MANAGEMENT REFORMS AND ITS EFFECT ON PUBLIC ENTERPRISE PERFORMANCE

Introduction

1.0 Background To The Study

This chapter is the introduction part of this study. The subject matter is introduced and discussed so as to give an overview of the study. Also, the objectives, scope and significance of the study are also examined in this chapter. The research questions and the research hypotheses of this study are stated in this chapter. And some commonly used terms would be defined in this chapter.

1.1 Background Of The Study

Just as the human brain is important in the body and co­ordination every thought and action of the body, the management of an organization performs similar functions using organizational resources.

In every organization, the four major functions of management are planning organizing, motivating and controlling. The top management must plan the direction the organization wants to chart in order to achieve set goals. After planning organizational resources are arranged within the organizational structure, and then the top management would put in every mechanism that would motivate the people in the organization to put in their best effort while making sure that control measures are put in place to make actual performance meet up with the standard set.

Be it a large or small organization, or a public or private organization, the function of management is important in getting things done by other. Without management, both human and material resources of the organization will be underutilized. Therefore the term “management “can be seen as a function which involves planning, organizing, motivating and controlling (Cole, 2004).

Also management as “the art of getting things done through people” She also described management as philosophy. One can also think of management functionally, as the action of measuring a quantity on a regular basis and of adjusting some initial plan; or as the actions taken to reach one’s intended goal. Mary Parker Follett (1868-1933).

Moreso, management can be seen as that central body in an organization which plans for organizes, motivates and controls organizational resources. It is simply a group of people called managers. In an organization, there are three levels of management. Top management middle management and lower management Otokiti, 2000).

In the public sector, the function of management is usually administration and the managers of public enterprises are usually referred to as administrators. However, in modern times, there is a movement towards making public enterprises more business-like just as private sector businesses. This is being referred to as the New Public Management (Ogundele et al,2(04).

The importance of management in any organization cannot be over emphasized. If an organization performs well, the management takes the credit but if it performs poorly the management takes the blame.

1.2 Statement Of The Problem

Public Enterprises in Nigeria have been identified with poor performance, Fekuru (2000) stated that “Public Enterprises presents a depressing picture of inefficiency, low productivity, losses, budgeting burdens, poor products and services”

In the past, government invested huge sums of money into public enterprises in order to provide goods and services at affordable rates (Soyibo et al (2001) noted that from 1975 to1985 over N23 billion was invested in public sector enterprises with N933.7 million in returns on Investment which is about 0.3% this showed that public enterprises were non­performance, they were very inefficient.

It was in view of the above mentioned problems that the government in Nigeria decided to over haul the public enterprises in Nigeria by introducing management reforms into them.

In reforming the way public enterprises in Nigeria were managed, the two foremost techniques for improving public enterprises management were Privatization and Commercialization (Jerome 2002). They were part of the Structural Adjustment Programme (SAP) introduced in the mid 1980s by the Nigeria government to ensure better management of the economy.

How far has management reforms improved upon the performance of Public Enterprises? Were the management reforms successful or otherwise in Nigeria? What are those factorsthat affected the implementation of the management reforms in Nigeria public enterprise?

These are some of the major issues that would be addressed in this study.

1.3 Objectives Of The Study

The major objective of this study is to examine the effect of management reforms on public enterprises performance.

Other specific objectives of this study are:

1. To determine the extent to which management reforms have improved on the financial status of public enterprises.
2. To access the impact of management reforms on motivation of workers in public sector enterprises.
3. To analyze the relationship between management reforms and workers productivity in public enterprises.
4. To examine the extent to which external factors affect management reforms of public enterprises.

1.4 Research Questions

The following are the research questions of the study:

1. What is the effect of management reforms on public enterprises performance?
2. To what extent has management reforms improved the financial status of public enterprises in Nigeria?
3. What is the impact of management reforms on motivation of workers in public sector enterprises in Nigeria?
4. What is the relationship between management reforms and workers productivity in public enterprises?
5. To what extent do external factors affect management reforms of public enterprises?

1.5 Statement Of Research Hypotheses

The following are the research hypotheses of this study:

1. Null hypothesis (Ho):

Management reforms have no effect on public enterprises performance. Alternative hypothesis (HI): management reforms have positive effect on public enterprise performance

2. Null hypothesis (HO):

Management reforms have not improved on the financial status of public enterprises. Alternative hypothesis (HI): management reforms have improved on the financial status of public enterprises.

3. Null hypothesis (HO):

There is no impact of management reforms on motivation of workers in public sector enterprises. Alternative hypothesis (HI): there is positive impact of management reforms on motivation of workers in public sector enterprises.

4. Null hypothesis (HO):

There is no relationship between management reforms and workers productivity in public enterprises. Alternative hypothesis (HI): there is positive relationship between management reforms and workers productivity in public enterprises.

5. Null hypothesis (HO):

External factors have lesser effect on management reforms of public enterprises. Alternative hypothesis (HI): external factors have greater effect on management reforms of public enterprises.

1.6 Scope Of The Study

As earlier stated, this study examines the effect of management reforms on the performance of public enterprises in Nigeria. The case study is the Power Holding Company of Nigeria (PHCN).

In the past, government in Nigeria has introduced various management reforms in public enterprises. For the purpose of this study, the management reform programmes that would be examined are privatization and commercialization. Privatization is handing over the total ownership and management of enterprises from the government to the private sector while Commercialization is contracting the management of public enterprises to private sector while the government retains ownership.

The public enterprise which this study focused on is the public utility enterprises in charge of generation, supply and distribution of electricity in Nigeria. It was formerly known as National Electrical Power Authority (NEPA) now called PHCH.

1.7 Significance Of The Study

This study is expected to make theoretical and practical contributions to the academic circle. It will add to the existing body of knowledge on management of public enterprises. Therefore, it will be profitable to Scholars” Authors, Writers and Students who are interested in studying management of public enterprises and how reforming the management, of public enterprises can improve their performance.

Also, this study will be of great benefit to me the researcher of this study.

It will bring about an increase in knowledge and understanding of the various reforms introduced into the management of public enterprises in Nigeria.

Furthermore, this study-will contribute greatly to policy makers in our government who are constantly in search of the most effective and efficient way of managing public enterprises. They will learn a great deal from this studies analysis of the strengths and weakness of past management reform policies on public enterprises.

Finally, this study will benefit the nation as whole, public enterprises were mostly established to deliver goods and services at affordable prices. Therefore, improvement in their performance would mean providing quality goods and services, greater productivity and efficiency. This makes management reforms very essential in improving the performance of public enterprises.

1.8 Definition Of Terms

The following are the’ terms and their meaning:

i. Commercialization:

This is a situation in which government removes subsidies from public enterprises so that they become self-financing.

ii. Effectiveness:

This is the ability of an individual group or organization to achieve the right goals with the right resources at the right time.

iii. Efficiency:

This is the ability of a person group or organization to put in minimum use of resources so as to achieve maximum result or outcome.

iv. Management:

This is the function in an organization which is involved with planning organizing motivating and controlling organizational resources to achieve set objectives.

v. Performance:

This refers to the actualization of set goals and objectives of an organization.

vi. Privatization:

This is the transfer of ownership control and management of enterprises from the government to private investors.

vii. Public Enterprises:

These are enterprises established owned controlled by the government to engaged in provision of goods and services at affordable rates.

viii. Reforms:

These are changes that are introduced into a system or organization so as to make it function properly.

ix. Self Financing:

This is the ability of a person, an organization etc. to be able to finance their activities by themselves.

x. Subsidies:

These are government funds allocated to public enterprises at regular basis to make the meet up with their financial obligations.

1.9 Organisation Of The Study

This study is divided into five chapters the first chapter provides and introduction and a general overview of the study the second chapter examines the conceptual and theoretical framework of the study. The third chapter discusses the methodology used in data collected, analyzing and interpreting the data collected in this study. The fourth chapter analyses the data collected in this study in relation to the research questions and hypotheses. The fifth chapter provides a quick summary of the findings and concludes the chapter with some recommendations on the way forward.