GOVERNMENT POLICIES AND

ENTREPRENEURSHIP DEVELOPMENT IN
NIGERIA

BY

ERINNE CHINWE I.
(NAU/MBA/2001426129P).

DEPARTMENT OF BUSINESS ADMINISTRATION

FACULTY OF MANAGEMENT SCIENCES,
NNAMDI AZIKIWE UNIVERSITY
AWKA

AUGUST, 2004.

i
GOVERNMENT POLICIES AND ENTREPRENEURSHIP
DEVELOPMENT IN NIGERIA

PRESENTED BY

.
ERINNE CHINWE I (MBA/2001426129P)

IN

PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTERS

DEGREE (MBA) IN BUSINESS ADMINISTRATION.

TO

THE DEPARTMENT OF BUSINESS ADMINISTRATION,

FACULTY OF MANAGEMENT SCIENCES,
NNAMDI AZIKIWE UNIVERSITY, AWKA.

AUGUST, 2004.

ii
 CERTIFICATION

This is to certify that this dissertation which was undertaken by Erinne

Chinwe I. of the faculty of Management Sciences, Nnamdi Azikiwe University met

the requirements of the course and has been read and approved.

DR .C.I. ONWUCHEKWA ------------------------------------

Research Supervisor

DR .C.I. ONWUCHEKWA ------------------------------------

Head of Department.

------------------------------------
_______________________
External Supervisor.

iii
 DEDICATION

To God Almighty,

Who has lifted me up again,

Who helped me immensely during this period

Whose bountiful love on me has refused to cease.

iv
 ACKNOWLEDGEMENT

I wish to express with deep joy, my profound gratitude to the following,

Firstly, to my dissertation supervisor, Dr C.I. Onwuchekwa, whose prompt and

constructive guidance saw to my understanding of the topic and completion of this

work. Secondly, to my family members especially my mum, sisters and brother,

my friends and well wishers. I love you all. Thirdly, to Dr.D.K Olukoya and

everyone working in Mountain of Fire and Miracle Ministry. God bless you all.

v
 ABSTRACT

This study investigated on the government entrepreneurial policies that facilitate

entrepreneurship and how effective these policies are on organizations. It focused
on the empirical study of creating knowledge about entrepreneurship development
in Nigeria. It studied the government efforts towards resolving the problems of
entrepreneurship: lack of finance, managerial and technological know how,
education and training, lack of experienced expatriate and local completion,
inadequate infrastructure leading to high cost and finally high burden of taxation.
The major findings of this research include; Government entrepreneurial
development policies have immensely improved entrepreneurial organizations,
these organizations in turn have contributed a lot towards economic and national
development especially in the aspect of reducing unemployment and generating
income. The most important incentive given to entrepreneurs by government is
finance. The entrepreneurs still encounter other problems in areas of technical and
managerial known how, employee training and development, poor supply of
infrastructure. Based on these findings, the researcher strongly recommends that
entrepreneurial organizations should be included in training and development of
their managers and other staff to acquire managerial and technical know how to
enable them cope with the challenges of modern management. For the maintenance
of human variable, there is need for human resource improvement. I humbly
recommend to the Government to draft programmes like workshops, seminars, and
career development programme which should have incentives attached to them. I
humbly recommend to the Government to compel the environment to be
supportive to entrepreneurs e.g. finance houses and banks should grant them loans.
I humbly recommend to Government to equally give them grants from time to
time, reduce the burden of tax and implement already made policies for the
entrepreneurs. I equally recommend to Government to provide basic infrastructure
like electricity, pipe borne water, boreholes, access roads, suitable spaces, market
places for these products especially in the rural areas to reduce the cost
encountered by the entrepreneurs. The researcher therefore concludes, that as the
“foundation for growth and national development”, entrepreneurs are indispensable
and must be given paramount attention by the government.

vi
 TABLE OF CONTENT
Title Page: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - -- - - - - - - i
Certification: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - ii
Dedication: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - iii
Acknowledgement: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - iv
Abstract: : - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - v
Table of content: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - vi

CHAPTER ONE INTRODUCTION

1.1. Background of the study: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - 1
1.2 Theoretical frame work : - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - 4
1.3 Statement of the problem: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - 5
1.4 Objective of the study: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - 6
1.5 Research Hypotheses: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - 6
1.6 Significance of the study: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - 7

1.7 Motivation and format for the study: - - - - - - - - - - - - - - - - - - - - - - - 8

1.8 Limitation of the study: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - -9
1.9 Definition of terms: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - ----- 9
CHAPTER TWO LITERATURE REVIEW

2.1 Introduction: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - -- - - - - - - 12

2.2 “Organization” : - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - 14
2.3 Management and its functions: - - - - - - - - - - - - - - - - - - - - - - - - - -- - 27
2.4 Entrepreneurship and National Development: - - - - - - - - - - - - - - - - - - 29
2.5 Government Entrepreneurial Policies : - - - - - - - - - - - - - - - - - -- - - - 32
2.6 Entrepreneurship and managerial problems: - - - - - - - - - - - - - - - - - -- 42

vii
2.7 Entrepreneurship and organizational performance: - - - - - - - - - - - - - 44

CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - - - - - - - - 48
3.2 Methodology Paradigm: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - -- - 48
3.3 Instrument for data collection: - - - - - - - - - - - - - - - - - - -- - - - - - -- - - - - - --- - - - --50
3.4 Statistical tools for data analysis: - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - 51

3.5 Issue of reliability of data collected: - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - -- 53

CHAPTER FOUR – DATA PRESENTATION AND ANALYSIS

4.1 Introduction: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - - - - - - - - - - - - --- - - - - 54
4.2 Description statistics: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - - - - - - - - - - 54
4.3 Analysis of research questionnaire items - - - - - - - - - - - - - - - - - - - - - - - - - - -- - -55
4.4 Test of research hypotheses: : - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - - - 56

CHAPTER FIVE – SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 Summary of findings: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - - 59

5.2 Conclusion: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - - - - - - - - - - - - -- - - - - - - 60
5.3 Recommendation: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - - - - - - - - - - - - -- 60
References: - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - --- - - - - - - - - - - - - - - ------------- 62
Appendix(es)

viii
 CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The history of big enterprises and industrial revolution started with persons whose

imaginative ventures into business gave rise to the present day technology. It dated

back to the olden days, when people engaged in farming, herding, crafts etc and

commodities were traded mainly on barter and later on precious metals. In the

colonial era, the tempo of business then was set and controlled by the colonial

government. Prominent European firms that were highly integrated and dominated

commercial and merchandising activities in Nigeria were John Holt, Paterson,

Zochoris, Leventis, Leverbrothers, PZ, Campaignie Francaise du L’Afrique

Occidentale (CFAO,) the Royal Niger now United African Company (UAC),

Societe Commerciale de L’ Ouest Africain (SCOA) etc. Some of these Companies

grew so large that few, if any of the economic decisions could be wisely initiated

and instituted in Nigeria without soliciting and obtaining their co-operation. Apart

from trading, colonialism also accounted for the development of quasi-technical

business and semi-skilled labour in Nigeria. About this time, many of the Nigerian

entrepreneurs were still gasping for breath. They did not benefit much from the

liberal attitude of the government because they lacked political persuasiveness

resulting from their lack of political power, low status, lack of cohesion and also

1
because the coming of independence created an insatiable demand for trained and

qualified nationals. Thus, there was a limit to their ability to pressurize the

government into favourable action or to threaten non co-operation in the attainment

of national priorities. Their impact was insignificant and as a result, in the

administrative bureaucracy of the colonial government (the civil service, public

sector utilities established by them e.g Public Works Dept [PWD], Post and

Telegraph [P&T], Railway, Electricity Corporation and other multinational

Organization) Nigerian workers served as the cronies of the white colonial masters

as messengers, clerks, semi-skilled technicians and craftsmen. Some of these

workers later established micro scale business in line with their trade.

From 1950’s, Nigeria began to make an unprecedented effort to encourage

economic growth and development. National consciousness was at its peak. In

1952, the pioneer industries ordinance was introduced. It gave certificates of

recognition to specified industries and exempted them from paying taxation for two

years. In the same year, the income tax ordinance was passed which allowed

companies accelerated amortization. In 1957 and 1958, the government gave import

relief taxation to foreign companies and liberalized the granting of pioneer

certificate, thus making the offer more attractive. In 1959, the Nigerian Industrial

Development Bank (NIDB) was established to assist entrepreneurs engage in

business. In 1960, political independence was granted and Nigeria witnessed an

2
expansion in business. The indigenization exercise started in 1972 with the

introduction of the Nigerians enterprises promotion Decree or the indigenization

Act of 1972 with the major objective of encouraging indigenous participation in

ownership and management of business. Maost of the Nigerian businessmen who

were apprenticed and agents of the “Colonial Lords” blossomed into large-scale

entrepreneurs. This Act also compelled some foreign organizations to share the

ownership of their business with Nigerian. The indigenization Act of 1977 known

as the Nigerian’s Enterprise Promotion’s Act specified the equity participation of

Nigerians in those companies which are broken into three categories (100% for

schedule 1, 60% for schedule II, 40% for schedule III). By virtue of this

indigenization exercise, Nigerians dramatically displaced the expatriates in

ownership, management and control of the business organization in Nigeria. On the

whole, a little over 700 alien dominated companies are expected to comply with this

decree (Bus Times, Vol. 3, No. 41 July 25, 1978 P.I). By this exercise also

Nigerians in one fell swoop, became owners of large business and started

conducting business activities at national and global levels.

What constitute a small scale business differ in terms of quantitative, qualitative,

technological or labour intensive methods. The Nigeria Bank for Commerce and

industries define small scale business as an indigenous firm or company having

assets, inclusive of working capital but excluding land or land worth, not above

3
N750, 000, and a paid employment not exceeding fifty persons at a time. The

Nigerian Enterprises Promotion Decree defines it as one capable of having assets

more than N750,000 and a paid employment of more than 50 persons provided that

its output is small to the prevalent size of plant, technology and labour. CBN

defines it as firm or company whose annual turnover ranges between N250,000 to

N500,000 while SAP defines it as having N150,000 to N500,000 as minimum and

maximum capital level.

According to the Minister for Industry, Kola Jamodu (2001), entrepreneurship in

Nigeria accounted for over 95% of non-oil productive activities outside Agriculture.

Some of the government efforts towards their development include financial, fiscal,

export incentives and technical assistance. These government policies will lead to

the growth in entrepreneurship and also create and distribute the economic wealth

of Nigeria thereby fostering national growth and development. Also to ensure

continued stay in business, there is the need for corporate appraisals from time to

time.

1.2 Theoretical Framework

A conceptual framework for this research is drawn from Entrepreneurship

development theory. Entrepreneurship is the process of initiating and managing

business organizations to accomplish societal objectives. It is also the willingness

and ability of an individual, group of individuals or government entity to seek out

4
investment opportunities, establish and run an enterprise successfully. An

entrepreneur therefore is an individual, a group of individuals or government entity

who undertake the responsibility of making innovations in the economy

(developing a new source of supply of raw material, new methods of production or

distribution, introducing new goods/ service and opening a new market) or carries

out a new organization of an industry.

The purpose of entrepreneurship is to diversify economic activities and also to

create opportunities within the economy. Government entrepreneurial development

policies include those policies which have been put in place by the government to

enhance the productivity of entrepreneurs. Empirical studies in the performance of

organizations as a result of these government interventions are rare. This study

would make significant contributions to the existing stock of knowledge in the

study of entrepreneurship.

1.3 STATEMENT OF THE PROBLEM:

The poor performance of entrepreneurial organizations are due to lack of finance,

managerial and technological know how, education and training, experienced

expatriate and local completion, inadequate infrastructure leading to high costs and

huge burden of taxation.

5
The statement of the problem in this study is therefore to investigate the ways in

which government policies have improved the performance of entrepreneurial

organizations. It studies the government efforts towards resolving the problems of

entrepreneurs and thus developing them to take up the challenges thrown to them as

the ENGINES OF NATIONAL DEVELOPMENT AND THE “LAST RESORT” in

the privatization exercise.

1.4 OBJECTIVES OF THE STUDY

The objective of this study is to investigate:

1. Those government positive interventions that can develop the entrepreneurs

to attain their peak in corporate performance.

2. The major problems facing entrepreneurship development and the diverse

ways in which government aims at resolving these problems.

3. The various ways of assessing co-operate performance either by the

entrepreneur himself or by external bodies to ascertain the extent to which the

objectives of the entrepreneur has been met.

1.5 RESEARCH HYPOTHESES.

Hypothesis 1: There is no significant relationship between government

entrepreneurial development strategies and the performance of

entrepreneurs.

6
Hypothesis 2: there is no significant relationship between managerial problems

and entrepreneurial performance.

Hypothesis 3: There is significant relationship between entrepreneurial

financial problems and entrepreneurial performance.

1.6 SIGNIFICANCE OF THE STUDY.

The overall returns of this study shall be beneficial to the economy as a whole. It is

therefore hoped that the perusal of findings would be of great help to individuals,

institutions, entrepreneurial organizations, government and researchers who will

make use of this work. This study has the potentials of making important

contributions for instance;

Firstly, to graduates and school leavers, who if they find themselves unemployed

could gain for themselves employment.

Secondly, businessmen will find this study interesting, as it will show why many

entrepreneurs did not succeed and recommend possible criteria for success.

Thirdly, government will find out the reasons for the low level of entrepreneurial

development and then provide a better and enabling environment for potential and

prospective entrepreneurs. This will also go ahead to increase employment and

income.

7
Furthermore, this study will show how rapid and sustained entrepreneurship

development will promote industrial development in Nigerian and finally, it will be

found useful for academic purposes.

1.7 MOTIVATION AND FORMAT FOR THE STUDY

The author who incidentally is an entrepreneur, was motivated to carry out this

study as a result of increased interest in area of entrepreneurship. What motivated

me to carry out this research was to find out if there was any “prospect” at all in

entrepreneurship. She wishes to find out to what extent the government has gone in

ensuring that rapidly springing up school leavers, graduates and prospective

entrepreneurs find entrepreneurship appealing. She wishes to encourage the

unemployed to prayerfully and carefully venture into a business.

Furthermore, I want to find out if entrepreneurial organizations are effective,

whether credit facilities are available to them, if there are provisions for basic

infrastructure, if the business climate is stable and if the markets can accommodate

their product as well.

This research work is divided into five chapters, chapter one focuses on the

background and general introduction to the topic, chapter two focuses on the review

of relevant concept to the topic. Chapter three treats the general methodology of the

8
study and chapter four deals with data presentation, analysis and interpretation.

Chapter five deals on summary of findings and recommendations.

1.8 LIMITATIONS OF THE STUDY

There were some impediments that limited this study. Time and finance were major

setbacks. Transportation demanded so much money and updates from the internet

as well. The researcher could not reach all the entrepreneurs in all the industries.

Random samples of the entrepreneurs were taken from selected firms in Anambra

state. The researcher was unable to collect the entire questionnaire issued out. The

time to move from one library to the other, type and distribute questionnaire posed a

constraint because of engagement at my workplace. Despite all these, the researcher

was able to carry out the study.

1.9 DEFINITION OF TERMS

1. ORGANIZATION: According to Onwuchekwa (2000), Organization is the

association of two or more individuals working cooperatively together for a

common purpose under authority and leadership.

2. MANAGEMENT: According to Stoner (1982), management is the process

of planning, organizing, leading and controlling efforts of organizational members

and of using all other organizational resources to achieve stated organizational

objectives.

9
3. ENTREPRENEUR: An entrepreneur is an individual, or a group of

individuals, who undertake the responsibility of making innovations in the economy

or carries out a new organization.

4. GOVERNMENT: Government is part of the environment of business and

within a focal country which exercises legal and regulatory control over all business

organization, as well as initiates the major strategies for the attainment of national

development objectives. It could also be seen as a person or group of persons into

whose hands the state has placed for the time being, functions of political control.

5. POLICIES: Policies are guides and directives that are formulated to shape

the thinking, actions and decisions of a people in a given area.

6. BUSINESS: Business is the planned activities of individuals or groups of

people aimed at producing and selling, for a profit, the goods and services that

satisfy the need of consumers.

7. ENVIRONMENT: The environment of an organization include those

individuals, organizations, government agencies, suppliers, distributors, press, etc.

who in one way or the other help an organization to carry out its productive

activities but are not subject to the control of that organization.

8. TECHNOLOGY: Technology is the state of the art of doing things in a

society in order to achieve goals.

10
9. PRIVATIZATION: Privatization is the process of change of ownership,

either in whole or in part from the government or state to the private sector.

10. CORPORATE EFFECTIVENESS: Corporate effectiveness is the same as

organizational worth, which is the extent to which an organization as a social

system, given certain resources and means, fulfils its objectives and without placing

undue strain upon its members.

11
 CHAPTER TWO

LITERATURE REVIEW

2.1 INTRODUCTION

Nigeria, which is blessed with enormous human and natural resources, if well

managed can be economically self reliant. Unfortunately, most of these resources

have been lying wasted and underutilized. The business environment in Nigeria

today has a lot of entrepreneurial opportunities.

George Steiner (1971) wrote that “for all business, the government is a partner,

sometimes silent and sometimes quite vocal”. For most business, government is

one of the greatest influences on its activities and often, it is the determining

influence on many aspects of the operations of a firm; its growth, pricing,

production, competition, wages, profits, investment etc. Government’s direct

participation in business activities is no longer fashionable and is therefore being

discouraged, thus their new and ideal role in the economy is being redefined.

According to President Olusegun Obasanjo (1999), it is estimated that successive

Nigerian governments have invested up to 80 billion Naira in public owned

companies but the annual returns to these have been below 10% constantly being

charged against the public treasury. That is why there’s a cry for efficiency. In the

light of this, government is assuming the role of a catalyst, by facilitating the rapid

socio-economic development of the nation. The expected national development

12
therefore is to be anchored on an adequate private sector participation and market

led economy.

According to Okongwu (1998), micro, small and medium scale enterprises

(MSMEs) have been recognized worldwide as effective instruments for energizing

a young/infant or backward economic system and constituting the bedrock for a

nation’s industrial take off. The development of entrepreneurship is therefore an

essential element in the growth strategy of most economies and holds particular

significance for Africa. It not only contributes significantly to improved living

standards, but brings about local capital formation and achieves high levels of

productivity and capability. The Minister for Industry, Kola Jamodu (2001) noted

that entrepreneurship in Nigeria accounted for over 95% of non-oil productive

activities outside agriculture. To enable them play this expected role as the engine

of growth of the economy, the government has a fundamental responsibility to

promote their growth and development. Some of the government’s efforts towards

entrepreneurship development in Nigeria are, the provision of financial incentives,

fiscal and export incentives, technical assistance etc.

It is obvious that entrepreneurs are made and not born. It is one thing to be willing

to go into entrepreneurship, it is yet another thing to be able to successfully manage

it. Given the right exposure, correct environment, necessary incentives,

13
opportunities, education and orientation, great entrepreneurs will emerge. The need

to achieve, to excel, to be independent, cuts across all ethnic groups in Nigeria.

There is then need for judicious evaluation of corporate performance if these

entrepreneurs are to derive maximum benefits from their investments. This

assessment is of great importance to the entrepreneurs, their workers and other

elements of the task environment who transact business with them. Organizational

effectiveness is therefore a composite of interrelated goals necessary for the

survival of the organization in the environment.

The obvious question is to what extents does the government entrepreneurial

policies really develop these entrepreneurs? The focus of this research is on the

essence of these policies towards the development of “successful entrepreneurs”,

since these policies cannot be adequate if they do not impact on entrepreneurship.

2.2 “ORGANIZATIONS”

An organization is a formal association of individuals with a common purpose and

with stipulated objectives to attain under authority and leadership. According to

Scott (2000), “A formal organization is a system of coordinated activities of a group

of people working co-operatively towards a common goal, under authority and

leadership. Barnard (1938), defines an organization as that kind of cooperation

14
among men that is conscious, deliberate and purposeful. Etzioni (1964), states that

organizations are social units or human grouping deliberately constructed and

reconstructed to seek specific goals while Parson views an organization as a social

system that is in structural and functional relationship with the larger social system,

the society.

Thus, business organization is a framework within which work is divided into a

logical section with links of responsibility, accountability and channels of

communication to achieve business objectives e.g. government ministries, military,

hospitals, universities, manufacturing companies etc.

According to Gouldner (1959), there are two fundamental models for analyzing

organizations. They are the rational systems and the natural systems. The two

important elements of the rational systems perspective are goal specificity and high

degree of structural formalization. The goals of the organization should be well

defined and specified and the relationship among organizational participant and

components should be consciously made explicit in terms of functional relationship.

The Natural systems approach rather lays emphasis on the overriding goal of an

organization which is survival. It directs its attention to discovering the mechanisms

by which these needs are satisfied.

15
ELEMENTS OF AN ORGANIZATION

All formal organizations, both business and non business have five basic elements

namely participants, goal, technology, environment and social structure.

Environment Social Structure

Technology Goals

Participant

Fig 2.2: Element of Business Organization

PARTICIPANTS

Organizational participants are those workers in the organization. They are the most

important component of an organization. Understanding the beliefs and orientation

of the participants will help design the organization and formulate appropriate

management strategies that will help achieve the goals of the organization.

People work in certain organization in order to satisfy certain needs. Their

behaviour in the business organization will depend on to what extent they satisfy

the needs that motivated their entry. According to Thompson, the behaviour of the

individual in the organization is controlled by the inducement/contribution contract

but the individual doesn’t loose other aspects of his personality as he becomes an

16
organizational member. It is the role of management to design the organizational

environment in such a way as to secure the loyalty of the individuals working in

them. One way to do this is to understand human beings as individuals,

organizational members and as a citizen of the country or society. There are many

factors that influence a person’s performance level, they include motivation, the

individual’s abilities and role perception.

GOALS

An organization has been defined by Scott (2000), as a system of coordinated

activities of a group of people working co-operatively towards a common goal,

under authority and leadership. The goals of an organization are specific, concrete

and measurable targets. Carlisle suggests that they are usually established in

relation to issues such as profitability, growth pattern, market positions and human

resources development, management performance and development, employee

attitudes, public image, social objectives relating to community, consumer and

environment. The degree to which the goals of a firm have been achieved ascertains

the organization’s performance.

Parson views organizational goals as set by the society since organizations are

subsystem of the society; they only pursue some set goals of which if they attain

these goals, will become aspects of functional performance needed to attain the

overall goals of the society. The goals of the organization are the goals of the

17
entrepreneur. The individual goals (motives) are divergent from the organizational

goals. For the staff to conform to the entrepreneurial goals there must be some

incentive strategies in terms of wages, salaries, fringe benefits etc. This brings about

the solution to the conflict between the organizational goals and the individual

goals.

TECHNOLOGY

Technology is the state of arts in a society or the cause effect belief in the

transformation process.

According to Perrow (1967), technology is a technique or complex of techniques

employed to alter materials (human or non human, mental or physical) in an

anticipated manner. He further states that equipment is a tool of technology but

technology rests upon the knowledge of the nature of raw materials. Thompson

(1967), states that technology can be viewed as an instrumental action and it is

rooted on one hand in desired outcomes (goal) and on the other hand in beliefs

about cause/effect relationship/means of transformation. In its simplest meaning,

technology means a set of organizational actions taken by an organization to

achieve its stipulated goal. Example of various technologies for traveling to Port-

Harcourt are by flying, driving, cycling or walking. The supportive tools for these

various technologies are aeroplanes, cars, bicycles and legs. What determines our

18
choice of technology is the degree of instrumentality (i.e. effectiveness) and

economic efficiency.

According to Thompson, there are three major variations in technologies operated

by organizations namely long linked, mediating and intensive technologies. The

long linked technology exhibits a serial interdependence e.g. activity B can only be

performed if and only if activity A has been successfully performed, then lastly

activity C. It is mostly found in assembly line production organization e.g. Peugeot

Automobile of Nigeria (PAN). Mediating technology is mostly found in service

organizations, their primary function being to link their customers or clients e.g. the

commercial banks linking depositors and borrowers, also its prevalent in insurance

organizations, telephone companies, post offices etc. the institutions are the

mediators. Intensive technology are found in organizations with co-ordinated

aggregations of technology e.g. hospitals, research institute, construction companies

and in the military. These organizations aim at changing the object being worked

on, human or non human but they will be acting on information or feedback they

get from the object they are handling eg on admission of an accident patient into the

emergency unit of the hospital, diverse aggregations of technologies are introduced

to change the state of the person e.g. X-ray, temperature control, lab test etc. One

way through which organizations attain a high level of technological competence is

19
by operating as closed system i.e. self supporting and self reliant organization

which is not subject to the influence of the environment.

ENVIRONMENT

Environment includes those entities, customers, institutions, organizations, systems,

competitors whose activities and services are essential for the effective performance of the

organization but are not subject to the control of the organization. Churchman (1968)

defines environment as something that lies outside the organization or system, and its

control which also determines how the system performs. Hall and Fagan (1956), define

environment as the set of all objects, a change in whose attributes affect the system and

also those objects whose attitudes are changed by the behaviour of the system. The two

basic relationships that exist between an organization and its environment are that the

environment can be viewed as a source of information and material resource. From a

resource dependence approach, a business environment can be analyzed firstly by

demarcating the sectors of the environment that actually affect the operations of the

organization, secondly by locating the areas where resources needed by an organization

can be found and those individuals, organizations or entities (task environment) that

possess and control them. Thirdly, by the organization negotiating itself into its

environment so that it can attain a degree of consensus with its task environment and

lastly by the management and maintenance of the consensus attained.

The organizational environment has been classified into two by Thompson namely

the general environment and the task environment. The General environment which

20
 constitutes the macro environment include government institutions and regulations

(economic policy), climatic conditions ( demography and technical systems having

general influence on all organizations. The general environment becomes very

important for an organization during periods of diversification and growth since

the search for strategic choice will be outside the task system environment. The task

environment constitute the marketing system and the publics. They are those

competitors and organizations who are in the same area of business with the focal

organization whose activities have direct influence on the focal organization in

terms of differential advantage. The core marketing system comprises of the

suppliers of materials, labour, capital, land, focal business, competitors (for both

resources and market), market intermediaries and the target market (distributors and

users), while the publics comprise of the financial institutions, government and

independent press, regulatory groups including unions and interfirm association.

General environment

Task environment

Core marketing Target

Focal Market
system Market
Business Intermediari
Suppliers es

21
 Competitors

Financial Government Independent

Publics Press
Institutions

Economic Technical Demography

Macro Policy System
environment

The classification of the business environment of an organization

The domain of a business defines its spheres of action within a focal organization.

Domain consensus define a set of expectations both for members of an organization

and for others with whom they interact about what the organization will and will

not do. The organization will therefore formulate management strategies to

maintain the atmosphere of domain consensus in the task environment. The

question now is how does the business manage its relationship with those who

possess these resources needed for survival? Firstly, the business must stake out its

domain which helps it to know its dependences (task environment) then the

business should negotiate with them to achieve domain consensus. Then, this

relationship must be managed and maintained by developing competitive, co-

22
operative and defensive power. To what extent the organization survives the

environment depends on how it manipulates its power dependences of acquire

resources.

SOCIAL STRUCTURE:

This is the patterned and regularized relationships among the people in the

organization. According to Scott (2000), there are two main components of the

social structure, the normative and the behavioural structures. The normative

structure is oriented towards their beliefs, role expectations, norms, ethics, etc. The

behivoural structure is the actual structural grouping of the organizational worker.

Organizational structure includes the patterns of relationships among organizational

workers, allocation of tasks and responsibility in relationship to attainment of the

overall organizational objective. It is actually the framework through which an

organization accomplishes its objectives and it represents the demands of

technology and environment on the organization. Stoner defines organizational

structure as the arrangement and interrelationship of the component parts and

positions of a company. An organization’s structure specifies its division of work

and activities, shows how different functions or activities are linked to some extent.

It also shows the level of specialization of work activities. It also indicates the

organization’s hierarchy and authority structure and its reporting relationships.

23
Hence, the long-run survival of an organization depends on the flexibility of its

organizational structure.

The elements of an organizational structure include; specialization of activities,

standardization of activities, co-ordination of activities, centralization and

decentralization of decision making and the size of the work unit. Specialization

means specification of individual and group work tasks throughout the organization

(division of labour). Standardization means the procedures used by the organization

to insure consistency and uniformity e.g. in selection, orientation and training

programmes. Co-ordination means the procedures that integrate the functions of

subunits within the organization. Centralization and decentralization of decision

making mean that where decisions are made at a high level by top managers or even

by a single individual, its centralized but if decision making is dispersed among

more individuals at middle and lower management levels, its decentralized. The

size of the work unit refer to the number of employee.

The basic factors affecting the structural design of an organization are:

a. Structure/Environment: The structure of each organization must fit the

nature of its environment. Burns and Stalker (1961), have given two types

of organizational structure namely the mechanistic and the organic

structures. The stable environment gives rise to mechanistic structure

24
 while organic structures are more suitable for turbulent environment.

Different types of structure might be appropriate for different departments

in the same organization e.g. the research department in a firm might deal

directly with great deal of change and turbulence because of the constant

development of new products. Its managers therefore, might use an

organic type of structure. On the other hand, the sales department in the

same firm with an established list of customers might not be affected by

change and might therefore be organized along more formal, mechanistic

line.

b. Structure/Participants: The actions of the two sets of people working in

an organization (managers and operatives) have impact on the

organizational structure. Managers influence organizational structure in

three ways. Each time they formulate new strategy and implement it, the

structure will change since it follows strategy. The managers who

manifest entrepreneurial behaviour are likely to formulate strategies from

time to time in response to changes in business environment. Secondly,

managers can influence organizational structures directly by deliberately

choosing a type of organizational structure as an appropriate one e.g.

organic or mechanistic. Finally based or managerial attitude towards

authority, their regard or disregard for formality, their past experience

25
 (positive or negative), they can influence the structures by for example

choosing structures that emphasize classical or neoclassical views. The

employee level of education, background, degree of interest on work and

availability of work alternative outside the organizational structure

influence the structure of the organization. An organization with well

educated employees must aim towards organic structure while the one

with less educated employees aims toward a mechanistic structure.

c. Structure/Technology: Woodward discussed her views on the influence

of technology on organizational structure as;

i. The more complex the technology, the greater is the number of managers

and management levels. Complex technologies lead to tall organizational

structures and requires a greater degree of suspension and co-ordination.

ii. The span of management of first-line managers increases from unit to

mass production and decreases from mass to process production.

iii. The greater the technological complexities of a firm, the larger are the

clerical and administrative staff. These staff are to service the large

number of managers, to attend to and maintain the complex equipment.

The significance of Woodward’s study is that for each type of technology, there are

specific aspects of organizational structure that are associated with more successful

performance.

26
2.3 MANAGEMENT AND ITS FUNCTIONS

Mcfarland (1974), defines management as that process by which managers create,

direct, maintain and operate purposive organizations through systematic co-

ordinated and co-operative human effort. Management is ideally, a process (social

and technical) that utilizes resources and changes human behaviour in the desired

direction in order to elicit contributions that will accomplish the objectives of the

organization. It involves getting things done through other people. Management is

an art of organizational design. The contingency theory of organizational design

states that there is no one best way to manage an organization. The contingency

theory favours the situational approach to management design in consideration of

environment, technology and social factors. The management of an organization is

contingent upon the factors that influence the activities of such an organization. In

designing organizations, we must understand that they are rational in behaviour,

hence goal oriented. As thought by the early management theorist that technological

rationality could achieve organizational goals, organizational rationality must be

incorporated also because it takes cognizance of the constraint of the task

environment.

Hence, management as an art of organizational design aims at achieving

organizational rationality by integrating technological and environmental factors.

27
The aim of management is to make organizations work i.e. to achieve effectiveness

and efficiency. It does this by identifying the areas of constrains and contingencies

of the organization so that the organization can make structural responses to include

them within its boundary. Hence, management helps the organization declare a

workable domain, identify growth opportunities within that domain and responds

with appropriate organizational structures.

The major functions of management are:

1. Choosing and maintaining a viable technology for the organization.

2. Identifying the task environment and having the capacity to satisfy

the demands of the task environment.

3. Identifying the contingencies and constraints of the task

environment due to continuous change.

4. Understanding the changes in technology as cause/effects

relationship change.

5. Protecting the technical core of the organization from

environmental uncertainties and contingencies by domain

maneuvering and organizational designing e.g. through buffering,

smoothing, anticipation, rationing etc.

28
 6. Development and maintenance of organizational structure

consistent with technological requirements and inputs, through put

and output demands of the environment.

7. Identifying the three types of interdependence in organizations and

three types of co-ordination strategies and designing effective

communication net-work.

8. Assessing and evaluating organizational performances.

9. Designing incentive strategies for the organization and maintenance

of human variable.

10. Formulation of goals, objectives and making effective decisions.

11. Controlling and directing actions towards goal attainment.

2.4 ENTREPRENEURSHIP AND NATIONAL DEVELOPMENT

An entrepreneur is an individual, a group of individuals or government entity who

undertake the responsibility of making innovations in the economy (developing a

new source of supply of raw materials, new methods of production or distribution,

introducing new goods, service, and opening a new market) or carries out a new

organization of any industry. A typical entrepreneur is a risk taker, a man who

braves uncertainty, strikes out on his own and through native wit, devotion to duty

and singleness of purpose, somehow create a business and industrial activity where

29
non existed before. According to Nzelibe (1996), an entrepreneur is a man or

woman who is courageous, alert, visionary and is engaged in the network of

exchange that stimulates and promotes the economy. Self confidence, task-result

orientation, high motivation, risk taking, leadership, initiative, flexibility, foresight

and perception are the characteristics of an entrepreneur.

Entrepreneurship is therefore defined as the willingness and ability of an individual

to seek out investment opportunities, establish and run an enterprise successfully. It

is the process of initiation and management of a business. It includes the

identification of investment opportunities, deciding what opportunities to exploit for

profit, promotion and establishment of business enterprise, others are pooling of

various scarce resources for the production and distribution of services,

organization and management of human and material resources for attainment of

organizational goal. Thus, importance of entrepreneurship in the process of

economic development of any nation cannot be over emphasized.

Philips (1992), summarizes some of the immense benefits of entrepreneurship as

follows:-

 Stimulation and promotion of indigenous small scale enterprises with a view

to encouraging entrepreneurship.

30
  Mobilization of domestic saving and conservation of foreign exchange

earnings through indigenous production.

 Generation of employment opportunities and facilitation of managerial

training for unskilled labour.

 Promotion of effective resource utilization and the development of local

technology.

 Mitigation of rural-urban drift.

 Enhancement of regional economic balance through industrial dispersal.

 Production of intermediate products for use in large scale enterprises.

 More skilled than large enterprises at making specialized or artistic articles

such as ivory works, embroidery. Lacquer ware gold and silver working.

SCOPE

Historically, prior to the creation of modern day Nigeria, many businesses were

small, subsistent and operated in such areas as agriculture, handicraft, weaving,

pottery, ceramics, black smiting, carpentry, mechanic, dry-cleaning, farming,

fishing, food processing, animal husbandry, block making, mental works, dress

making and hairdressing repair shops, wholesaling and retail shops, transportation,

hawking etc.

31
The advent of colonialism and the concomitant economic interests of the colonial

government saw the coming on board of such European and colonial multinational

business enterprises as the UAC, Lever brothers, PZ, John Holt, CFAO, UTC

Leventis Group etc. According to Osuagwu (2001), these multinational companies,

with vast business experience and strong capital base, dominated the Nigerian

economy before and after its political independence.

Today, the scope of entrepreneurship is rather vast, touching almost all the sectors

of the economy. They are found in commerce, agriculture, education, banking,

insurance, health, communication, fast foods, hoteling, transportation, oil sector

etc.

2.5 GOVERNMENT ENTREPRENEURIAL POLCIES

To enable the private sector play the expected role as the engine of growth of the

economy, the government which has a fundamental responsibility of promoting

their growth has come up with policies to engender adequate private sector

participation. These include the new industrial policy of Nigeria which came up in

1989 and the Structural Adjustment Programme (SAP) which was introduced in

July 1986, etc.

32
The New Industrial Policy which was launched in January 14th, 1989 by the Federal

Government contains incentives, guidelines and institutional framework for the

regulation of the industrial growth and development in Nigeria. Its aims are,

increased export of manufactured goods, dispersal of industries, providing greater

employment opportunities, improving the technological skills and capacity

available in the country. The incentives contained in the policy are financial, fiscal

and effective protection with import tariff, export promotion zone at Calabar and

foreign currency facility for international trade, technical/ institutional assistance

etc.

The SAP aimed at altering and realigning aggregate domestic expenditure and

production patterns so as to minimize dependence on imports, enhance the non-oil

exports base and bring the economy back on balanced growth. According to

Ezejelue (1989:3), SAP is expected to expand non-oil exports, stimulate research

and increase local sources of industrial input, revitalize the agricultural and

industrial sectors to achieve self sufficiency in food and industrial production,

eliminate the accumulation of further external debts, privatize commercial interests

of government, encourage a new inflow of foreign investment into Nigeria and

adoption of a realistic exchange rate policy.

33
Some of the Incentives given by the government are:-

A. Financial Incentives: Finance is the lifewire of business and an essential

ingredient for the survival and growth of any business enterprise. Government’s
role as a financier of business comes mainly through government agencies,
financial institutions and establishments that provide various types of funding for
both the public and private enterprises.

The Development Finance Institutions (DFIs) which are government institutions

established for meeting the medium and long term needs of business
organizations for credit and investments include NIDB (The Nigerian Industrial
Development Bank), NBCI (Nigerian Bank for Commerce & Industry) , NACB
(Nigeria Agriculture and Co-operative Bank), FMBN (Federal Mortgage Bank
of Nigeria), UDB(Urban Development Bank), PBN(People’s Bank of Nigeria).
NIDB was established in 1964 is to provide medium and long-term finances to
industrial enterprises ascertained to make significant contributions to economic
development of Nigeria. It identifies investment priorities, supervises projects
and carries out feasibility studies on investment projects. It provides technical
and managerial consultancy services to organizations.

The Nigerian Bank for Commerce and Industry (NBCI) established in 1973 to
underwrite share issues particularly those arising from indigenous business men
to acquire the ownership interest of aliens affected by indigenization decree and
also assist businessmen by providing consultancy services in identifying and
funding viable business projects.

34
The Nigerian Agricultural and Co-operative Bank (NACB) established in 1973 to

improve the level of production of all aspects of agricultural production and the

availability and marketing of agricultural products through extending liberal credit

facilities to farmers, co-operate and allied industries. These include farming,

poultry, fisheries, animal-husbandry, forestry and timber production as well as

storage, distribution and marketing connected with such production. NACB’s

sources of funds include government subventions, credit shortfall on agricultural

loans through the CBN and loans from international finance institutions/ World

Bank, African Development Bank, European Investment Bank etc. The Federal

Mortgage Bank of Nigeria (FMBN) was established to promote mortgage

institutions. Urban Development Bank (UDB) established in 1993 was to cater for

the financing of urban development needs of Nigerian cities and urban centers.

The Peoples Bank of Nigeria (PBN) established in 1989 to provide small funds to

small business owners at a free interest rate.

The Central Bank of Nigeria credit guide lines, Commercial and Merchant banks to

allocate a stipulated minimum credit to preferred sectors of the economy especially

to entrepreneurs.

35
Apart from the OFIs, other support agencies involved in the production and

development of entrepreneurship in State and Federal levels are the Industrial

Development Centres (IDCs) established to provide technical support and

manpower training facilities to industries. Others are NERFUND, NDE, DFRRI,

VSS.

The National Economic Reconstruction Fund (NERFUND) was established in 1989

to provide medium and long-term funds to entrepreneurs. It is also to correct any

observed inadequacies in the provision of medium and long-term finances. It also

provides medium and long-term loans to participating commercial and merchant

banks for on lending to entrepreneurs. It facilitates the provision of maturity,

including a grace period of one to three years depending on the nature of the

enterprise or project and finally to provide such loans either in local or foreign

currencies.

The National Directorate of Employment (NDE) established in 1988 by the federal

government to encourage the development and survival of entrepreneurship. It is

charged with the provision of loans to young graduates to establish their own

business. This programme sparked off the highest number of small-scale businesses

throughout the country. The loans are without hard measures and rigid lending

guidelines of commercial banks. The entrepreneur here, enjoys low taxes, free

technical advice and support services.

36
The Directorate of Food, Roads and Rural Infrastructure (DFRRI) establish in 1987

to provide electricity and good roads in rural areas. The need arises as a good

number of entrepreneurs are in the rural areas and source raw materials from there.

This helped in the reduction of overhead costs.

The Volunteer service Scheme (VSS) operated by the government of the old

Anambra State to train unemployed and unskilled youths to acquire various skills

and thereafter, provide them with start-up capital.

Others are the Universal Investment and development Company Benin, the Central

Investment Company Enugu (owned by the South East Government), the New

Nigerian Investment Ltd (NNIL) Kaduna (owned by the old eleven Northern

States), Odu’a Investment Ltd Ibadan (owned by the old western states government

excluding Lagos), which is one of the biggest investment companies in Africa.

B. Fiscal Incentives: Besides financial incentives, the Nigerian government

provides other forms of assistance to entrepreneurs to give them some considerable

measure of relief and advantages in carrying out their activities. Some of these are

tax and tariff related incentives.

Tax holidays are granted to entrepreneurs for the first six months of operation.

Nwabuzor (1990:45) noted that government has however, taken some concrete

steps to ameliorate the tax burden on enterprises. One of such was the amendment

37
of the Company’s Income Tax Act of 1979, by section 32 of the finance

(Miscellaneous Taxation Provision) Decree of 1985, which reduced withholding tax

on interest income from 45 to 15%, a decision intended to attract reinvestments.

This was followed in 1987 by the reduction in the taxation rate on corporate profits

from 45% to 40% and currently to 35%. Tarrifs are mainly used by government to

protect local and infant industries in Nigeria, usually against foreign goods. In 1988,

the federal government established the Tariff review Board to carry out a

comprehensive study and review of the Customs and Excise Tariff of the country to

provide an appropriate level of protection for domestic industries. The government

then reduced the number of excisable products from 412 to 182 items most of

which are final and luxury products. Import duties were increased on dry cell

batteries from 25% to 45%, syringes and needles, from 25% to 40%. In recent

years, the Nigerian government have taken various measures towards reforming

and reviewing the customs and excise provisions on tariffs and duties for various

categories of products. Such measures include:-

 The review of import and export prohibition list. Such goods as frozen

poultry products have been outrightly prohibited.

 The review of items for export as wet blue and all unprocessed leather is still

prohibited. This will ensure the protection of existing local tanneries which

process leather into finished products. The prohibition of exportation of wet

38
 blue leather is also meant to enhance local capacity utilization, generate

foreign exchange through exports of finished products and also increase and

guarantee the employment generation potentials of the sub sector.

 The abolition of import duty rebate introduced in 1995 (25%).

 Ports and customs reforms notably, the phasing out of the pre-ship inspection

of imports (introduced in 1979) and the planned replacement with destination

inspection, with effect from 2003. By this measure, it would no longer be

necessary to have Import Duty Report (IDR) on goods to be imported into

Nigeria, as assessment of duties would be done upon arrival of goods in

Nigerian Port. Most contra bound goods will be ceased thereby encouraging

the populace to source it locally from indigenous entrepreneurs. Also high

excise duties will be levied on certain items as spirits, cigarette, tobacco at

the rate of 40%. This is particularly directed in safeguarding the citizenry’s

health.

C. Export Promotion Incentives: In the 1950’s and 1960s, agricultural

products like cocoa, rubber, palm produce and groundnut accounted for over 80%

of Nigeria’s total export. The discovery of oil in Nigeria in 1956 and the instant

economic fortunes that it brought blinded the country’s from further developing

other non-oil sectors. Nigeria now became ferocious importers of everything from

white sliced bread to Mercedes etc. The most taxing question in the Nigerian

39
Politics at that time was how to spend all that money. The events thereafter and the

consequent economic recession became the price Nigeria had to pay for their

neglect. As a result, its foreign reserve dipped. To shore up Nigeria’s foreign

reserve and revive the non-oil economic activities, the government came up with a

lot of policies to encourage export activities by entrepreneurs. Its highpoint was the

promulgation of a decree in 1986 with a package of incentive for export e.g. the

export development fund, export expansion grant, duty drawback scheme, duty

suspension scheme and manufacture in bond scheme.

i. Export Development Fund Scheme: A scheme whereby the federal

government and the private sector contribute into a fund which will be used to

finance a series of export promotion and development activities like training,

workshop, symposia, research, studies, consultancy services, local and oversea

trade fairs.

ii. Export Expansion Grant: Involves the giving of cash grant to local

manufacturers who achieve a minimum of N50,000 worth of exports annually. This

was to encourage such manufacturers to increase their export sales value.

iii. Duty Drawback Scheme: This allows importers to claim rebates on duties

paid on imported products and materials (raw materials equipment and machinery)

meant for use in the manufacture of other goods meant for exports.

40
 iv. Duty Suspension Scheme: This involves the lifting of duties paid on

certain categories of exports.

v. Manufacture in-bond Scheme: This involves the non-payment of duties

on imported raw materials for the production of exportable goods backed

by a bond issued by a first class bank. The performance bond is

discharged after evidence of exportation and repatriation of foreign

exchange earnings to the country.

The government bodies for the promotion of exports are:

i. The Nigerian Export-Import Bank (NEXIM), bank to provide export

stimulation loan facilities to entrepreneurs.

ii. The Nigerian Export processing zones Authority (NEPZA) (at Calabar

and Kano) with duty free incentives.

iii. The Nigerian Export Promotion Council (NEPC) charged with the

primary responsibility of administering export incentives to entrepreneurs.

D. Technical/Institutional Assistance: Entrepreneurs in Nigeria have equally

over the past decade enjoyed technical assistance and implementation support from

the government’s numerous institutes and agencies. Such government technical

institutes and agencies are the various industrial research institutes like the Industrial

Development Centres (IDCs), the Centre for Industrial Research and Development

(CIRD), Centre for Management Development (CMD) SME Unit, Federal Institute of

41
Industrial Research Oshodi (FIIRO), Project Development Agency (PRODA) Enugu,

Raw Material Research Development Institute (RMRDC),

etc. These government technical institutes and agencies have largely supported the

entrepreneurs and have in particular rendered assistance to them ranging from

manpower training, appropriate machinery selection and installation, machine repairs

and maintenance as well as extension services (CBN Annual Reports and Statement

of Accounts 1977).

2.6 ENTREPRENEURSHIP AND MANAGERIAL PROBLEMS

Research work has pointed to poor management as the major factor that causes

business failure. Some entrepreneurs depend on their personal skills in running the

enterprise. They could be skilled artisans but may not know the basic principles of

management. They have to compete with large business who have better finance

and specialists to help them make better decisions. A lot of highly skilled personnel

do not like to work with entrepreneurs because of inability to pay attractive wages

nor fringe benefits, packages nor give job security. Some entrepreneur therefore

hire cheap and unskilled labour which constitute managerial problem, their poor

financial base and stunted resources make it difficult for them to train their

employee. Their poor management could lead to improper carry out of the key

managerial functions; planning, organizing, directing, controlling, decision making.

42
Lack of Proper Planning: Planning is the most important managerial function.

The manager should prepare and predict future events. This is achieved by

establishing objectives and strategies to achieve these objectives.

Lack of Organizing: Organizing deals with determining the tasks to be performed

and establishing a framework of authority and responsibility.

Lack of Directing: Directing involves the ability of the entrepreneur to motivate,

educate, guide and communicate to the subordinates.

Lack of Controlling: Controlling involves ability to prevent, identify and correct

deficiencies in all phases of the operation.

Lack of Making Proper Decisions: Decisions are very sensitive. They deal with

the setting of policies, setting of goals and taking of vital decisions.

Most of the problems encountered by entrepreneurial organizations are:

1. Lack of finance

2. Lack of training and adequate preparation

3. Lack of adequate capital and over stretching of capital

4. Too much or too little investment in fixed assets

5. Poor credit management

6. Lack of understanding and appreciation of technology

7. Lack of appreciation and use of accounting function

8. Premature expansion

43
9. Unhealthy competition

10. Inability to separate self from business.

11. Finally, bad attitudes, neglect and absentee landlord.

2.7 ENTREPRENEURSHIP AND ORGANIZATIONAL PERFORMANCE

One of the reasons why enterprises are assessed either by themselves or by external

bodies is to find out, to what extent they have achieved their objectives or in what

direction they are performing (i.e. either negatively or positively). According to

Carlisle, the objectives of entrepreneurs are usually established in relation to issues

such as profitability, growth pattern, market positions and penetration, marketing

mix, product leadership, productivity, human resources development, management

performance and development, employee attitudes, public image, social objectives

relating to community, consumer and environment. This process of determining the

extent of an organization’s performance level is called organizational effectiveness.

The assessment of organizations is of great importance to their owners, the workers

in them and other elements of the task environment who have business relationship

with them. According to Scott (2000), to inquire into effectiveness is to ask how

well an organization is doing, relative to some set standards. Georgeo Poulous and

Tennenbaum (1957), term organizational effectiveness as organizational success or

worth and defines it as “the extent to which an organization as a social system,

given certain resources and means, fulfils its objectives without incapacitating its

44
means and resources and without placing undue strain upon its members. The

establishment of criteria for assessment is a controversial issue. In order to ascertain

which assessment is appropriate for situation, we have to examine to what extent

the goals and technologies formulated and chosen by the organization are specific

in consideration with goals completed in terms of technology employed.

The three assessment dimensions are the efficiency test, instrumental test and

social test. The efficiency test assesses if the result achieved by an organization was

produced with the least cost. The instrumental test assesses whether the desired

state of affair (objective) is achieved while the social test is a comparison with

reference groups.

According to Thompson, the most appropriate assessment is that which assesses

organizations as institutions, thus attention is focuses on fitness of the organization

for the future. Emphasis is placed on the survival of the organization. This

assessment situation demands the three assessment dimensions. The organization

must perform well in its economic exchange relationship with the environment in

order to improve on its historical profit growth. This means that it must be efficient

in its operations. It must also grow and expand its structural configuration. It must

compare well with its related business groups in the task environment. Organization

facing dynamic task environment will have the future uncertain while organizations

45
facing relatively stable task environment seek to demonstrate fitness for future

action by demonstrating historical improvement. Two major areas for assessment

here will be profit margin and sales. However, when it comes to comparing with

reference groups, criteria for comparism will concentrate on the area of profits,

market shares, investments, structural development features etc.

In the view of Barnard, any assessment of the performance of an organization must

consider two major things namely effectiveness and efficiency of organizational

actions. By effectiveness, he means that accomplishment of recognized objectives

and by efficiency, he means the resultant of the efficiencies of the individuals

furnishing the constituent efforts i.e. as viewed by them. If the individual finds his

motives being satisfied by what he does, he continues his co-operative effort,

otherwise he does not. The life of an organization depends on its ability to secure

and maintain the personal contributions of energy… necessary to effects its

purposes. Performance here therefore depends generally on the level of structural

development in organization, which is fundamental to the achievement of the

economic incentives used to motivate the organization’s members.

According to Etzioni (1962), there are two methods of organizational performance

assessment namely the goal model and the system theory approach. The goal model

approach investigates the goal of an organization and selects the criteria for

46
evaluation on the basis of the goals isolated from the point of view of the highest

organizational leadership who are responsible for goal formation. A business

organization is only assessed on the basis of ability to make profit. The systems

approach considers organizational effectiveness as a composite of interrelated goals

necessary for the survival of organization in the environment. The criteria for

judging survival and effective realization of goals are multiple. Etzioni further

divided the systems approach into survival approach and an effectiveness model

approach. The survival model approach depicts a set of requirements which if

fulfilled, allows the system to exist. The effectiveness model on the other hand

defines a pattern of interrelations among the elements of a system which would

make it most effective in the service of given goals.

Approaches to assessment of
organizations.

Goal Model Approach Systems Theory

Approach

Survival Model
Approach
Effectiveness Model
(institutional)
Approach

Fig 2.3: Approaches of Organizational Assessment

47
 CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 INTRODUCTION
This chapter involves a description of the procedure adopted in carrying out this

research. This is done by using approved standard techniques. This chapter is

organized under these major issues.

a. The methodology paradigm of this research is represented by the research

design and sampling procedure.

b. The empirical investigation or field study conducted within the business

organization where the questionnaire design and data collection methods

are discussed.

c. Statistical tools for data analysis

d. The issue of reliability of data collected during the field study

3.2 METHODOLOGY PARADIGM

The methodology of this research is mainly descriptive and explanatory on the role

of government in entrepreneurship development. Akuezuilo and Agu, (2004.50)

defines research design as the plan for research project. It provides guidelines which

direct the researcher towards solving the research problem and it may vary

depending on the nature of the problem being studied. In conducting this research,

48
the researcher made use of survey research method because this study is merely

descriptive in nature. A survey design according to Akuezuilo and Agu (2004:54),

is an attempt to collect data from a sample of a population in order to determine the

current status of the population with respect to one or more variables. A sample size

of one hundred and eighty-four was used.

RESEARCH DESIGN

The design included tabular fill-in scaled (Likert type), open-end structured, multi-

choice and dichotomized questions. The questions were clearly simplified and

structured in a way devoid of any ambiguity and technical details. Most of the

questions simply required the respondents to tick against the appropriate responses.

The margin of error is used to determine and get reasonable and workable size for

the population.

POPULATION AND SAMPLING PROCEDURE: It is necessary to statistically

determine the group to be used.

n = N
1+N(e)2

n = Sample size

N = Population (1891)

49
e = margin of error = 7% or .07

n = 1891
1+1891 (0.07)2

= 1891
10.2659 = 184
The sample size is one hundred and eighty-four.

3.3 INSTRUMENT FOR DATA COLLECTION

The methods of data collection employed in this study were the use of primary and

secondary sources of data collection. The major primary data sources were

questionnaires, interview, and observations while the secondary data were collected

through management texts, articles, journals, magazines, government publications

and other literature relevant to the research topic.

QUESTIONNAIRES: The analysis was obtained through responses to

questionnaires administered randomly to entrepreneurs, management and non

management staff of the organization.

INTERVIEWS: Interviews were conducted with the owners and personnel in the

organization. Both formal and informal interviews were applied. The formal

interviews were based on previously formulated questions. Informal interviews

were used when necessary.

50
LITERATURE: Data were collected through management texts, articles, research

works, journals and other library materials that were relevant to the research topic.

3.4 STATISTICAL TOOL(S) FOR DATA ANALYSIS

The data collected were analyzed using mean, standard deviation of the various

question items and Z-test used for test of hypotheses.

The computational formula are

n
Mean = X = Σxi SD = Σ(x-x)2 SD = Standard Deviation
i =1 n
n
Where x = the responses

x = sample mean

n = sample size = 184

where x takes the value of 5,4,3, 2 or 1

The cut of point for the acceptance of any item is 3.0 obtained:

From (5 + 4 + 3 + 2 + 1) = 15
5 5 = 3

Decision Rule
Any item with a mean of 3.50 and above will be accepted as positive or high while

any item with a mean less than 3.50 will not be accepted .

Category Weight Class limit

Strongly Agree (SA) 5 4.50-5.00
Agree (A) 4 3.50-4.49

51
Undecided (U) 3 2.50-3.49
Disagreed (D) 2 1.50-2.49
Strongly Disagreed (SD) 1 1.00-1.49

The stated hypotheses were tested using Z-test at 0.05 level of significance. The

researcher chose z-test because the sample size is large, that is greater than 30.

The formula for Z – test

Z- test = X-µ
S/ n

Where:

µ = population mean or cut off mark

X = sample mean

S = standard derivation

Decision Rule:

The test for hypothesis is thus:

Reject the null hypothesis if Z-calculated is greater than Z tabulated (critical value),

otherwise accept that is when the Z calculated is less than Z tabulated.

Ztab = Z1 ∞ = Z1 – 0.05 Z1- 0.025

2 2

= Z 0.975 = 1.96 from table.

52
3.5 ISSUE OF RELIABILITY OF DATA COLLECTED

The reliability of data in social science is not similar to reliability of data in Natural

sciences, since the later occur under controlled experimental conditions. Business

Administration in an applied social science and therefore, its data reliability is

construed from the social science perspective. To illustrate this, if two researchers

conduct experiment on the same scientific procedure, if the results of the two

experiments are the same, reliability has been established. However, reliability in

the social sciences is viewed from the perspective of contextual validity. Contextual

validity is established if data studied, interviews, observations and questionnaires

are relevant to the phonomena investigated. Besides, human behaviour cannot be

predicted at any point in time.

Since the data collected, presented and analyzed which were relevant and

contextual, pertained to the effect of government entrepreneurial policies on

organizations, they are visualized as being valid and therefore reliable.

53
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 INTRODUCTION

This chapter covers the presentation and analysis of the data collected. The

presentation is divided into two parts. First, the descriptive statistics presented with

tables and the second part is the test of hypotheses.

4.2 DESCRIPTIVE STATISTICS

Tabulation of educational qualification of entrepreneurs/ staff of the org.

Educational Qualification Entrepreneurs/staff of the org. Percentage
FSLC (First School Leaving Certificate 50 27.1
SSCE or its equivalent 80 43.5
B.Sc, BA or HND 34 18.5
MBA, M.SC 20 10.9
Total 184 100
Table 4.2a: Source: Field Study, 2004.

Table 4a shows that out of 184 respondents,50(27.1%) had first school leaving

certificate.80(43.5%) had only SSCE or its equivalent while 34(18.5%)had BS.c,

BA or HND. 20(10.9%) had obtained their masters.

Respondent by Gender
Gender No. of respondents Percentage
Male 100 54.3
Female 84 45.7
Total 184 100
Table 4.2b: Source: Field Study, 2004.

In table 4.2b, male respondents were 100 (54.3) while female were 84 (45.7%).

54
 Respondents by Age
Age No. of Respondents percentage
20-below 20 10.9
20-30 50 27.1
30-40 50 27.1
40-50 44 24
50-60 20 10.9
Total 184 100
Table 4.2c Source: Field Study, 2004.

Table 4.2c revealed that 20 (10.9%) of the respondents fall below or are the age of

20 and between 50-60. 50(27.1%) of the respondents fall between the ages of 20-30

and 30-40. 44 (24%) of the respondents fall between the ages of 40-50.

4.3 ANALYSIS OF RESEARCH QUESTIONNAIRE ITEMS

Research Question B: The Role of Government in entrepreneurship

S/N Questionnaire Item Mean Decision
1. Do you feel that government entrepreneurial strategies so 3.73 Agreed
far have improved performances in entrepreneurial
organizations?
2. Do you think that tax holiday given by the government at 3.30 Undecided
the commencement of business encourages
entrepreneurs?
3 Do you think that government financing makes any 3.55 Agreed
impact on the performance of organization
4 Do you think that the prohibition on importation of certain 3.65 Agreed
goods enhances local capacity utilization.
5 Do you think that the provision of social amenities like 3.62 Agreed
light, good road etc by the government reduces the cost
of entrepreneurial organization
Grand Mean 3.57
Table 4.3a. Source: Field Survey 2004

Table 4.3a with a grand mean of 3.57 shows the role of government in
entrepreneurship. The response of entrepreneurs/staff in all items are more than
3.50. except in question 2 where they are undecided.

RESEARCH QUESTION C: The impact of management on entrepreneurship

55
S/N Questionnaire Item Mean Decision
6 Do you think that managerial problems hinder 3.56 Agreed
performance of entrepreneurial organization?
7 Do you think that human resource development is 3.71 Agreed
beneficial to the entrepreneurial organization?
Grand mean 3.69
Table 4.3b Source: Field Survey, 2004.
Table 4.3b with a grand mean of 3.69 shows the impact of management the on
entrepreneurial organization.

RESEARCH QUESTION D: The role of finance in entrepreneurship

S/N Questionnaire Item Mean Decision
8 Do you think that financial problems 3.67 Agreed
hinder entrepreneurial performance?
9 Do you think that business financing 3.50 Agreed
improves equipment and productive
structure of the firm?
Grand Mean 3.59
Table 4.3c: Source: Field survey, 2004.
Table4.3c with the grand mean responses of 3.59. This shows the role of finance in
entrepreneurship.

4.4 TEST OF RESEARCH HYPOTHESES

Three hypotheses formulated in this study were tested at 0.05 level of significance

to provide information for the study.

Hypothesis one

There is no significant relationship between government entrepreneurial

development strategy and performance of entrepreneurs.

The hypothesis is tested using response from question 1. The Z test statistic is given
thus: Ztest = x-
S n

56
x = mean of item
 = cut off point (which is 3)
SD = Standard deviation of items
n = number (sample size).

Questionnaire item 1  Mean SD n Df Zcal Z-tab Remark

critical
value
Do you feel that 3 3.73 4.95 184 183 2.0 1.96 H0
government entrepreneurial rejected
strategies so far have
improved performance in
entrepreneurial
organization
Table 4.4a. Source field survey, 2004

The X of item 1 is 3.73, SD = 4.95, n = 184 applying these values to the z-test

Z = 3.73-3 = 73 = 73 = 2.0.
4.95 184 4.95 13.56 .365

Remark : If Z calculated is > Z tabulated, reject the null hypothesis, therefore, we

reject the null hypothesis and accept the alternative hypothesis that states that there

is a significant relationship between Government entrepreneurial development

strategies and the performance of entrepreneurs.

Hypothesis Two

There is no significant relationship between managerial problem and

entrepreneurial organizational performance.

Questionnaire item 6  Mean SD n Df Zcal Z-tab Remark

critical

57
 value
Do you think that 3 3.65 3.2 184 183 2.37 1.96 H0 rejected
managerial problem hinder
performance of
entrepreneur organization?

Table 4.4b. Source field survey, 2004

Z = 3. 56 – 3 .56 = . 56 = 2.37
3.2 184 = 3.2 13.56 .236
Z calculated (2.37) is > z tabulated (1.96) therefore we reject the null hypothesis
and accept the alternative hypothesis that there is a significant relationship between
managerial problem and entrepreneur organizational performance.
Hypothesis 3: There is a significant relationship between financial problems and
entrepreneurial performance.
Questionnaire item 8  Mean SD n Df Zcal Z-tab Remark
critical
value
Do you think that financial 3 3.67 5.1 184 185 1.78 1.96 Ho: accepted
problems hinder
entrepreneurial
performance?

Table 4.4c. Source field survey, 2004

Z = 3.67 - 3 .67 = .67 = = 1. 78

5.1 184 = 5.1 13.50 0.376

Z calculated (1.78) is < Z tabulated (1.96), therefore we accept the null hypothesis
that states that there is a significant relationship between financial problems and
entrepreneurial performance.

CHAPTER FIVE

58
 DATA SUMMARY, CONCLUSION, AND RECOMMENDATION

5.1 SUMMARY OF FINDINGS

This research work is divided into five chapters.

Chapter one introduced the research topic, organizational performance in

Government Entrepreneurial Development Policy. It highlighted the background of

the study, theoretical framework of the problem, objective of the study, hypothesis

for the study, significance of the study, motivation and format for the study,

limitations of the study and definitions of terms.

In chapter two, the literature review provided the theoretical background for the

field study. In chapter three, the research designs and methodology which were

used in the course of the field investigation were presented.

Chapter four, effectively discussed the method of data presentation and analysis.

The hypothesis were tested which were formulated to guide the major activities of

these research.

Finally, chapter five, summarizes the entire findings of the work, concludes and

then makes the recommendation.

The following are the findings:

1. Finance is a major bedrock of organizational performance

2. Poor management is another major factor that causes business failure.

59
3. Entrepreneurs still encounter problems in areas of employee training and

development, management and technology, high cost due to poor infrastructure.

4. Government policies on entrepreneurs have immensely improved their

performances especially in areas of business finance.

5. Some of the government entrepreneurial policies that are already in place are not

implemented by the government.

5.2 CONCLUSION

Observations from the findings reveals that entrepreneurs are of great

importance to the nation therefore should be handled with utmost care by the

government.

5.3 RECOMMENDATION

There are lots of problems hindering goal attainment in business organizations. In

recognition of these basic problems encountered by the entrepreneurs, the

government should promptly respond to them by forming policies, strategic enough

to handle such problems and implementing them. Until this is done,

entrepreneurship will only barely survive but not flourish

in sufficient number as the seabed for the industry of the future. I therefore humbly

recommend:

60
1. For the Government from time to time to give grants to entrepreneurs and lower

the tax burden on them. Government should draft strategies to implement the

already made policies to enhance entrepreneur.

2. For the Government to provide basic infrastructure such as electricity, pipe borne

water, boreholes, access roads and market places for these products especially in

rural areas.

3. For the Government to continue to compel the environment to be supportive to

them e.g. the finance houses and banks should grant loans to them

4. That there is need for human resource improvement for maintenance of human

variables. The government should draft employee training and development

programme for the entrepreneurial organizations. Such programme should have

incentive attached to them. Workshops, seminars and career development

programme should be organized at the expense of government.

5.That Entrepreneurial organizations should be included in training and

developments of their managers to enable the manager acquire managerial and

technical know how that is necessary to cope with the challenges of modern

management.

REFERENCES

61
Akuezuilo, E. and Agu, N. (2003), Research and Statistics in Education and Social
Science. Methods and Applications (3rd ed), Awka: Nuel Ceiti publishers
and Academic press ltd.

Drucker, P. (1985), Management; Tasks, Responsibilities (2nd ed), Prentice New

York: Hatper and Row

East, R.A. (1946), A Business Entrepreneur in Colonial Economy. New York: New
York University Press.

Hisrich, R.D and Peters M.P. (2001), Entrepreneurship (3rd ed), Boston: McGraw-
Hills.

Idigo, E.N. (2003), Government Business Relations Lagos: X-Pose Comm. and
Publishing Ltd.

Morris M and Kiratkpo, D.F. (2002), Cooperate Entrepreneurship (2nd ed),

Manson: South Western.

Mullins, L. (1995), Management and Organization Behaviour (4th ed), London:

Pitman Publishing.

Nwabuzor, A.M. (1990), Business Government Relations in Nigeria Ibadan:

Macmillan Nigeria Publishers Ltd.

Nwachukwu, C.C (1990), The Practice of Entrepreneurship in Nigeria Benin:

Ilupeju Press Ltd.

Okenwa, C.P. (1990) Entrepreneurship Development in Nigeria Onitsha: Adson

Educational Publishers.

Onwuchekwa, C.I. (1993), Managing Small Business Organizations Awka: Goshen

Prints and Publishing Company.

Onwuchekwa C.I. (2002), Organizational Behaviour (1st ed), Enugu: Zik Chukus.

Onwuchekwa C.I. (2000), Business policy and Strategic Management (1st ed),
Onitsha: University Publishing Company

62
Osuagwu, L. (2001), Small Business and Entrepreneurship Management. Lagos:
Grey Resources Ltd.

Oyeka, Cyprian A. (1996), An introduction to Applied Statistical methods in the

Sciences (3rd ed), Enugu: Nober Avocation Publishing Company.

Robins, Stephen (1999), Business Policy and Strategic Management (5th ed), India:
New Delhi.

Stoner, J.A.F, Freeman, R.I. and Gilbert, Daniel R. (Jr), (2000), Management (4th
ed) India: Pearson Education.

Udeh, J.O. (1999), Entrepreneurship in the 21st Century, Enugu: CIDJAP

publication.

63
 EVALUATING ORGANIZATIONAL PERFORMANCE IN GOVERNMENT

ENTREPRENEURIAL DEVELOPMENT POLICY: A CASE STUDY OF SELECTED

FIRMS (ENTREPRENEURS/ SELECTED STAFF)IN ANAMBRA STATE

Dear Respondent,

The researcher is an MBA student in Nnamdi Azikiwe University, Awka, Anambra

State. This study is purely an academic exercise, which is in partial fulfillment for

the award of Masters in Business Administration.

Kindly provide sincere responses to the questions below. All information supplied

will be confidential. Thanks for your co-operation.

Erinne Chinwe I.

The Researcher

64
 FIELD RESEARCH INVESTIGATION
PART A
Questions for describing entrepreneurial organization
1. Name of Entrepreneurial Organization
2. Place or Location
3. No of Employee
4. Product Produced
5. Sex of Entrepreneur/ Staff
6. Age of Entrepreneur/ Staff
7. Educational qualification
8. Management and organizational studies
9. Organizational performance
10. Organizational performance in government entrepreneurial development policies.
PART B
Questions for testing Hypothesis
1. Do you feel that government entrepreneurial strategies so far have improved organizational
performance in entrepreneurial organizations?
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree
2 Do you think that tax holiday given to entrepreneurs by the government encourages them?
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree
3 Do you think that government financing makes any impact on the performance of
organizations.
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree
4. Do you think that the prohibition of importation of certain goods enhances local capacity
utilization?
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree

65
5. Do you think that the provision of social amenities like light, good road etc by the government,
reduces the cost of entrepreneurial organizations?
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree

PART C
6. Do you think that managerial problems hinder performance of entrepreneurial organization?
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree

7. Do you think that human resource development is beneficial to the entrepreneurial organization
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree

PART D
8. Do you think that financial problem hinder entrepreneurial performance?
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree

9 Do you think that business financing improves equipment and productive of the firm?
A. Strongly Agree
B. Agree
C. Undecided.
D. Disagree
E. Strongly Disagree

66