- PROJECT TITLE: THE EFFECT OF STRATEGIC MANAGEMENT ON ORGANIZATIONS PERFORMANCE (A STUDY OF KRISORAL GROUP OF COMPANIES LIMITED ONITSHA) DEPARTMENT: BUSINESS ADMINISTRATION
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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.
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
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
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
iii. The relationship between strategic management and the achievement or organizational goals and
1.4 Research Questions
1. How has management strategy influenced the
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.