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1.1              BACKGROUND OF STUDY

From the definition of business dictionary; A bank is An establishment authorized by a government to accepted deposit, pay interest, clear checks, make loansact as an intermediary in financial transactions, and provide other financial services to its customers, Banks as a major sector in the financial enhancement of government and private business, the bank as an institution which assists business men and woman in improving financial odd and boost business.

The advancement in Technology has played an important role in improving service delivery standards in the Banking industry.  In its simplest form, Automated Teller Machines (ATMs) and deposit machines now allow consumers carry out banking transactions beyond banking hours.

Bank enhancing the operation of small and medium enterprise in accepting deposit, give out loan, and other financial services should consider safety and forms or means of improving service to the customer and choice of technology to fasten the means by which services are given out.  Considering the electronic mode of transaction which is the new system of transaction adding with it new potential in terms of information access and availability simultaneously, introducing new technology in protecting insightful information from staff while making it obtainable to others. Today’s business environment is extremely energetic and experience express changes as a result of technological improvement, increased awareness and demands Banks to serve their customers electronically. Banks have traditionally been in the forefront of harnessing technology to improve their products and services.

 According to R.W. Griffin (2007) :- “Technology is the set of processes and systems used by organizations to convert resources in to products or services”. According to G. Jones and C. Hill: “Technology is the grouping of skills and equipments that managers use in the blueprint, creation and delivery of goods and services, Technological revolutionize leads to improved innovation of goods and services, Technology progression in banking environment increases the profitability, effective use of resources, and brings prospect for upgrading business firms linking with banks mostly the SME in Nigeria. Business and technology are indivisible, and harmonizing to each other.

 In the banking environment, Technology Reduced wastage, Improved quality of service (e.g. speed of service) Lower costs per unit of product, Improved competitiveness, Improved productivity, Reduced running costs, Technology which are related to Business and Technology Investment, Production, technology in banking environment people in the department which makes effective use of technology are: Technology and Human Factor & Managers should be skillful for full operation of technology. The capability of technology revolves around its people.

Technology can cause impact on business firm: • Shutting down of old business • Changes in occupational structure and • Displace of employees Employee must have ability to acquire new skills. Technology and Human Factor, Technology transfer Skill base for Technology

The Banking industry in Nigeria operates in an intricate and spirited environment classed by these varying conditions and highly impulsive economic climate. The term "information technology", or IT, commonly refers to computers and computer networks but is also used to encompass other information distribution technologies such as television and telephones etc. Information technology (IT) is a branch of knowledge concerned with the development, management, and use of computer-based information systems.  Information and Communication Technology (ICT) is at the edge of this global change arc of Electronic Banking System in Nigeria now. (Stevens 2002). Looking at the banking technology  using electronic and telecommunication networks for delivering a wide range of value added products and services, managers in Banking industry in Nigeria cannot ignore Information Systems because they play a critical impact in current Banking system, they point out that the entire cash flow of most fortune Banks are linked to Information System.

Transactions are made easy by owning mobile phones; the introduction of mobile banking to cater for customers who are always on the move. Mobile banking gives room for individuals to check their account balances and make fund transfers using their mobile phones. This was popularized by First Atlantic Bank (now First Inland Bank) through its “Flash me cash” product Customers can also recharge their mobile phones via SMS. E-Banking has made banking transactions easier around the World and it is fast gaining acceptance in Nigeria.

The delivery channels today in Nigeria electronic Banking are quite numerous has it is mentioned here Automatic Teller Machine (ATM), Point of Sales (POS), Telephone Banking, Smart Cards, Internet Banking etc Personal computers in the Banking industry was first introduced into Nigeria by Society Generally, Bank as the popular PC easy access to the internet and World Wide Web (www) and internet is increasingly used by Bank’s as a channel of delivering the products and services to the numerous customers. Virtually almost all Banks in Nigeria have a web presence; this form of Banking is referred to as Internet Banking which is generally part of Electronic Banking. The delivery of products by banks on public domain is an indication of advertisement which is known has E-Commerce.  Electronic commerce on the other hand is a general term for any type of business or commercial transaction it involves the transfer of information across the internet. E-Commerce involves individuals and business organization exchanging business information and instructions       over electronic media using computers, telephones and other communication equipments. This covers a range of different types of business from consumers to retails products. However, Electronic banking as it is; is a product of E-Commerce in the field of banking and financial services. It’s offers different online services like balance enquiry, request for cheque books, recording stop payment instructions, balance transfer instructions, account opening and other form of traditional banking services

There is controversy that small and medium scale business in any country where they operate play important role in the economic growth and development of that country or nation and it improves the quality of life of individuals (Ohanemu, 2006).

Technology has always played a role in the process of commerce. However the effects of bank technological environment in today’s business world are hardly comparable to the technology used by generations from the past.  The banks technology which does have high advantage on the performance of SME in fund delivery may also have effect on high time of need.

The effect of bank technology environment on SME is;

1.      Limitation in fund transfer and withdrawers after banking hours

2.      Policy of foreign and charges are involved

3.      Fix amount of #100,000,00 per day

 Technology must not drive us as owners of SMEs, but must be a tool with which we drive our business.  We must consider the impact of new technology on the entire business team.  In some cases, cost savings may be so substantial that the technology must be adopted.

Speed: Technology allows businesses to do everything faster. Many processes that once required ledgers, checkbooks and journal notations have now moved onto computer systems. Logging in and out, updating inventory information and communicating can now happen much more swiftly. This allows businesses to react immediately to any changes.

Accuracy: A properly designed computer program does not make any mistakes, and its computations (not its inputs) are free from human error. This means that a calculation done by a computer program (like Excel) will always be accurate and trustworthy. Unless the coding or the inputs are wrong, there is no chance a program can produce inaccurate data.

Competition: Technology moves very quickly, constantly evolving and creating new devices and faster systems. Businesses note these changes and attempt to move with technology, adapting it to their present and future needs while also keeping a wary eye on the technology competitors are using. The end result is an increase in the evolution of technology and its application to business, a process by which everyone benefits.

Confusion: While technology is useful, its fast pace and complex systems can be confusing. If companies want to update their systems or change the type of technology they use, they have to retrain not only employees, but often customers. New employees must also be trained in using business systems, which can create confusion

Availability: Technology is very available, meaning that it is easy for competitors of all sizes to use and learn. This makes it difficult for businesses to keep up with technological changes and vastly increases the number of competitors in their market as smaller business can use technology to offer value to a wider range of consumers

Crime: Technology also increases the possibility of crime. A tech-savvy employee can embezzle funds and make it difficult for the company to trace. Hackers can access personal and financial data of customers who trust the company to keep their information safe. Businesses must spend time and money developing safeguards against these events.

            Business organizations anywhere in the world operate within environments which according to Adidu & Olanye (2006) is an aggregate of all conditions, events, circumstances and influences that surround and effect the business organization.

            In management, the term “Environment” does not necessarily mean physical surroundings but, it is used as a total forces, factors and influences that surround and affect business organizations as a separate entity as well as other business organizations. This means that business organizations must interact with those forces that influence its decisions, directions, actions, size, health, profitability and performance of the organization as a whole.

            Ukaegbu (2004) stated that the contemporary environment is becoming dynamic and competitive and since business organizations do not operate in vacuum, they affect and are affected by environment conditions. Therefore, business organizations irrespective of their objectives must take into consideration, these environmental opportunities and constraints. Businesses affect the environment by providing the required goods and services thereby contributing to the development of the business by presenting opportunities and threats. One thing to be emphasized at this point is that, the extent to which managers could identify, evaluate and react to the environmental forces will have considerable impact on organizational performances.

            Kuye, (2004), emphasized that the need to study business environments is very important considering the fact that business organizations do not operate in vacuum and an effective management in complex and dynamic society requires the assessment of strengths and weaknesses of the organization and the opportunities and threats provided by the challenges of the external environment, hence for survival and growth, organizations must cope and adopt to these challenges posed by the ever changing environment (internal & external) in which managers operate means that mangers must not only be aware of what constitutes the elements of their business environment but also should be able to respond to the forces of the environment which inevitably impinges on the operations of the business organization.

Ukaegbu (2006) further stated that the relationship between a business organization and its host environment can be examined from three strategic ways;

            Firstly, the organization can be viewed as importing various kinds of inputs (resources), such as human resources, capital, managerial and technical inputs. These inputs are then transformed to provoke output which takes the form of goods and services. A second approach is the study of the relationship between the organization and the society. It focuses on the demands and legitimate rights of different claimants such as employees, consumers, suppliers, stakeholders, government and the community. A third approach is to view the organization as operating in an external environment of opportunities and constraints. Thus no single approach is sufficient for all times and in all circumstances. They are complementary. The elements external to the organization affects its performance as well as those elements within the organizations.


The technological environment and its effect on the performance vary from one situation to another. The technological environment suitable for the growth of a particular business may be hostile to the survival of another business. The problems that necessitated this research are as follows:

·         Assess the technological environmental and its effect on the performance of small scale enterprises in Nigeria

·         The ability to identify, evaluate and react to the challenges is critical to organizational performance.

Therefore, this study seeks to investigate the technological environment and its effect on the performance of small scale business in Nigeria


The purpose of the study is to assess the extent to which technological environment affects the performance of small business enterprises, evaluate it, determine its success and failure and discuss its likely effects on organizational survival and growth. The other objectives this research seeks to achieve are:

i.                    To determine the extent to which technological environment affect organizational growth and survival of small scale business in Nigeria.

ii.                  To determine the relationship existing between small scale business and its operating environments.

iii.                To determine the challenges facing small scale businesses in Nigeria

iv.                To examine how small scale business manage these environmental factors.


In order to arrive at a precise answer to the technological environment and its effect on the performance of small scale enterprises in Nigeria, the following research questions shall be tested;

i           To what extent do technological environment and its effect on the growth and survival of small scale businesses.

ii.         Is there a relationship existing between small scale business and its operating environment?

iii.        What are the challenges facing small businesses in Nigeria

iv.        How do small scale businesses manage these environmental factors?

v.                  What are the available incentives provided by the government to support small scale businesses?


            The following formulated hypothesis would be tested in order to help provide answers to the research questions;


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