Impact of Strategic Management on Organizational Productivity (a Case Study of Cadbury Nigeria Plc)
CHAPTER ONE
OBJECTIVES OF THE STUDY
The general objective of this research is to investigate the impact of strategic performance on organizational performance and survival.
Specific objectives
- To establish the need for strategic management in the organization
- To establish performance of firms that use strategic management as compared to those that do not use.
- To identify the challenges faced by the organization who practice strategic management.
- To establish the significant factors essential for effective strategic management practice and how they affect the overall organizational performance.
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
CONCEPTUAL FRAMEWORK
Strategic management as well as organizational productivity is a subject different individual has written on this topic and have organised many seminars and workshops. An organization is as good as the quality of strategy it adopts in order to meeting its goals.
Strategic management remains the sensitive core area in the era of high competition in the business world. A company that is interested on profit maximization and cost minimization should be able to place a sound strategy. In this chapter emphasis will be on what strategy, benefits and problems and general survey or related literatures on strategic management.
In addition, various existing journals, texts related dailies and classroom lecture materials on strategic management will be analysed to relate how this new era of management can be used to propel organization productivity.
This aims at explaining the major issues of the study and giving a detail of the objectives intended to be achieved. From the mid seventies we can note that scholars makes the distinction between small and large businesses in terms of needs, level of sophistication and range of strategic planning. Bracker and Pearson (1986), Rue and Ibrahim (1998), Perry (2001) and Wijewardena, Zoysa, Fonseka and Perera (2004) all formulate definitions of strategic planning which take the uniqueness of small businesses into account and allow for the fact that small businesses cannot draw on management and material resources in a manner similar to that of large organizations.
Empiric studies’ findings indicate at a correlation between strategic planning and performance. Nevertheless, the findings are mixed. A survey of twenty-six experimental studies enabled Miller and Cardinal (1994) to identify a significant positive connection between strategic planning and small business performance.
Robinson (1982) found a significantly high level of profitability as well as an increase in sales and returns on sales and the number of full time employees in a group of small businesses that employed external consultants for the purpose of strategic planning. Compared with other businesses, Bracker and Pearson (1986) discovered a significant increase in income and remuneration per entrepreneur in businesses that prepared strategic plans (the highest of four designated levels of strategic planning). No significant increase was detected in the measure salary expenditure divided on the sum total of sales. A significant differentiation in the rate of sales increase was found by Rue and Ibrahim (1998) in small businesses that incorporated written planning (basic or sophisticated), as opposed to other businesses.
Perry (2001) detected a significant differentiation in the degree to which planning was conducted in small businesses that did not applied for bankruptcy as opposed to those that did. Wijewardena et al. (2004) define three levels of planning: no written planning; basic planning; and detailed planning. The findings indicate that the level of planning stands in direct proportion to the level of increase in sales. Yusuf and Saffu (2005) classify three levels of planning: low; moderate; and high. A connection was found between increase in sales and the low level of planning. No correlation was found between strategic planning and increases in market share or in profitability.
One early definition of strategy was provided by American business historian, Alfred D. Chandler (1962), as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out those goals.
Chandler subscribes to the view that strategy is as much about defining goals and objectives as it is about providing the means for achieving them.
Another contributor, Kenneth Andrews (1987), also combines goal-setting with the policies and plans needed to achieve goals. In his definition of strategy he distinguishes between corporate strategy, which is the lead strategy, and business strategy, a secondary,though vital, aspect of corporate strategy. Andrew defines strategy as a pattern of decisions… (Which represent) … the unity, coherence and internal consistency of a company’s strategic decisions that position a company in its environment and give the firm its identity, its power to mobilize its strengths, and its likelihood of success in the market place.
According to van der Werff, CMC Strategic planning is a disciplined, creative process for determining how to take your organization from where it is today to where you wish it to be in the future.
Strategic planning is fundamentally a decision making process, based on asking simple (but deep) questions, analyzing the range of answers, and choosing among them.
CHAPTER THREE
CADBURY NIGERIA PLC AND METHODOLOGY
INTRODUCTION
This chapter deals with and explains how the study was carried out , the sample design and its characteristic the data gathering procedure and the construction of the research instrument bearing in mind the study was carried out in a selected case study. This chapter also has a bent but exhaustive insight about the case study.
DATA SPECIFICATION
In order to achieve the objectives of the study, data were obtained from information relating to the organization is performance indicators, which includes records of asset taxation income received, profit taxation, profit after taxation dividend paid to shareholders retained earnings, investments value added tax, return on investments and gross earnings.
All these performances indicators were collected for the assessment of strategic management on the organisation performances for the past five years.
SAMPLE AND SAMPLING PROCEDURES
Since it is impossible to conduct a research using the whole population, in order to avoid unnecessary difficultly and Cumbersomeness. it is always advisable to examine a small proportion of the whole population in other words the small proportion of a population called the sample was used for the purpose of the project.
Although, a purpose expert technique was adopted choosing time cadre of management .top and muddle level of management (because of the topic) the sample random sampling and multi-stage sampling techniques were nevertheless used to ease the job of the researcher.
Initially, the branches were grouped according to coordinate location around Ogun State, after which two branches were selected from each cardinal location, placing emphasis on their sizes the managers from these selected branches were later grouped as middle lower level managers the selection from this grouping was now done randomly.
However, placing emphasis on positions help by the managers could affect strategic formulation implementation and its control the random selected was done to give all an equal chance of being selected.
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION OF RESULT
INTRODUCTION
This chapter presents the description of the result of data collection and discussion of findings. According to the questionnaire administered the table below gives a clear picture of the view of respondents.
TESTING OF HYPOTHESIS ONE
Ho : Adequate strategic planning and implementation in an organization increase the return on the organization investment
Hi : Adequate strategic planning and implementation in an organization does not increase the return on the organization investment
The expected frequency (Ei) for each cell was arrived at by dividing the total number of the observed frequency (Oi) by the number of rows i.e. 50/4 = 12.5
CHAPTER FIVE
SUMMARY CONCLUSION AND RECOMMENDATION
INTRODUCTION
This chapter presents a summary of the study findings, conclusion of the study, suggestions and vital recommendations and suggestions for further research. It summarizes findings in relation to major issues raised with respect to the objectives of the study.
SUMMARY OF FINDINGS
This chapter summarizes the research findings and offers conclusions drawn after the data collected was analyzed. This was done in relation to the objectives of the study and their corresponding research questions. There are also recommendations of the research and suggestions on areas of future research on this particular research problem.
The researcher wanted to understand the need for strategic planning in an organization and all respondents felt there was a need for strategic planning in an organization to in order to achieve corporate organizational goals. From the findings it was also evident that effective strategic planning provides unity of purpose for all employees to steer towards achieving organizational objectives.
According to the findings the performance of those firms which apply strategic planning had higher chances of expanding their market share and financial stability. The firms that use strategic planning in the long run become market leaders in their respective industry.
The study findings indicate that one of the major challenges to effective strategic planning process is inadequate leadership and direction by departmental managers. Since department managers are responsible in formulating and implementing short term plans for the accomplishment of tasks in order to achieve corporate organizational goals, lack de of leadership on their part greatly hinders the success of strategic plans. From the findings, majority of respondents attributed organizational culture as a barrier to effective strategic planning process.
According to the findings, one of the essential factor for effective strategic planning process is appropriate organizational structure which should be in harmony with what the organization needs to accomplish in the long run. Organizational structure should align with the goals of the organization and this will make strategic planning effective in achieving organizational objectives.
CONCLUSIONS
From the findings of the research carried out, the researcher concludes that strategic planning is very vital tool which should not be taken for granted. An organization which needs to excel must use strategic planning to gain competitive advantage over competitors. Strategic planning is applicable to all organizations regardless of their size and scope of operations.
The management of the organizations should establish the need for strategic planning in their respective organizations and formulate policies and budgets for achieving organizational goals. By establishing the need for strategic planning, the management will collectively work towards achieving the corporate objectives of the firm.It is evident that the firms that use strategic planning perform better compared to those don’t and therefore managers should understand that strategic planning provides direction to the overall organization in achieving corporate goals.
There are immense barriers to strategic planning process and these barriers can be overcome by aligning organization structure with the corporate goals and involving employees in strategy formulation since they will be responsible in implementing those strategies. The challenges can also be overcome by communicating effectively to employees on what they are supposed to perform in order to achieve organizational goals. This can be done by communicating the corporate goal to employees.
RECOMMENDATIONS
After an in depth analysis of the findings and looking at the conclusions, the study can firmly recommend the following aspects to be put in place in order to ensure effective strategic planning in an organization.
The management should establish the need for strategic planning by defining the corporate goals and formulating policies which acts as a guide in decision making. The management should conduct industry analysis to understand its industry and its competitors which will greatly help the organization formulate strategic plans for achieving its corporate goals.
Strategic planning provides firms with competitive edge over those who do not use strategic planning. Strategic planning provides overall organizational direction towards achieving corporate goals. It is evident that firms which use strategic planning are more financially stable and have larger market share in their respective industries. If you fail to plan then you are planning to fail.
It is prudent for the firms to conduct SWOT analysis in order to understand their strengths as well as their weaknesses and also understand opportunities and threats in the external environment. Internally, the firm should align its organization structure to match with the corporate goals.
The organizational culture should be managed to match with the organizational goals. There should be a paradigm shift in order to carry out strategic planning in an organization.
The employees should be incorporated in formulation of corporate goals so as to feel an identity with the goals hence a feeling of ownership which will motivate the operatives in implementing the formulated goals.
The financial resources should be sufficient to execute strategy. Lack of finance hinders strategic planning implementation and as such the organization should provide sufficient funds for this vital purpose. Besides, information systems used for monitoring strategic plans should be adequate and default of variations. The lower employees should be given adequate training and instructions in carrying out strategic planning.
SUGGESTIONS FOR FURTHER RESEARCH
Due to time constraints and resources, this research is not conclusive as such. It is imperative that a further research be undertaken in this area of study in order to find solutions to new and emerging problems.
There is need for further research on the impact of strategic planning on organizational performance and survival.
REFERENCES
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- Al-Ghamd, (1998) Associate professor of Management department of management and marketing at college of Industrial management Dhahran
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- Beamish, P.W., (2000) Strategic Management. Ivey Publishers. New York
- Byars, Rue and Zahra (1996) Strategic Management. Irwin publishers. London Davis, W., (2004) Definitions of strategic planning. Woodward Davis Associates.
- James L. Mercer (1991) Strategic Planning for Public Managers Quorum Books. NewYork.