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A
CASE STUDY OF PABOD SUPPLIES LIMITED PORT HARCOURT
ABSTRACT
This
study is an attempt to examine the relationship between the Pabod Supplies
Limited, Port Harcourt and its environment. it analyzes the influence of the
state and other organizations on Pabod Supplies Company. It discusses the
strategies used by the company to enable it survive in its environment
especially in the present depression in the Nigerian economy. The study also inquiries
into how the company influences and is in turn influenced by the State
Government. It examines the extent to which Federal Government policies affect
the organization in the face of the various drastic measures it exercised to
combat the declining and sick economy. After a careful analyzes of data, the
study makes the observation that Pabod Supplies Limited has capabilities of
adjusting to forces in its environment. The study has four chapters.
In
Chapter One of the study, the problem is stated concepts defined, and the
literature is reviewed. The objectives of study and hypotheses to be tested are
also stated. The methodology of study, the research setting and objectives of
study are discussed in Chapter Two. This Chapter also examines problems encountered
during the research, data reliability and the organizational chart of the
company under study. In Chapter Three, the strategies adopted by the Pabod
Supplies Nigeria Limited were discussed. The environments of Pabod Supplies
Limited are also discussed. Chapter Four is the conclusion which warns that,
while the research for autonomy is essential to organizations, they must do
without jeopardizing their existence.
TABLE OF CONTENTS
Title Page - - - - - - - - - - i
Certification - - - - - - - - - ii
Dedication - - - - - - - - - iii
Acknowledgement - - - - - - - - iv
Abstract - - - - - - - - - - vi
Table of Contents - - - - - - - - vii
CHAPTER ONE: INTRODUCTION
1.1
Statement of Problem
1.2
Literature Review
1.3
Objectives of Study
1.4
Why the Research is Necessary
1.5
Definition of Concepts
CHAPTER TWO
2.1 Methodology
2.2 Problems Encountered
2.3 Data Reliability
2.4 The Setting
CHAPTER THREE
3.1 Pabod Supplies Limited Versus
3.2 Political Environment
3.3 Pabod Supplies Limited Versus
3.4 Other Organizations in Port Harcourt
3.5 Pabod versus other Business
3.6 Environment in Port Harcourt
CHAPTER FOUR
Conclusion
Bibliography
Questionnaire
CHAPTER
ONE
INTRODUCTION
1.1 STATEMENT OF PROBLEM
Modern society is characterized by the
proliferation of organizations. It is impossible to escape from the influence
of one form of organization or the other in modern society. This means that
organizations affect most if not all aspects of our lives. In pre-industrial
societies, the family constituted the unit of production as well as
consumption. People were socialized, trained and equipped to play their roles
within, the family unit. But these functions are gradually being taken over by
modern organizations. People are now socialized not to take their places within
the family unit in the process of production, but to be gainfully employ in one
form of organization or the other. For example, most students in universities
are being trained to take their places within modern organizations. Indeed, we
all depend on organizations not only for our subsistence, but also for our
leisure. Thus, the significance of organizations to our lives cannot be over
emphasized.
Unfortunately, no organization exists
in isolation or vacuum. All organizations exist within an environment which
comprises physical, political, economic, social, technological, legal and
cultural elements. Organizational environment may also consist of similar and
dissimilar organizations. This study will locate the environments of Pabod
Supplies Limited and will examine how these factors affect Pabod and are in
turn being influenced by it.
1.2 LITERATURE REVIEW
Ubeku (1972), stresses that the
environment affects the organization either positively or negatively through
the reality that the organization has to compete or corporate with other
organizations. Sikula (1972) contends that organizational behaviour is
basically environmentally determined. Bernard (1972) supports this contention
by seeing the environment as helping in personality determination, while
Galthway and Guthnier (1976) observe that for the environmentalists, everything
the organization does is the result of learning from the environment. While the
above observations may be an overestimation of environmental possibilities,
they so indicate the important role of the environment in the determination of
organizational structure and behavior.
This is supported by Nambudiri (1978)
who contends that business organizations have little control over their
environments. But this is not necessarily so as many organizations have been
able to make a considerable impact on their environment. Organizations are
influenced but at the same time they also do influence the environment in which
they find themselves. It is a two way process.
Slovic, Fishchcoff, and Lichtenste in
(1977) Nisbet and Rose (1980) believe that organizations create their own
environments by the way they interpreted and act in a confusing world. Meyer
and Bowan (1977), Weich (1977, 1979) counter this by saying that it is
impossible for organizations to act strategically in an environment they help
to create.
Even the process of motivation of
organizational participants has also, sometimes been attributed to environmental
influences. Contributing to this idea Mbabe (1978) observe that Nigerian
workers are motivated by the group, vis –a vis the environment. he further
contends that business standards are necessarily affected by the conditions in
the environment. For Balogun (1976), a public service organization is efficient
when it is able to achieve its goals while combining the need to survive in a
competitive and dynamic environment with the need to satisfy the basic social,
economic and political problems of the environment. This is important to a
business organization like Pabod Supplies Limited whose organization and
function this study is out to analyze.
No organization exists in isolation
but does so in an environment of similar and dissimilar organizations if by
organizational environment we mean those elements, agencies or forces that
affect the performance of an organization; but over which the organization has
little or no direct control. But there is the absence of homogeneity in the
categorization of components of the organizational environment.
Luthans (1973) categories them into
physical, socio-cultural and technological components; Parker Brown and others
(1967) wrote on the economy and the educational sub-systems, the family, social
stratification, the community, polity; while Drunkenly (1972) treats only other
organizations and technology which he says are the most important in the
functioning of organizations. In this paper, we will regard the State, other
organizations, culture, technology, and the public – in contact as the
components of the organization’s environment. it must be pointed out that all
organizations operate in an environment and procure resources including personnel’s
from it.
The political environment is a crucial
aspect of organizational environment as government often intervenes in
organizational activities and functioning. Therefore any discussion of
organizational environment without the state of government is fruitless in as
much as the government sets the limits of operation of all organizations. Thus,
the state looked at as a component of organizational environment is important
in the sense that it makes regulations and policies which affect organizations.
One of such policies is the Trade Disputes Decree No. 7 of 1976. This policy
puts the state in a constraint position to easily intervene in internal
conflicts in organizations.
Unless on issues that affect national
interest, for example, issues affecting all organizations, public issues, the
government will hardly interfere with any internal disputes of any organization
unless such disputes are referred to it. This policy encourages management and
workers to explore all avenues available to find solutions to their disputes.
Contributing to the idea, Ubeku (1964) points out that government may suddenly
decide to make drastic laws, for example, during economic depressions, and
these may have serious implications for organizations. The present state of the
economy has resulted in the austerity measures of the importation of various
goods including some raw materials for some industries. Therefore, companies
using imported raw materials may be affected adversely.
Furthermore, employment policies also
exist at various levels of government in Nigeria. These include the Quota and
indigenization policies of the Federal Government and restrictions on
employment of non-indigenes at the State level. Etzioni (1964) observes that
certain patterns of State regulation of inter-organizational interaction can be
identified. These include laissez faire, active regulation and indicative
planning. Laissez faire is hardly adopted in modern times. Active regulation
obtains in a country like Nigeria with a large public sector.
In indicative planning, government
lists areas of productive activity likely to attract government support. In
Nigeria, indicative planning exists through development plans which list areas
of priority for investors and direct resources to pre-determined actors of the
economy. The last patter is total control of organizations through state
organizations which are in turn under party control as in the U.S.S.R. No
single pattern is unusually adopted and the combination of modes pursued is
dependent on the policy of the State concerned.
Mcdill (1974) notes that the flow of
people may affect the relationships between organizations, since employees of
government regulating agencies sometimes subsequently become employees of
organizations they regulate; this may affect the pattern of relationship
between the organization and the state.
It must be remarked here that the
organizations particularly in a capitalist economy is not passive clay for the
government to mood into whatever form it pleases. If the organization is looked
at as an open system, it is not difficult to conceptualize it as sending out
processed inputs as outputs into the environment: which influences further
inputs (stress) on the system. In this way, we can account for stability of
organizational structures in the face of environmental stress.
Other organizations constitute another
important component of organizational environment. Modern society has witnessed
a tremendous proliferation of organizations. Using Merton’s (1954)
classification of “role set” and consequent conflicting expectation of partners
in this set, Blau and Scott (1964) observe that every organization like
individuals is engaged in a “role set” with role partners making conflicting
demands. Certain mechanisms at the disposal of the organization enable it to
articulate the contradictory needs of the organization in the role set.
Thus, all organizations interact in an
environment of similar and dissimilar organization. Contributing to this idea
Blau and Scott (1964) assert that organizations must at one time or another and
to a greater or lesser extent interact with other organizations. Drunkenly
(1972) believe that industrial organizations are often dependent upon banking
and financial organizations or upon competitors or customers who often take the
form of organizations rather than discrete individuals. When several
organizations interact, the possibility of conflict cannot be ruled out.
Drunkenly (1972) further observes that an organization is more likely to
achieve its goals if it achieves a high level of separation from environment.
Therefore, the greater the dependency, the loss the effectiveness of the
organization, what may be added here is that, while organizational autonomy are
necessary for their effectiveness, they must not strife for it is to the extent
that they jeopardize their life chances.
Blua and Scott (1960) note that
organizations as a component of the environment constitute role partners. This
points to the necessity for organizations where it is possible to constitute
themselves into mutual benefit associations for the protection of their
interest; to inform role partners of pressures from other role partners; and as
mechanisms for articulating conflicting demands on the organization. Merton
(1954) views organizations as engaging in “organization set”. This means that,
there is a network of expectations on one another. Such expectations are often
incompatible, this point to the inevitability of conflict in an organization or
between organizations.
Organizations must adapt themselves to
the environment otherwise they would be wiped out. Thus, every organization
adopts certain strategies to cope with pressures in the environment. Thompson
and McEwen (1967) listed four organizational strategies for coping with
pressures from other organizations.
These include competition, for
example, for resources, personnel’s and the market. Competition it must be
explained is a relationship of rivalry among organizations involving the
pursuit of the same goals, clientele or scarce resources. The aim of any
organization involved in this process is to secure an advantage over other
competitors. Competition is inevitable in the life of the organization. The
other three strategies constitute those of co-operation namely bargaining,
co-optation coalition. It must also be emphasized that each type of
co-operation involves some loss of autonomy for the organizations concerned
with the highest degree of sacrifice with regard to autonomy occurring in
coalition. Bargaining permits more autonomy than co-optation. The least loss in
autonomy obtains in competition which does not entail direct interaction.
In addition, we may mention here that
organizations may pursue a policy of non-alignment. The essence of this is to
ensure greater freedom and autonomy in the treatment of issues. Yet, another strategy
is that of warfare. This is a rivalry relationship and parties involved aim at
the elimination of the others. Organizations may use espionage and legal action
against opponents.
Finally, we must mention that
organizations usually employ more than one strategy in their daily functioning.
For example, organizations may compete in one sphere but bargain in another.
Even organizations having monopoly status in one sphere such as the market may
still have to compete in other sphere, for example, in the procurement of
personnel. The choice of strategies by organizations is influenced by factors
such as cultural, power and ecological factors.
Much has been written in the
literature on the relationship between culture as an environmental component
and the organization. For example, it has been assumed that the prevailing
culture affects the behaviours of members in an organization particularly their
conformity behaviors. Contributing to this idea, Etzioni (1961) Goffman (1961)
and Coser (1964) indicate that the concept of culture as an environmental
factor is particularly useful in certain types of organizations particularly
educational, religious. Correctional and social movement type of organizations,
but while this idea is useful especially if the roles of the above mentioned
organizations are considered, it must be remembered that no organization is
absolutely free from the influence of environmental culture. Organizational
development can be affected by the prevailing cultural pattern. Pettigrew and
Bumstead (1980) support this when they observe that variations in
organizational culture affect the impact of organizational development
activities.
Another component of the environment
is the public in-contact. This relates mainly to service organizations, such as
hospitals, hotels or restaurants and stores. Blau and Scott (1969) observe that
the influence of the clientele or customers on the organization depends on
whether or not they are organized. Where the clients are not organized, they
depend on the honesty and expertise of the professionals to identify their
interests. Where they are organized, as may be the case in the formation of
business or bank co-operatives, it would be in a position to locate its rights
and interests without necessarily relying on experts or professional. Blau and
Scott’s observation is true because organizations often learn from the response
of clients. Indeed, clients and customers send signals to organizations, the
most conspicuous and serious being the withdrawal of their patronage. But
though withdrawal may constitute a major device used by market organizations to
maintain product quality, it is not always effective after all (Hirschman,
1970).
Technology constitutes another
component of the environment. The environment, therefore, influences the
organization through its technology as it is what the organization utilizes in
its daily operations. Dunkerly (1972) observes that technology determines
various organizational and structural characteristics including its goals, the
division of labour in and general working of the organization, types of
personnel employed, quality of products and pattern of interaction between organizational
units. It must be added that technology may produce negative consequences; it
may lead to the alienation of the workers, may turn the workers into machines
and may throw several others out of jobs.
The review of the literature above
though brief has shown that factors external to the organization can have a
considerable influence upon the working of organizations. The influence of a
series of environmental factors has been examined. It shows that organizations
interact with one another and influence each other to varying degrees. Also,
technology, in its broadest sense, had been discussed as an external influence
upon the internal functioning of an organization. In particular, we discussed
the various ways in which the State with particular reference to Nigeria can
influence the functioning, goals of the organization and inter-organizational
relationship.
We had further observed that the
organization is not passive clay for the environment to mold into whatever form
it pleases. If the organization is looked at as an open system, it is not
difficult to conceptualize it as sending out processed inputs as outputs into
the environment which influences further inputs on the system. This will be
applied to pabod Nigeria Limited in subsequent chapters.
1.3 OBJECTIVES OF STUDY
This study attempts to examine the
relationship between the Pabod Supplies Nigeria Limited and its environment. it
analyzes the influence of other organizations on Pabod Supplies Company. It
also studies the extent to which the clientele influence the organization.
Furthermore, it examines the influence of customers on prices, policies and
decision making of the trading Company.
It will look into how the Board of
Directors is appointed and if some of the board members are engaged in
directing other companies. Where a member is also serving in the board of
directors of other companies, the influence of this on the organization of
Pabod and its strategies will be examined. The study will also try to probe
into how the company adapts itself to both the state and Federal Government
policies especially those related to the ban on the importation of certain
goods and strict control on foreign exchange.
Finally, the study will investigate
how the company influences and is in turn influenced by the state government
which through legislation brought PABOD into being.
1.4 WHY THE RESEARCH IS NECESSARY
This research when successfully
completed, will discuss the strategies used by PABOD to cope with forces in its
environment and will serve as a guide the Managers and Directors of companies
in their business management. the study may also be a pointer to certain
defects in organizations which need attention and modification if the
organization is to survive in its environment and attain its goals.
The research findings would also be
useful to decision makers especially our political leaders and administrators
in their future policy and planning efforts. Academically, it may go a long way
to confirm or modify earlier discoveries in this field. It will also inspire
future studies or research.
1.5 DEFINITION OF CONCEPTS
For the purpose of this study,
environment will be used to mean the surrounding conditions of an organization
which determines the survival or demise of the organization. Political
environment refers to the influence of the Federal and State Government
policies on the activities of organizations. Economic or business environment
is used to mean the relationship between Pabod Supplies Limited as an
organization and other similar and dissimilar business. These are the Kinsway
Stores, Levant’s Stores, K. Clalarams Stores, Bosons Stores, Chanrai Stores,
the Markets, other supermarkets and the Banks.
Adaptation will mean how an
organization reacts to changes in its environment to enable it to survive and
keep sailing. Put more simply, it means how an organization adjusts to changes
both in favorable and unfavorable conditions, in hostile as well as stable
environments. Organization as used here will mean a business establishment,
registered with/and approved by a government that has a system of interrelated
functional parts.
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