CHAPTER ONE

INTRODUCTION

1.1        BACKGROUND OF THE STUDY

The concern for high productivity in industrial organizations is universal, and is the desire of every manager. In the world of globalization there is lot of competition in the market also there is competition among different organizations and same organization having similar product and also within the organization. The overall success of each and every organization is depending upon the quality of employees. How successful the organization will be told by the employees on the success of or growth of that company’s employees (Kumbhar 2011). Human beings are considered as an important asset of every organization. It is a duty of every organization to motivate the employees and influence the behavior of the employees through Management system.

The manufacturing sector in Nigeria has suffered setbacks which are largely attributed to ineffective and inefficient management. Management is a tool which focuses on managing the individual and work environment in such a manner that an individual/team can achieve set organizational goals. Management is described “as a systematic process for improving organizational performance of individuals and teams. It is a means of getting better results by understanding and managing performance within an agreed framework of planned goals, standard and competency requirement. Armstrong (2006: 495) Management is also considered as “a systematic and holistic (all-embracing) process of work planning, monitoring and measurement aimed at continuously improving the teams and -- individual employee’s contribution to achievement of organizational goals”. Akata (2003:14).

The profitability of organizations can directly be linked to the performance of their managers, and it is in line with this link that Kanter (1982) and Nwachukwu (1992), also see company productivity as dependent to a great degree on how innovative managers especially middle level managers are, because such managers have their fingers on the paste of operations. This means people are managed as assets not costs.

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Bradley and Taylor (1992) categorically state that why capabilities of companies may be enhanced by technology, they rest fundamentally on the efforts of the employees in particular, managers who commit their best energies to corporate endeavours. Infact no company can hope to meet the rising expectations created by intensified competition without productive and creative managers and employees, much less profitable.

Managers are keys to making any Management system work. Armstrong and Baron (1998) contend that so essential is Management that managers must manage performance as an essential part of their job. Ironically, while all these possibilities exist through management, in Nigeria the bane of business enterprises is under performance. This explains the need for this study on Management and corporate profitability in the manufacturing companies. We believe that Management as an integrated process could bring about greater profitability for companies that practice it.

1.2       STATEMENT OF PROBLEM

 Management is a basic tool for corporate profit. The obvious advantage of the practice Management notwithstanding, many captains of industries are not aware of this tool. Even some that do are not very conversant with the approaches. In view of these problems, the research seeks to address the objectives stated below.

1.3         OBJECTIVES OF THE STUDY

Objectives of the study are:

1.      To determine the level of awareness of Management in the manufacturing firms

2.      To ascertain the approaches use in managing performance in the manufacturing firms

3.      To investigate the performance review mechanism utilized by manufacturing firms.

4.      To find out the nature of relationship between Management practice and the profitability of the manufacturing firms

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5.      To identify the problems associated with Management system in the manufacturing firms.

1.4         RESEARCH QUESTIONS

In any research of this nature, some questions are asked which aimed at helping the researchers to accomplish his investigations. These questions are:

1.

What

is the level of awareness of Management in the manufacturing

firms?

2.

What

are the approaches used in managing performance in the manufacturing

firms?

3.

Which

are the performance review mechanisms utilized by the manufacturing

firms?

4.

What is

the  nature  of  relationship  between  performance  management  and

profitability of the manufacturing firms?

5.

What

are the problems associated with Management system in

Nigeria manufacturing firms?

1.5    RESEARCH HYPOTHESES

The following are the alternate hypotheses formulated, in order to provide focus for the study:

H1:        The level of awareness of Management in the manufacturing firms is high.

H2:        Manufacturing companies to a large extent use programme evaluation techniques, balance score card and benchmarking techniques as approaches in managing performance.

H3:        Appraisal method, management by objective and multi scale rating are performance review mechanisms that are applied by manufacturing firms for improving staff performance.

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H4:        There is significant relationship between Management practice and corporate profitability in the manufacturing firms.

H5:        Lack of awareness, organizational culture and inadequate feedback are the key problems of Management in the selected manufacturing companies.

1.6        SIGNIFICANCE OF THE STUDY

This researcher believes that this study will be of immense important in the following ways:

It will help the management of the selected manufacturing companies to realize how Management impacts on corporate profitability in an organization especially in the manufacturing sector of the economy.

It will create an awareness of the importance of Management to managers of all organizations which would undoubtedly stimulate the use of Management systems as an indispensable tool in human resources management in the selected organizations and other organizations.

Finally, it may serve as a benchmark for further research material for students, policy makers and other scholars who may have growing interest in the operation of business organization.

1.7            SCOPE OF THE STUDY

The focus of this study is on Management and corporate profitability in the manufacturing sector. The study covers the conceptual framework of Management, the theoretical framework of Management and the empirical review of works related to the topic.

The study was carried out in four selected manufacturing firms in Lagos state of Nigeria. These are Berger Paints Plc, Chemical and Allied Product (CAP) Plc, PZ Cussons Nigeria plc and Cadbury Nigeria Plc.

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1.8    LIMITATIONS OF THE STUDY

In carrying out this study, the researchers were confronted with some limitations. This is not unusual as it is part of research experience by researchers all over the globe. Some major limitations are:

Financial Constraint: A comprehensive survey of all manufacturing company in Lagos state would have been carried out . Because of financial constraint, few manufacturing companies were surveyed.

Non-Challant Attitude of the Respondents: Research has indicated that survey investigations are often plagued with respondents giving typical responses, not the true responses. This is probably due to their ignorance of the main purpose of the study. Also entrance into the companies was a bit difficult, the security personnel and the receptionist were suspicious of the purpose of the research.

Time: Other limitation was time. A survey of all the manufacturing company would have been better but due to time constraint, only four manufacturing companies were covered.

1.9      PROFILE OF SELECTED MANUFACTURING FIRMS UNDERSTUDY

Berger Paint Nigeria Plc

Berger Paints Nigeria Plc, together with its subsidiaries, manufactures and markets paints and allied products in Nigeria. It offers decorative for interior and exterior use on wall surfaces and ceiling; industrial paints, such as Etch primer, Quick drying enamel, Cellulose enamels, two-pack polyurethane, general purpose stoving enamels, and polyester coil coatings used as coatings for various categories of manufactured items; and marine and protective coatings for various oil drilling companies and ship maintenance companies. The company also provides various automotive products comprising autolux primer, autolux finish, auto varnish etc under the LIGNOLAC name. In addition, it manufactures a range of emulsion, gloss, textured coatings, and red oxide, as well as provides construction, renovation, project management, and other architectural services. Berger Paints Nigeria Plc distributes its products through a network of depots and various distributors, as well as agents. The company was formerly known as British Paints (West Africa) Limited and changed its name to

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Berger Paints Nigeria Plc in 1969. Berger Paints Nigeria Plc was incorporated in 1959 and is based in Lagos, Nigeria.

Presently Berger Paint Nigeria plc has staff strength of 360

CAP PLC

Chemical and Allied Products plc evolved from the world-renowned British multinational Imperial Chemical Industries plc, which formalized its Nigerian operations in 1957 under ICI Exports Limited. In 1962, ICI Paints was also incorporated to manufacture Dulux paints. In 1965, ICI Exports Limited changed its name to ICI Nigeria Limited and in 1968 it subsumed the paints company.