IMPACT OF STRATEGIC PLANNING ON ORGANIZATIONAL PRODUCTIVITY
ABSTRACT
This research study was on the impact of strategic planning on organizational productivity (a case study of Nigeria Bottling Company). The main objectives of the study are: To assess the impact of environmental factors on the strategic planning of the company. To evaluate the relationship between strategic planning and the corporate performance of the company. Based on this, two hypotheses were formulated and tested. The population of study constitute all the company in Eastern Region especially Enugu and Onitsha. Questionnaire and oral interview were used to elicit data from respondents. Simple tables and percentages where used in analyzing the data collected. From the analysis the researcher discovered that: Internal and external environmental factors surrounding the company greatly influence its ability to plan strategically. That long range strategic planning was carried out by corporate to management team. In the light of the above, recommendations on how to enhance company’s productivity through improved strategic planning were given. It is strongly believed that these measures will go a long way in enhancing the organisational performance of the company.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Strategic planning which is a process that involves analyzing the opportunities and threats in the market place, which building the strengths and correcting the weaknesses within the firm, also involves setting goals for specific product market and for the firm (Bernett and Willsted:1988); and since it is perceived as a mediating force between the organisation and its environment, it has become highly imperative for business organizations to adopt it so as to enhance productivity. This is sequal to the fact that business enterprises under the prevailing economic environment of today, have to be up-and-doing so as to be efficient to survive. High prices due to increasing production costs coupled with severe liquidity squeeze necessitated by the dwindling external value of our national currency, have had a serious dampening effect on consumer demand. Having been faced, therefore, with a high cost of production, diminishing markets and environmental uncertainties, business organizations have had to compete more aggressively with one another to attain acceptable volumes of production, sales and a good market share.
Suffice it to say, therefore, that the complexity to today’s business, coupled with the turbulence in the economic waters of the nation, makes it very doubtful if any modern business organization of reasonable size can survive this competitive environment without adequate strategic planning. No wonder, therefore, that strategic planning has become increasingly important to managers in recent years. And since it defines fundamental goals and objectives, in specific terms, and determines the means to achieve them, as well as provides a basic long-range framework into which other forms of planning can fit, it can, therefore, be said to have a very strong influence on the survival and growth of an organization, most especially in a volatile environment.
Consequent upon that, business organizations need plans to be able to predict unforeseen contingencies, minimize production costs, as well as wastages and then be able to grapple with competitions in a programmed manners – which is the essence of strategic planning. All business organizations need to plan ahead whatever the kind of market; competitive, monopolistic in which they operate. An organization operating in a competitive market needs to plan and design strategies such as will ensure first, its survival, and then the continued probability. A firm operating in a monopolistic market has more critical reasons for planning because of the fierceness of the competition in such market, and even the monopolist organization has to continually devise new strategies to maintain its position or else it will soon be faced with competition. A wrong investment decision in today’s business world is likely to entail a huge financial loss.
A fundamental and pertinent question arises as to why some organizations are outstandingly successful while others achieve marginal or moderate successes and others fail alarmingly. It is also asked to what it is about organizations that tend to make some winners and some losers. It has been emphasized that most corporate successes are as a result of the ability of their managers to pull critical levers at important points in the evolutionary development of their companies. For these managers, the trick is knowing which levers to pull, and when to pull these levers to produce the desired and significant results in terms of increased productivity which leads to high profitability of their organization. We may identify these critical levers as organizational strategies. Strategy and strategic planning in the context of business organizations, refer to major action programmes that are used by organizations to achieve their mission and goals. The focus of all business organization is viability and profitability. The first requirement of the spirit of organization is high performance standards for the group as well as for individuals in the organization. A successful organization is most often an efficient enterprise. One of the major focuses of management by objectives is to have manages set high performance standards for themselves. A manager performs his functions by allocation and integration of human and economic resources through the process of planning. Organizing, directing and controlling for the purpose of producing outputs (goods and services) desired by its customers, so that organization’s objectives are achieved. A manager works with and through people and other resources to realize these organisation’s objectives, Akpala Agwu (1990).
As modern business activities widen, environmental scanning and planning become difficult and more relevant. Today’s business conditions have continued to change so fast to emphasize a growing need for continuous business intelligence activities and strategic planning as the only option to anticipate future problems and opportunities. Strategic planning provides all employees with clear goals and directions to the future of the organization. It also provides a standard against which future performance can be compared. And all these make it complicated in many highly technical firms that are subject to the “law of acceleration” which suggests an increasing rate of changes.
Since strategic planning aims at finding how a company competes successfully within its environment, it is therefore said to be based on the principle of “comparative competitive advantage” necessary for survival and growth under competitive conditions. A firm cannot survive or grow unless it maintains one or more comparative competitive advantages which provide the basic rationale by which customers will refers that firm to others.
Unfortunately, though, Nigeria presents a strong picture of turbulent and unpredictable environment for organizations to shift-particularly the manufacturing sector. This is due mainly to constant changes in the political and economic conditions in the country. The effect of this on the manufacturing sector is quite stupendous. This is especially so when one considers the fact that majority of our manufacturing industries today provide below capacity.
Specifically speaking, for manufacturing industries operating in today’s volatile business environment, the need for strategic planning seems too obvious and imperative to require mentioning. The fortunes of our economy and the manufacturing sector appear inextricably interwoven and so development within the overall economy will inevitably have direct impacts on the environment. Similarly, the operational efficiency of this sector or otherwise in bringing to function the social and economic yearning of the nation has direct impact on the economy. It is against the background that this study intends to assess the effect of strategic planning on the productivity of the Nigerian Bottling Company. It is hoped that this study will in the long-run afford the rare opportunity of understanding and appreciating the significance of strategic planning in today’s organizational restructuring, planning and improvement.