THE EFFECT OF STRATEGIC MANAGEMENT ON ORGANIZATIONS PERFORMANCE (A STUDY OF KRISORAL GROUP OF COMPANIES LIMITED ONITSHA)

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ADOGU LAURETTA NNEKA

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  • Name: THE EFFECT OF STRATEGIC MANAGEMENT ON ORGANIZATIONS PERFORMANCE (A STUDY OF KRISORAL GROUP OF COMPANIES LIMITED ONITSHA)
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ABSTRACT

The topic of this project is “the effect of strategic management on organization’s performance”, with a particular reference to Krisoral Group of company’s Ltd Onitsha. The problem of this study si that most business organizations fail not because they lack good employees but because their management lack adequate strategy. How organizations can successfully adapt to their environment to ensure growth, survival, profitability and continual existence is the concern of this project. The objectives being to bring to focus the necessity for effective and efficient management strategy in organizations such as: 1. The extent to which the organizations involve in strategic management. 2. Why strategic management fails in some organizations.
3. The relationship between strategic management and secondary data collected. Whereas the secondary data were collected from text books, journals, Internets Data analysis involved sampling out a particular number from the population of study in order to make generalization. The work went as far as testing the hypothesis formulated in chapter one f this project. It was found out that clear understanding of a company’s business objectives to a large extent determines the rate of managerial efficiency. Proper monitoring and control of company’s strategy is very essential in organization’s efficiency. Flexibility of strategy is necessary for organization to stand the test of time. In conclusion, strategic management is a means towards attaining success in business endeavours. Therefore strategic management is inevitable for organization to stand and continue in existence.

TABLE OF CONTENTS

Title page- – – – – – – – – i
Approval- – – – – – – – – ii
Dedication- – – — – – – – iii
Acknowledgements- – – – – – – iv
Abstract- – – – – – – – – v
Table of Contents- – – – – – – vi
Chapter one
1.0 Introduction- – – – – – – 1
1.1 Background of the study- – – – – 1
1.2 Statement of the problem- – – – – 9
1.3 Objectives of the study- – – – – 9
1.4 Research questions- – – – – – 12
1.5 Research hypothesis- – – – – 13
1.6 Significance of the study- – – – – 13
1.7 Scope and limitation of the study- – – 14

CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction- – – – – – – 17
2.2 Meaning of strategy- – – – – – 21
2.3 Growth strategies/Characteristics of strategy 23
2.4 Organisation- – – – – – – 26
2.4.1 Definition of organization– – – – 26
2.4.1a Definition as Rational systems- – – 26
2.5 Basic elements of organization– – – 32
2.6 Organisation structure- – – – – 33
2.7 Organisational design- – – – – 39
2.8 Types of organization- – – – – 39
2.9 Business environment- – – – – 42
2.9.1 Analysis of business environment- – – 42
2.10 Strategic management and managerial efficiency44
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction- – – – – – – 66
3.2 The design of the study- – – – – 67
3.3 Population of the study- – – – – 68
3.4 Sampling design and technique- – – 68
3.5 Source of data collection- – – – – 70
3.6 Instrument of data collection- – – – 71
3.7 Validity and reliability of the instrument – 72
3.8 Method of data collection- – – – – 72
3.9 Method of data analysis- – – – – 74
CHAPTER FOUR:
DATA PRESENTATION, ANALYSIS
AND INTERPRETATION
4.1 Introduction- – – – – – – 76
4.2 Data presentation and analysis- – – 77
4.3 Testing of hypotheses- – – – – 81
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of research project- – – – 92
5.2 Findings- – – – – – – – 93
5.3 Conclusion- – – – – – – 94
5.4 Recommendations- – – – – – 95
Bibliography- – – – – – – – 97
Appendix- – – – – – – – – 101
Questionnaire- – – – – – – – 102

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND INFORMATION
Business today operates in a highly competitive,
fast paced, globally connected environment where change
is a constant. This environment presents challenges to
any leadership team attempting to lead and manage
successful and sustainable business in the global area.
Strategizing ahead becomes of paramount
importance to the leaders of organizations. Spot and
strategic management is therefore critical as the
strategies implemented will help lead organizations to
assume their best position in the global market.
Nowadays, demands on corporate strategists are
increasingly heavy, as strategic implementation is
becoming more complex in the real world. Therefore,
there is a need to develop a conceptual model to integrate
and make the theory of strategic implementation easier to
understand and apply.
An organized enterprise does not exist ina vacuum,
but is dependent on its external environment.
The enterprises therefore receives inputs,
transforms them into processed outputs and delivers
them to the environment are composed of
1. Customers (both distributors and users)
2. Suppliers of materials, Labour, Capital equipment
and work space
3. Competitors for both the markets and resources
and
4. Regulatory groups including governmental agencies,
unions, and inter firm association
General environment includes economic policies,
Technical system and demography
Managers have no control on these forces but rather
respond to their changes. Their ability to respond to
these external variables and internal forces are the major
trust of this study.
(Akpala 1990, P.12) Poor management of any
organization will likely bring about poor undesired
performance necessitated by inappropriate organization
structure which is the pivot or building block for
management. Without a known framework, management
of organization cannot be effective and efficient. It is
within this framework that organization management
process thrives effectively. According to Akpala,
management as the process of combing and utilizing or of
allocating an organization’s input (i.e. men is human
resource, material and money) by planning, organizing,
directing and controlling for the purpose of producing
outputs (goods and services)desired by customers to
achieve organizational objectives or goals. The ability of
any organization to achieve its aims and objectives within
specified limits is known as managerial efficiency. How
well an organization uses its available resources to
achieve desired goals is a source of concern for managers
in this era of scarcity of resource.
Human resource management, one of the key
factors to improve business performance can be regarded
as a general approach to the strategic management of
intentions of organization on the future direction it wants
to take. It is concerned with long-term people issues and
macro-concerns about structure, quality, culture values,
commitment and matching resource to future need.
Since early 1990s, there has been evidence being
generated on the impact of people’s management
practices on business performance. It is useful for all
organizations and inherent framework which reflect the
business strategy. They can ensure that various aspect
of people management are mutually reinforcing in
developing to achieve business success.
(Akpala 1990, P. 12) Poor management of any
organization will of no doubt bring about undesired
performance necessitated by which the pivot or building
block for management.
Without a known framework, management of an
organization cannot be effective and efficient. It is within
this framework that organization management process
thrives effectively.
According to Akpala, management as the process of
combining and utilizing or of allocating an organizations
inputs (men, material and money) by planning, directing
and controlling for the purpose of producing outputs
(goods and services) desired by customer to achieve
organizational objectives. The ability to any organization
to achieve its aims and objective is known as managerial
efficiency. How well an organisation uses its available
resources to achieve desired goals is a source of concern
for managers especially in this area of scarcity of
resources. So, in strategic management appropriate
organizational structure which will match the
environment and productive activities of an organisation
is chosen.
Sometimes, when an organisation is implementing
the strategies it has formulated, the environment can
change further thereby indicating that there should be
further strategic planning analysis of these new events
which the organisation did not anticipate before they
occurred during the strategic implementation process.
These new issues are called real-time response
management (Ansoff, 1984). When implementing
strategies formulated to respond to changes in the
environment, two major problems are faced by the
general management which are
1. Behavioural resistance to change and
2. Systematic resistance to change.
Strategic management is a component of business
policy. The major objective of the vairus strategic
management analyses is to help an organisation to
formulate effective business policies which can lead to
the attainment of organization objectives.
Krisoal Group of Companies was chosen as the case
study to highlight some areas of study. The effect of
strategic management on the performance of the
organisation.
Krisoral Group of Companies Ltd was established by
one man in 1996 as Eastern Distilleries Ltd., and located
at Niger Bridge Industrial Layout Onitsha. The company
started with few employees producing schnapps and wine
in a small scale. The company grew gradually, expanded
and diversified into other things. Because of the
expansion and diversification the location became so over
crowded that they have to pack into their new location at
Atani Road Harbour Industrial Layout Onitsha,
structures erected by the organisation. The mission of
the organisation is to establish viable productive and
service oriented enterprises with absolute commitment to
quality, and the vision being to pragmatically evolve
human endeavours to touch life and project them as the
best in their chosen field. For these reasons, the
company changed its name to Krisoral Group
Companies, comprising of Eastern distilleries, krisoral
Agro Allied Ind.
Strategic management is necessitated by the fact
that company’s operation is determined to a large extent
by the external variables in the environment which the
company is a sub-unit. The company’s ability to achieve
managerial efficiency is dependent on its ability to
forecast and respond to the external environment and to
adopt the best alternative course of action that will
improve its performance to remain in business as a
corporate body. The level of competence a company has
been able to achieve is the domain of this research.

1.2 STATEMENT OF THE PROBLEM
Business continuity is a task that must be pursued.
Therefore the future occurrences are problems that every
manager must take seriously as a first class management
task. Nobody can say for certain what the future will be
like but and can make good forecast. Irrespective of ones
careful plans and strategies, there are still abundant
unforeseeable occurrences one cannot predict or
determine.
Every organization devotes time to map out where
the company is going how to get greater height and what
it will be doing in order to adapt and survive in this hard
economic crunch and competitive market.
Most organizations have been observed to be
declining from their objectives only to engage in attractive
and multiple but unattainable activities; they then lose
their sense of purpose and direction. They are more
often than not prepared for this environmental dynamics
of change. Such organizations that cannot adapt with
the dynamics of change in their environment die off
prematurely while those that are able to streamline and
fine tune their strategy continue to strive from strength
to greater heights. Any organisation that fails to
strategise and adapt to change covertly has planned to
fail overtly. Most business concerns fail not because they
lack good employees, but because their management lack
adequate strategy. The problem is then on how
organizations can successfully adapted to their
environment to ensure survival, growth, profitability and
continued existence.

1.3 OBJECTIVES OF THE STUDY
Based on the very nature of the changing external
environment organizations are faced with the test of
having to adapt to the external variables that make up
the larger system. Strategies are made, but because they
are subject to change become ineffective over a given
period of time. Due to this volatile nature of the larger
environment, strategies must be flexible and dynamic in
order to adapt with changes and ensure growth,
continuity and survival in the future. Be that as it may,
the objective of this research work is to bring to focus the
necessity for effective and efficient management strategy
in an organization.
An indepth study of how Krisoral Group of
Companies involve in strategic management to determine
i. The extent to which the orgainsation involve in
strategic management.
ii. Why strategic management fails in some
organizations.
iii. The relationship between strategic management and
the achievement or organizational goals and
objectives.

1.4 Research Questions
1. How has management strategy influenced the
organizational performance?
2. What effect does flexibility of strategy have on
organizational performance?
3. How does monitoring of company’s strategy reduce
or add deviation form planned courses of actions?
4. How has non clarity of an organization mission and
objectives influenced its ability to achieve
organizational goals?

1.5 RESEARCH HYPOTHESIS
Ho: Strategic management has enhanced the
performance of the organizations.
Hi: Strategic management has not enhanced the
performance of the organizations.
Ho: Monitoring and controlling of company’s strategy
reduce deviations from planned courses of action
thereby leading to managerial efficiency.
Hi: Monitoring and controlling of company’s strategy do
not reduce deviations from planned courses of
action thereby leading to managerial efficiency.
Ho: Flexibility is necessary if a strategy is to stand the
test of time.
Hi: Flexibility is not necessary if a strategy is to stand
the test of time.
Ho: Non clarity of an organization’s business mission
and objectives has influence on its ability to achieve
organizational goals.
Non clarity of an organization’s business mission and
objectives has no influence on its ability to achieve
organizational goals.

1.6 SIGNIFICANCE OF THE STUDY
This will be of immense benefit to both public and
private organizations to determine the extent of their
strategic management and its impact on their
performances. In addition, the study will determine the
factors or problems limiting strategic management of this
organization. Through this investigation, the
organization will understand their short comings and
weak points and will adapt measures aimed at enhancing
their strategic management.

1.7 SCOPE AND LIMITATION OF THE STUDY
The study limited to the concept and process of
management and how it affects the ability of an
organization to utilize its available resources to achieve
its goals and objective. The study focuses on top and
middle management. A total of 30 questionnaires were
distributed to the management staff and all were
returned.

1.7 Definition of Terms
Decision Making: the act of choosing from among
alternative courses of the best option to be used in the
future.
Forecast: The quantitative and qualitative estimation of
events or trends that one believes may occur in the
future.
Mission: This is the principle of social responsibility the
business owes the larger society, which the society
expects as a value derivable from the company’s broad
purpose.
Strategy: The determination of the basic long-term
objectives of an organization and the adoption of courses
of action and allocation of resources necessary to achieve
goals.
Policies: The guidelines to managerial action
Objectives: An end in view or a goal to be sought, the
“where” of management as distinct from “how”.
Gap: The difference between a target and a forecast. It
shows the extent to which one must take actions to
achieve the set goals.
Efficiency: Input-output analysis to articulate the
symbiotic relationship between the quality and quantity
of output realized from a given set of input (Imaga 1996
p2).
Budget: A financial statement over a given period of tem
basically one year period expressed quantitatively to
regulate activities.