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IMPACT OF STRATEGIC PLANNING ON CORPORATE GOVERNANCE IN NIGERIA (A CASE STUDY OF DANGOTE FLOUR MILL LAGOS)
The study examined the impact of strategic planning on corporate governance and survival. The effectiveness of strategic planning can be measured in terms of the extent to which it influences organizational performance, which affects its survival rate. The main objective of this study is to re-evaluate the planning performance relationship in organization and determine the extent to which strategic planning affects performance in an organization, of which Dangote Flour Mill, Lagos will be used as case study. Based on the above objective, relevant literatures were thoroughly reviewed and two hypotheses were formulated and tested in this study. A survey technique was used with the comprising of both the senior and junior staff in Dangote Flour Mill, Lagos in Lagos State metropolis. The data collected were analyzed using chi-square statistical methods were used in testing the hypotheses was confirmed. The implication of this study is that strategic planning enhances better organizational governance, which in the long run has impact on its survival and that strategic planning intensify is determined by managerial, environmental and organizational factors.
1.1 Background to the Study
Goals indicate what an organization wants to achieve, strategic planning is a game plan for getting there. Every organization or company must design a strategic plan for achieving its goals.
In every economic system, there are two producers of goods and services for customer use; these are the private owner of factors of production and the government. In recent time, the world is experiencing a global pressed economy. Nigeria which is a developing country is no exception, the implication of this is that an organization has to be sound strategically and operationally to cover its costs and stay in business.
According to porter in Kotler (2007), firms pursuing the same strategic planning to the same target customer constitute a strategic group, the firm that do not pursue a clear strategy and try to be good on all strategic dimension do the worst.
Strategic is rooted in the firm’s ability to look ahead, understanding a dynamic environment and effectively position the organization or it’s sub-unite for continued success in changing times. Therefore, there is need for manager at top level (strategic level of management) to think strategically.
However, any company or organization that placed much emphases on strategic planning and implementation will have little problem as they would have been identified before they become a nightmare. According to Thompson and strihland (2001), there are three conditions necessary for continued corporation survival and growth in competitive and rapid changing economy.
- i. A company must maintain a keen awareness as its own resources and capabilities and remain alert to changes in its own market as well as those of other firms.
- ii. Management must have timely and accurate information with which to assess the potential value of an opportunity.
- iii. Corporate Governance must be maintained at a level which provides investment for ventures having acceptable level of risk and uncertainty.
In order to meet these requirements, a company must develop and adhere to a plan which provides direction for future and guideline for day to day operation.
Strategic planning involves the formulation of long-term goals and objectives for the company and the selection of strategies to achieve these goals and objectives in the light of the uncertain future and external environment in which the firm operate.
The purpose of strategic planning is to provide management with a frame work at which decision can be made which will have a long-term impact on the behavior of the firm.
All the management problems of strategic planning on corporate governance has necessitated the intent of the researcher into a research about organization/company using strategic planning as a test to assess one of the great corporate governance with particular reference to Dangote Flour Mill, Lagos, Lagos State.
1.2 Statement of the Problem
The statement of this research work can be traced to that of inability of the organization to forecast ahead of future and failure to think ahead of future. The organization limit their thinking based on the present situations.
Some of the problem that affect strategic planning can be seen in the following ways: failure to analyze a situation before strategic decision are made, failure to implement strategic planning including failure to think through the implication of a new strategy, problem with the process of planning itself and also incomplete understanding of many of the concepts by those claiming to apply them.
Trying to predict future events and working out contingent strategies is one key to a successful company. The essence of this project work is to determine how strategic planning is formulated, how they are implemented and the effect of such strategic planning on corporate performance.
1.3 Objective of the Study
The main objectives of this study is to examine the impact of strategic planning on corporate governance in Nigerian companies. Other specific objectives are as follows:
- To examine the effects of strategic planning on corporate governance.
- To determine whether strategic planning is a major determinant of operating efficiency of an organization.
- To determine how closely strategic planning has been adhere to in the institutions.
- To show the impact of environmental factors in planning, formulation and implementation.
1.4 Statement of Hypotheses
This in a research work forms the core of the study; it helps the researcher in planning the course of action of enquiry in choosing the kinds of data needed and in deciding the proper statistical treatment and analysis of the results of the research study.
Hypothesis is defined by E.C Osuala (1985), as a conjectural statement of the relationship between two or more variables. He further states that they are like a tentative generalization whose tenability is to be tested on the basis of the compatibility of its implication with empirical evidence and with previous knowledge.
Two hypotheses will be stated and tested against the alternative hypothesis. The hypotheses are:
Ho: Effective strategic planning does not affects corporate performance.
Hi: Effective strategic planning affects corporate governance.
Ho: Strategic planning is not a major determinant of operating efficiency of an organization.
Hi. Strategic planning is a major determinant of operating efficiency of an organization.
1.5 Significance of the Study
The importance of this research work intends to shine light on the impact of strategic planning on corporate governance in an organization. It is to bring a better understanding on what strategic means, its evolution, types, challenges and everything that cut across the length and breadth of strategic planning and its impact to an organization. The research work will help to educate fellow student, strategic managers, consultancies, educationist and interested researchers in terms of strategic planning on corporate performance.
It will also show the benefits enjoyed by organization that use strategic planning for their survival, growth and organizational performance.
By the end of this research work, it is hoped that research would describe the methods, techniques and means by which strategic planning are formulated and implemented.
1.6 Scope and Limitation of the Study
Scope of the Study
The scope of the study will only restricted to Dangote Flour Mill, Lagos. The choice of the company is born out of the need to assess the impact of strategic planning on corporate performance
Limitation of the Study
In the course of carrying out this study, the researcher experienced the following limitations and constraints.
Financial Constraints: The research of this nature requires enough capital in order to get all the necessary materials needed.
Time Limitation: Because of the short time available for the research, an undue detail of the topic under study was not pursued and therefore some areas were left out by the researcher as further areas of study of the research topic.
Unavailability of Statistical Data: Source of information from the organization is difficult because of the confidentiality involved.
1.7 Definition of Key Terms
Strategic Management: Refers to the managerial process of forming a strategic vision, setting objectives, crafting a strategy, implementation and executing the strategy and then overtime initiating whatever corrective adjustment in the vision, objective and strategy execution are deemed appropriate.
Strategy: Strategy as the adoption of courses of action and allocation of resources necessary to achieve company’s mission and objectives.
Strategy Planning: Strategy planning involves making decision about the organization’s long-term goals strategies.
Corporate Planning: is defined as the process of formulating objectives as well as developing and evaluating cause of action to reach these objectives on the basis of identified opportunities and threats and internal strength and weaknesses. Strategy is basically the process of determining the objective of an organization and the policy programs of achieving this predetermine objectives.
Implementation: is the process of carrying out the laid down plans and strategies following particular approved manner trend.
Policies: are general statements of understanding that guide managers. Thinking and decision making. They ensure that decisions fall within certain boundaries.
Vision Statement: A vision is the destination, the guiding star of the horizon-forever pursued, but never attained.
Change Management: change management can be defined from three perspectives. The first, it is the process of managing change; the second, it is an area of professional practice; and the third, it is the body of knowledge consisting of models, methods, techniques and other tools.
Structure: in the content of strategy, structure is the way in which the tasks and sub-tasks required to implement a strategy are arranged.
1.8 Organization of Work
The research work is divided into five chapters: Chapter one examines background to the study, statement of the problem, objectives of the study, statement of hypothesis, significance of the study, scope and limitation of the study, definition of key terms and organization of work.
Chapter two reviews the relevant literature related to the topic of the study. Chapter three is focused on research methodology among which are, research design, and area of the study, sources and method of data collection, population of the study, sample and sampling techniques, and method of data analysis.
Chapter four covers data presentation and analysis. Chapter five being the last chapter of the research covers summary of findings, summary of the study, conclusion, and suggestions for further research, recommendations, bibliography and questionnaire.