Why were they surprised?

An article published on 7th February 2010 in South Africa's Sunday Times newspaper claims that "economic conditions and new regulations have made life tough at Vodacom," the country's largest cellphone operator. The company's CEO is quoted as saying that "Competition last year was fierce and we probably took too long to respond to it ...."

Vodacom's experience is not untypical of many firms that fail to deliver the 'superior returns' that shareholders and other stakeholders rightly expect in consideration for the generous remuneration packages paid to senior executives. The Vodacom case thus raises a number of important questions regarding the effectiveness of management decision-making. These include: Were the strategies that led to Vodacom's sub-optimal performance last year INFORMED strategies; i.e., informed by the estimates and judgments one expects from a competent intelligence function? If Vodacom's intelligence unit was doing its job, was management listening? To what extent, in 2007/8, was Vodacom's management anticipating the linchpin events likely to take place in it competitive environment that could disrupt, or otherwise affect its 2009 results?

The big question, however, is how many other firms in South Africa (and elsewhere) face the same dilemma: increasingly "fierce," rapidly changing, and apparently 'unexpected' competition? My questions are: Why are executives so surprised?