The Impact of Computer Technology on Accounting Systems and Its Effect on Organizational Performance; A Case Study of A.G. Levenits and Pak–Micro Computer International Ltd

The Impact of Computer Technology on Accounting Systems and Its Effect on Organizational Performance; A Case Study of A.G. Levenits and Pak–Micro Computer International Ltd

Chapter One

OBJECTIVES OF THE STUDY

The purpose of this research work is to find out and evaluate the implication of computer introduction to Accounting sections of business operations with particular reference to A.G. Leventis PLC and Pak–Micro International as some of the largest organisations in Nigeria today.

The study will also attempt to find out the efficiency and effectiveness of such application to overall management capabilities in decision-making.

CHAPTER TWO

LITERATURE REVIEW

It is an established fact according to Dr. E.O. Adegbeyemi, that the use of modern technologies enhances better performance, reliability and positive results. This is evident from the study of some countries where such modern equipments are applied in their everyday activities to ensure consistency of information, timely and adequacy of such information for planning and decision-making. The introduction of new technology involves changes in the product, methods, processes or the means of manufacturing at a location, which reduces the existing job at the location. One phenomenon of working life in the past twenty five years has been the implication of new technology. Luthans F. argued that “resistance to change is a facet of organizational life². This “resistance” to technological changes is termed “technolostress”³ according to Brid C., Technology may be said to be of three main types namely:-

• Long linked
• Meditating and
• Intensive

These types of technologies have been defined as:-

LONG LINKED

A set of linked interdependent tasks or operations analogues to a mass production assembly line. The production rationalized and simplified.

MEDIATING TECHNOLOGY

These involve activities which link clients or customers who are interdependent or who wish to become connected. The technology is exemplified by organisatins serving primarily, these linking or meditating functions such as banks, insurance agencies, trust companies and so on.⁴

INTENSIVE TECHNOLOGY

These involve complex and on-routinised tasks. A variety of techniques and methods of work may be used in carrying out a job component depending on the nature of the job itself.⁵. Until very recently, only clerical and factory workers equipped with word processors, electronic accounting systems and computer controlled tools have really benefited from computer technology. Now though, the personal computer explosion is changing the organizational structure of companies as well as the function of managers.6

Most reports on the effective management and application of computer technology for development have demonstrated the important role of computers in transfer of technology.7

According to Thompson I.D  address to policy makers, which stress the application of computers for social and economic development. The following recommendations should be followed for better implementation of computer application:-

• Education and training for the application of computers and computer related areas of accelerate the process of economic and social development must be of top priority.
• It could be conceived that computer technology is on the increase and its diffusion and sound application can make a significant contribution in accelerating the rate of national economic and social development.
• There must be a national policy consistent with the nation’s material goals (aims and objectives) on the application of computer technology.8
• There must be need to increase or rather establish the international co-operation in all areas of computer technology.

The implementation of new technology can be costly both in terms of personal injury and organizational ineffectiveness. However, resistance to new innovations (like computer) is not total; and only occurs when the innovation is seen as a threat or barrier by the individual or it affects a person’s security, causes economic loss and or creates social problems due to new relationships that may be formed.9. If these threats can be overcomed, people can be very enthusiastic about technological changes and embrace them with little or no resistance.

There is therefore little doubt, that the world has become a hostage to modern technology. Human inventions have climbed to the heights in its zeal to enhance progress on earth just as it has descended to the lowest spot in the valley in its capacity to eliminate mankind from the “face of the earth”. The pace of technological growth is so fast that there seems to be a tenuous line between modern and ‘obsolete’ technology.

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CHAPTER THREE

RESEARCH METHODOLOGY

Different methods of data collection were employed by this study to obtain answers to research questions which were valid and reliable.

RESEARCH METHODS USED

Though survey and historical research methods were used for the collection of primary data, a complementary method, was also used as the former was found to be inadequate for computer applications, because it can only suit “why something happen”. Personal observation was employed in order to enhance the research results by limiting the possible errors. It also enables the Researcher to assess population sample size, attitude of respondents, existing literature on subject matter.

DESCRIPTION OF RESPONDENTS.

The demographic characteristics of the respondents are as follows:

80% male and 20% female 13% of them were below 21 years of age while 87% were non-managerial and 24% were managerial staff. Since the phenomenon under study has a social origin, a combination of closed and open – ended questions were employed to allow respondents build in their respective feeling as a combination of both is usually better.

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

 DATA ANALYSIS

This chapter deals with the analysis of data collected during the study. There were primary data collected by means of such research instruments as questionnaire and personal interviews. All efforts on data collection were concentrated on the computerized departments of A.G Leventis and Co. (Plc) and Pak – Micro computer centre Enugu.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATION.

 SUMMARY OF FINDINGS

1. Computer has been introduced in all the departments of studies. This introduced bean about ten years ago to process various jobs, such as inventory control, payroll system and General ledger Accounts.
2. 88% of the respondents according to table vii observed that there was retrenchment exercise in the recent past. The number of people affected by their exercise varies from one department to the other 41.03% of the respondents observed that the number of those affected is between six and ten people (table viii) some (33.33%) said less than five workers were affected while 15.39% agreed that they were over twenty employee affected by the retrenchment exercise. Table vii(a) shows that the estimated total number of employees affected at the time computer was introduced were about three hundred and twenty-two people.
3. However, persona interview conducted by the researcher on the personnel manager, Heads of the computerized departments, the EDP Managers and the Union Leaders show that only four employees out of these three hundred and twenty-two people were retrenched as a result of introduction of computer to business. While about 89% of the respondents (table vi) agreed that computer was introduced between seven and ten years ago, the view as to when retrenchment took place was divergent. Table x show that 51.28% of the respondents are of the view as to when retrenchment tool place about three years ago while 33.33% of respondents said it took place about ten years ago.

4. 84.71% of the people interviewed (respondents) confirmed that there was retraining of existing workers. (Table xi) 41.18% of the respondents said the retraining was on new job while 58.82% of the respondents said the retraining was one xisting jobs (table xii). Interview conducted showed that sixty-five members of staff, were actually involved in the training/retraining exercise which was conducted as a result of the introduction of computer.
5. It was revealing from table xiii that 43.53% of the respondent agreed that the new employees were employed to work with the computer. 89.19% (table xiv) of the respondent viewed that the new workers in each of the departments were below five in number while 10.91% said they were between six and ten people in number. In all the actual number of new staff employed as a result of introduction of computer to business operations was found to be fifteen. These new employees work as computer engineers, system analysts, programmers and operators.
6. It was discovered during the investigation that the computer provided more information. In table xv 8.70% of the respondents agreed that more information comes out from use of computer than manual. Table xiii indicates that these information are presented in a better, concise and easy to assimilate format than the information from manual operation as confirmed by the view of 53.94% (table xx) of the respondents said that the information from the computer is more accurate than information from manual operations. Furthermore, the reliability of computer information relative to manually generated information is put at 92.94% according to respondents (Table xx(a).
7. Moreover, 90.59% (table xxi) of respondents said that they have better confidence in computer generated information.

8. Many of the respondents were of the view that the volume of information generated by use of computer would not have been possible by use of manual operations indicated by 88.23% of people served with written questionnaire Table xxii.
9. It was revealed that to achieve the present volume of information extra resources will be needed. 24.70% of the respondents said that more time than used will be required, 47.06% agreed that more personnel would be required while 17.65% said more money will be required.

10. The researcher gathered that there was better understanding and co-opertion between management of A.G Leventis and the trade union executives in the company on the introduction of computer. The personnel department on behalf of management held several meetings and consultants with union executives (members). As a result, the union gave a willing co-operation.
11. Economic recession and rough business climate were implicated for decline in employment as shown in table xxiv rather than introduction of computer to business operations in the organisation. Very recently, many business organizations includeing A.G Leventis and Pak Micro computer are all trying to cope with the demands of the structural adjustment programme of the federal government as a step to revamp the economy. Other economic measures indiginizaiton, local sourcing of raw materials and backward integration research and development as well as others have in the short run increased cost of production astronomically. Therefore companies like Pak-Micro computer and A.G. Leventis have to control cost by either reducing staff strength or maintaining same level of employment.

CONCLUSION

Although computers are the society’s technological marvels, they are also one of its greatest headaches. Interestingly, many of the problems not technical or economic problem.

The literature review shows that many of the implications of technological changes are sources of industrial conflict and turbulence – employment security, job security, the perceived threat to union survival, deskilling and retrenchment.

In conclusion, one may simply say that as technological changes proceed, labour management relations may become more prone to cross fires and industrial unrest.

“It is important to recognise that technological changes set in motion initiatives and dispositions one hand, and reactions and responses on the other hand, which together create scenarins for conflicted labour management relations”.

As computers continues to play an increasingly greater rile in all segments of the society, both government and business concerns must begin to move rigorously and attack the human related problems they created before these problems become entrenched and imporrible to rectify.

The computer and associated technologies have not only formed to be efficient but also effective as means of processing and managing information.

It has been shown in the course of this study that use of computer for processing clerical tasks implies displacing employees who perform these repetitive and monotonous duties manually. It has equally been shown from this research that the introduction of computer implies a change in method of processing. Introduction of computer does not necessarily imply reduction in employment. The number of employees applicated by introduction of computer to business operation in this study is quit insignificant to conclude otherwise.

Moreover, the four employees implicated would have been retained of only they were productive, capable and willing to learn. On the contrary, existing employees received training to use the new equipment thereby increasing the productivity, awareness knowledge and efficiency in their job areas and other related tasks.

Furthermore, the introduction of computer to business tasks implied new jobs, such as computer engineers, system analysis, programmers, computer operators and data preparation clerks.

Since computer increase the scope of work performed, total employment level in the economy may not have changed considerably.

The jobs created by computer application are probably off set by jobs displaced by the computers. (i.e. a sort of substitution effect).

RECOMMENDATION

From the data collected analysed in chapter four, the following proposals are hereby recommended:

1. As business organizations grow bigger and bigger in size, executives get further detached from processes and rely on second-hand information, therefore, such big organizations should “go computer” as to give or generate accurate and reliable information for which for quick and dynamic decision making process.
2. Qualified computer personnel should be employed to manage the areas of computer operations.
3. Existing staff should be retrained to effectively handle the computers, interpret and use the information thereby generated for better overall management.
4. The computers should be maintained constantly by qualified engineers and standardized from time to time to avoid computer – down- time and malfunctions.
5. Practices such as on the job training, job enrichment, job rotation and so on should be practiced to ensure that other staff not directly involved with use of computers for now, can later be changed with those currently using computers to avoid boredom, retarded productivity and other short comings of repetitive tasks.

The researcher revealed that computers provided more information with less number of staff to a large extent that can be manually provided. This computer generated information is more accurate, reliable and dependable. Larger volume of data can be processed and handled within a very short period of time due to high speed and efficiency with which the computer operates.

Computer generated information are well designed, clear, magnificently presented and easily digested. These information can also be produced to a large extent in various sizes of prints, colours, business language, and in large copies as quick as possible.

The quality of decision – making have to a large extent been increased by the introduction of computers to business tasks. It has also increased the security and retention of vital data for longer periods of time in a manageable space (diskette) for easy retrieval.

It is quite possible that the lukewarm attitude of most people towards computer introduction will in the longrun change for the better as this study revealed that computerisation does no to a large extent imply retrenchment or lack of employment.

SELECTED BIBLIOGRAPHY

• Agbasi, K.C.,          Introduction to computer science and  programming. (Enugu, A.B.I.C, Books and Equip Limited, 1991).
• Cliffton, H.O.,          Choosing and Using Computer. (London; Business Books, 1975)
• hugh, J. Watson and Computers for Business Archie B. Carroll,  (USA, Business Publications incorporation, 1984).
• John Mossi;,           Foundations of programming (London, input too – Nine Ltd, 1978)
• lucey, T    Quantitative Techniques: An instruction Mannually. (4^th Edition (London, ELBS, 1989)
• Luthens F.              Organisational Behaviour: A Modern  behavioural Approach to Management. (New York: MacGraw – Hill Book Company; 1979)
• Osuala, E.C.           Introduction to Research Methodology  (Onitsha: African – FEP Publishers Ltd, 1987)
• Slichter, Summer, H: The Impact of Computer
• Healy, Hames, Jr. Collective Bargaining on Management   (Washinton, D.C: The Bookings Institution 1960).

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