THE EFFECT OF SUCCESSION PLANNING ON ORGANIZATIONAL RESILIENCE IN SELECTED MANUFACTURING COMPANIES IN RIVERS STATE
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THE EFFECT OF SUCCESSION PLANNING ON
ORGANIZATIONAL RESILIENCE IN SELECTED MANUFACTURING COMPANIES IN RIVERS STATE
CHAPTER ONE
INTRODUCTION
1.1 CONTEXT OF THE PROBLEM
The
corporate world exists in a dynamic environment with external factors far beyond
the control of managers and internal factors generated within the organization.
Managers are constantly striving to improve the performance of their
organization. Regardless of the type of
and purpose of an enterprise, its leaders seek to enhance the way an
organization conducts its business by adopting management practices which aim
to increase effectiveness, efficiency and safety, also being resilient.
Alastir
(2010) asserts that as our society becomes more complex and independent, we are
becoming more vulnerable to disruptive events form threats and hazard.
Alastir contends that the aim of
building resilience is to remove or reduce the exposure of organizations to
threats and hazards by developing protective measures which claim to reduce the
likelihood and consequences of a disruptive event, by preventing when possible,
responding effectively and efficiently when an event occurs, and by recovering
as quickly and completely as possible.
The
concept of organizational resilience was borne out of the need for
organizations to constantly keep themselves abreast of obstructions that may
erode their entire existence and thereby take adequate precautionary measures
which are regarded as anticipatory measures. The importance of organizations
being resilient has a far reaching effect on the position of the entire
enterprise. Scientists are now finding that the ability of good people to
bounce back from bad situation, to continue to move forward under stress is a
behaviour which should be nurtured and can infact be learned. Organization need
to constantly respond not just to one time crisis or disaster event but to
continuously anticipate and adjust to trends that permanently impair the
earning power of the organization.
This
is also affirmed by Mallak (1998) who opines that while disaster and crisis
situation necessitates resilience for organizations, the unexpected events of
most of the day-to-day operations of today’s unpredictable business environment
require similar responses by employees too. The ability of any organization to
maintain its standard and remain viable in the face of many perturbations today
is a reflection of how resilient such organization could be. This is affirmed
in Umoh (2009) who asserts that social organizations have to absorb environmental
disturbance of all kinds in the process of achieving goals or objectives. He
contends that the regulatory capacity of a subsystem is limited to its variety
i.e. complexity. The regulatory must generate higher variety than that of the
situation being regulated, otherwise it is impossible to bring and keep the
situation within the set of desirable states.
This
is also in consonance with the law of requisite variety cited in Umoh (2009)
that “only variety absorbs variety”. The concept of a system being variable can
be seen in eh context of how resilient it is. How proactive manages of
organizations are in dealing with crisis, how prepared they are a measure of
their viability.
Koontz,
O’Donnel and Weihrich (1980) posit that an organized enterprise does not exist
in a vacuum rather it is mutually dependent on its external environment, it is
part of a larger system such as economics system, the industry to which it
belongs and society. This implies that certain environmental factors such as
natural disaster, economic factors, government regulations, socio-cultural
factors, political instability, employee turnover are disturbance that can
affect the entire business operations of an organization.
Umoh
(2009) maintains that organizations must be at a homeostatic equilibrium or
steady state being an open system it is and develop an error control measure as
well in the form of feedback adjusters/adjuster organizers such as
environmental inputs specialized facilities which check and forestalls the
organization enabling it to live on negative entropy.
Drucker
(2008) asserts that as baby boomers leave the workplace, they are also taking
the depth of their experience with them, thus, there is not only a decline the
number of workers, but there is also a shortage of experienced workers, and
lack of documented practices. Hence, he contends that an organization has to
provide today the men and women who can run it tomorrow. It has to renew its
human capital by steadily upgrading its human resources. The next generation should
stand in on the shoulders of their predecessors, establish a new “high
business” baseline for the generation after them. For Drucker, an organization
that just perpetuates today’s level of vision, excellence, and accomplishment
has lost the capacity to adopt.
Several
authors have looked at the concept of resilience from different angles.
Archeologists and anthropologists have written provocatively about studying the
resilience of parts, present societies.
Holling
and Gunderson (2002:25-27) have considered resilience from the ecological view
relating to biological studies using flexibility “adaptive cycle” to analyzes
specific ecosystem trajectories against this theory. They also related this to
families which may integrate due to divorce, but that reconstituted families
follow the designs deemed “acceptable” by culture or religious institutions,
including most parent child nuclear families. According to Redman and Kinzig
(2003) archeologists, ecologists and economics have conceptualized on adaptive
cycles and anarchy. However, the conceptualization made by holling in the field
of ecology is being widely adopted and is serving as the basis for same
compelling international collaborations devoted to enhancing resilience and
regional sustainability, largely through auspices of the Resilience Alliance.
In
Ostrom (1999) and Westely (1995)
participating economists have considered resilience useful incorporating
notions of markets, pricing, and future discounting into refinements.
Studies
on resilience and succession planning have been examined independently. It has
also been related to other concepts. The researcher attempts to close this gap
by defining succession planning as to how it affects organizational resilience.
1.2 STATEMENT OF THE PROBLEM
Organizations
maintain our economy; they provide jobs, goods, service and a sense of
community. The increasingly globalized nature of the modern world has led to
organizations facing threats that often become crisis (McManus, Sonia, Therese;
2008). The implication of an ageing population on organizations will be
substantial in terms of employee cost, flexibility and availability (Alastir;
2010).
Manufacturing
companies in Nigeria, particularly Rivers State have been facing tremendous
challenges such as epileptic power supply, the country’s deficient
infrastructure including bad nature of the roads, credit squeeze, low
purchasing power, high cost of custom duties for importation of raw material
used in local production, corruption, poor management, production of fake
products, youth restiveness as witnessed in kidnapping and recent bombings and
many more are some of the eminent problems so many manufacturing companies in
Nigeria.
Manufacturing
companies are also faced with employee turnover arising from retirement,
illness, death, search for better opportunities in other companies, economic
situations arising from inflation, religious/cultural issues, competition etc.
The external environmental factors are the most threatening because some of
them are far beyond the control of managers.
It
was reported in Vanguard Newspaper of November 13th, 2011, that
manufacturers identified energy supply as one the challenge facing the sector.
Source of energy and high cost of production are two major problems
manufacturing companies are facing. These problems have led to some employees
leaving their organizations for better opportunities. When employees move away
from their companies, the knowledge gap created by their absence generates
significant costs to the employers, but even more trouble is the potential loss
of institutional knowledge vulnerability. This calls for need for a resilient
team of management that is committed to actively manage resilience issue in
these manufacturing companies.
Succession
planning is a well-designed management tool which can address these problems
arising from loss of key employees, thereby preparing the organization in
advance. Succession plans are anticipatory measures and anticipatory measures
according to Umoh (2009) anticipates and responds in advance to threats.
Steve
(2010) asserts that succession planning focuses on managing risk and ensuring
continuity across all level of the organization- risk of retirees taking their
skills and knowledge with them and leaving nothing behind, and risk of retiree
taking their skill and knowledge with them and risk of losing high value
employees to competitors.
Daniel
(2009) asserts in a study earlier this decade by the Bureau of Labour statistic
reported that 17 percent of boomers holding executive and managerial positions
were expected to leave their career by 2010. Forty percent (40%) of the skilled
labour force will leave the manufacturing workforce during the next five years
and will reportedly cost companies between $50 million and hundred million
dollar ($100m), according to a June 2005 study by Advanced Technology Service
and Nielsen Entertainment Consumer Products Group. This problem could only be
addressed through well planned succession. Succession planning focuses on training
those that will occupy executive positions.
1.3 CONCEPTUAL FRAMEWORK |
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Source:
The
above model has been developed borrowing from the work of several authors.
Berke (2008) conceptualized management development as crucial to for succession
planning and necessary for business continuity. Caldwell, C. Ann (2007)
conceptualized leadership/management development as one of the dimensions of
succession planning, while Bell,C. R. (1996) conceptualized mentoring as one of
the dimensions of succession planning. He emphasized that whole succession
ensures continuity and providing ready candidates for vacancy development
ensures that employees have the necessary knowledge and skills to perform their
jobs effectively and prepared for future assignments. Kurt, J. Engemann and
Douglas, M. Handderson (1994) conceptualized risk management, business
continuity and emergency response as measures of organization resilience.
1.4 PURPOSE OF THE STUDY
The
general purpose of this study is to empirically evaluate the effect of
Succession Planning on organization Resilience.
The
specific objectives are:
1. To
examine the effect of management development on organizational resilience.
2. To
evaluate the effect of mentoring on organizational resilience.
3. To
evaluate the impact of structure on the relationship between succession
planning and organizational resilience.
1.5 RESEARCH QUESTIONS
1. To
what extent can management development affect organizational resilience?
2. To
what extent can mentoring affect organizational resilience?
3. To
what extent can structure moderate the influence of succession planning on
organizational resilience?
1.6 HYPOTHESES
To
add direction to this study the hypotheses will be stated in a null form as
follows:
H01:
Management development does not have any significant effect on risk management.
H02:
Management development does not have any significant effect on business
continuity.
H03:
Management development does not have any significant effect on emergency
management.
H04:
Mentoring does not have any effect on risk management
H05:
Mentoring does not have any significant effect on business continuity.
H06:
Mentoring does not have any significant effect on emergency management.
H07:
Organizational structure will not moderate the effect of succession planning on
organizational resilience.
1.7 SIGNIFICANCE OF THE STUDY
This
study is intended to help the companies under study to be aware of the threats,
the environmental hazards facing their business and how to deal with these
challenges through strategic human resource planning. The significance of this
study will be categorized into two areas
(1) Theoretical significance
(2) Practical significance
1. Theoretical Significance: This study is
intended to help academician an scholars who might be interested in this area
of research in adding to their wealth of knowledge by broadening their scope in
this area.
2. Practical Significance: The study will
help companies, policy makers and other users of such information relating to
succession and organizational resilience in dealing with situations arising
from resilience and how to pan for succession.
1.8 SCOPE OF THE STUDY
Pfeffer
(1982) has argued that the level of or unit of analysis is determined by the
theoretical content of the criteria value. In this study, the study units are
organizational level not individual or group level. The organization is of two
micro and macro level. The study here is a macro level analysis. It is a deductive
study, the researcher is pulling from a major knowledge.
The
geographical or survey area is a sample of manufacturing companies in Rivers
State.
1.9 LIMITATION
The researcher found it difficult to gain
access to these companies under study. The respondents posed a lot of problem
in retrieving data from them as some were unwilling to respond fine.
Financial
constraints were one of the major problems in this research work.
1.10 DEFINITION OF TERMS
Business Continuity:
Business continuity is the activity performed by an organization to ensure that
critical business functions will be available to customers, suppliers,
regulators, and other entities that must have access to those functions.
Delegate:
To give part of your work, power or authority to somebody in a lower position
than you.
Development:
The gradual growth of something so that it becomes advanced, stronger, etc.
Emergency Management:
Emergency management is the generic name of an interdisciplinary field dealing
with the strategic organizational management processes used to protect critical
assets of an organization from hazard risks that can cause events like disaster
or catastrophes and to ensure the resilience of the organization within their
planned life time.
Emergency:
A sudden serious and dangerous event or situation which needs immediate action
to deal with it.
Management Development:
This is the process by which managers learn and improve their skills not only
to benefit themselves but also their employing organizations.
Management:
The act of running and controlling a business or similar organization.
Mentor:
An experienced person who advices and help somebody with less experience over a
period of time.
Plan:
(something) (for something) to make detailed arrangement for something you want
to do in the future.
Resilience:
The ability of people or things to feel better quickly after something
unpleasant, such as shock, injury etc.
Risk Management:
the identification, analysis, assessment, control, and avoidance, minimization,
or elimination of unacceptable risks.
Risk:
to somebody or something the possibility of something bad happening at some
time in the future; a situation that could be dangerous or have a bad result.
Succession Planning:
is therefore the process of making a detailed arrangement for someone to take
over an official position or title.
Succession:
The act of taking over an official position or title; the right to take over an
official position or title, especially to become the king or queen of a
country.
1.10 ORGANIZATION OF THE STUDY
This study is divided into several chapters.
This will ensure that the discussions are clear and consistent with the
distinct areas covered by each chapter. For the purpose of this study, the
discussion are divided into five chapters
Chapter One:
The first chapter basically forms part of the introductory elements of this
paper. It offers a discussion on what the study intends to tackle and what
organizational issue it seeks to resolve. An introduction to the general
importance of organizational resilience, a background of the problems in the current
environment of manufacturing companies in Nigeria, and the rationale why and
how this general problem needs to be addressed shall be indicated in this
chapter. Hence, the first chapter shall build the foundation on which the
subsequent chapters will relate.
Chapter Two: The second chapter shall provide for the
review of related literature pertaining to succession planning, organizational
resilience and contextual factor, structure. On a more specific note, the
discussions shall fall squarely on how the existing literature points to the
concepts and issues mentioned in purpose of this study. Moreover, this chapter
will also provide some description of past studies that shows similarities with
the intended ends of this study. These discussions will then be sued to relate to
the actual findings of this study.
Chapter Three:
The third part of the paper shall cover the methods and procedures used in this
paper. Simply, the discussion on this chapter shall cover the models used in
the data acquisition processes in the paper. Statistical tools as well as other
concerns which the researcher encountered during the course of the study shall
be taken into account. This is to provide a transparent account on how the data
is acquired and to show that the data used in the analysis are credible.
Chapter Four:
The fourth chapter shall present, interpretation and analysis of the data
acquired from the respondent companies. In this part of the study, tables shall
be used to summarize the findings made by the researcher process. Specifically,
the processed data from the quantitative research shall be discussed and
related to the objectives of the paper. In addition to that, the discussions
shall also relate the findings on the existing theories pointed out in the
earlier literature review.
Chapter Five:
The last chapter shall be giving out the summary, conclusion and
recommendations based on the findings presented in the preceding chapter. In
doing so, this chapter will succinctly specify the implication of the study on
the overall field of organization.
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