
2.2.5 Relationship between Managerial Skills and Operational performance:
Successful and effective management is a management that lead to organizational
objectives. Studies confirmed that managers who want to achieve organizational goals and
perform their own duties need to gain managerial skills. In order to assess managers‘ skills
and determining their success and effectiveness, we can use efficiency measure.
performance efficiency is a measure that assess the cost of resources that were used in the
process of "gaining goals" It means that with comparing the outputs obtained to input
consumed, In addition to the cost of human resources, the cost of equipment used,
maintenance, facilities and the rate of return on investment and so on are measured
(Whetten& Cameron, 2002). There for to increase organizations efficiency and achieve
organizational goals, we need managers with managerial skills. Success at integrating the
activities of the resources of the firm leads to higher operational capability‖ (Postrel,
2009).
2.2.6 Katz Theory of Managerial Skills (Three-Skill Approach)
Katz (1974) presented a classification of managerial skills which was the first major
classification of these types of skills that were perceived to be necessary for all managers.
In his article named ―skills for an effective administrator‖ which was published in the
Harvard Business Review in 1974, he highlighted the crucial sets of managerial skills that
were needed for increased effectiveness by managers. Lately, managerial skills have been
conceptualized in terms of basic observable interrelated categories that are termed; task,
people related and self and career development sets (Analoui, 1993). The research work by
Katz (1974) pointed out that managers required three essential skills namely technical
skills, human skills and conceptual skills.

15
2.2.7 Mintzberg Managerial Roles Classification Model
By conducting a longitudinal study of managerial work Mintzberg (1974) sought to
provide the required classification of managerial skills. He conducted the study by
obtaining the personal information about five CEOs, a calendar of their scheduled
appointments for a month as well as more information regarding their organizations. Based
on the information he collected, he planned a week of structured observations in which he
collected two types of data namely anecdotal data and structural data. From the
observations, (Mintzberg, 1974) found that managers worked on unrelenting pace where
they had a large variety of tasks and were often subjected to frequent interruptions. The
researcher noted that they normally preferred working on specific well defined activities of
current importance rather than on more general functions which may be less certain and
whose immediate relevance was unclear. The researcher established that they favored
verbal rather than written contact with others. This influenced him to postulate that
managerial activities or roles could in general be classified into three categories (Shapira&
Dunbar, 1980).
Mintzberg (1974) defines a role as an organized set of behaviors that are identified with a
specific management position and is measured by what individuals do in their day to day
work. He classified these roles into interpersonal which includes figurehead, leader and
liaison; informational that includes monitor, disseminator and spokesperson and; decision
making that includes entrepreneur, disturbance handler, resource allocator and negotiator.
He further asserts that each role is normally influenced by four factors namely;
Environment which are the organization characteristics; job implying its level and the
functions supervised; person (manager‘s characteristics and situation which is a temporal
feature. In essence, all managers perform all roles but to some degree and these roles vary
insignificantly as managers being specialized require performing particular set of
specialized roles (Ghalandari, 2012). This theory was therefore applicable in this study as
highlights one of the key competencies in this study Informational competence especially
in terms of monitoring, disseminating and communicating on behalf of employee largely
affects their productivity.
2.2.8 Approaches to Analyzing Management
Several approaches have been used to analyze the job of management. One common
approach examines management by categorizing the functions (work) performed by
managers. A second approach looks at the roles that managers perform. A third approach

16
analyzes the skills required of managers (Leslie & Lloyd: 1992).
2.2.9 Management Functions
Being an effective manager is no easy task by any means, and no matter what field you are
operating in, basic management principles remain the same for business administration and
management. Whether you are heading a small organization or running a multimillion
dollar corporation, there are some rules and concepts that universally apply to every
situation where people management time management and resource management is
necessary. According to (Mohamude: 2012) Mangers engage in certain basic
activities that are often grouped into conceptual categories called the functions of
management. These functions of management categories are: planning, Organizing,
Staffing, Leading and Controlling.
2.2.10 Management Roles
Henry Mintzberg identifies 10 managerial roles, which have divided into three major
groups: interpersonal roles, informational role, and decisional roles. Interpersonal roles
provide information and the 3 managerial roles under this are figurehead, liaison and
leader. Informational roles of manager process the information provided by the
interpersonal roles and include managerial roles as monitor, disseminator and
spokesperson. Decisional roles are managerial roles which act and use the information
processed by the informational managerial roles and includes roles entrepreneur,
disturbance handler, resource allocator and negotiator (Leslie & Lloyd, 1992).
2.3 Empirical Literature Review
According toGentry, Harris, Baker and Leslie, (2008) study "Managerial Skills: What has
changed since the Late 1980s". This study, using survey methodology, is within the
context of USA field research using 7,389 managers from 1988-1992 and 7,410 managers
from 2004-2006. The study aimed to show how changes in the workplace may have
coincided with shifts in the importance of managerial skills over the past 15 years and to
identify managerial skills needed at different levels and functions in today's work context.
The Findings showed that Managerial skills important in the 1980s are relevant today. The
study also identifies which managerial skills are important at different levels and across
different functions of an organization in today's work environment.
According to Hysong, (2008) study entitled ―The Role of Technical Skill in Perceptions of
Managerial Performance‖. A total of 107 first-tier supervisors from local petrochemical
and engineering companies in (Houston, USA) completed an online survey about their
professional background and managerial skills; subordinates rated supervisors' technical

17
skill, power, and influence tactic habits. Managerial performance was measured as:
production output, subordinate job satisfaction, and subordinate ratings. The purpose of the
research was to determine whether technical skill provides incremental value over
managerial skill in managerial performance for first-tier managers, and explore potential
mediators of this relationship. The researcher fined that Technical skill incrementally
predicted subordinate perceptions of managerial performance over managerial skill.
Referent power mediated the relationship between technical skill and both subordinate
ratings and job satisfaction; expert power only mediated for job satisfaction. Rational
persuasion mediated the relationship between expert power and subordinate ratings of
managerial performance.
Technical skill is valuable to managers as a source of credibility and a means to identify
with subordinates. Technical skill should not, therefore, be the most important criterion in
selecting technical managers. The relationship among the various capacities or skills can
be illustrated in a simple way as follows. Technical skills are mandatory for managers to
exercise the day to day routine activities while supervising or backstopping and
guiding/leading their subordinates. A manager that doesn‘t have the necessary technical
knowledge can hardly lead, manage or supervise the staff he or she is responsible for. It is
therefore, automatic that managers must acquire the right skills to get jobs done. This shall
be reinforced by demonstrated managerial performance which in turn shall be improved
eventually for a better achievement. The performance of the Manager shall be subject to a
transparent Subordinate rating order to get constructive feedback without any bias. Such
comments/feedback through a structured questionnaire intended to enhance the mangers'
performance is critically important to seal any weak points be it technical, managerial and
even attitudes towards behavioral aspects. The feedbacks or comments received shall be
considered by managers respectfully and converted in to action which otherwise results in
dishonest subordinates‘ feedback at a later stage. Conversely when managers are
committed to transparent feedbacks and demonstrate in action, subordinates feel confident
on their bosses. This can contribute to the Job satisfaction of employees which in turn
results in employee retention. The effect of job satisfaction together with proper incentives
and capacity building of employees' lead to an enhanced commitment and hard work
which in turn contributes to the sustenance of the bank since the subordinates constitute
the majority of the workforce.
Gana and Ifah (2012) examined the effects of manager‘s managerial skills on staff
efficiency and effectiveness in organization. The total population of sixty (60) staff was

18
used as data sources. The result obtained from the analysis showed that there existed a
strong relationship between manager‘s managerial skills and staffs efficiency and
effectiveness in organization. The study also emphasized the needs for managers to acquire
basic skills approach such as technical, human, conceptual, diagnostics and
communication skills through education, experience and mentor relationship.
Butt et.al (2014) examined whether leadership skills such as technical skills, conceptual
skills and interpersonal skills had an impact on increasing the productivity of employees in
Pakistan. With different other concepts, better skills of leaders could increase the
productivity of employees. Skilled and dedicated leadership could set good values.
Learning and mastering a variety of abilities facilitated leaders to spread and establish high
standards in the organizations. The results showed that all the variables had positive
impact on productivity of employees working in Pakistan through leadership skills.
Ghalandari (2012) conducted an investigation of the effect of management skills
(technical, human and cognitive) on productivity of human resources in Iran. According to
the study results, lack of attention to labor productivity and paying attention to other
factors will not only reduce the efficiency and effectiveness of the organization, but also
cause increase in loss and accidents and dissatisfaction of manpower. Therefore, paying
attention to the human skills in order to increase labor productivity in the organization can
be useful. Totally, 100 questionnaires were distributed to staff of Islamic Azad University
of Urmia city, that 66 questionnaires were used for the final analysis, which the results
from analysis of them based on simple linear regression show that management skills
(technical, human and cognitive) have a significant and positive influence on productivity
of human resources in Iran.
According to Katz (1955), conceptual skills are the ability to work with ideas and
concepts. Whereas technical skills deal with things and human skills deal with people,
conceptual skills involve the ability to work with ideas. A leader with conceptual skills is
comfortable talking about the ideas that shape an organization and the intricacies involved.
He or she is good at putting the company‘s goals into words and can understand and
express the economic principles that affect the company. Conceptual skills are central to
creating a vision and strategic plan for an organization. Conceptual skill is most important
at the top management levels. In fact, when upper-level managers do not have strong
conceptual skills, they can jeopardize the whole organization. Conceptual skills are also
important in middle management; as we move down to lower management levels,

19
conceptual skills become less important (Kamal, 2012).
In Malaysia, the result of the study conducted by Abu Bakar (2010) proved that the
operations‘s performance and managerial competencies are interrelated. In addition, the
study conducted by Bucur (2013) revealed that compared to middle and line managers, the
core competencies were more important for top managers in identifying managerial
performance. Similarly, a study conducted in Sri Lanka by Zoyza (2011) aims to
distinguish the firm-level abilities in terms of managerial level competencies in which a
range of factors are identified at the managerial competency level that from firm-level
capabilities as a result. In Nigeria, the study conducted by Gladson (2008) affirmed that
managerial competencies lead to marketing effectiveness in corporate organizations. In
China, the result of the study conducted by Wang (2009), he suggested that the middle
managers must focus on its critical competencies such as continual learning, execution,
team building, communication, and coordination. In addition, the study of Sahoo (2014) in
India, he mentioned that to improve the managerial performance, potential dimensions
such as entrepreneurial and leadership competencies should be identified. Moreover, the
study of Sharma (2011) in the development of competencies, he shows that cognitive,
social and intelligence competencies predict the effectiveness in management and thus can
be developed in adults.
In Singapore, the study conducted by Chong (2013) concluded that work environment
differs when the competency differences are apparent. The study also revealed that
organizing, planning, and motivating others to distinguish a more rapid career advancing
managers regardless of their work environment are associated with assessed competencies.
On the other hand, findings of the study indicate that the career advancement is not
satisfactory and the result shows that these competencies are necessary. In contrast, the
study of Pilay (2008) in South Africa, the study revealed that there is a significant gap in
terms of managerial competencies between private and public managers. The private
managers perceived themselves to be more competent than the public managers.
Organization performance becomes a significant indicator for organizations in the
attainment of their objectives or goals in both developed and developing economies in
small medium enterprises as well as in big organizations. According to Richard et al.
(2009), organization performance is a factor that determines how well an organization
achieves its objective. Prior researchers paid less attention than what factors included in an
operational performance that measures operational performance well, e.g., financial

20
performance or non-financial performance or both (Richards et al. 2008). Organizations
overall focus goes to enhance their performance by increasing their profit (Lusthaus and
Adrien, 1998). Although, organization performance is an important construct for most of
the prior studies and unfortunately this construct not defined properly in studies (Dess and
Robinson, 1984) because some of the organizations measures this construct differently to
see their business objects. Meanwhile, organization performance includes the main three
areas such as market performance, financial performance, and stakeholder return (Richard
et al. 2009).
According to Carmeli (2008) has evaluated the effects of management skills on the
performance of city agencies and has come to the conclusion that management skills
(technical - creativity and educational) have effect on the organization's performance. And
in the short-term, changes in the management skills can easily create significant changes in
the performance level. Because, the structural changes in addition to the high cost need to
spend more time.
According to Bond (2007) has studied the relationship between management
education, management style and organizational efficiency to identify a relatively new
type of training based on healthy attitude of mind and operational performance.
Employees' opinions survey and assessing operational performance showed that education
has changed the behavior of managers. Managers attributed these changes to a
combination of management education, effects of transformational management and
changes in cultural norms which improve the working environment.
According to Carmeliandtishler (2006) have considered the relative importance of
management skills in the excellent team of managers .The purpose of study was to
investigate the effect of managerial skills on performance of industrial firms. The results
showed that the relationship between firm's performance and cognitive abilities are
positive, significant and even more important than the relationship between firm's
performance and the skills of human resources. The effect these skills on the performance
of firms is more than the effect of the other variables such as firm's size, life and
environmental uncertainty.
According to Martín et. al. (2009) the studies on multi-skilled employees are necessary
to improve manufacturing flexibility. With a multi-skilled team, managers can be prepared
to any kind of flexibility on customer demands and tastes. It‘s important to have a team
focus in continuous learning to find new ways to perform their jobs and tasks in order to
reach higher productivity level and with that make valuable contributions to the

21
organization‘s goals.
According to Awwad et.al (2010) the study showed that companies utilize different
competitive priorities to maintain competitive advantage. The means/percentiles of ranks
of the most important performance indicators to achieve and maintain competitive
advantage are Quality (4.213/23.9%), cost (3.270/23.9%), Flexibility (3.127/22.8%) and
delivery (3.081/22.5%) respectively.
Hawi (2018) on the study effect of knowledge management practice on organizational
performance noted that knowledge management accounted for 67.5 percent of the variance
in organizational performance.
According to Farah, (2017) on the study analysis of managerial competencies and their
influence on staff productivity noted that majority of the respondents 74.5% for technicsl
skills , 68.7% for human skills and 77.90% for conceptual skills disagreed with the
statement that those in management positions within the county government had enough
and proper training on their area of work.
Table2.1: Summary of empirical literature review
Researchers Focus Findings
Gentry et al.,
(2008)
What has changed since the
Late 1980s in managerial
skills
Managerial skills important in the 1980s
are relevant today
Hysong,
(2008)
The Role of Technical Skill in
Perceptions of Managerial
Performance
Technical skill incrementally predicted
subordinate perceptions of managerial
performance over managerial skill
Gana and Ifah
(2012)
the effects of manager‘s
managerial skills on staff
efficiency and effectiveness in
organization
there existed a strong relationship
between manager‘s managerial skills and
staffs efficiency and effectiveness in
organization
Butt et.al
(2014)
leadership skills impact on
increasing the productivity of
employees in Pakistan
all the variables (technical skills,
conceptual skills and interpersonal skills)
had positive impact on productivity of
employees working in Pakistan through
leadership skills
Ghalandari
(2012)
the effect of management
skills (technical, human and
cognitive) on productivity of
human resources in Iran
Management skills (technical, human
and cognitive) have a significant and
positive influence on productivity of
human resources in Iran.
Katz (1955) Types of skills required for
the management levels
AbuBakar
(2010)
operational performance and managerial
competencies are interrelated
Bucur (2013) compared to middle and line managers,
the core competencies were more
important for top managers in

22
identifying managerial performance
Zoyza (2011)
Gladson
(2008)
Managerial competencies lead to
marketing effectiveness in corporate
organizations.
Wang (2009) the middle managers must focus on its
critical competencies such as continual
learning, execution, team building,
communication, and coordination
Sahoo (2014) to improve the managerial performance,
potential dimensions such as
entrepreneurial and leadership
competencies should be identified.
Sharma
(2011)
the development of
competencies
cognitive, social and intelligence
competencies predict the effectiveness in
management
Chong (2013) Work environment differs when the
competency differences are apparent.
Carmeli
(2008)
the effects of management
skills on the performance of
city agencies
changes in the management skills can
easily create significant changes in the
performance level
Bond (2007) the relationship between
management education,
management style and
organizational efficiency
that education has changed the behavior
of managers
Carmeli and
tishler (2006)
the relative importance of
management skills in the
excellent team of managers
the relationship between firm's
performance and cognitive abilities are
positive, significant and even more
important than the relationship between
firm's performance and the skills of
human resources.
Martín et. al.
(2009)
multi-skilled employees are necessary to
improve manufacturing flexibility
Awwad et.al
(2010)
companies utilize different competitive
priorities to maintain competitive
advantage
Hawi (2018) Effect of knowledge
management practice on
organizational performance
Noted that knowledge management
accounted for 67.5 percent of the
variance in organizational performance.
Farah, (2017 analysis of managerial
competencies and their
influence on staff productivity
Majority of the respondents 74.5% for
technical skills , 68.7% for human skills
and 77.90% for conceptual skills
disagreed with the statement that those in
management positions within the county
government had enough and proper
training on their area of work.

23
2.4 Conceptual Framework of the Study
Conceptual framework represents way of thinking about a problem or a study or way of
representing how complex things are (Bordage, 2009).
The conceptual framework of your study the system of concepts, assumptions,
expectations,beliefs, and theories that supports and informs your research is a key part of
your design(Robson, 2011). The independent variables are technical skill, human skill and
conceptual skill. The dependent variable is the operational performance. For answering the
research question, a set of hypotheses arise as a result of the theoretical discussion
Figure2.1 : Conceptual Framework
Source: Katz ( 2009), Javadin (2010)
2.5 OPERATIONALIZATION OF VARIABLES
Operationalization is the process of strictly defining variables into measurable factors. The
process defines fuzzy concepts and allows them to be measured, empirically and
quantitatively.

24
Figure2.2: Operationalization of research variables
Operational variables (or operationalizing definitions) refer to how you will define and
measure a specific variable as it is used in your study.
Table2.2: Operationalization of the variables
Type of
Variable
Operational Variable Level/scale of
Measurement
Data
collection
Method
Dependent (Yi) Operational performance Ordinal Questionnaire
Independent (X1i) Technical skill Ordinal Questionnaire
Independent (X2i) Human skill Ordinal Questionnaire
Independent (X3i) Conceptual skill Ordinal Questionnaire

25
CHAPTER THREE
RESEARCH METHODOLOGY
3.1. Research Design and Approach
The main objective of this study was to examine the influence of managerial skills on
operational performance of NCSC. In doing so, the researcher was employed both
descriptive and explanatory research designs in order to satisfy specific objectives of the
study. Moreover, a quantitative research design was used via a cross-sectional study
approach in which the data was collected from cross sectional survey (October to
November), 2019 from NCSC employees at managerial and non-managerial positions
which helps to triangulate the data collected from different sources via Questionnaires as
per required for the researcher.
There are three types of research approaches namely, quantitative, qualitative and mixed
methods approach, (Leedy and Ormrod; 2005). According to Creswel (2003), in
quantitative studies, researcher advances the relationship among variables and poses that in
terms of questions or hypotheses. Quantitative approach is used to answer question about
relationships among measured variables with the purpose of explaining, predicting and
controlling phenomenon.
Whereas according to Leedy and Ormrod; (2005), qualitative approach is used to answer
questions about the complex nature of phenomena and its purpose is describing and
understanding the phenomena.
Contrary to quantitative research, qualitative research consists of a body of research
techniques that do not attempt to measure, but rather seek insight through a less structured
and more flexible approach (Gray, 2004. Quantitative research approach is appropriate for
answering different kinds of questions. Thus, the study deployed quantitative research
techniques:-descriptive statistics, spearman correlation and ordinal logistic regressions.
3.2. Description of the Study Area
This study was under taken in National Cement Share Company. NCSC was established
in 2006 by acquiring the state-owned Dire Dawa Lime and Cement Factory, which was
originally set up and built in 1936 by the Italians, as the first cement plant in Ethiopia. It
was established through a joint venture of East Africa Mining Corporation, the Federal
Democratic Republic of Ethiopia‘s privatization and public enterprises supervising Agency
in which 80% share of the factory was owned by East African Mining Corporation, and the
20% was by the government. Since past few years, government shares were bought out by

26
East African Mining Corporation. Since July 2010, it is a fully privatized company under
the share of East African Mining Corporation, & a global partner called the Schulz Global
Investment /SGI/ joined the company as foreign investor (NCSC Strategic Plan , 2016-19).
Immediately after takeover, the old plant was converted from a long semi-wet
manufacturing process to a suspension pre-heater kiln system, and the production capacity
was upgraded from the original capacity of 36,000 Tons Per Annum (TPA) to 150,000TPA
or 500 TPD. By taking in consideration the increased capacity of the newly inaugurated
3000 TPD plant, Economy of scale and environmental issues influenced the decision to
have the old plant mothballed.
In line with the company‘s vision and continuous efforts to position itself as a prominent
player in the development and industrialization of the country, and to respond to the
growing cement demand, NCSC aggressively embarked on the construction of a
Greenfield Cement Plant with a capacity of 3,000TPD (1 Million Tons Clinker per annum)
or 1.2Million Tons Cement Per Annum & built by Chinese contractor named NHI. The
project started in 2009 and started preliminary operations as of January 2013. Commercial
production started on March 1, 2013. The plant is located in Dire Dawa City, 515 km east
of the Ethiopian capital, Addis Ababa, at 09.35N latitude and 41.45E longitude near the
old plant about three kilometers far from the city center on the Dire Dawa - Addis Ababa
highway.
Currently, 1512 total number of employees are found and working in the factory (NCSC
Strategic Plan, 2016-19). Among them 125 are at managerial positions and 1387 are at
operational occupations.
Therefore, this research will investigate the Top, middle level and lower supervisory level
managerial position under National Cement Share Company
3.3. Source of Data
Data was collected from primary and secondary sources by employing quantitative data.
The quantitative data includes objective items through the close ended questionnaires.
Target population for the primary data was supervisors and managerial position personnel
in National Cement share Company at Dire Dawa Administration City. Primary data
collect by using structured (closed) questionnaire with the selected different departments‘
managers and non-managers as per indicated in table3.1 and secondary data by reviewing
of major project report, books, journals, magazines and documents. For quantitative data
collection, Likert rating scale was adapted to support producing the appropriate ratings

27
with a 5-point Likert scale rating of 1-5 points where by each measurement statement was
assigned points (Strongly agree = 5, Agree = 4, Neutral = 3, Disagree = 2, strongly
Disagree=1). The questionnaire will distribute to managerial and non-managerial
employees in National Cement share Company to fill it independently and returned for
analysis.
3.4. Sampling Methods and techniques
Sampling techniques are the ways in which an appropriate sample size is selected for the
wider study (Bryman, 2012). Respondents are diversified in terms of educational
qualification, job‘s variety and other parameters, the participants‘ perceptions of
managerial skills have expected to be varied accordingly. In this study a stratified
sampling technique was used to ensure that the representatives of the population in the
sample will reflect the significant characteristics of the entire population. Stratified
sampling is a technique where the researcher divides the entire population in to different
sub groups on the basis of their department .Thus, stratified random sampling method
applied to avoid such heterogeneity of the population.
The following explanation by Kothari (2004, p.62), in his research methodology book,
complements the above rationale of this study for adopting the stratified sampling design.
If a population from which a sample is to be drawn does not constitute a homogeneous
group, stratified sampling technique is generally applied in order to obtain a representative
sample. Under stratified sampling the population is divided into several sub-populations
that are individually more homogeneous than the total population (the different sub-
populations are called ‗strata‘) and then we select items from each stratum to constitute a
sample. Since each stratum is more homogeneous then the total population, we are able to
get more precise estimates for each stratum and by estimating more accurately each of the
component parts, we get a better estimate of the whole.
The study used stratified random sampling approach for selecting samples from the
population which is diversified in terms of age, sex, educational qualification, job‘s variety
and other parameters (are Electrical Maintenance, HRM, Auto Garage, Community
Liaison Office, Quality Control, Safety and Health, Engineering, MIS, Supply Chain,
General Service, Quarry, Mechanical Maintenance, Marketing and Sales, Finance,
Production, Fleet Operation, Koka Plant and Addis Ababa Support Office). The
participants‘ perceptions of managerial skill on organizational performance have expected
to be varied accordingly. A stratified random sampling allows us to take into account the

28
different subgroups of people in the population (see table 3.1).
After dividing the population based on strata group, the researcher used disproportionate
random sampling technique to select sample units respondents from each stratum, having
41% of managers and 59% of non-managers. This technique was used by including all the
managers in the company and the senior non-managers who worked in the company for
the last five years.
3.4.1. Population
The total population in the NCSC is 5121, but among this the study was made with 495
target populations who worked in the company for the last five years (NCSC Manpower
Data by Department, June. 2019). This target population comprises of managerial and non-
managerial employees worked with the managers for the last five years in NCSC among
different departments i.e. Electrical Maintenance, HRM, Auto Garage, Community Liaison
Office, Quality Control, Safety and Health, Engineering, MIS, Supply Chain, General
Service, Quarry, Mechanical Maintenance, Marketing and Sales, Finance, Production,
Fleet Operation, Koka Plant and Addis Ababa Support Office described in table 3.1 is used
for sample size determination. For triangulation of data collected in the company on the
effect of managerial skill on operational performance the researcher used both the
managerial and non-managerial employees whom they are senior and worked in the
company for the last five years. Among the target population of 495 respondent
employees, 125 are managers and 370 are non-managers.
3.4.2. Sample Size
Kothari (2004) argues that in order to represent the whole population, the sample size of
a thesis should be large enough. Creswell (2006) indicates that information gathered from
the sample size should be enough and should allow easy analysis. Slovin's Formula is
used to determine the sample size. As it is described in section 3.4.1 the target population
of 495. Among these respondent employees, 125 are managers and 370 are non-
managers. So the managerial employees are manageable to take it as a census survey and
the researcher used slovins sampling size determination formula to select non-managerial
employee respondents. The slovins formula used to selected non-managerial employee
respondent‘s is described as the followings.
n= , n=N/(1+Ne2
), n= = 192
where, n=number of samples, N= total target population=margin of error(0.05)

29
now the researcher have n1=192 for non-managerial employees using the slvins sample size
determination formula and n2= 125 for managerial employees taken as census data (total
number of sample size for survey study=317). Thus the questionnaire was distributed to
317 respondents consist of both 125 managers and 192 non- managers in the survey study.
3.4.3. Sampling Frame
The study was used descriptive and correlation research method through the stratified
sampling method that engaged in Managerial staffs and subordinate employees.
Table3.1: Sample Size Determination
Department
managerial
census
non-managerial
population
non-managers
samples
Electrical Maintenance 10 31 16
HRM 4 10 5
Auto Garage 7 19 10
Community Liaison Office 9 27 14
Quality Control 3 8 4
Safety and Health 5 13 7
Engineering 3 6 3
MIS 4 10 5
Supply Chain 6 15 8
General Service 12 42 22
Quarry 13 44 23
Mechanical Maintenance 13 46 24
Marketing and Sales 5 13 7
Finance 5 13 7
Production 5 12 6
Fleet Operation 5 13 7
Koka Plant 10 31 16
Addis Ababa Support Office 6 15 8
Grand total 125 370 192
Source: NCSC HR, 2019
1.1. Data Collection Methods
Methods of data collection relatively dependence on standard questionnaires (
Swaminathan , 2004) which was prepared in the form of Likert five scales. However, to
measure managerial skill on operational performance the researcher modify in relation to
the study for that matter the researcher test the reliability and check the dependability. For
the purpose of data collection, the researcher was used closed-ended questionnaires and

30
both structured and semi structured interviews. A closed-ended questionnaire was prepared
on the basis of effect of managerial skill on operational performance.
Thus, closed ended questionnaires helps to avoid pressure up on the respondents in any
direction and better be able to obtain the required data in the study area. The questionnaire
was divided in to two sections. The first section contained the demographic characteristics
of the respondents were requested to provide information about their gender, age, year of
service or experience and education level.
The second section of the questionnaire was designed to enable the researcher to gather
information about conceptual framework variables. For all questionnaire included in
section 2, the respondents were requested to indicate their feeling on a five point Likert
scale type to measure weighted as follows: 1=strongly disagree, i.e., very much dissatisfied
with the case described, 2=disagree, i.e., not satisfied with the case described, 3=neutral,
i.e., uncertain with the case, 4=agree, i.e., feeling alright with the case described, and 5=
strongly agree, i.e., very much supporting the case described for managerial skills and for
the operational performance questionnaire was designed to enable the researcher to gather
information operational performance variables To what extent (on a scale of 1-5) have the
operational performance dimensions has been improved measure ranging from MINIMAL
(1) to GREAT EXTENT (5)
3.6. Data Analysis Methods
After the data was collected from primary source it was checked and internal editing was
undertaken to detect errors that has been committed by the respondents. Then, the edited
data was coded and manually entered in to statistical package for social science (SPSS)
computer software. Quantitative data was presented in tables and charts. Moreover,
quantitative methods of data analysis techniques were employed depending on the study‘s
research questions, hypothesis and objectives. As a result, the data was analyzed using
both descriptive and inferential statistics. The study utilized descriptive statistics to
analyze quantitative data. The descriptive statistics adopted by the study include measure
of central tendency, measure of dispersion and measure of location (e.g. percentages,
frequencies; mean and standard deviations). Analysis of data in this research was done by
using descriptive statistical methods like: frequency, mean, standard deviation and
inferential statistical methods such as: correlation and regression. The regression
analyses were conducted to determine by how much percent the independent variable i.e.
managerial skill explains the dependent variable which is operational performance.
Correlation analysis was conducted to test the proposed hypothesis whether there is a

31
positive significant relationship between the managerial skill and operational performance.
To realize the character and strength of the connection between the variables measured
bivariate correlation analyses was performed. (Creswell, 2012). So, this association
facilitate in investigating the degree to which one variable will linearly interlinked to
another. To examine the relationship between the managerial skill and operational
performance, spearmans nonparametric correlation test was used.
T-tests generated by SPSS was used to test the perception difference between the means of
managerial respondents and non-managerial respondents, as well as significant of the
relationship between the variables under the study and establish the extent to which the
predictor variable explains the variation in dependent variable.
3.7. Research Model specification:
In this study, Katz primary model was selected as a basic model to determine
managerial skills and because, first this model is more comprehensive and competed in
comparison with other models, secondly it is more compatible with the managerial levels
and third gathering information about its levels by current tools is possible.
Ordered (ordinal) Logistic regression model was used to indicate the major factors that
influence the OP. Ordinal Logistic regression was selected due to the nature of dependent
variable. When the dependent variable is categorical in nature and has ordered and ranked
levels of variables, ordinal logit model is suitable and could be applied (Agresti, 2010). To
identify major factors associated with ordinal outcomes, using ordinal Logistic Regression
model is more appropriate.
Research Model: ln(p/1-p)= Yi=β0+β1X1i+ β2X2i+ β3X3i +℮i
The model Yi=β0+β1X1i+ β2X2i+ β3X3i+℮I is used for the research depending on the
conceptual framework, research questions , research hypothesis and objectives of the
study, Where
Yi=operational performance
β0=the Y intercept
X1i= technical skill
β1=slope coefficient of technical skill
X2i= human skill
Β2=slope coefficient of human skill
X3i= conceptual skill
Β3=slope coefficient of conceptual skill

32
℮i=the error term
In this study, Managerial Skills (technical skill, human skill and conceptual skill) are the
independent variable while operational performance is the dependent variable in the
research thesis relationship context. Managerial Skills Contribute in improving the
operational performance of manufacturing companies measured in terms of quality, cost,
flexibility and delivery. Demographic variables can be included in the logistic research
model specification as categorical factor variables during the regression analysis.
For this study the model was specified and its Link function was set out as follows:
Log (Pi/ 1-pi) = Bi+ B1 X1 + B2 X2 + B3 X3 + Bn Xn+ ei
Where, Pi= the probability of an outcome for dependent variable Bi= intercepts for the
categories of outcome variable
B1, B2, Bn = coefficients of slope parameter and x1, X2 &x3= independent variables. ei =
An error term (random variable)
This can be further explained as:
The probability of an outcome for dependent variable (Y) = OP
X1 = CS, X2 = HS, X3 = TS, X4 = gender, X5 =age, X6 = work experience and x7 =
education level. Based on the nature of data, the researcher used some inferential statistical
techniques to analyze the data, to test and determine its relationship such as likelihood
Ratio (LR) test which follows the chi-square (j2) test and pseudo- R2 to measure the
strength of association to assess the model fitness, to evaluate the contribution of each
predictors to a given model and to test the level and pattern of association between the
predictor (independent) variables and the outcome (dependent) variable.
The three variables representing MS and the four control variables were regressed on OP.
In the regression model the three MS like CS, HS and TS, acted as the independent
variables and OP as the dependent variable.
Now, we can deal with the odds ratio assumption which is used to evaluate the probability
of individual event, just by exponentiating the ‗B‘ coefficients.
Proportional Odds Ratio Assumption: the assumption underlying ordinal logistic
regression is that the relationship between each pair of outcome groups is the same.
In other words, ordinal logistic regression assumes that the coefficients that describe the
relationship between, say, the lowest versus all higher categories of the response variable
are the same as those that describe the relationship between the next lowest order and all

Effect of managerial skills on operational performance in national cement share company

Effect of managerial skills on operational performance in national cement share company

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Effect of managerial skills on operational performance in national cement share company

Similar to Effect of managerial skills on operational performance in national cement share company (20)

Recently uploaded

Recently uploaded (20)

Effect of managerial skills on operational performance in national cement share company