INTRODUCTION
1.1 Background of the study
Strategy in business is defined as a specific plan designed by companies to achieve it goals and objectives. Strategic practices on the other hand is a wide field that encompasses various aspects of strategy development and implementation. There is no single definition for the concept in a way that holds a general acceptability due to its complexities, robustness and applications across varied aspects of life. Although there exist vast variations of the definition of the subject matter within the literature, some of the most widely used definitions include; a decision making process which helps the company achieve its objectives. A plan designed to improve company profitability and productivity. Decisions by management which directly affects the company’s vision, objectives, mission and goals.
Even though the definitions of strategic practices varies from person to person as seen above, one of the resounding attributes of the terminology is the use of decision, plan, goals and objectives, these are what makes up the strategic practice, the constant routine observed by companies daily in other to achieve it’s vision. Everyday a business opens and decides to serve it’s customers the best quality of goods and services, the closer it is to achieving its objectives, which for most is profitability and productivity. These two metrics are used to better qualify these practices. The strategies put together to accomplish a specific goal usually translates to an output which can be positive or negative depending on the impact after a strategy execution (Anne, 2017), therefore when businesses design a set of goals to be achieved, if must be practical but at the same time, it must be well designed to prevent poor results (Dauda, 2010).
Businesses all over the world, no matter the economic structure have a primary goal, which forms the basis for its foundation which is the need to grow. For some, growth can be as simple as making more profit, for others, growth can be an increase in market share. While the objectives of any business worldwide might be subjective to the company’s vision, growth is a rather objective and holds a general validity. There are external and internal factors that can hinder or elevate the growth of a company. The external factors are those which are outside of the control of the business itself. Government laws, regulations and policies can be the rise or fall of a business, in any business environment in which the government has a level of control over how businesses should be carried out, like in the case of Nigeria where mixed market economy is practiced, the government can make and change policies which affects the operations of private companies which in turn can affect how they engage the market. Another important external factor which is not caused by the government is technological evolution.
Everyday, technology is growing and as a result it is attracting more attention in various aspects of life, more people are now acceptant towards technology, for most businesses who cannot adapt to the changing environment, this can have a huge effect on its growth. Decades ago, postal service was a huge business but with technological advancements, electronic mails were innovated, allowing people seamlessly send and receive mails through their phones. Companies who could not cope with the transitions and emerging demands from the new market failed because of a fall in demand (Obeidat, 2016). These are prevailing issues which companies face regularly. Another major external factor is the effects as a result of Covid-19, a pandemic that changed the way companies engaged the market. This is by far the most significant factor in modern times that affected more than 90% of private companies worldwide, it changed the way companies operate, deliver its services and manages its audience. The factors highlighted above are external and therefore outside of a company’s control. However, the internal factors which can limit or increase a company’s ability to grow is summed up as, strategic practices. They include all the necessary steps and plans designed by a company to achieve its goals and objectives (Junqueira, 2016). These practices are divided into 4 main phases, the fist phase which includes a clear description of a company's plan for its growth (Umar, 2020). In this case, companies have the power to influence growth through strategic planning (Me, 2018), this is one of the most important stages in the strategic cycle because it maps out a plan that the company must follow if it wants to grow.
The next stage which is the strategy development, at this point, companies are aware of their mission and vision and have a plan on how this will be achieved, including a timeline, the development stage involves breaking down the plans into smaller blocks of executable agendas. For example if the company’s goal is to increase profit by 2% in 2years, the development stage breaks down the timeline into smaller blocks comprising of months which gives a micro views on actions to be taken to achieve a 2% profit (Meres, 2019). The next stage is the strategy execution, at this point, the plan has already been developed and is ready to be implemented. When executed, the plans can have an immediate response or a slow response depending on the plan’s life cycle, the best way to observe the impact of a strategy is through an evaluation. The strategy evaluation is the final stage in the process, at this point, the company analysis the impact of their plans if it was successful or if it failed (Phina, 2020).
The aim of this study is to determine the extent of the effects of strategic practices on the performance of private companies in Nigeria. This will be achieved through extensive research on the subject matter. This study hopes to fill the gap in the body of work which has been identified. Most private companies in Nigeria do not have a clear set of goals, objectives and mission which guides the affairs of the business and because of that, their growth rate is hindered. This study will explore the problem discovered and proffer solutions to the prevailing issue.
1.2 Problem Statement
Private companies are the engine of growth in any mixed or capitalist economy, because they have potentials of boosting economic growth through its operations and profitability which is actualized through its performance. Because of its importance and potentials, company performance has been of key interest and focus for in-depth research especially within the modern business environment. With the growth in the field of study, more businesses are becoming more conscious and aware of competitive advantages. The term competitive advantage is the added measures taken by companies to stay ahead of its competition which is an important aspect of the market economy in which companies must constantly improve and provide quality in other to be profitable. The awareness includes good public relations strategy, improved technology and human resource management. For most companies, more time is spent trying to meet up with emerging trends and unexpected global changes rather than anticipating the changes and making plans to stay ahead. The emergence of the word pandemic changed the world totally, both socially, politically and economically most companies were caught off guard, most companies had not versioned that far and therefore didn’t have a visible solution to the emerging transitions associated with Covid-19. Many businesses do not have strategic planning and crisis management. When companies do not engage in strategic practices, they are usually caught off guard when they are faced with a challenge which causes more strain on the company trying to resolve these issues in the shortest period of time given the amount of resource and time. It is imperative for companies to stay ahead of trends and changes in economic conditions through strategic practices designed and tailored towards achieving company objectives while making room for unforeseen circumstances. This is why this study looks at strategic practices and its effect on company performance.
1.3 Objective of the study
The primary objective of this study is to investigate the effects of strategic practices on the performance of private companies in Nigeria, using Absolute PR Limited as the case study.
The primary objective is further broken down into IV specific objectives which are stated as follows;
i. To determine the effect of strategic objective on the performance of private companies in Nigeria.
ii. To examine the effect of strategy development on the performance of private companies in Nigeria.
iii. To investigate the effect of strategy implementation on the performance of private companies in Nigeria.
iv. To ascertain the effect of strategy evaluation on the performance of private companies in Nigeria.
1.4 Research Questions
Based on the objectives of the study, the following research questions were answered in this study:
i. To what extent does strategic objective affect the performance of private companies in Nigeria?
ii. What influence does strategy development have on the performance of private companies in Nigeria?
iii. What effect does strategy implementation have on the performance of private companies in Nigeria?
iv. What effect does strategy evaluation have on the performance of private companies in Nigeria?
1.5 Research Hypotheses
The following hypotheses were tested:
Hypothesis 1:
H (0) = There is no significant effect of strategic objective on the performance of private companies in Nigeria.
H (1) = There is a significant effect of strategic objective on the performance of private companies in Nigeria.
Hypothesis 2:
H (0) = There is no significant effect of strategic development on the performance of private companies in Nigeria.
H (1) = There is a significant effect of strategic development on the performance of private companies in Nigeria.
Hypothesis 3:
H (0) = There is no significant effect of strategic implementation on the performance of private companies in Nigeria.
H (1) = There is a significant effect of strategic implementation on the performance of private companies in Nigeria.
Hypothesis 4:
H (0) = There is no significant effect of strategic evaluation on the performance of private companies in Nigeria.
H (1) = There is a significant effect of strategic evaluation on the performance of private companies in Nigeria.
1.6 Justification for the Study
The motivation behind this research was birthed as a result of understanding business decisions and operations and how this affects its profitability as well as its performance. Private companies in Nigeria unlike most companies in more developed countries do not consider factors like strategic planning, strategy formulation, execution and evaluation when providing goods and services which limits its growth rate as well as its visibility and ability to expand, some of these private companies simply lack the expertise needed to operate at a world standard in terms of running a company. In fact, most private companies in Nigeria do not understand the value of vision, mission statement, goals and objectives and its impact on guiding business practices.
1.7 Significance of the study
Performance is a very important metric for businesses because it translates to the company’s level of growth whether it is in the aspect of market expansion or profitability, it is also an evidence of a company’s achievement of its objectives. Hence, the essence of this study is not only for the benefit of Absolute PR Limited, but for all the private companies as well as other stakeholders within the company. The study is also important to other related fields such as accounting, economics, business administration and management because the subject matter heavily influences the operations within those fields.
Stakeholders who will benefit from the results and findings in this study include:
Management of Absolute PR Limited: The management would benefit from the findings of this research since it is the case study, as it would provide them with an analysis of the effect of their strategic practices on the performance of the company. .
Potential Investors: The results of the findings will greatly improve investor’s background knowledge on the performance metrics it should look for when investing in companies, it will also allow for better understanding of business objectives, vision, mission as well as it goals and how this can affect both its short and long term performance.
Government: This study would contribute to their knowledge and understanding of the role of private companies in economic growth in Nigeria, since the private sector affects various aspects of the economy including the national output as well as the volume of exports.
Students: The study provides a source of resource material for future research in the literature.
Researchers: This group of stakeholders will find the study important, to serve as a basis or starting point for future research on concepts and empirical views on the focus of the research.
1.8 Scope of the study
This study examines the extent to which strategic practices affects the performance of private companies in Nigeria; using the performance indicators such as sales growth, market share, profitability and productivity as measurements for business performance. The study is however, delimited to Absolute PR Limited and privately owned companies in Nigeria using purposive sampling. The geographical location for this study is Lagos state, Nigeria, which is the location where Absolute PR is located. The study is based on the evaluation of various strategic practices and how this affects business performance using different performance metrics. The goal is to establish a correlation between business practices and business performance, this interrelationship will help incorporate intelligent decision making within the company. Data to be used in this study will be sourced through primary research from the case study, the population sample will comprise of the management and employees in charge of strategy execution
1.9 Definition of terms
Strategic Practices:
There are the set of plans comprising of approaches designed by businesses in other to achieve it’s goals and objectives. These plans are also used to set a standard through out the company as a systemic way of operating and engaging the outside world. Businesses need a plan in other to approach the market, without one, the business is bound to fail. When a clear and precise plan is put in place, a business can have a direction which it can work towards.
Strategic Planning:
Strategic planning can be defined as a process through which the managements of companies conceptualize their vision for the future; the planning process also highlights the company’s goals and objectives for both its short and long term. The process sets the timeline for achieving these goals; the use of a timeline sets a sequence which is used to track its achievable plans in other to accomplish the vision.
Strategy Evaluation
The strategy evaluation is the last stage in a sequence of strategic practices, the process beings with strategic planning, then the plans are formulated and the executed, the next and final stage which is the evaluation is a performance metrics used to measure the success of a strategy plan. Simply put, the strategy evaluation is a process through which companies measure the success of a strategy. The process involves phases of reviews, appraisals and reporting which assesses the execution and measures its performance.
Business Performance
The business evaluation is regarded as a post-strategy execution stage; this is the outcome of a company’s strategy. The positive or negative outcome directly reflects the performance of a strategy and strategic practices. The performance usually has a commercial impact as it shows its effectiveness to increasing market share, profit, business growth or productivity.
Purposive sampling
Purposive sampling is a non-probability sampling technique in which the researchers relies on their own judgement when selecting the respondents for the research. Purposive sampling is also widely known as subjective or judgmental sampling.
1.10 Introduction to Private Companies in Nigeria
A private company can be defined as a business which is owned and controlled by private individuals comprising of founders, shareholders or non-governmental bodies. The main concept in here is the inclusion of private. Which means that the company does not offer its shares to the general public, it affairs are also kept private. Sometimes, a private company is referred to as a limited liability company depending on the country of operation and how the business is structured. Nigeria practices an mixed market system which allows a certain level of ownership of factors of production. Companies can be privately held under the laws of the cooperate affairs commission, which governs cooperate bodies across Nigeria. Once a company is registered, it can function as a legal entity able to operate within the shores of Nigeria. Private companies are the engine of growth and the heart of the economy in Nigeria due to their immense contributions to economic growth, employment and export.
1.10.1 Absolute PR Limited
Absolute PR is a Nigerian private company that offers public relations and communication services, the company is located in Lagos, Nigeria. Incorporated as a brand and reputation management firm in 2007. Absolute PR commenced operations in Lagos, Nigeria back in 2009. The company’s approach involves using both new media and traditional media to create conversations. Engaging stakeholders, building communities of interest for brands and brand owners. Their services includes, Brand Management, Strategic Management, Management, Digital PR and Online Reputation building and Management. The company has been responsible for the PR of several of the most respectful brands in Nigeria including, access bank, OMO, Eco bank and MoneyGram.
1.11 Plan of the Study
The chapter two will entail the relevant literature review which will cover conceptual review, theoretical review, empirical review and the gap of the study. Chapter three will cover the model development as chapter four subsequently entails the analysis of the model and the method of estimation. Finally, chapter five entails merely the conclusions drawn from the findings of the research work and suggested recommendations.
REFERENCES
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