An Investigation Into Socio Economic Effects Caused by the Closure of Companies: a Case Study of ZISCOSTEEL
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Midlands State University Established 2000 FACULTY OF EDUCATION DEPARTMENT OF ADULT EDUCATION An Investigation into Socio Economic Effects Caused by the Closure of Companies: A Case Study of ZISCOSTEEL. BY CLARRIDGE SINGAGWARI REG No: R 12569C A RESEARCH PROJECT SUBMITTED TO THE MIDLANDS STATE UNIVERSITY IN PARTIAL FULLFILMENT OF THE REQIUREMENTS FOR A BACHELOR OF ADULT EDUCATION DEGREE GWERU ZIMBABWE October 2016 RELEASE FORM Author Reg No : R12569C Title Research The Socio Economic effects caused by the closure of companies. A case study of ZISCOSTEEL Degree program : Bachelor of Adult Education Contact : 0774795849 Year : 2016 : Permission is hereby granted to the Midlands State University Library to produce copies for private scholarly or scientific research only. The author reserves other publication rights and neither the dissertation or exclusive extracts from it may be printed or otherwise reproduced without the author‟s permission. Signed……………………… Permanent address : 15350 15extension Mbizo Kwekwe Date…………………………... i APPROVAL FORM The undersigned certify that they have read and recommend to the Midlands State University for acceptance; a dissertation entitled:The Socio Economic effects caused by the closure of companies. A case study of ZISCOSTEEL. …………………… ………………….. Supervisor Date …………………… ……………………. Chairperson Date ii DECLARATION BY STUDENT R12569C, hereby sincerely declare that this dissertation is my original work that has not been submitted in parts or full for any other degree to any other university or college. Equally, I also declare that proper citations and acknowledgements in accordance with copy right law and ethical requirements have been strictly adhered to in writing of this dissertation. Name of Student………………………………………….R12569C Signature of student……………………………………… Date……………………………………………………….. iii iii iii ACKNOWLEDGEMENTS I am very thankful to my wife Macilline for her continuous support and encouragement, to my two kids Hazel Theresa and Kunashe Clarridge jnr who missed a lot for this to be a success, to my classmates Harmony Nyakonda, Kudzai Muzuva, Jane Mutyiri and Jonathan Mapaike for inspiration. I also extend my sincere gratitude to my supervisor Mr S S Mashingaidze who diligently paid a lot of attention and detail in the process of assisting me to understand the whole process of this project and ensuring that I finish this project successfully, all lecturers and MSU staff who have played their roles both academic and social support and the almighty God for the blessings. Thank you. iv iv DEDICATION I dedicate this project to my family, friends and relatives for constantly supporting me through the arduous journey without them I would not have managed successfully. v v ABSTRACT This study‟s main focus area was to investigate the socio- economic effects of company closures. This research study is based on the background of numerous company closures across the globe and in Zimbabwe. Data was collected from the workers, company management, social services, nurses, police, councilors and teachers. Interviews and questionnaires were employed in the collection of data. The collected data was examined and interpreted. The study found out the majority of skilled workers moved on and what remains are a semi- skilled and non-skilled workers who failed to move on because of lack of courses. The Company last recruited six years ago, 75% of the workers are in their early forties and fifties and hence find it difficult to find employment elsewhere. The study also found out that the workers were owed sixty months wages, were not given severance packages and are facing challenges in buying food, paying bills, accessing medication, paying school fees. The study revealed 30 % of families broke down while crime and prostitution increased significantly. Social services are overwhelmed as 100% of the workers are in need of assistance. Basing on the findings of the study the researcher concluded that the workers are faced with serious socio economic challenges which they cannot overcome given the current state of affairs .The study recommends that the Government and the Company should consider sourcing funds to pay the workers their severance packages to enable them to start income generating projects .The Government should also consider engaging other stakeholders such as Non-Governmental Organizations to help in the counselling of the workers as well as conducting and funding of vocational courses and self-sustenance projects. vi vi TABLE OF CONTENTS Release Form i Approval Form ii Declaration by Student iii Acknowledgement iv Dedication v Abstract vi Table of contents vii List of Figures x List of Tables xi List of Appendix xii Chapter one: The research problem 1.0 Introduction 1 1.1 Background to Research Study 1 1.2 Statement of the problem 4 1.3 Research Questions 4 1.3.1 Sub research Questions. 4 1.3.2 Objectives of the study 4 1.4 Significance of the Study. 5 1.5 Definition of key terms 5 1.6 Delimitations of the study 6 1.7 Limitations of the study 6 1.8 Assumptions of the study 7 1.9 Summary 7 Chapter two: Review of related literature 8 2.0 Introduction 8 2.1Socio economic effects caused by closures 8 2.2 Case National Steel Company 9 2.2.1. Impacts of closure 9 2.2.2 Welfare of displaced workers 10 2.2.3 Family life 10 2.2.4Health 11 2.3Case of MG Rover 12 2.3.1 Effect on community 12 vii 2.3.2. Psychological well- being 13 2.3.3Mortality 13 2.3.4 Children‟s outcomes 14 2.3.5 Fertility 14 2.4Case of African minerals 15 2.4.1Effects on workers 15 2.4.2 Living conditions 15 2.4.3 General unhappiness 16 2.5 Measures that can be used to address the problems 16 2.5.1 Communication 16 2.5.2 Training 16 2.5.3 Outplacement 17 2.5.4 Financial counselling 18 2.7 Summary 18 Chapter three: Research methodology 19 3.0 Introduction 19 3.1. Research Design 19 3.1.1 Case Study 19 3.1.2Research population 21 3.2.0 Sample 22 3.2.1 Sampling technique 22 3.2.2Sampling frame 23 3.2.3Sample size 23 3.3. Data sources 24 3.3.1 Primary data 25 3.3.2Secondary data 25 3.4Research instruments 25 3.4.1Questionnaires 25 3.4.2Advantages of questionnaires 26 3.4.3 Interviews 26 3.4.4 Types of interviews 27 3.4.5 Face to face interviews 27 3.4.6 Advantages 27 viii viii viii viii 3.4.7 Disadvantages 28 3.4.8 Data collection procedures 28 3.5 Ethical considerations 29 3.5.1Validity and reliability of findings 29 3.5.2 Protection from harm 29 3.5.3 Consent 29 3.5.4 Confidentiality 29 3.5.5 Anonymity 29 3.5.6 Plagiarism 30 3.6 Data analysis and presentation tools 30 3.7 Summary 30 Chapter four: Data presentation ,analysis and discussion 31 4.0 Chapter introduction 31 4.1Data presentation 31 4.1.2 Distribution of research instruments 30 4.1.3 General response questionnaire and interviews 32 4.1.4 Workers academic qualifications 32 4.1.5 Professional qualifications 33 4.1.6 Gender and Age 35 4.2 Discussion 36 4.2.1 Socio economic effects: Company management view 36 4.2.2 Socio economic effects: as seen by workers 38 4.2.3 Socio economic effects: as seen by teachers 41 4.2.4 Socio economic effects: social services view point 43 4.2.5Socio economic effects: police 45 4.2.6 Socio economic effects: as suggested by nurses 48 4.2.7 Measures currently being used to assist the workers 50 4.3 Chapter summary 50 ix ix Chapter five: Summary, conclusions and recommendations 47 5.1 Introduction 47 5.2Conclusions 49 5.3 Recommendations 49 5.3.1Government 49 5.3.2 Company 51 5.3.3 Workers 51 References 52 x x LIST OF FIGURES Figure (i) showing period in employment. 34 Figure (ii) showing economic challenges as suggested by 38 Figure (iii) showing socio economic effects according to Social Service 43 Figure (iv) Showing comparison of cases reported between 2004 and 2015 47 xi xi LIST OF TABLES Table 1.0 showing sample size and composition 23 Table 1.1: Distribution of questionnaires and interviews 31 Table 1.2 General response rate to questionnaire and Interviews 32 Table 1.3 Workers Academic Qualifications 32 Table 1.4 Professional Qualifications 33 Table 1.5 Gender and Age 35 Table 1.6 Frequency table for Socio Economic effects as suggested by Management 36 Table 1.7 Frequency table for Socio Economic effects as seen by Teachers. 41 Table 1.8 Comparison of Cases reported between 2004-2009 and 2010-2016 46 Table 1.9 Frequency table of Socio Economic effects as suggested by Councilors 48 xii LIST OF APPENDICES Appendix 1 Letter of Permission 61 Appendix 2 Employee Questionnaire 62 Appendix 3 Councilor Questionnaire 64 Appendix 4 Social Services Questionnaire 69 Appendix 5 Teachers Questionnaire 72 Appendix 6 Interview Guide for Company Management 75 Appendix 7 Interview Guide for Nurses 76 Appendix 8 Interview Guide for Police Officer 77 xiii CHAPTER 1: THE RESEARCH PROBLEM 1.0 INTRODUCTION Zimbabwe has been experiencing serious economic challenges for the past two decades. The economic malaise has resulted in numerous Company closures within both the private and public sectors. This sad state of affairs has led to many workers losing their source of earnings. This economic scenario is not peculiar to Zimbabwe alone but has also affected many countries within Sub Saharan Africa and World over. This write up is motivated by the desire to investigate socio –economic effects brought about by the closure of one of Zimbabwe‟s biggest parastatals, the Zimbabwe Iron and Steel Company (ZISCO) now referred to as the New Zimbabwe Steel Company after an aborted deal to resuscitate it by the Government of Zimbabwe and ESSAR group of Mauritius .This chapter gives an insight into the problem under study.