THE INFLUENCE OF DIVERSITY MANAGEMENT ON EMPLOYEE MORALE IN BREWING INDUSTRY IN SOUTHEASTERN NIGERIA

THE EFFECT OF SUCCESSION MANAGEMENT ON CORPORATE SURVIVAL AND GOAL ATTAINMENT IN THE NIGERIAN OIL AND GAS INDUSTRY

ABSTRACT

The study examined the effect of succession management on corporate survival and goal attainment in the Nigerian oil gas industry. Some selected companies within the industry were assessed to ascertain the extent to which succession management could function as a strategy for growth and profitability in the Nigerian oil and gas industry. The study verified whether succession management encourages healthy competition and advance continuity of corporate objective in Nigerian oil industry. The study found out whether gaps in leadership pipeline, difficulty in filling key employee’s positions, inadequate career path and ineffective line management were the key challenges succession management is designed to address in Nigerian oil industry and its (succession management) role in curbing these challenges. It also ascertained the extent to which the supply of talented, experienced, motivated and high morale staff ensured prospects in Nigerian oil industry. The study verified the degree to which succession management engendered significantly labour retention among employees in Nigerian oil and gas industry.  The instruments for data collection used were structured questionnaire and oral interview. The questionnaire was structured in line with likert-five point scale and validated using the face-to-face approach. The instruments were checked for reliability using the pilot survey method. The data collected from the responses to questions in the questionnaire and structured oral interview were analyzed using quantitative and qualitative methods. The test of hypotheses was performed using chi-square distribution, Analysis of Variance (ANOVA) one-way test and Pearson Product Moment Correlation Coefficient(r=0.84). It was discovered that succession management functioned as a strategy for growth and profitability of the Nigerian oil and Gas industry  (Fcal=6952.68>Ftab=3.00,p<0.05). It was revealed that succession management significantly engendered healthy competition and advanced achievement of corporate mission in the Nigerian oil and Gas industry(Fcal=6930.50>Ftab=3.00,p<0.05). The study revealed that gaps in leadership pipeline, difficulty in filling key employee’s position, inadequate career paths and ineffective line management were the major challenges facing the Nigerian oil and gas industry (Fcal=1882.01>Ftab=3.00,p<0.05). It was discovered that the internal supply of trained, experienced and motivated talents who could create the necessary competitive edge and sustain the companies through turbulent and uncertain business environment were the key prospects of succession management(Fcal=2094.23>Ftab=3.00,p<0.05). The study revealed that succession management engendered significantly labour retention among employees in Nigerian oil and gas industry(Fcal=7403.66>Ftab=3.00,p<0.05). Scholars have extensively discussed the effect of succession management on the survival of organizations. They have also discussed the principles and operational procedures of succession management. However, there are dearth of relevant information on the implementation of succession management in Nigerian oil industry and its effect on the survival of the industry. The study found that there was a gap between the perceived and actual position of succession management in the oil industry which serves as a wake up call for the industry. It was recommended that the industry should evolve strategies aimed at identification of where and when leadership pipeline is running dry, planning and development of management so as not to lack the capability to compete in the future, and creating changes to refocus the firms position in the market place. All organisations need strong leaders in order to maintain continuity and remain relevant in the ever turbulent environment. Therefore succession management ensures the corporate survival and goal attainment in Nigerian oil and gas industry.

TABLE OF CONTENTS

Declaration                                                                                                                             ii

Approval                                                                                                                                 iii

Dedication                                                                                                                              iv

Acknowledgements                                                                                                                v

Abstract                                                                                                                                  vii

List of Tables                                                                                                                          xi

Abbreviations                                                                                                                         xii

List of Figures                                                                                                                         xiii

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study                                                                                                  1

1.2 Statement of the Problem                                                                                                             9

1.3 Objectives of the Study                                                                                                    11

1.4 Research Questions                                                                                                           11 1.5Research Hypotheses                                                                                                         11

1.6 Significance of the Study                                                                                                             13

1.7 Scope of the Study                                                                                                           13

1.8 Limitations of the Study                                                                                                   14

1.9 Profile of Selected Organizations                                                                                     15

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Introduction                                                                                                                      21        2.2 Conceptual Framework                                                                                                     21

2.2.1 The Concept of Succession Management                                                                      21

2.2.2 The Concept of Goal                                                                                                      21

2.2.3 The Concept of Oil Industry                                                                                          23

2.2.4 The Concept of Corporate Governance                                                                         23

2.2.5 The Concept of Corporate Social Responsibility                                                          24

2.3 Theoretical Framework                                                                                                     25

2.4 Empirical Review                                                                                                               34

2.4.1 Empirical Review Related to Objective One                                                                  34

2.4.2 Empirical Review Related to Objective Two                                                                 35

2.4.3 Empirical Review Related to Objective Three                                                               39

2.4.4 Empirical Review Related to Objective Four                                                                 41

2.4.5 Empirical Review Related to Objective Five                                                                45

2.5  Summary of Review of Related Literature                                                                     46

CHAPTER THREE: METHODOLOGY

3.1 Introduction                                                                                                                      59

3.2 Research Design                                                                                                               59

3.3 Type of Data and the Source                                                                                            59

3.4 Population of the Study                                                                                                    60

3.5 Sampling and Sampling Procedure                                                                                   60

3.6 Method of Data Collection                                                                                               61

3.7 Method of Data Presentation and Analysis                                                                      61

3.8 Validity of Research Instrument                                                                                      62

3.9 Reliability of Research Instrument                                                                                   63

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Introduction                                                                                                                       66

4.2 Data Presentation and Analysis                                                                                        66

4.3 Test of Hypotheses                                                                                                           77                                                        4.4 Discussion of Findings                                                                                                     82

4.4.1 Discussion of Findings Related to Objective One                                                         82

4.4.2 Discussion of Findings Related to Objective Two                                                        87

4.4.3 Discussion of Findings Related to Objective Three                                                      89

4.4.4 Discussion of Findings Related to Objective Four                                                        94

4.4.5 Discussion of Findings Related to Objective Five                                                        97

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND           RECOMMENDATIONS

5.1 Introduction                                                                                                                      105

5.2 Summary of Findings                                                                                                       105

5.3 Conclusion                                                                                                                        106

5.4 Recommendations                                                                                                            106

5.5 Contribution to Knowledge                                                                                              107

5.6 Areas for Further Research                                                                                               109

Bibliography                                                                                                                           110

Appendixes                                                                                                                             121

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CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Vision is the ability to see what change is needed and how it will benefit people when the change is made. The vision of outsourcing business functions to external provider came out of the desire of corporate executives who out of exigency of time purposed to improve company’s focus, enhance profitability/productivity through cost reduction or control of operating costs and freeing internally available resources for other value adding activities that is fundamentally core to them. Outsourcing as a process involves shelding off of non-core functions that is highly resource demanding or difficult to manage by utilizing outside opportunity available to have top level support that the organization could not get internally. As a contracted relationship, it involves transferring of existing non-core business functions including its relevant physical and human resources to external provider in order to strategically utilize outside resources to perform task previously done in-house. Outsourcing is growing in our environment because business. Margins are thinning out. And once this begins to happen, every responsible business driver to look for ways to maximize profit.

Outsourcing thus provides the avenue needed to get services rendered without necessarily paying fully for it. As outsourcing continued to gain ground and acceptance around the world, organization are beginning to assess what function(s) within the organization can be outsourced and how outsourcing such function would impact on the whole organisation. They want to know how a decision to outsource a particular function could take them from print A to Point B. they want to know how they can reposition themselves to be managers of result instead of resources knowing that once they outsourced certain function within the organisation; the onus automatically falls on the provider on the agreed result. On the contrary, survey has shown that a large proportion of firms that have outsourced some processes are not happy with the result obtained. The major reasons adduced for this un-satisfactory experience include, poor, quality service, lack of devotion and commitment to duties. Additionally, a seemingly random policy of outsourcing can lead to lower employee morale and by extention decrease in the level of productivity and to a “who next atmosphere”.

Furthermore, the problem of contending with labour union who are of the view that workers are unjustly been casualties have left sour experience on some companies that previously outsourced some of their business processes.

This research is therefore set to focus on the process of outsourcing physical security function on a medium scale enterprise while taking cognizance of these contending views.

 

1.2   STATEMENT OF PROBLEM

 

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THE EFFECT OF HUMAN CAPITAL DEVELOPMENT ON ORGANIZATIONAL PERFORMANCE

ABSTRACT

The purpose of this research work is to highlight the impact of human capital management on organisational performance in the manufacturing firms. Today’s business environment is in the state of flux, where competition is the name of the game. Organizations that fail to change may be forced to change from existence to non-existence, hence survival is the panacea. To survive, companies must explore all available avenues that can bring about competitive advantage. To develop a competitive advantage, it is important that firms truly leverage on the workforce as a competitive weapon. Specifically, the study aimed to pursue the following objectives: to establish  the relationship between  Human capital management and organizational performance, to examine the extent to which training affects organizational performance, to ascertain the extent to which talent management impacts on organizational performance, to evaluate the extent to which incentive and compensation influence organizational productivity. The study had a population size of 1,210, out of  which a sample size of 303 was realised using Taro Yamene formula at 5% error to tolerance and 95 % level of confidence. Instrument used for data collection was primarily questionnaire and interview. The total numbers of 303 copies of the questionnaire were distributed while 283 copies were returned. The descriptive research design was adopted for the study. Four hypotheses were tested using Pearson’s moment correlation coefficient, chi-square (x2) and Z- test statistical tools. The findings indicate that there was significant relationship between human capital management and organisational performance. Training positively affects organisational performance. Incentives and compensations positively influence organisational performance. The study concluded that theoretical and technological advance in human capital management has allowed manufacturing organizations to move beyond managing personnel by head count and billet, the managing their workforces. The study recommends that Firms should conduct a workforce assessment to determine the current human capital capacity based on the verified job requirements.

CHAPTER ONE

INTRODUCTION

1 .1         BACKGROUND OF STUDY

Today’s business environment is in the state of flux, where competition is the name of the game. Organizations that fail to change may be forced to change from existence to non-existence, hence survival is the panacea. To survive, companies must explore all available avenues that can bring about competitive advantage. To develop a competitive advantage, it is important that firms truly leverage on the workforce as a competitive weapon. A strategy for improving workforce productivity to drive higher value for the firms has become an important focus. Firms seek to optimize their workforce through comprehensive human capital development programmes not only to achieve business goals but most important is for the long term survival and sustainability of the organization. To accomplish this, firms will need to invest resources to ensure that employees have the knowledge, skills, and competencies they need to work effectively in a rapidly changing and complex environment (Marimuthu, Arokiasamy, and Ismail, 2009).

 In response to the changes, most firms have embraced the notion of human capital has a good competitive advantage that will enhance higher performance. Human capital development becomes a part of an overall effort to achieve cost-effective and firm performance. Hence, firms need to understand human capital that would enhance employee satisfaction and improve performance. Although there is a broad assumption that human capital has positive effects on firms’ performance, the notion of performance for human capital remains largely untested.

Human capital management can contain different aspect, such as personal cost, performance of employee turnover or demography .Human capital management is an attempt to place a financial figure on the knowledge and skill of an organisation employees or human capital (Bnet 2008) but also includes the planning, controlling and analysing of all personnel management related procedures as far as they are quantifiable. The growing number of articles shows the increasing relevance of human capital management  theory take the view that employees can be regarded as assets (Ordiorne 1984) They even believe that value can be put on them and that employees can be managed much as a portfolio of stocks in managing and maintain or enhance their value to the firm (ordiorne 1984).

Human capital generally refers to a repertoire of knowledge, competency, attitude and behavior embedded in an individual (Youndt et al., 2004; Rastogi, 2002). It has gained increasing recognition among organization and management scholars because of its promise to deliver competitive advantage (Gratton, 2000; Pfeffer, 1994), create value (Rastogi, 2002; Mayo, 2001) and secure long-term economic growth (Tomer, 2003; Chuang, 1999). The growing emphasis on human capital in organizations reflects a view that market values depend less on tangible resources and more on intangible resources, particularly human resources (HR) (Edström  and Lorange, 1984).

The development of the resource-based view of the firm (Barney, 1991; Penrose, 1959), together with influence work in strategy on organizational core competencies (Hamel and Prahalad, 1994), has placed the role of human capital centre stage within organizations. People and people processes, it is claimed, create competitive advantage chiefly through the characteristics of being (potentially) valuable, rare, hard-to-imitate and non-substitutable (Wright et al., 1994). This means that a link between HR practices and the firm-specific  nature of particular organizations can foster uniqueness and create high barriers to imitation (Becker et al., 2001; Wright et al., 2001). In order to build a competitive advantage, organizations need to define what human capital really means and how to deliver effective human capital development.

As some scholars state:“…HR leaders [need] to know that the work they’re doing is among the most important work that anybody can do. Human capital is, and should be, the centre of any business.” (Rosner, 1999: 41) “[Human capital is] generally understood to consist of the individual’s capabilities, knowledge, skills and experience of the company’s employees and managers, as they are relevant to the task at hand, as well as the capacity to add to this reservoir of knowledge, skills, and experience through individual learning.” (Dess and Picken, 1999: 8) Such a philosophy requires, it is argued, a strategic approach to managing people, implementing solutions for evaluating workforce capability, identifying skill gaps areas and improving employees’ productivity, performance and well-being (Mayo, 2001). Strategic issues such as increasing firm’s performance (Maruping, 2002), designing competencies (Nordhaug, 1998), human capital measurement (Critten, 1994), returns on investment of human capital (Fitz-enz, 2000), benchmarking (Huang et al., 2002) and resource allocation (Lepak and Snell, 1999). Hence, this paper attempts to look into the connection between human capital and firm’s performance.

1.2   STATEMENT OF   THE PROBLEM

The productivity of workers is falling resulting to poor and low performance of the organization. This is because most firms fail to send their employees on training due to lack of funds that is involved in embarking on employees training. Also most firms believes that workers are dubious in nature, after returning from training desert their firms to join other firms. For instance most Nigerian organization do not give their employee effective and efficient training, considering the cost implication of sending employees on quality training which result into low productivity. Nevertheless, the issues of human capital development are not taken seriously by many organizations, this is because of the failure to acknowledge the fact that business environment has become very dynamic and as such only those organizations with the right informational need in the business times can succeed with the right technological manpower to succeed in modern times. Failure to take training and development especially in modern organization will lead to stifling growth, lack of productivity and inability to compete favourably in the industry. Pertinent to the above the study seeks to investigate the effect of human capital development on organizational performance.

1. OBJECTIVES OF THE STUDY

Given the statement of the problem above, this study aims to achieve the following objectives.

1. To establish  the relationship between  Human capital management and organizational performance
2. To examine the extent to which training affects organizational performance
3. To ascertain the extent to which talent management impacts on organizational performance
4. To evaluate the extent to which incentive and compensation influence organizational productivity.

1.4       RESEARCH QUESTIONS

1.         What is the relationship between Human capital management and organizational performance?

2.         To what extent does training affects  organizational performance?

3.         To what extent do talent management impacts on organizational   performance?

4.         To what extent do incentives and compensation influence organizational productivity?

1.   RESEARCH HYPOTHESES 

The following hypotheses was formulate and will be  tested in their null form.

1.         Ho:      There is no significant relationship between human capital  and

organizational performance.

            H₁:       There is significant relationship between human capital  and

Organizational performance

2.         Ho:      Training does not positively affects  organizational performance

            H₁:       Training positively affects organizational performance

3.         Ho:      Talent management does not significantly positively impacts on

Organizational performance 

            H₁:       Talent management significantly positively impacts  on

organizational Performance.

4.         H₀:       Incentive and compensation don’t positively influence

organizational Productivity

            H₁:       Incentive and compensation positively influence organizational

Productivity.

1.6       SIGNIFICANCE OF THE STUDY

1. It will show how organizations will maintain, develop workforce in other to enhance organizational productivity.
2. The findings of this study would highlight the need for managers and trainers to design the content of their training and development programmes to reflect the needs of the employees and  the organization
3. It is significant in the sense that its findings will serve as a base and framework for future researchers to carry out further studies.

1.7       SCOPE OF THE STUDY

The scope of this study was limited to three manufacturing company in Enugu state, these include Nigeria Bottling Company, Nigerian Breweries Plc and ANAMCO. Basically the following concept was covered. Definition Human capital management, features and functions, human capital theory, and human capital and complementary capitals ,concept of performance, factors affecting performance, and performance management  etc.

1.8       LIMITATIONS OF THE STUDY

             As part of the research experience by researcher all over globe certain limitation hinder effective collection of materials.

1. Time constraint: The time required for this project work was not enough, this was because the project work was done at same time of serious academic work was going on in the school.
2. Financial constraint: The finance needed to carry out this work is too much and cannot be afforded by the student. This poses great limitation to the successful carrying out of this work.
3. Scarcity of materials: There is generally non-availability and adequate literature on the research topic. Hence the researcher finds it cumbersome to finalized.
4. Non-challant attitude of respondents: Another limitation in the course of carrying this study was the non- challant attitude of the respondents in supplying the necessary information. This  was probably due to their ignorance of the main purpose of the study. Also many refused to great interviews or answer questions bordering on the activities of their organizations.

1.9       DEFINITION OF THE TERMS

1. Human capital management: This is the abilities and know-how of men and women that have been acquired at some cost and that can command a price in the labour market because they are useful in the productive process (Parnes 1984:58).

2. Human resource management: this  is  the process of accomplishing organizational objectives by acquiring, retaining, terminating, developing and properly using the human resource in an organization (Donnelly et al 1992:21).
3. Talent management: This encompasses all the applications necessary for handling personnel-related tasks. For corporate manager and individual employees from the point of hire to the point of retire (Dickson 2003:47).
4. Training: This focuses on teaching organizational members how to perform their current jobs and helping them acquire the knowledge and skills they need to be effective performers (Ezigbbo 2007:414).
5. Organizational performance: This is the commonly referred to as financial performance where considerations of budgets and assets are crucial in determining the overall bottom-line of an organization (Yeo 2003:114).

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