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HUMAN CAPITAL
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TABLE
OF CONTENTS
CHAPTER
ONE: BACKGROUND OF THE STUDY
1.1 context
of the problem 1
1.2 statement
of the problem 5
1.3 purpose
of the study 8
1.4 research
questions 9
1.5 research
hypothesis 9
1.6 significance
of the study 11
1.7 limitation
of the study 11
1.8 definition
of term 12
1.9 scope
of the study 13
1.10 organization of the study 14
CHAPTER
TWO: LITERATURE REVIEW
2.0 Introduction 20
2.1 human
capital theory 20
2.2 origin
of the term human capital 23
2.3 concept
of human capital 24
2.4 employees
as human capital 28
2.5 method
of human capital development 29
2.6 training
as a method of human capital development 31
2.6.1 objectives of training and development 34
2.6.2 determination of training needs 37
2.6.3 method of manpower training and development
Programmes in Nigeria 38
2.6.4 problem of manpower training and development
in
Nigeria 43
2.7 benefits
of training to Organization 44
2.7.1 reasons for management development 49
2.7.2 reasons for management development 50
2.7.3 The relevance of manpower development in
Nigeria 52
2.7.4
problems associated with management development in
Nigeria 54
2.8 mentoring
defined 57
2.8.1 benefit of a mentoring program 58
2.8.2 reasons for failures of some mentoring
programs 59
29 survival
theories 61
2.9.1 economic survival theory 62
2.9.2 organizational survival ecology 62
2.9.3 organizational survival theory 63
2.10 definition of organizational survival 64
2.11 human capital and organizational innovative
capability 66
2.12 technology and organizational survival 67
2.13 size and organizational survival 70
2.14 firm diversification and organizational
survival 71
2.15
relationship between human capital and organizational
Survival 73
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Introduction 90
3.2 research
design 90
3.3 population
of the study 92
3.4 sampling
procedure/sample size determination 92
3.5 test of
validity/reliability 94
3.5.1 test of validity 94
3.6 data
collection techniques 96
3.7 operational
measure of variables 97
Summary
References
Appendix 1
Appendix 2
CHAPTER ONE
INTRODUCTION
BACKGROUND
OF THE STUDY
1.1 CONTEXT OF THE PROBLEM
Today,
in spite of the fact that many organizations have designed some business
strategic application of latest technological know-how, accumulation of human
and financial resources, merges and acquisitions with or of major competitors,
etc, corporate failures has continued to be an everyday issue around the world.
Organizational
survival can be defined as an organizational ability or state of continuing to
live or exist, often despite difficulty, challenges or dangers. An organization
survives as long as it “acquires inputs from supplies and provides output to a
given public (customers, clients, etc). An organization fails when coalitions
of resource provides cannot be induced to supply resources and the firm repay
resource provides for past support (Sheppard 1989). There is general agreement
among the stakeholders that a firm has failed once it has entered bankruptcy
proceedings (Moulton, 1988). In order words, the firs has failed to return
investors’ and credit’ capital in the agree manner to provide workers with job
security, to provide states with tax revenue. In other words, survival means
non-failure.
Many
organizational variables have been proposed by various authors and experts as
solution to problems of corporate failures.
Wang,
yen & Lin (2008) posit that organizations innovative ability and creativity
increases an organizations chance of survival. This is supported by Gronhaug
and Kaufmann (1988).
Weston
and Masieghka (1971) found that corporate level diversification ability
correlated positively with organizational chance of survival. This position was
supported by Pfeffer and Salancik (1978) and Sheppard (1989). However, Sheppard
noted that diversification can be undertaken when the firm is doing well in
order to insure its future survival. However, diversification is more
ill-advised if the firm is on its last legs and looking for a way to survive.
Some
studies have highlighted the importance of human capital in enhancing
organizational performance. According to Oforegbunam and Okorafor (2010) the quality
of human capital available in an organization influence its chance of survival,
since it is the most critical agent of business performance. This is supported
by Olufemi (2009). When he stated that, “To survive in an environment where,
all provide almost the same product and services, the quality of the human
element is a major factor. It has also become a critical index of competition
in the world of business to the extent that the development of such
capabilities though training has become top priority in designing the strategic
plans business organizations (Tim and Brinkerhoff, 2008). The above assertion
seems relevant for the banking sector since it has come under great threat in
recent years.
Fajaba
(2002) noted that, “in most of today’s organizations, the ability to learn and
change faster than the competitors is the key to survival”. Lundgadard (2007)
observed that the application of Human resources strategy like attraction and
retention of skilled workforce, work place flexibility and wellbeing, alignment
and employee engagement are associated with organizational survival in today’s
contemporary society.
According
to Christensen and Montgonmenry (1981), the ability of a firm to perform and
survive may depend on conditions which exists in the environment. This position
was supported by Schmalense (1985). Meanwhile, Hansen & Binger (1989)
observed that industry profitability play a role in an organization’s chance of
survival. Thus, firms involved in more profitable industries are more likely to
survive. Other variables found to positively affect organizations chances of
survival include, firm market share (D’ Avein, 1987; Sheppard, 1989;
Christensen & Montgomery, 1981). Quality of leadership and management
experience (Nwachukwu, 2007:iii) firm general financial conditions (Chen and
Shemerda, 1981).
Many
authors have noted that survival of organizations depends highly on the quality
of organizational leadership and management experience (Robbins and Coulter,
2007; Nwachukwu, 2007). Some researchers have however taken another line of
argument that organizational survival is likely to be influenced by the quality
of an organizations human capital (Oforegbunam and Okorafor, 2010). Observation
have also revealed that most organizations do not employee well qualified
workforce, as well as do not train and develop them properly to meet the ever
challenging and competitive work pressure in their industry. Based on this the
researcher has decide to investigate how organizational survival can be
influenced by human capital development.
Human
capital in itself is seen as the totality of knowledge skills, experience and
ability residing within and that is used by an individual. Research has shown
that people decisively contribute to corporate success and survival (Pfeffer,
1994; Hitt et al., 2001; Becker and Huselid, 1998).
With
ever changing technology, increase in competitions, and increase in numbers of
bank failure, the need for the continuous development of human capital in the
Nigeria banking industry becomes highly underscored.
Organizational
survival has in recent time increasingly become the concern of research, it is
quite glaring that there has been some number of studies on different
organizational variables and organizational survival, yet, review of work done
on organizational survival revealed that there has been no significant effort
to study human capital development and organizational survival in Nigeria
banking industry. To fill this gap in the existing literature, this present
study is aimed at using empirical investigation approach to find out the effect
of human capital development on organizational survival in Nigeria banking
industry with a study of banks in Port Harcourt.
1.2 STATEMENT OF THE PROBLEM
Organizational
survival is arguably the most importance causes of concern for business
organizations today especially the Nigeria banking sector, where
competitiveness, profitability and innovative are norms that go with survival.
Organizations have adopted various business strategies in order to ensure
survival in our contemporary society. However, despite all these effort, a
great number of organizational failures have continually been observed.
The
Nigeria scene portrays the situation very adequately. Despite the rich
environment, abundant human and natural resources, favourable environment and
government policies, organizations find it difficult to sustain growth and
survival (Nwachukwu, 2007:IV).
Nonaka
(2002) noted that in an environment where the only certainty is uncertainty,
where market shifts, products proliferates and technology becomes obsolete
virtually overnight, the only surviving companies are the knowledge based
companies driven by human capital development consciousness. Despite efforts by
management of organizations in recent time to boost productivity, profitability
and growth which are essential ingredient for survival in today’s
hyper-inflated competitive business environments, has given rise to high rate
of business failure while many organization which has utilized various
strategies in order to survive has failed.
Some
authors have noted that human capital development could be the answer for
survival (Offoregbunam & Okorafor, 2010). In spite of this, some
organizations pay lip service to issue of human capital development, while some
treat it as avoidable cost. Ins some extreme cases, some organizations subtly
surcharge their employees for training and development cost. It is this paradox
concerning human capital development and organizational survival that has given
the researcher some concern to find out the effect of human capital development
on organizational survival among Nigeria banking industry and the impact of
lack of necessary human capital development on survival of Nigeria banking
organizations, as well as the factors that affect survival of banking
organizations in Nigeria.
It
is based on this that the researcher is embarking on this work to find out the
relationship between human capital development and organizational survival.
This is the problem addressed in this paper. Based on this, the researcher has
some up with the model below as the conceptual framework for this study;
CONCEPTUAL FRAMEWORK
After
a review of related literature, the researcher came up with figure 1, as a
model of the perceived relationship between HCD and Organizational Survival.
Figure1.
Framework Model of the Relationship between Human Capital and Organizational
Survival.
SOURCE:
RESEARCHER’S CONCEPTUALIZATION, 2012
The framework above shows the relationship
between human capital and organizational survival. The general human capital
development variables include training, mentoring and employee development that
will enhance human capital effectiveness. The effective human capital residual
in the organization, through concerted effort enhances organization survival.
The output has a feedback loop that allows the outcome or result of
organizational survival to flow back the moderating variables and into human
capital to form fresh inputs.
1.3 PURPOSE OF THE STUDY
The
primary purpose of this study is to empirically establish the effect of human
capital on organizational survival in selected banks in Port Harcourt. The
measures of organizational survival applicable are performance and
productivity, alignment, firm size diversification general financial condition
in market share and attraction and retention. Thus the study is aimed at
achieving the following objectives:
(1) To establish the impact of training on
organizational survival;
(2) To
establish the impact of mentoring on organizational survival;
(3) To
establish the impact of employee development on organizational survival.
(4) To
establish the impact of firm size on organizational survival;
(5) To
find out how technology influence the survival of banking organization.
1.4 RESEARCH QUESTIONS
In
the light of the problems stated above, the entire research will be carried out
through a broad framework of research questions. This will serve to guide the
focus of the research in the proposed investigation.
The
specific questions thus derived are as follows:
i. Is
the any relationship between training and organizational survival?
ii. Is
there any relationship between mentoring and organizational survival.
iii. Is
there any relationship between employee development and organizational
survival?
iv. Is
there any relationship between firm size and organizational survival?
v. Is
there any relationship between technology and an organizational survival?
1.5 RESEARCH
HYPOTHESES
In
order to ascertain the validity and reliability consisting of this research
work, some hypotheses, which are fundamental to this study, must be tested to
provide empirical evidence. Hence, this study will test the following
hypotheses;
H01:
There is no significant relationship between training and an organization’s
innovative ability.
H02:
There is no significant relationship between training and an organization’s
productive ability.
H03:
There is no significant relationship between mentoring and an organizational
innovative ability.
H04:
There is no significant relationship between mentoring and an organization’s
productive ability.
H05:
There is no significant relationship between employee development and an
organizations innovative ability.
H06:
There is no significant relationship between employee development and
organizational productive ability.
H07:
There is no significant relationship between firm size and organization’s
innovative ability.
H08:
There is no significant relationship between firm size and organization’s
productive ability.
H09:
There is no significant relationship between technology and organizational
innovative ability.
H010:
There is no significant relationship between technology and organization’s
productive ability.
1.6 SIGNIFICANCE OF THE STUDY
The
result of this study will be of immense contribution to the understanding of
the impact of human capital on organizational survival, particularly among the
banking industry. It will help banks management to understand how acquisition
and development of human capital is essential to the overall wellbeing,
performance and survival of their organization in a higher volatile and highly
dynamic and competitive Nigerian business environment.
This
research is also significant for the following additional reason; it will
provide empirical evidence of the effect of human capital on organizational
survival. It will highlight areas of human capital requiring development for
the full benefit of the organization and employee. It will add to the existing
body knowledge in the area of the topic under study which students and
researchers in this area will find useful. This study will also assist
organizations in understanding the variable that relate to human capital
development from the individual employee perspective and hence formulate and
implement better human resource management programmes.
1.7 LIMITATION OF THE STUDY
The
researcher envisages problems in data gathering because some of the personnel
in these banks will be reluctant to release information concerning their human
capital development practice because of the competitive nature of the banking
industry. Time allowed for this research work will pose some problems because
movements to all the affected banks will be time consuming. Finance is another
area which will cause constraint as we have to pay the necessary bills
associated with gathering of data. Finally, since the findings that will be
made in this study will be based on only on the banking sector, it will be
difficulty to generalize it on other sectors.
1.8 DEFINITION OF TERMS
Banking Industry:
The total aggregate of banking firms operating in a particular economic
environment.
Bank Failure:
A situation in which a bank has to close up operation because it is not
successful.
Competitive:
situation in which an organization try hard to be better than others in
business competing against them.
Employee:
A person paid to work for an organization.
Human Capital:
The stock of knowledge skill and abilities residing and utilized by
individuals.
H.C.D:
This involves all the various programmes and conscious investment (development)
activities which an organization undertaken in order to equip and improve on
the skill of its workforce.
Innovation:
The identification and use of opportunity create new products services or work
practices.
Mentoring:
According to Emecheta (2007), it is defined as a relationship between a young
persons and an adult in which the adult provide the young person with support,
guidance, an assistance as the younger person goes through difficult period,
face new challenges or work to correct earlier problem. It is a relationship
between a mentor and a mentee (protege) whereby the latter understudies the
former both in a formal and in an informal way, for the purpose of acquiring
certain skills and knowledge from the mentor.
Organization:
A planned social or business unit deliberately structured for the purpose of
attaining specific goals.
Organizational Survival:
An organizational ability or state of continuing to live or exist, often
despite difficulty, challenge or dangers.
Training:
This is a human capital development programme aimed at helping employees to
update on the skill they have and to acquire those they do not have. The
interest here is the extent to which sample banks train help employees.
1.9 SCOPE OF THE STUDY
The
scope of this study is the total study coverage of this research work. This
covers three areas
i. Geographical/survey scope
ii. Content scope
iii. The study unit scope
Geographical/Survey Scope:
Some constraints as observed have necessitated the scaling down of this
research to only banks located in Port Harcourt city alone. This being the
case, the researcher concentrated his attention in selected banks within the
area of understanding and this would be used for generalization the entire banks
in Port Harcourt.
The content/theoretical scope
of the study is human resources management.
The study scope
of this work is the level of analysis covered. And the level of analysis is the
organization otherwise, referred to as the banking firms in this research work.
1.10 ORGANIZATION OF THE STUDY
This
study is organized into five chapters, chapter one deals with the context of
the problem (overview), statement if the problem, purpose of the study research
questions, research hypotheses, and significance of the study limitation of the
definition of terms and the scope and organization of the study.
Chapter
two deal with the review of relevant and related literature. Chapter three
describe the research design, population of the study, sampling procedure/sample
size determination, test of validity and reliability, data collection method
and data analysis technique. Chapter four will deal with data presentation,
analysis of data, test of hypotheses and summary of findings.
Chapter
five will present the discussion, conclusion of the research findings and the
recommendation and direction for further research.
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