THE INFLUENCE OF BUSINESS ENVIRONMENT IN DECISION MAKING IN AN ORGANIS…

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CHAPTER ONE

INTRODUCTION

1.0    BACKGROUND OF THE STUDY

Modern business managers operate in a dynamic environment. The change in the environment has been rapid and unpredictable. Economic variables have been complex, both in form and impact on business decisions. The most dramatic change has been that exhibited by competitive pressures. The sheer rapidity of competitive change in today’s Nigerian business environment needs adaptability.

The environment of any organisation is the aggregate of all conditions, events and influence that surround and affect it. Since the environment influences an organisation in many ways an understanding of it is of crucial importance to the firms survival.

A business organisation operates within a larger framework. The task environment is that part of the world outside an organisation with which the organisation comes into frequent operating contact. Customers, suppliers, competitors, the labour and financial markets, government regulating agencies, social political issues and all these groups represent the types of people and institutions that comprises the task environment of Nigerian businesses. Business organisation in Nigerian also operate in a larger context, called the socio-cultural and political environment. All these affect the practice of management and indeed the firm’s decision making.

There are several systems within these business sub-environments. Among them the more important ones are the economic, political, proactive and marketing systems, and the resources towards which they are directed.

Recently, the Nigerian business environment has come under series of economic reforms and these include:

–       Privatisation and commercialization of some public enterprises. This measures has some economic and competitive implications for practicing organisation managers.

–       Self-reliance through export promotion programme.

–       Agro-economic based programmes an alternative to business undertakings.

–       Self-denial and sacrifice through removal of the subsidy etc. These constitute elements that impact greatly on firm’s decision making.

–       The task of this work is on the influence of environment in decision making of an organisation.

–       A case study of Champion Breweries

1.1    STATEMENT OF THE PROBLEM

Diverse industrial problems and various social ills that pervade the Nigerian business environment and militate against the success of many organisation include: inadequate supply of raw materials, inadequate energy supply, poor management know-how, inflation network, poor roads, unemployment, poor communication, apparent religious divergences, unstable political system, dishonesty and poor ethical standard, governmental policy inconsistency, etc.

This is the Problem

The research is therefore attempts to investigate the relationship that exist between these elements and the firm’s decision making.

1.2    OBJECTIVE OF THE STUDY

This research has the following objectives:

  • To examine the relationship between the Nigerian business environments and the firm’s decision making.
  • To determine the extent to which the element in the Nigerian business environment affects the firm’s decision making process.
  • To determine the problems face by the forms in the cause of decision making as a result of business environment.

1.3    SIGNIFICANCE OF THE STUDY      

Managements understanding of the dynamic business environment will enhance the organisation business policy and strategy.

–       The components of the Nigerian business environment will be synthesized for the ultimate aim of making affective decision in the organisation.

–       The study will further expose the current economic reforms and its implications on the firm’s performance.

–       Other researchers will benefit as this will serve as an additional references material.

1.4    RESEARCH QUESTIONS

The following research questions are raised:

  1. What is the relationship between the Nigerian business environment and the firm’s decision making?
  2. To what extent are the element in the Nigerian business environment affecting the firm’s decision making?
  3. Is the Nigerian economic reforms relevance to the firm’s decision making?
  4. Does competitive presents affects the firm’s performance? Okwandu, G. A. (2004).

1.5    RESEARCH HYPOTHESES

This research intends to state the hypotheses in the null. (Ho) and affirmative (Hi) forms as follows:

  1. Ho: There is no significant relationship between the Nigerian business environment and the firm’s decision making.

Hi: There is a significant relationship between the Nigerian business environment and the firm’s decision making.

  1. Ho: The Nigerian economic reforms are relevant to the firm’s decision making.

Hi: The Nigerian economic reforms are relevant to the firm’s decision making.

  1. Ho: Competitive pressures do not affect the firm’s performance.

Hi: Competitive pressures do affect the firm’s performance.

1.6    SCOPE AND LIMITATION OF THE STUDY

This research focus mainly on the effects of the elements in the Nigerian business environment on the firm’s decision making, Champion Breweries Nig. Plc as a case study. Given the envisaged constraint in the time allowed for this research, the limited data availability, the cost implications of a research of this magnitude, the study is limited to the private sector with emphasis on the case study.

1.7    DEFINITION OF KEY CONCEPTS

  1. Environment
  2. Organisation
  3. Firm
  4. Business Decisions
  5. Government policy
  1. Environment: This refers to the external context in which an organisation operates, is also the external factors, as air, water etc.
  2. Organisation: This refers to an organisation that is a collection or group of people who are brought together to perform a task. Whelham (1972).
  3. Firm: This refers to any business, such as a sole proprietorship, partnership or corporation.
  4. Business Decisions: This refers to a choice made between alternative courses of action in a situation of uncertainty.
  5. Government policy: This refers to the avenue to address policy makers an important issues.

This material content is developed to serve as a GUIDE for students to conduct academic research

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