Background Of The Study
Globally, the business environment has changed rapidly as the market environment has gotten more competitive across industries. The growth of information technology, which has resulted in the use of computers, the internet, and social networks by businesses to conduct business operations such as product marketing and advertising, is one of the key drivers to this rapid transformation of business environment (Afkinlabi, 2010). Hence, in order for firms to compete profitably in today’s marketplace, rational and dynamic strategies are essential. The strategies according to Floyd(2004), should be directed at improving product quality and cost, as well as the form of the business activity.
Strategy, according to Dauda (2010), is a collection of specific business plans developed to fulfill organizational objectives. Considering business is a game of chance, a badly planned and executed strategic move, as stated by Slevin (2009), might end in the liquidation of a business and the loss of thousands of jobs, hence. Thus, strategic planning is the collection of decisions made to meet an organization’s goals. On the other hand, strategic planning has been regarded as a key component in mitigating business organization underperformance. Moutinho (2009) defines strategic planning as a deliberate and collaborative controlled effort to make crucial decisions with the express purpose of establishing and shaping an organization’s overall image. Strategic planning in the view of Yazdifar, (2012), is necessary and relevant in any type of organization, and manufacturing firms are no different.
Strategic planning in a manufacturing firm, as claimed by Dess (2005), requires senior management to direct resources and organize the organization to make the planned strategies a reality. Thus, top-management engagement in strategic planning is very important and critical since it entails long-term, future-oriented, dynamic decisions and demands huge resources.
Furthermore, as globalization has taken center stage in the last two decades, as posited by Eisner (2007), studies on strategic planning have received a lot of interest from business practitioners and academic scholars. As more industries become multinational, strategic planning is becoming an increasingly crucial tool for staying on top of international trends and positioning the firm for long-term competitive advantage.
In other words, as Gichunge (2007) asserts, strategic planning is required in order to prevent industrial organizations from underperforming. In the like of the above, this study aims at examining the impact of strategic planning in the performance of manufacturing companies in Nigeria.
Statement Of The Problem
The operating environment for manufacturing firms in Nigeria is continuously changing as a result of a dynamic economic climate and a highly competitive market (Muogbo, 2013). Thus, when confronted with considerably higher levels of uncertainty and risk, many firms fail to appropriately plan for the present and future through effective strategic planning. However, most organizations in Nigeria that use competent strategy planning as a tool for business survival face obstacles such as inadequate communication and goal comprehension (Oyedijo, 2013). Similarly, according to Hofer (2011), the rate of unsatisfactory performance in manufacturing enterprises has increased. This can be attributed to a decrease in production as a result of poor planning and implementation. However, the importance of employing excellent strategic planning as a means of providing remedies to this pressing issue cannot be overstated. Although there is a broad view and conviction that planning increases an organization’s effectiveness, the anticipated benefit may not be realized if it is pursued inappropriately. According to Bamford (2014), a bad strategy or a poorly drafted plan may not result in the expected value for the firm. As a result, competent strategic planning is required. Therefore, the study is focused on examining the impact of strategic planning in the performance of manufacturing companies in Nigeria.
Objective Of The Study
The general aim of this study is to examine the impact of strategic planning on the performance of manufacturing companies in Nigeria. Specifically, the study will
1. Ascertain whether there is a positive relationship between strategic planning and the competitive strength of manufacturing firms.
2. Ascertain whether there is any positive relationship between strategic planning and return on investment of manufacturing firms in Nigeria.
3. Ascertain whether there is any positive relationship between strategic planning and the growth of manufacturing firms in Nigeria.
4. Identify the factors influencing effective strategic planning in manufacturing companies in Nigeria.
The study will be guided by the following hypothetical statements;
H01: There is no positive relationship between strategic planning and the competitive strength of manufacturing firms.
H02: There is no positive relationship between strategic planning and the return on investment of manufacturing firms in Nigeria.
H03: There is no positive relationship between strategic planning and the growth of manufacturing firms in Nigeria.
Significance Of The Study
The place of strategic planning has been undermined in most business organizations, which has led to the downfall of many. Most organizations have also lost their place in the competitive market as a result of poor strategic planning. Hence, this study will emphasize more on the relevance and need for strategic planning and its effective implementation. Hence, the management and stakeholders of the organizations will find this study useful.
Additionally, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the impact of strategic planning on the performance of manufacturing companies in Nigeria.
Scope Of The Study
Generally, this study is channeled towards examining the impact of strategic planning in the performance of manufacturing companies in Nigeria. The study however will specifically ascertain whether there is a positive relationship between strategic planning and the competitive strength of manufacturing firms, ascertain whether there is any positive relationship between strategic planning and return on investment of manufacturing firms in Nigeria, ascertain if there is any positive relationship between strategic planning and the growth of manufacturing firms in Nigeria, and identify the factors influencing effective strategic planning in manufacturing companies in Nigeria. Thus, respondents for thus study will be obtained from the top management staff of selected manufacturing firms in Enugu State.
Limitations Of The Study
In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents.
In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed.
More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other manufacturing companies, and business organizations.
Definition Of The Study
Planning: This is the process of outlining the steps needed to achieve the goal, including hurdles to anticipate, and how to utilize human resources and opportunities to achieve the expected outcome.
Strategic Planning: This is a process in which organizational leaders determine their vision for the future as well as identify their goals and objectives for the organization. The process also includes establishing the sequence in which those goals should fall so that the organization is enabled to achieve its stated vision.
Organizational Performance: This indicates how well a company or institution has met its goals and objectives.