CORPORATE PLANNING AS A GROWTH STRATEGY IN THE PRIVATE SECTOR
(A CASE STUDY OF LIFE FLOUR MILL LIFE SAPELE)
The main purpose of this study was to consider the effect of corporate planning as a growth strategy to private sector, particularly Life Flour Mill, Sapele
In practice the development of corporate planning involves taking information from the environment and deciding upon on organization’s mission and upon goals and objectives. The organization now know where it want to go. But in order to get there, the organization develops different strategy planning techniques, which constitute the strategy for growth or development. The role of strategy in corporate planning is to identify the general approaches that the organization will uses to achieve its organizational goals it also involves (lie planning process to the organization will take to pulse ii objectives.
Various works done by various researchers were consulted in writing Literature review. It worked at the concept if planning and its process, the need for corporate planning and other related for materials on corporate planning.
Set of’ questionnaire of twenty— seven (27) question were administered to thirty (30) personnel of the top management cadre, senior staff and junior staff of Life flour Mill Limited, Sapele and thirty questionnaire were retrieved duly completed and this is the sample size for the study. the chi—square(x2) test of’ 0.05 level of significance was used to test the hypothesis formulated
From the data analysis and hypothesis formulated. It was observed that there is obvious growth in companies that undertook Corporate planning and no growth in who did not. Also it was discovered that corporate planning influences employees’ performance positively.
Sequel to these findings the following recommendations were proffered. Decision makers and corporate should be well trained So as to play their roles effectively and creditably.
Management should pay attention to its employee so that they will have that sensed belonging so as to enable them put in their best to the growth and success of the firm. Management should look into the possibility of having their own raw materials so that they will not run out raw materials during scarcity.
Corporate organization should ensure that its policies maker embark on continuous training and education so that cm tent trend in management of’ such organization globally would acquired.
Plan and strategy of corporate organization should be made to accommodate the bug term need of such organizations so that their existence would not be short lived. Plans should he reviewed always as government policies change.
In view of all these, it was finally recommended that Companies should practice Corporate planning.
TABLE OF CONTENTS
1.1 Background of the study
1.2 Statement of Research Problem
1.3 Research Questions
1.4 Objective of the study
1.5 Scope of study
1.6 Significance of study
1.7 Statement of Research Hypothesis
1.8 Limitation of the study
1.9 Background information of Life Flour Mill Limited
1.10 Definition of Relevant Terms
Chapter Two – Literature Review
2.1 Concept of Planning
2.2 Concept of corporate Planning
2.3 Concept pf private sector
2.4 Concepts of Growth Strategies
2.5 Nature of Private Planning
2.6 Types of Operative Plans
2.7 Corporate Planning and Growth Strategy
2.8 Corporate Planning and Growth in a Private Firm
2.9 Problems of corporate planning and growth
strategy in a private sector
3.1 Research Design
3.2 Population of the Study
3.3 Sampling Procedure and Size
3.4 Data a Collection
3.5 Data Analysis
Chapter Four - PRESENTATION AND ANALYSIS
4.1 Data Presentation and Analysis
Corporate planning particularly important in a developing country where resource are relatively scare. In Nigeria where many of the business are inexperienced and the academic preparation is by no means very impressive, planning is a blue print for action. A firm that wishes to enter into any business has to engage in any sort of production has engage in detail planning in order to identify the source of raw materials, equipment, determines delivery dates, sources of manpower supply and in some instance sources of working capital. Many projects have failed in the country because adequate plans were not made to identify all the important variables likely to bear on the project that would determine the failure or sources.
Many indigenous businessmen are often too preoccupied by the day-today operation of their business with the result that they have a narrow concept o their business and consider it ideal to plan because they believe they cannot control most of the variables. To this group of persons planning is not a necessity. They fail it realize that failure to plan will give rise to inefficiency and lack of direction. It makes them constantly fire instead of preventing it occurrence.
In capitalist Nation like Nigeria that is characterized by unpredictable environment changes, the need for the application of corporate planning as a managerial technique for company’s growth’ cannot be over emphasized. If cooperate planning is overlooked, the dynamic environment and continuing uncertainties will continue to impede the survival the growth of Nigeria’s companies.
In Nigeria, the environment realities include global economic recession, the escalating cost capital, political instability, the depreciating rate of out currency, stiff industry competition and the threats posed by the multinational corporations. Therefore, to carry out productive venture, which could lead to growth of firms in the country, the life of its internal strength and weaknesses? This is essence of corporate planning, which is to decide what is to be done in the feature.
The importance of corporate planning to organization should be seen in the light of its benefits include its ability to infuse new life in a weak management system, to plan for diversification in a vulnerable single product of a company and to improve communication within the organization. This will promote growth and profitability.
1.2 STATEMENT OF RESEARCH PROBLEMS
The down turn on word economy since 1983 which followed the Nigeria economic boom at oil wealth precipitated the fall in oil prices, huge external debts and hyper inflation. The government responses to revamp the economy came in 1986in the form of Structural Adjustment Programme (SAP) one of the major measures by the federal government the implementation of the Structural Adjustment Programme was the local sourcing of law materials as input production processes. This led to the banning of wheat importation, which serves as the major raw materials for the Flour Mill Industry. Therefore, firms in this industry are faced with the problem of sourcing for local raw material. Cost efficient means of production and production means to process local raw materials.
This research study therefore, focuses at investigating how corporate planning acts as a strategy resolving the problems militating against the growth Life Flour Mill Limited, Sapele.
1.3 RESEARCH QUESTIONS
The following questions will however be examined in this study;
1. What relevance is corporate planning to the growth and success of the firms?
2. How does corporate planning influence the performance of employees?
3. How does the firm cope with turbulent environment emanating from the requirement of 1oeaLsourcin of-raw material in this thriving period?
4. What facilities are in place to absorb the shock in the external environment?
5. What technological change do they have to effect with respect to production processes?
6. What personal changes are needed to suit the current firm’s requirement in actualizing their growth goals and objectives?
1.4 OBJECTIVES OF THE STUDY
Having stated the research problem, the following constitute the objective of this research.
1. To find the importance of corporate planning to the growth and success of the firm
2 To ascertain the choice of personnel replacement to suit the current firm in achieving their growth and objectives.
3. The strength of firm in the 4oGal- sourcing of material considering the harsh environment situation.
4. To ascertain the extent of technological innovation in it’s production process.
5. To envisage the extent of effect corporate planning has no employees
6. To know if there are adequate facilities to absorb the shock in the external environment.
1.5 SCOPE OF STUDY
The research study is restricted to flour mill- industry and in particular, Life Flour Mill limited situation in Sapele, Delta State.
The period under study will cover a three years corporation plan of the firm (2002-2004). Staff and employees, in addition to some important customers will be involved in the importance, effects and problems to be encountered in corporate planning as a growth strategy in private sector. Resolving such problem will also be highlighted in the process of the study.
1.6 SIGNIFICANCE OF STUDY
The research work, when successfully completed will be useful in the following area:
i. It will enable the research determine how competent and important corporate planning will to be overall growth of private sector.
ii. It enables the researcher to review the strength and weakness of corporate planning in achieving growth and success of the firm
iii. he study will bring out new contribution of corporate planning as it aids growth strategy in private section.
iv. It may serve as reference material to researchers who might want to carry out research on similar topic.
v. At the end of this research findings will be made, recommendation proffered and conclusion from this study.
1.7 STATEMENT OF RESEARCH HYPOTHESIS
In order to help us make the final conclusion the following hypothesis will be tested.
(I) Ho: Corporate planning is not a prerequisite for the growth and success of a firm.
H1: Corporate planning is a prerequisite for the growth and success of a firm.
(ii) Ho: Corporate planning is a prerequisite for the growth and success of a firm.
H1: Corporate planning influence employee performance.
1.8 L1MITATIONOF THE STUDY
The researcher wishes to have state that many constraints were encounter during the composition of this work. These constraints view mainly on the following.
1 Time: Because of the short nature of the session the research had it so difficult going out for souring and gathering information for the purpose of this work.
2. Financial: Beside the committed time provided for this research work, another problem faced in finance, this was a constraint in outing for relevance information from Ozoro to Sapele especially as it concern transpiration cost.
3. Unwillingness to Disclose Information: Some of the personnel staff in Life Flour Mill Company’ Limited, Sapele were unwilling to disclose relevant information that might be vital for the purpose of this work.
4 Literature: Getting relevant literature to source data was one of the most difficulties that was faced in writing this research work.
Life Flour Mill Limited, Sapele is a top corporate image. It was established in 1970 as one of the subsidiaries of Seaboard Group of Companies. The company is a private limited liability company with staff strength of 400 people. The company has a strong assets base. The production facilities are good and one of the best facilities that may be found in the flour milling industry in Nigeria. The success of life Flour Mill is due to their concentration upon their strengths while minimizing the effect of its weakness in order to takes advantage of opportunities and avoid or overcome threats in the environment.
The raw material used in the company are wheat, maize, meal, sorghum and their products are wheat flour maize meal, sorghum meal and rye, which are used in the manufacturing of biscuit. Life Flour Mill Limited, Sapele is one of seven Flour Mill and over Nigeria which Guinness Nigeria Plc has contractual agreement with for the milling of maize and sorghum.
Within the decade, life Flour Mill Limited had some weakness and faced threats, which include ban on wheat importation, transport problems etc. resolving these problems necessitate the adoption of strategic or corporate planning. With the barn on wheat importation, the company has to go into proper research to highlight some of the essential survival planning strategies.
The primary source of cohesiveness in an organization is strategic planning or corporate planning. According to Vancil (1977). Strategy must be more than just a ringing statement of purpose or objectives. It must also provide guidance that will assist subordinate mangers in deciding how to proceed towards achieving the objective. Furthermore, strategy should help to weld an organization together by developing among members of the managerial team both a major action programme and a shared commitment to execute these programme successfully.
The process of policy formulation, establishment of goals and objectives and the development of strategies are all subsumed under corporate planning. In other words, planning covers the whole process of determining what purpose to pursue and means of attaining them as the mechanisms for monitoring results.
The starting point in corporate planning is developing a thorough understanding of the firms environment. However, from a corporate planning perspective, the planners need to think in terms of basic environment forces and how to balance them against the firms strengths and weaknesses
The general environment forces are not necessarily with other specific firms but are part of the general content of an organization. They are political, legal, economic, international, social-culture and technological. (Meytor 1983). Managers and strategists must consider each of these. If they are effective in establishing goals.
Fore most organization, corporate planning clearing emanates from the top some employ in-house strategic planning for some other assist and advice management in corporate planning for some other firms. They use the service of consultants. But life Flour Mill Limited, Sapele possesses strong top management with great communication to corporate planning, good structure and industrial relations. The firms third distribution system entirely rest on contract, transportation with third parties who are paid freight based on rates agreed upon from time to time.
1.10 DEFINITION OF RELEVANT TERMS
Corporate planning - Steiner and Miner (1977) define corporate planning as the foregoing of company mission setting of objectives for the organization in the light of external and internal forces. Formulating policies and strategies to achieve the objectives and ensuring their proper implementation so that basic purpose and objectives of the organization will be achieved.
Strategy - This refers to management action plan for achieving the chosen objectives. It specifies how tile organization will be operated a run and what entrepreneurial, competitive and functional areas approaches and action will be taken to put the organization into desired position Baridam (1999).
Company Growth- This an increase in economic activities, profit and production activities of company Oxford Advance Learner Dictionary.
Environment Forces- Those factors which influence an organization within its area of operation. David Schusartz (1979).
Akingbode, J.A. (1983). “ Profitability Planning” its concept and practice in Nigeria Commercial Banks.
Ansoft, J, (1965) “ Strategy New York McGraw-Hill Book Company.
Arghent, I. (1968) “ Planning Lodon. Ellen and Union.
Drucker, Peter (1979) “ for resulting London, pan Books
Fabara. B.A. (1986) “ Planning in Nigeria Long Range Planning. Vol.19
Wilson, R.M.S. (1982) “ Control and Corporate Planning the Institute of Marketing Heinemann, London.CORPORATE PLANNING AS A GROWTH STRATEGY IN THE PRIVATE SECTOR