The impact of environmental factor on purchasing business strategies in an organization (a case study of selected purchasing business like abc transport company owerri imo state)

Description

ABSTRACT

It has been argued that the success and effectiveness of an organization are not determined solely by the abilities and competencies of the employees and management alone, the environment also has found effect on company operations. Based on these facts therefore, this research work was undertaken to analyse the impact of environmental factor on purchasing business strategies in an Organization using ABC Transport Company as the case study. In carrying out this work, 50 (fifty) copies of the questionnaire in all are distributed to the company understudy. And to test the validity of the assumption, a hypothesis was formulated for this study. The chi-square (X²) statistical tool was used. The major findings of this work can be summarized as follows.

Environmental factors have profound impact on organizational performance organizational culture influences corporate performance of ABC Transport Company. And government legislation influences organizational goal accomplishment.

Finally, it was recommended that the management of the company could perform their effectively by having a good and clear understanding to the environmental variables. This will in turn increase productivity thereby achieving its sets objectives

TABLE OF CONTENTS

Title page                                                              i

Approval page                                                        ii

Dedication                                                             iii

Acknowledgment                                                    iv

Abstract                                                                v

Table of content                                                     vii

CHAPTER ONE

• Introduction 1

1.2 Background of the study                                    1

1.3 Statement of Problem                                        3

1.4 Purpose of the study                                                6

1.5 Research questions                                            7

1.6 Statement of   hypothesis                                         7

1.7 Scope of the study/ Delimitation                         9

1.8 limitation of the study                                       9

1.9 Significance Of The Study                                          11

1.10 Definition of Terms                                          12

References                                                             15

CHAPTER TWO 

• Literature review 16

2.1  Introduction                                                    16

2.2  Environmental factor                                        18

2.3  Environment factors                                                21

2.3  External Environment                                       26

2.4  Classification of environmental factor                  48

2.5  Selecting and shaping the environment               50

2.6  Strategic response to the environment               52

2.7  Environmental analysis                                     55

2.8  Organizational effectiveness                              57

CHAPTER THREE

• Research design and methodology                    67

3.1  Area of coverage                                             68

3.2  Research design                                              68

3.3  Sample design                                                69

3.4  Sampling size determination                              69

3.5  Collection of data                                             71

3.6 Data source                                                      71

3.7  Instrumentation                                              73

3.8  Data analysis techniques                                   75

3.9  Validity and reliability of measuring instrument    77

CHAPTER FOUR

Data presentation and analysis of data                      80

4.0  Introduction                                                    80

4.3  Test of hypothesis                                           94

4.1 Analysis of most relevant questionnaire

4.2 Test of hypothesis

4.3 Summary

CHAPTER FIVE

• Summary of Findings, Conclusion and

Recommendation                                             102

• Introduction                                                 102
• Summary of Findings 102
• Conclusion 104
• Recommendation 105
• For further research 106

Bibliography/ Reference                                           108

Appendix                                                                      113

Questionnaire                                                         114

CHAPTER ONE

• INTRODUCTION

The environment is a major source of uncertainty to a purchasing business manager and as such it influences the design of any organization and the configuration of organization structure (Akanwa 2000:59). Environment could  also be regarded as a combination of natural object (living and non-living) made by human, and the interrelationship between them and  various circumstances that surround people on earth. (Ohazurike) 2003:59) purchasing business exists in an environment that consists of factors and forces that are internal to the firm.

• BACKGROUND OF THE STUDY

In pursuance of its objective, an organization cannot achieve its objective, without interaction with other members    of the environment. An organization and its environment are interdependent; the organization depends on its environment for the resources and opportunities necessary for its existence. Further more, the environment determines the limits of the organization activities. For examples the passing of a new law by government may make certain purchasing business in Nigeria either stop or start doing certain things. (Alugbuo 2002:1) the environment sources of growth may therefore be internal or external. Both have impact on the organization a purchasing business can therefore be regarded as an open adaptive system within its environment acting as a supra-system. Such purchasing business must change values. Materials or energy within the environment thus therefore the principal task of the manager is to design an internal environment for performance, he must necessary do so within the constraints and influence of the enterprise external environment whether economic, technological, social political or ethical Nigeria contract.(Awujo 1997:268) in order to meet the challenges of economics success, associated with environment efficiently due to its change in  nature and need for accomplishment of the environmental factor are these capable of influencing or negatively. It is possible when the outcome of the influences is favourable but become negative when the out come of the influences is in favourable (Ohazuike 2003:65). However, the aim of this research is to find out the impact environmental factors has on organizational performance. Basically, how and what extent can an environment influences the objectives and goal of corporate organization. This study will at this point advise management to be efficiently been informed and manage its environment in order to adapt to the changing climate so as to accomplish its set objective and goals.

BRIEF HISTORY OF ABC TRANSPORT

Associated BUS company limited operation of ABC transport commenced operation in road passenger transportation on February 1 1993 as an off- shoot of rapid ventures with a   view to running a model road transportation system in Nigeria. In March 2003, capital alliance private Equity (GAPE) acquire 30% shares of ABC transport. With the acquisition, capital alliance (Nigeria) because stake holders in ABC transport, a partnership that repositioned the company for greater performance. ABC transport operates Luxury Bus services according to transportation. Its services are specially designed for distinguishing travellers who would otherwise use our services. The operation within Nigeria is carried out in Ultra modern terminals with comfortable languages in various cities like Lagos (Jibowu and Festac), Aba Owerri Port Harcourt, Abuja, Enugu, Okene, Onitsha, and Umuahia etc. ABC buses are doubled with the company’s trademark the reindeer. The choice of the reindeer as the company’s. Symbol was made after a careful study of the peculiarities of the animal, which is strong fast and moves in hard. For the company’s remarkable achievement in transportation ABC transport was adjudged the best transporters in Nigeria by  the chartered institute of transport Nigeria and has since their consistently won the national Bus operator of the year award  along with other accolades by renowned bodies.

1.3 STATEMENT OF THE PROBLEM

With the dynamic changes in the society many organization have in one way or the other been affected dues to poor planning perhaps not having good management term. Organizations have tried to adapt to certain changes in the environmental factor but still to no avail.   Corporate organization who have failed to analyse and diagnose its external environment have suffered great losses that is in term of poor return on investment poor patronage from customer, poor quality of product or service etc. therefore, due to the volatile nature of today’s environmental factor and the rapidity with which changes occurs, it becomes imperative that for every organization to be successful it has to monitor all the force influencing its operations environment. Government regulations influence organizational objectives (performances). Lack of labour does lead to poor environment scanning result. The company was able to render service that meet the need of customers and their service are in conformity with customer need but customers do react negatively to sudden increase in price of their service. Political interference (instability) affects the level of patronage from customers. Competition from other firms (company) afters the company from increasing its market share.

1.4 THE PURPOSE OF THIS STUDY

1. The purpose of this study is to evaluate the impact of environmental factors on the effectiveness of purchasing business organization.
2. To determine the level of competition so as to know whether the environment is favourable or unfavourable.
3. To examine the degree of environment hostility. The decision of strategic manager
4. To examine if managers must comply with the federal, state and local government laws as well as with court decision.
5. To find out if the company has a good relationship with customers and what impact it has on purchasing business.

1.5 RESEARCH QUESTION

The research question used in this work is as fellows:

1. Do changes on the environment have favourable effect on corporate goal accomplishment?
2. What is the major environment factors that affect organizational performance?
3. Can management successfully control their environmental factor under hostile condition?
4. Does government legislation influences corporate objective?
5. What is the relationship between the work-study techniques and organization performance in ABC?

1.6 HYPOTHESIS

HYPOTHESIS I

Ho: Environmental factor has no significant impact on organizational performance.

Hi: Environmental factor has significant impact on organizational performance.

HYPOTHESIS II

Ho: Government regulation has no significant impact on organizational performance

Hi: Government regulation has significant impact on organizational performance

HYPOTHESIS III

Ho: High level of competition has no significant impact on organization performance

Hi: High level of competition has significant impact on organization performance

HYPOTHESIS IV

Ho: There is no significant relationship between the company policy as part of internal factor of environmental factor in relation to its organization

Hi: There is a significant relationship between the company policy as part of internal factor of environmental factor in relation to its organization

1.8 SCOPE OF THE STUDY (DELIMITATION)

The scope of this study covers the impact of environmental factor on purchasing business strategies in an Organization on ABC transport limited in Imo state.

1.9 LIMITATIONS OF THE STUDY

In the course of this research some constraints were encountered. Notably among them is finance, which slow down the rate of sourcing information, another was time constraint. This was a limiting factor because the research had to combine this project with preparation for agree examination. Also, there was lack of co-operation in existing information, from the staff of ABC transport limited during oral interviews. It is chosen because of its impart in the development, viability and creativity or organizations with particular reference to transport companies, this led to the choosing of ABC transport company for our study since the company have their head office at Owerri Imo state. They play on almost all the roots in Imo state, which is the base of our study; they are therefore, good sample cases for a balance analysis of the study because of their wide coverage of operation in Imo state.  On the other hand, this work is limited by several factors beyond the control of the researcher and this includes:

1. Human resources: Access to some key personnel’s in the concerned organizations was difficult and they were reluctant to give most of the information necessary for this study.
2. The necessary reference materials required by the researcher for a deep and thorough study were not easy to come by.
3. Another major factor is time constraint the topic being discussed is vast and cuts across every area in the transportation purchasing business. Moreover, it occurs on daily bases and therefore requires a thorough investigation.
4. To some extent, this work is limited by lack of fund. This resulted from high transportation cost from one company to another especially when you are asked to come repeatedly without meeting the supposed personnel.

1.8 SIGNIFICANCE OF THE STUDY

It is important to know that organization operates within an environment which directly or indirectly affects its effectiveness as a result of the important of environmental factor to organizational performance cannot be over stated. Organization irrespective of how proper articulation of their programmes they have to take cognisance of their environment it is this perspective that the significance of this work cannot be under stated, hence it will benefit the researcher, public, the case study organization and management scholars in the following ways: This work will serve as a guide and reference purpose to the public and other researcher writing on this topic. The case study organization stands to get more benefit from their research. This is because the research will be carried directly on its activities, and also helps them to know especially the manager’s how to employ and manager the environmental factor efficiently. This study will also be useful to the academic development on how environmental factor influence organizational performance and for this reason will be very useful to the management scholars.

1.10 DEFINITION OF TERMS

For the avoidance of doubt regarding the use of words and terms in this study. The author has decided to state the following definitions:

1. Elements both internal and external impinges or which influence organization performance.
2. Effectiveness: This is the ability of purchasing business organization in achieving its targets.
3. Efficiency: This is the rate at which objectives or goal set (target) are achieved at a minimum cost.
4. Environment scanning: Refers to the process of studying the environment in which the organization exists to pinpoint opportunities and threats.
5. Organization: Refers to a system in which two or more people work together in structured way to achieved specified objectives.
6. Management: The act or skill of planning organizing controlling and co-ordinating the activities/work of a company or organization.
7. Viability: The act of being able to continue to live or to develop into a living thing
8. Profitability turnover: The rate of earnings made in a purchasing business by a company or organization within a given period of time.
9. Objective: The mission, target or focus in carrying out a research on a particular subject or issue.
10. Policy: A course of action that has been officially agreed and chosen by a purchasing business or other organization.

SUMMARY

In this chapter the researcher tried to give brief description of the study by explaining what environment is, how purchasing business exist in an environment that consist of internal and external environment, both factors have impact on the organization. The problem statement of this study is stated, purpose of the study is also stated. The relevant research questions such as on how environmental factor have an impact on corporate goal accomplishment together with the hypothesis for the research work was stated. The scope and limitation of the study is highlighted, some terms relating to the topic of the study is defined, brief information about the case study organization (ABC TRANSPORT LIMITED) is also stated

REFERENCES

ANYANWU, A (2000), research methodology in purchasing business and social sciences, 1^st edition, Owerri: canun publishers Nigeria ltd.

ALUGBUO, C.C (2002) common concerns of manager 1^st edition, Owerri: Achugo publication

AWUJO, A.C (1997) Elements of management 2^nd edition Owerri: Olliverson publishers.

OHAZURIKE, N.C (2003) man and environmental influences 1^st edition Owerri, city prints publishers.

PETER U.A AND UKEJE, S.A (2002) corporate planning and policy, 1^st edition, Owerri Avan global publisher.

CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

The essence of this chapter is to critically look at some salient literatures that have some theoretical relevance to this research work.  Also, textbook, articles in academic journals and other published and unpublished articles will be reviewed to provide the needed materials and facts. Organizations do exist in a vacuum. Each organization is set a particular environment to which it   is inextricably linked. This environment provides multiple contents that affect the organization and its performance and how it operates (Nabli and Nugent (1989:78). Any effort to diagnose and improve the performance of an organization requires an understanding of the forces outside the organization that can facilitate or inhibit that performance.