IMPACT OF INFORMATION AND COMMUNICATION TECHNOLOGY ON ORGANIZATIONAL PERFORMANCE OF BREWING INDUSTRY IN SOUTH-EAST, NIGERIA
CHAPTER ONE/INTRODUCTION
Background of the Study
Information Communication Technology (ICT) refers to a wide range of computerized technologies that enables communication and the electronic capturing, processing, and transmission of information. These technologies include products and services such as desktop computers, laptops, hand – held devices, wired or wireless intranet, business productivity software, data storage and security, network security etc (Ashrafi and Murtaza, 2008). With the use of ICT, businesses can interact more efficiently, and it enabled businesses to be digitally networked (Buhalis, 2003). With the use of ICT, the time constraint, and distance barrier to accessing relevant information is eliminated or drastically reduced hence it improves coordination of activities within organizational boundaries (Spanos, Prastacos & Poulymenakou,2002).
The rise of the information industry has gone hand in hand with the developments of the electronics industry. Since the Second World War this has been spearheaded by the USA and lately also by Japan. The year, 1983, the European Economic Community(EEC)has realized its growing dependence on the USA and Japan and it has initiated a major programme for the development of the information industry in Europe (Miller, 1984).
The term ICT originated as Information Technology (IT) until recently when it was thought that the communication component ought to be highlighted because of its significance. It was then that the concept transformed to Information and Communication Technology ICT (Olusanya and Oleyede, 2003).
The nature and scope of information and communication required by managers at different levels in an organization vary considerably. Organizations require different types of information and communication systems to meet their needs. Therefore, information is the result/product of processed data. Communication has to do with the process of the transfer of the information which is the processed data and the output of the data processing system from the sender to the receiver through a medium in the communication system (Nwachukwu, 2006).
Organizations are encountering significant changes in their business practices due to the emergence and widespread use of information and communication technologies (ICT’s) over the last two decades. In the early 2000s,businesses around the world were spending well over $2 trillion on information technologies per annum (Carr, 2003).
Since the early years of the 20th century, the world has been experiencing a revolution known as information technology. Some consider it to be the most fascinating development since the industrial revolution around the mid-18th Century (Tom, 1991). This revolution is changing our daily lives at home and at work, in shops and banks, in schools, colleges and universities. It is changing the way people think, communicate and behave. Today, the world has become a global village with the internet, mobile phones and satellite networks shrinking time and space, bringing together computers and communications; resulting in new ways of communication, processing, storing and distributing enormous amounts of information (Werthner and Klein, 2005). Advancement in chip, satellite, radio, and optical fiber technology have enabled millions of people around the world to connect electronically regardless of national or international boundaries. This explosion in connectivity is the latest and the most important wave in the information revolution (Evans & Wurster, 1997). The twenty-first century witnessed advances from an automation to an era of digitization (built on zeros and ones). It started with computer technology which changed from mainframe to personal computer to net personal computers. Along with these changes, there were changes in soft wares. As network started, there was a convergence of telecommunication with computer. The nature of data transmission using telecom and subsequent development of wireless phone and mobile has revolutionized the information processing system (Gupta, 2007).
Similarly, there is a shift in business models to move beyond automation to innovation. The potential of information system (IS) is to exploit the power of people’s creativity. O’brien (2008) suggests the cascade model in the evolution of information management. The adoption of (ICT) consists of a series of jumps.Emerging economic trend is based on several layers such as social organization, entrepreneurship, knowledge creation, workforce skill sets, infrastructural tools, and natural resources. The important change in the third industrial revolution is occurring in retailing. It is moving from national to global and this transition is more turbulent than earlier industrial revolutions.
Today’s business environment is very dynamic and undergoes rapid changes as a result of technological innovation, increased awareness and demands from customers. Business organisations, especially the manufacturing industry of the 21st century operate in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic recession. ICT is at the centre of this global change curve. Laudon and Laudon, (1991) contend that managers cannot ignore Information Systems because they play a critical role in contemporary organisation. They point out that the entire cash flow of most fortune 500 companies is linked to Information System.The application of information and communication technology concepts, techniques, policies and implementation strategies to any organisation has become a subject of fundamental importance and concerns to all organization and indeed a prerequisite for local and global competitiveness. ICT directly affects how managers decide, how they plan and what products and services are offered in the manufacturing industry. It has continued to change the way manufacturing firms and their production are organized worldwide and the variety of innovative devices available to enhance the processes and quality of product delivery.
Information and Communication Technology has been defined as “a broad based technology (including its methods, management and application) that supports the creation, storage, manipulation and communication of information” (French, 1996). Therefore, Information and Communication Technology has found its niche in every sphere of Nigeria’s polity.
Nworgu (2007) states that ICT industry appears to be making significant in road into the Nigeria society. Prior to 1999, ICT resources and facilities were grossly limited in the country. Only very few wealthy Nigerians had access to these facilities and services. Internet facilities and services were rare to come by and the facsimile (ie. Fax) remained for a long time, the only means available to Nigerians for transmitting and receiving data or documents to other parts of the world. Public awareness of ICT and its application was low.
A significant milestone in the development of the ICT industry in the country is the formulation of a National Information Technology Policy (NITP), which was approved in March, 2001 by the Federal Executive Council. With the enactment of this policy came the establishment of an implementing agency-the National Information Technology Development Agency (NITDA) in April 2001. This agency is charged with the responsibility of implementing Nigeria’s IT policy “as well as promote the healthy growth and development of the IT industry in Nigeria (Isoun, 2003).
The brewing of beer is one of the oldest applications in biotechnology; the oldest historical evidence of formal brewing dates back to about 6000 B.C. in ancient Babylonia. It was only at the end of the 19th and the beginning of the 20th century that brewing evolved to an efficient and well-controlled bioprocess. Increased understanding of brewing fermentation kinetics and mechanism led to design of new accelerated fermentation methods, which incorporate improved batch bioreactors ranging from open, relatively shallow tanks to large cylindroconical fermentors. Furthermore, advances were made in development of continuous beer fermentation processes attractive for many advantages, which continuous mode of operation offers as compared to batch operation such as greater efficiency in utilisation of carbohydrates and better use of equipment (Ronnie, 2000)
Since the beginning of the 20th century, many different systems using suspended yeast cells have been developed. The excitement for application of continuous beer fermentation led to development of various interesting systems especially during the 1950 and 1960’s. These systems can be classified as: (i) stirred versus unstirred tank reactors, (ii) single-vessel systems versus systems consisting of a number of vessels connected in series, (iii) vessels which allow yeast to overflow freely with the beer (“open systems”) versus vessels which have abnormally high yeast concentrations (“closed” or “semi-closed systems”) (Hough, Briggs, Stevens, and Young,1982).
However, these continuous beer fermentation processes were not commercially successful due to many practical problems, such as increased risk of contamination (not only during fermentation but also during storage of wort in supplementary holding tanks required for usually batch upstream and downstream brewing processes), variations in beer flavour and poor understanding of the beer fermentation kinetics under continuous conditions (Ronnie, 2000). One of the well-known exceptions is successful implementation of a continuous beer production process in New Zealand by Morton Coutts (Dominion Breweries) still in use today (Hough, Briggs, Stevens, and Young,1982).
The Nigerian breweries industry has evolved over the years from mere production of bottled drinks to a diversified industry. The industry is a large segment of the food and beverages sub-sector currently accounting for half of the growth in the manufacturing sector, which grew 22 per cent in 2013 as against 14 per cent in 2012. Specifically, the food and beverage sub-sector’s growth accelerated to 12 per cent in 2013 as against 7 per cent in 2012.The industry, which has now become a major growth driver of the economy is currently growing faster than the telecommunications, oil and gas and agricultural sectors (Aderinokun, 2015).
In terms of the contribution to the gross domestic product (GDP), the manufacturing sector represents nine per cent of GDP in 2013 as against the four per cent in the preceding year. The improvement in the manufacturing sector was attributed mainly to the activities in the food and beverages sub-sector, which has the breweries industry playing a significant role (Aderinokun, 2015). The principal activities of the breweries industry include the production, packaging and sales of alcoholic and malt beverages. It has two players dominating its landscape namely Nigerian Breweries Plc and Guinness Nigeria Plc but there are others that are playing on the fringes. But SABMiller, a South African brewery giant, has joined the market with its acquisitionof International Breweries in 2012. SABMiller has a strong track record of building market share as a new entrant, and appears happy to be a loss leader to gain a dominant position in the Nigerian market (Aderinokun, 2015).
The brewery industry is highly capital intensive and this accounts for the reason why the ownership structure is either public and/or state-owned with/without foreign partnership. The technology for the industry, spare parts and expert technicians are not available in the country and therefore highly dependent on foreign exchange. Guinness for example has Diego of Ireland as its foreign partner (Nigeria Breweries, 2016).The ban on importation of barley in 1987 necessitated the industry to settle for local substitute of maize and sorghum as raw materials for its production. The resultant plant conversion to accommodate the new raw material input-mix cost Nigerian Brewery a whopping sum of 100million naira! (Nigeria Breweries, 2016).One of the major challenges facing the industry is the maintenance of equipments and machinery. The players commit huge financial resources in technology and upgrades in order to remain competitive (Nigeria Breweries, 2016). Against the above background, this study seeks to investigate on the impact of Information Communication Technology on organizational performance of brewing industry in South East, Nigeria.
1.2 Statement of the Problem
Managers in brewing industry in Nigeria are scared of losing their jobs due to the advent of information communication technology. Nevertheless, Information communication technology when properly implemented in an organization brings about increase in productivity, profitability, market share and easy flow of information, effective production delivery services to customers.
However, one of the major challenges facing the industry is the lack of maintenance of equipment and machinery which affect production, low market share due to importation of raw materialand exchange rate. These challenges have lead to the closure of quite a number of the smaller firms in the early 2000 in South East, Nigeria leaving only the large firms with strong financial base. Also, problem of organizational information and communication processes on shareholders’ welfare, lack of ICT systems of production and operations management on organizational growth, the problem ofthe rise on ICT on profitability in the brewing industry and poor Information Technology applications and problem of absence of well-trained ICT staff.
However, studies have been carried by prior researchers and this study identifiedthat studies carried out where having a small sample size and related studies that were carried out, dealt on an aspect of ICT and organizational performance, this will not reflect the true life situation currently. Consequently, there is still paucity of information on impact of ICT on organizational performance in the brewing industry in South- East, Nigeria.Therefore, this study seek to address this gapby ascertaining the impact of Information and Communication Technology on Organizational Performance of Brewery Industry in South-East, Nigeria.
1.3 Objectives of the Study
The broad objective of this study is to ascertain the impact of Information and Communication Technology on Organizational Performance of Brewery Industry in South-East,Nigeria. The specific objectives of the study are to:
- Determine the impact oftechnology on productivity level in brewery industry in South-East, Nigeria.
- Assess the extent to which organizational information, communication and technical knowledge impact on market share of brewery industry in South-East, Nigeria.
- Assess the extent to whichorganizational information and communication processes impact on shareholders’ welfare of brewery industry in South-East, Nigeria.
- Ascertain the extent to which ICT systems impact on organizational growth of brewery industry in South-East, Nigeria.
- Establish the extent to which the rise of ICT impact on profitability of brewing industry in South-East, Nigeria.
1.4 Research Questions
This study was guided by the following questions:
- To what extent does technological growthimpact on productivity of brewery industry in South-East, Nigeria?
- To what extent doesorganizational information, communication and technical knowledge impact on market share ofbrewery industry in South-East, Nigeria?
- To what extent doesorganizational information and communication processes impact on shareholders’ welfare of brewery industry in South-East,Nigeria?
- To what extent doesICT systems impact on organizational growth ofbrewery industry in South-East, Nigeria?
- How doesthe rise of ICT impact on profitability of brewery industry in South-East, Nigeria?
1.5 Research Hypotheses
The Five hypotheseswere formulated to guide the study
- Technology has a significant positive impact on Productivity of brewery Industry in South-East, Nigeria.
- Organizational information, communication and technical knowledge has significant positive impact on market share of brewery industry in South-East, Nigeria.
- Organizational information and communication processes have positive impact onshareholders’ welfareof brewery industry in South-East, Nigeria.
- ICT Systems have significant positive impact on organizational growth of brewery industry in South-East, Nigeria.
- The Rise of ICT has a significant positiveimpact on Profitability of brewery industry in South-East, Nigeria.
1.6 The Scope of the Study
The focus of the study is to investigate on the impact of Information Communication Technology (ICT) on organizational performance of brewery industry in South East, Nigeria.The Area scope include the dependent and independent variables, under the dependent variables are organizational performance:productivity, market share, shareholders’ welfare, organizational growth and profitability andindependent variables are ICT:technology, organizational information, communication and technical knowledge, organizational information and communication processes, ICT Systems, and Rise of ICT.
The geographical scope is in South East, Nigeria and organizations studied include Nigerian Breweries Plc Enugu, Guinness Breweries Plc Aba, Hero Breweries Plc Onitsha and Continental Breweries Plc Awoomama Imo State. The time scope is between two years.
1.7 Significance of the Study
This study is significant because it will generate information on the analysis of the impact of Information and Communication Technology (ICT) on organizational performance of Brewery Industry in South-East, Nigeria.
The study will help treat and improve some existing theories on ICT as itapply to any organizations. It will also become a vital and integral part of every business plan .It will also help organizations to improve the way they design and manage customer relationships.
The significance of this research work is immeasurable both to the practitioners, office professionals, chief executives, personnel managers, the management of the organizations and the public at large. It is expected that the findings and recommendations of the study will guide the area of study to consider introducing information technology for their office professional efficiency and other human resources departments for effective administration of personnel matters.
The study will be useful to student who may wish to write or make some research on a similar or related topic using this as a point of reference and to reorient them towards their profession, future research or practical endeavors. It is also hoped that the findings of this study will contribute to the existing body of knowledge and information in the area of research.
1.8 Limitations of the Study
The study experienced an initial slow response from the respondents who were mainly busy workers of the brewery firms, but this was mitigated by having constant follow up on phones and the physical visits to the respondents’ offices. Another limitation of this study was that most of the brewery firms considered some information confidential and hence could not be willing to reveal them and it affected the analysis of the oral interview schedule. The study however overcame this limitations by having a letter of introduction from the university to assure the respondents that the information provided would be used for academic purpose only and would thereby treated with confidentiality.
1.9 Operational Definition of Terms
The following terms below were defined as they were used in the study
ICT: Information andCommunication and Technology is the activities that border on processed data (information) and transfer of the information from the sender to the receiver (communication) and the totality of the technical systems involved adding electronically, commercial
Organizational Information, Communication and Technical Knowledge: Organizational Information, Communication and Technical Knowledge is the processed data and its transfer from the sender to the receiver all done electronically to acquire an understanding and information got by a group of people who have come together, connected with the practical use of machinery and methods
TABLE OF CONTENTS
Declaration i
Approval ii
Dedication iii
Acknowledgements iv
List of Tables vii
Abstract viii
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 7
1.3 Objectives of the Study 8
1.4 Research Questions 9
1.5 Research Hypotheses 10
1.6 Scope of the Study 10
1.7 Significance of the Study 11
1.8 Limitations of the Study 12
1.9 Operational Definition Terms 12
1.10 Profile of the Organizations Studied 14
References 19
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework 21
2.2 Theoretical Framework 61
2.3 Empirical Review 70
2.4 Summary of Reviewed Related Literature 78
2.5 Gap in Literature 79
Reference 81
CHAPTER THREE: METHODOLOGY
3.1 Research Design 88
3.2 Sources of Data 88
3.3 Population of the Study 89
3.4 The Sample and Sampling Technique 89
3.5 Description of Research Instrument 91
3.6 Method of data Analyses 92
3.7 Validity of Instrument 92
3.8 Reliability of the Research Instrument 92
3.9 Decision Rule 93
References 94
CHAPTER FOUR: DATA PRESENTATION AND ANALYSES
4.1 Data Presentation 95
4.2 Test of Hypotheses 106
4.3 Discussion of Findings 113
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of Findings 116
5.2 Conclusion 116
5.3 Recommendations 117
5.4 Contribution to Knowledge 117
5.5 Suggestions for Further Studies 118
Bibliography 119
Appendices 127