CHAPTER ONE

1.1  INTRODUCTION

As Countries endeavor to give reality to political independence, the concept of economic self-reliance gradually develops in meaning and in purpose. This is true of the Nigerian situation. This economic self-reliance cannot be achieved under an economic structure dominated by foreign capital and especially foreign entrepreneurs. This would instead result to the repatriation of resources necessary for indigenous economic development, to foreign countries.

In an attempt to reduce the weight of the nations dependence on foreign countries and foreign entrepreneurs, the Federal government of Nigeria has designed and implemented several strategies to empower her citizens, with the necessary skills, favorable environment and financial support needed to create wealth. Individuals themselves have courageously accepted the risk of entrepreneurship in their bid to support and enhance the realization of an independent economy. But unfortunately, they lack the skills and competence to drive this process.

One of the factors contributing to the nation’s over-dependence on foreign economies is the under-productivity of the small business sector. This research work is geared towards highlighting strategic management concepts that will enhance small business growth. To achieve this, our focus will be on the hierarchy of strategic intent in the strategic management process. This is the missing variable in the ‘ Modus Operandi ‘ (mode of operation) of small business in Nigeria.

1.1.1  BACKGROUND OF STUDY

Diagram of the earth at night

The above diagram comprises of hundreds of photos of the earth taken at night by sattelite and presented by two researchers, Michael and Stephen, in 2002 (Michael and Stephen, 2003: 9). Some parts of this image show that highly developed countries like the Seacoast of Europe, Eastern United States, Eastern China and Japan are bright at night. Whereas areas like Africa, the poorest region, is relatively dark. (Michael and Stephen, 2003: 9). This night light is man-made.

Analyses of the causes of these differences show that the level and nature of human activities in these economies differ significantly.

Nigeria is one of the largest nations in Africa and has a population of over 130 million people. Despite all the Laurels she has received for contributing to the stability of other nations, she still suffers the dreaded disease, POVERTY. This is not as a result of lack of physical and human resources, on the contrary, it is as a result of the poor management of these resources.

The general level of living in the country tends to be very low for the vast majority of people. This is true not only in relation to her counterparts in developed nations but also in relation to small elite groups within her own society. This low levels of living are manifested quantitatively and qualitatively in the form of low income (poverty), limited education, Low life and work expectancies, high infant mortality rate, inadequate housing, and in many cases a general sense of malaise and hopelessness.

One of the major contributors to the Countries slow growth rate is the under-productivity of the small business sector. To this extent, we may claim that the productivity of the small business sector is a necessary condition for improvement in the quality of life in Nigeria. Without sustained and continuous economic progress at the level of the individual, the realization of economic self-dependence or determination would not be possible.

1.2         STATEMENT OF PROBLEM

Nigerian entrepreneurs are yet to move from the use of traditional methods of running an enterprise to the application of contemporary management techniques. This has robbed them of their competitive valor and has placed them at the mercy of larger firms, both at local and international levels. In 2002, Nickels et al (2002: 176) reported that the small business sector contributed about 40% to the GDP (gross domestic product) of the United States of America and also employed a population of people whose number is greater than the population of Australia and Canada combined.

Conversely, the Nigerian small business sector pales in terms of their contribution to the economic development of the nation. The case of low productivity has reached epidemic proportions in the region and has even become an economic problem. Studies have shown that the cause of the low productivity level of this sector is due to inadequate managerial strength. According to A. W. Okparanma in an unpublished material, ‘ the problems militating against the effective development of the small business sector in Nigeria can be … categorized into the following: managerial, financial, infrastructure, technological and social. He further asserts that many entrepreneurs lack the managerial skills and talents for planning, organizing, directing and controlling their human and material resources. Although these problems are real, they are a reflection of ‘internal lapses which is caused by the absence of a strategic intent in the ‘modus operandi’ (mode of operation) of Nigerian small business enterprises. These small business enterprises have not really built a foundation on which the enterprises ought to stand and operate. They have neither vision, mission, set objectives and have not defined their businesses in terms of customer group, customer function and alternative technology.

1.3     RESEARCH QUESTIONS

The following research questions will help in achieving the objectives of this study:

• What is strategy?
• How can strategic Management Concept contribute to the success of small business enterprises?
• Is the weakness of Nigerian small businesses an internally or externally induced phenomenon?
• How can the productivity of small businesses be measured?

1.4     OBJECTIVES / PURPOSE OF STUDY

For any research paper to be complete and at the same time possess some level of validity, some objectives must be set and standardized. Based on the statement of problem of this study, the following objectives were set to guide this research enquiry:

1. To ascertain the depth at which the strategic management concept has been applied by small business enterprises in Nigeria.
2. To explain the Concept of strategic Management and also relate the strategic intent to small business.
3. To enlighten Nigerian entrepreneurs on how to approach entrepreneurial problems analytically.
4. To show the relevance of the small business sector to the growth of the Nigerian economy.
5. To reinforce and refocus the small business sector in Nigeria for positive results.
6. To make recommendations based on the findings.

1.5     RESEARCH HYPOTHESIS

The importance of the hypotheses in this research cannot be overemphasized. It served as a guide in planning the course of enquire, in choosing the kinds of data needed, in deciding the proper statistical treatment, and in examining the results of the study. The following hypotheses form the premise of this study:

H0 –  Small businesses cannot survive in Nigeria neither can they    contribute to its economic development.

H1 – Small businesses can survive in Nigeria and can also contribute to its economic development.

H2 – Applying strategic Management to small businesses cannot improve its performance.

H3 – Applying strategic Management concept to small businesses can improve its performance.

H4  –  The performance of Small business enterprises cannot be measured.

H5  – The parameters for measuring small business performance can be determined?

1.6     SIGNIFICANCE OF STUDY

1. This study is expected to provide great insight into the overall contributions of small businesses to the nations economic growth.
2. It will enable Nigerians to appreciate the relevance of the strategic management concept to small business growth.
3. The study would enable small business entrepreneurs to appreciate the complexities in business.
4. An understanding of the strategic intent will help refocus small business entrepreneurs.
5. The study would enable small business entrepreneurs effectively utilize the nation’s resources thereby reducing the degree of her dependence on foreign countries.
6. It would be of benefit to the academic community as it would add to the body of knowledge and will also serve as a platform for further research studies on the application of strategic management to small businesses in Nigeria.

1.7     DELIMITATIONS AND LIMITATIONS OF STUDY

1. This study is focused on the strategic intent of the strategic management concept in relation to small businesses in Nigeria, specifically, Port Harcourt. It does include all the strategic variables in the strategic management model and does not also involve small businesses in other nations.
2. The study likewise did not attempt to research into other functional areas of management, which also affects the productivity small businesses in Nigeria.
3. This study does not include other strategic courses of actions needed to be taken by small business enterprises to enable them achieve success.

Although the delimitations are restrictions deliberately Imposed on this study by the researcher, the nature of the research work itself limited the researcher in making generalizations. These limitations are:

1. The reliability of the answers supplied in the questionnaire could not be verified.
2. The selection of a convenient sample due to financial and time constraints restricted generalization to only the individuals responding to the survey.