Problems Facing Public Enterprises in Nigeria
Problems Facing Public Enterprises in Nigeria – The variety of approaches to the theoretical background of management have provided their own versions of what is meant by such key word as management. There is no generally accepted definition of management as an activity. Management has been defined by different authors. Frost G. (1966:13) defined management as the act of directing human activities in such a way as to achieve the greatest possible measure of conformity with company policy. To order the Complete Project Material, Pay thr Sum of N3,000 to: BANK NAME: FIRST BANK PLC ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM ACCOUNT NUMBER: 3066880122 Then send the Project Topic, Your Email Address and Full Name to 07033378184.
Management is a process of organizing and employing resources to accomplish predetermined objective as well as planning the means of reaching them. Despite the differences in approach, the various authors have one thing in common and that is the planning and directing of resources towards the accomplishment of a set goal.
Public enterprises are mainly government owned business organizations charged with the responsibility of providing services that are of public interest. In Nigeria, public enterprises include Universities, Nigeria Railway Corporation, Federal Radio Corporation, Nigeria Television Authority, water Boards, the Ezzamgbo building material industry etc. Each of these organizations is established by the government, hence the extent of their operation and ownership of property are subject to control by the government. According to William A. R. (1989:46), the major concerns of public enterprises are to provide vital services for people’s welfare and progress and to accelerate development. The question however, is whether these public enterprises have been fulfilling their public functions to the public.
The origin of public enterprises in developing countries dates back to colonial period when many European nations utilized public corporations as an arm of their government for seizing foreign territories (Pabrikant 1976 quoted by Okpata 2004: 360).
Historically, the system of public enterprises began in Nigeria in 1888 when the British Colonial Administration undertook the Railway Transport project in Nigeria from Iddo in the capital city of Lagos to the Hinterland. This was followed by coal mining, electricity and marine which later became ports (Tokumbo 1990 quoted by Okpata 2004). Among the earlier public corporations include Nigeria Railway Corporation (1955), National Electric Power Authority (1952), Nigerian Produce Board and Development Board (1950) among others (Okpata 2004:360).
Still on historical perspective of development of public enterprises in Nigeria, after the political independence of Nigeria in 1960, the influx of public enterprises increased immensely as the Nigerian Policy formulators resorted to the use of public enterprises as viable instrument of implementing development programs.
The major Landmark in the evolution of public enterprise in Nigeria came in with the conversion of public utilities operated under government departments into public corporation. Public utility is an organization that supplies water, electricity, gas etc to people while public corporations are established by the government to cater mainly for the society. The impetus for this change came as a result of the
growing commitment in Britain after World war II to expand private investment in colonies to create new demands on the existing infrastructure and a simultaneous potential organizational model from the way in which the infrastructure were managed to meet demands, was the first reason for the conversion of public utilities to public enterprise while the second reason was the new doctrine of greater state economic intervention in the British economics reflected in the establishment of new corporations which later had some effects in Nigeria. Nigeria witnessed a rapid growth of public enterprises during the post independent era thus emphasis on public enterprises varied with development plans (Okpata 2004 : 360).
Meanwhile, a close and critical look at some public enterprises be it federal, state or local government owned, reveals that something is wrong somewhere. This really calls for a serious investigation but already, Agulua (1991:36) thinks that the current commercialization and privatization of government parastatals and companies throughout the country, would permanently put to an end the inefficiency, mismanagement and lethargy which he feels, had characterized these organizations.
There is no doubt that some of these public enterprises that do not seem to be living up to expectations of the public, have a role to play in the overall National development; the developmental role of the public enterprises is set out clearly in the country’s constitution which provided for the economic objectives of the state policy. To achieve the economic objectives, the government in the Nigerian policy should assume the role of the entrepreneur and set up the public corporations (Ademolakun 1983:47).
This bold step taken by the federal government as a solution to the problem of poor performance of the organizations owned by the government is a clear indication and admission that the general idea of poor management directed against most government or public enterprises has strong base.
To order the Complete Project Material, Pay thr Sum of N3,000 to:
BANK NAME: FIRST BANK PLC
ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM
ACCOUNT NUMBER: 3066880122
Then send the Project Topic, Your Email Address and Full Name to 07033378184.
1.2 STATEMENT OF THE PROBLEM
There is no human endeavour that does not require proper management for its proper functioning. All types of enterprise require good management and performance to function efficiently and effectively.
Public enterprises depending on the goals set out for each are expected to render some welfare services to the people, generate revenue with which to finance developmental projects; undertake certain infrastructural facilities such as ports and harbours and also provide employment opportunities. It is unfortunate that these enterprises being established by government have been viewed as being unable to perform up to the standard expected of them by the public, that they are meant to serve.
This has attracted a lot of attention and general comments in several quarters, both from the government and the governed, the private and the public sector itself. The general idea far and wide is that these public enterprises are suffering from poor management. These comments both positive and adverse need some investigation and that is what this project intend to do. This study therefore focuses on the management of public enterprise in Nigeria: issues, problems and prospects, using Ezzamgbo building materials as case study.
1.3 OBJECTIVES OF STUDY
From the statement of the problem, the research work is meant to achieve the following objectives:
(1) To examine the nature and issues of public enterprise in Nigeria.
(2) To find out the problems facing pubic enterprises especially the Ezzamgbo building material industry.
(3) Another objective is to look for strong measures which if adopted, would definitely improve on the management of public enterprises and to make recommendations where necessary.
1.4 RESEARCH QUESTIONS
1 What is the nature of the problem existing in the public enterprises?
2. What are the strengths and weaknesses of such organization?
3. Does the type of management structure have effect on the operations of the organization?
4. Are there ways of improving or strengthening the operations of the organization?
5. Are there any benefits in having a government owned company?
1.5 SCOPE OF STUDY
The study covers the issues of public enterprises: The basic problems with public enterprises in Nigeria and the problems associated specifically with the management of the Ezzamgbo building materials industry Abakaliki. For convenience sake the researcher has decided to use Ezzamgbo building material industry as a case study.
1.6. SIGNIFICANCE OF THE STUDY
(1) The study will be of benefit to a whole lot of managers, policy formulators, policy makers and executors, all of those that run the affairs of government or public businesses and future researchers on the management of organizations, particularly government or state owned ones.
(2) The study would help to make public mangers or intending young public managers more knowledgeable and informed on how best to achieve high performance and sound management in public enterprises.
(3) The research work is important in that it would bring to lime light, the contributory factors to the problem of poor management in public enterprises and the general implications on the enterprises, the environment and the people, that the enterprises are meant to serve.
(4) The work will also serve as a source of literature for students and researchers who may want to carry out further researches on similar or related issue or topic.
1.7. LIMITATIONS OF THE STUDY
In the course of this study of public enterprises in Nigeria, the researcher encountered some unavoidable constraints. These constraints placed some limitations including time as the work should have taken at least one year to accomplish rather than few months within which the researcher worked.
Furthermore, the prevalent economic crunch and the attendant financial and mobility constraints played another devastating role in preventing the researcher to use certain approaches and methods in the course of this study.
It is an obvious fact that when two men co-operate to roll a stone that either could have moved alone, the rudiments of management have appeared. The first ingredient of management is people because people have to be present before management can take place. Government like any other body operates businesses.
The management of public enterprises, like Ezzamgbo building material industry is not an easy one, this stems from the fact that virtually all the strategic policies and programmes of the organization is strictly governed and regulated by the government in charge. The government first and foremost has to constitute board of directors and also enforce government programmes on the organization through the management offices.
Ezzamgbo building materials is owned by Ebonyi state government and as a result owes its responsibilities to them. It has to act in accordance with the rules and laws guiding it and should not act outside its powers
The brief history and information collected from the company under study shows that the Ezzamgbo building material industry Abakaliki was established on 30th March 1989 under the then Anambra State government. However, the creation of the Ebonyi State in October 1st 1996, changed its ownership status as the company management was handed over to the Ebonyi State government. The Ezzamgbo building material first formed partnership with an Israelites firm called “Diezengorf West Africa Limited”. The firm has been managed by five different managers.
The company produces different products used for building some of its products include:
– Concrete Electric Pole
– Ring Culvert of different sizes
– Blocks of different shapes and sizes
– High tension poles
– The firm also produces Tarazole tiles, which due to vandalization of the plant is no more functioning.
– They also produce products like rod cubes, concrete slabs etc.
The firm has a section that differentiates their products from others. Currently, the firm has staff strength of 48 comprising of senior and junior staff.
As we progress in the course of this study, we would very much appreciate the dynamics and complexities surrounding the management of public enterprises. The emphasis of any government owned or public enterprise is on the overall approach to solve organizations problems and it is through management that day-to-day operations and organizations of any establishment become effective and successful.
The rest of the literature review is arranged as follows:
The general concept of management
The origin of Nigerian Government owned or public enterprises
Public enterprise defined
The concept of public enterprise
Organizational problems of Nigerian public enterprises.
Prospect for a better management in public enterprises.
Nevertheless, government owned or public enterprises have been discovered to be a viable-organization for social-economic development of the society.
2.2 GENERAL CONCEPT OF MANAGEMENT
The concept of poor management is not new to us. It has generated comments or several discussions in the past. However, this review becomes necessary in order to provide a clearer perspective for this study.
In essence, it is reasonable that we first of all know what is meant by management and all that go with it. The most comprehensive definition view management as an integrating process by which authorized individual create, maintain and operate an organization in the selection and accomplishment of its aims (Hanrie 1977:26).
Management or administration is inevitable in any organization, set up for a defined purpose or objective, whether a university, a broadcasting firm, the army, an industry and the like because each consist of human beings brought together in a hierarchical set up, employing instruments both human, financial and material resources all in a bid to attain the objective for which the organization is established.
Following the definition, administration is present whenever and wherever two or more persons come and put their resources together in an attempt to achieve organizations objective. The large numbers of employees have to be supervised, coordinated and controlled. In most industries, the span of activities is nationwide. Often, it is international. Thousands of workers have to be brought together and distribute for work among the various departments which the establishment is composed and are graded in different levels of authority, from managing Directors, Directors and managers at the top to cleaners at the bottom. Everyone has to be assigned his specific function and contribution of each must be towards the objective of the whole organization.
The same is applicable to the state, the church, the army, the media outfits and in any organization in which large number of people are employed at different levels of authority but all working towards the achievement of the establishments’ objective.
Adams (1913:47) it is because of this that made organization and management the main constituents of administration. Administration or management could be public or private. Public administration refers to the practice of administration in the public enterprise; policy and management go hand in hand.
The other type of management is private and it is the management that takes place in the private sector of the society. Having known the meaning of management in a wider sense and when it is public or private, I believe we can now ask when is management poor or what constitutes to poor administration concept.
Though we hinted earlier that we will be ready to admit that we might find ourselves in disagreement with other people over what constitute poor management, the fact remains that the concept of poor management open up the great question of performance, effectiveness and efficiency of a set-up and a quest for good and sound management.
Poor management, like mismanagement is a large subject, it occurs wherever social organization exists (Weave 1973:52) it is not confined to operators of government or state alone. But we shall confine ourselves as it occurs in the public sector, since from the meaning of management which are earlier exposed to the tendency of experiencing poor management, it is quite high in the public sector which include government and its agencies.
Agulua (1991:44) writing about poor management of public enterprises, gave appointment of wrong managers by government to run affairs of her organization as one of the basic causes of poor performance of such organizations. This in effect means that political foundations of such institutions are great constraints to their smooth operations. An efficient public sector continued Agulua, must be able to shift resource in the same manner and way that private enterprises do in response to signals from the market. They cannot even though in most cases, the public sector performs poorly or is castigated for effectiveness and inefficiency since by regulation they are bounded.
Also, writing on the contribution of politics in poor management and administration, Ifedi (1991:23) said that the public enterprise largely manifests the negative impact of political intervention. The effectiveness of the boards depends very much on the caliber of its membership. Ideally, those nominated for appointment to the board of directors should be persons who posses relevant knowledge and experience which would enable them to contribute effectively to the running of public enterprises.
Commenting also on poor management, Njoku (1990: 50) said that non-prosperity and performance of government business was essentially because management principles were not obeyed. For example, appointments are not given necessary to the officer with the requisite qualifications and experience but to the person that belong to the ruling group. Meanwhile, an aggregate of all the management schools called contingency theory of management, says the effective manager or administrator is therefore the individual who is able to analyze and assess a particular situation and then supply appropriate techniques or principles to the situation.
Now, it can be understood that the position of an administrator or manager in an organization is strategic and a keystone to the success, existence or failure of the organization. It is therefore suitable to say that “whatever may be the future, the science of management will be the essential instrument of human welfare. Benard (1941:63), the future of civilized government and civilization itself, rest upon our ability to develop a science and philosophy and practice of civilized society.
Finally, it could be said that in the government organization structure, to achieve effective and efficient management of scarce resources is the most effective instrument to adopt, particularly in our presidential federation with three-tier government hierarchy.
2.3 THE ORIGIN OF NIGERIAN GOVERNMENT OWNED ORGANIZATIONS
At all stages in the development of society, important administration has been carried outside the strictly governmental sphere, from the family in the beginning to the commercial and industrial corporation or company of the modern age.
Organizations of public type arose at an early stage and many have been referred to in this work. One need only mention the chartered companies employed as instruments of overseas development, out of which purely governmental institutions took shape, like the notable East India Company; established during the reign of Queen Elizabeth I. Publicly sponsored or controlled bodies have commonly been established outside the ordinary government to provide communal services of all types.
The modern nation based public co-operation gradually took shape out of earlier types of organization and its distribution has gradually widened in the shape of a corporate body authorized by charter or statue to undertake specific functions, government appointment and controlled to a varying extend, the modern public corporation achieved and advanced from and widely approved status in Britain between the world war (1991-1993).
The public corporation was used in the united state during the first world war to look after public responsibilities that were of business rather than a governmental nature and the form became widely enough employed to lead to special legislation in the shape of the government corporation control Act of 1945 which made such corporations fully accountable to both present and congress. The most noted of the U.S. public corporation was Tennessee Valley Authority established in 1993. The equivalent of public enterprises in France was establishment of public, or public institution a specialized agency set up by the central government or local authority to undertake administrative social services or nationalized industrial or commercial undertakings. It is also on record that both Israel and Pakistan corporations had thirty-six corporations by 1964(gladden; 1992: 382).
In the case of Nigeria, the origin of government enterprises or public corporation could be traced to colonial days. The earliest example of public enterprise emerged during the British colonial rule in form of marketing boards in 1936, and the conversion of certain government departments into corporation in the immediate years after the second world war, notably the Nigerian Railway corporation and the Nigerian ports Authority. However, it was not until the decade of decolonization (1960-60) that the emerging nationalist led government articulated a clear role for public enterprises as instruments for promoting national development (Ademolakun; 1983: 47). The development role of public authority is given a boost and set out clearly in the country’s constitution. According to the constitution; the state shall:
(a) Control the national in such a manner as to secure the maximum welfare, freedom and happiness of every citizen on the basic of social justice and equality of status and opportunity.
(b) Without prejudice to its right to operate or participate in the areas of the economy other that the state shall direct its policy towards ensuring :
(i) The promotion of a planned and balanced economic development;
(ii) That the material resources of the community are harnessed and distributed as best as possible to serve the common good.
(iii) That the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individual or a group, and
(iv) That suitable and adequate food, reasonable national minimum wage, old age care and pensions, and unemployment and sick benefits are provided for all citizens.
To achieve the above economic objectives, it is obvious that the government in the Nigeria policy must assume the role of entrepreneurs. In the earlier chapter, we made the point that expansion of the scope of governmental activities led to the situation in which government ministries as conceived under certain governmental were considered inappropriate for managing some of the new activities for which government have assumed responsibility.
Post independent governments, An Africa states have articulated economic objectives that assign more or less critical economic roles to the state. At one end are government like those of Algeria, guinea, Malagasy and Tanzania where the economic role of the state is more significant than which exist in Nigeria, and at the other end are countries like Cameroon, Kenya, Gabon and Ivory Coast, where the economic role of the state is not as significant as the case in Nigeria (Ademolakun; 1983: 48)
2.4 PUBLIC ENTERPRISE/GOVERNMENT ORGANIZATION
The title of public enterprise encompasses “all corporations, authorities, Boards, Councils and limited companies in which government has full or majority interest”.
Public enterprises are established by both federal and state government and they vary widely in terms of their functions, types of organization, and nature of operations. By 1981, the number of public enterprises established by the federal government was put at 168 (presidential commission on parastatals, 1981). The total figure for the state may not be less than the figure of the federal.
As bodies set up to perform certain defined functions, parastatals have existed in Nigeria for a long time, and the basic principles governing their management have been discussed repeatedly and extensively. There has been general agreement on the more fundamental issues, namely, that parastatals should be directed by Boards which should be concerned only with ensuring the formulation and enunciation of each parastatals should be the task of the chief executive and his staff; and lastly, that government should control the affairs of the parastatal through the interaction of a minister with the chairman and members of the board. However, differences of opinion on the part of commissions and working parties as to what should constitute “day to day” management have created problem resulting in the emasculation of the authority of parastatals.
The purpose of setting up public enterprise has been stated in a number of publications issued by government. It is well known that public enterprises are established to discharge functions and attain objectives more easily achievable outside the civil service structure and procedure. This statement of policy is in consonance with the original intension of government in transforming some government departments like the Nigeria Railway into statutory corporation. The country is in fact growing up and we must be prepared to change our methods to suit the times. The Nigeria Railway of course, play a major part in all these economic development, and the time has come when we should free it from the close departmental controls under which it has so far operated if it is to respond to the new demands being placed upon it.
I think I can do no better than quote from a reply to a question in the House of Representative given by the vice president of the party which now follows the leader of the opposition. In August 1952, late chief Bode Thomas stated that; “It is the government’s view that a public utility of this kind is better operated on quasi-commercial lines by a statutory corporation than by a government
rigidity of control and the established formalism which are proper and necessary in the operation of a government department are not only to provide the service required by the public but should do so on sound financial line”. That in my view sets our governments’ case vary clearly.
It is clear from the foregoing policy statement that public enterprises are conceived and established as organizations that exist outside the civil service so that they could operate with great degree of freedom and flexibility. For reasons of Nigeria colonial heritage from Britain, our earlier type of public enterprises operation were patterned after the British model.
2.5 ADMINISTRATION OF PUBLIC ENTERPRISES
For more understanding of the concept, “public enterprises or government owned organization, we have to know the meaning of organization as well as government. Organization is a formal structure brought about by the arrangement of personnel, functions and material for goal achievement.
Chester Benard described formal organization as a system of consciously coordinated activities at two or more persons. He sees organization as group of people working together under authority towards achieving goals that mutually benefit
the participants and the organization. Benard (1948: 72) organization could be viewed as a body such as a company or corporation, or it could be used to mean method of ordinations activities.
Organizations has types and are classified into types based essentially on their main purpose. Manager and management practices and problems vary among the several types of private sector organizations.
2.6 ORGANIZATIONAL PROBLEMS IN NIGERIA PUBLIC ENTERPRISES
The recalls of the findings of the series of Tribunals and commissions of Enquiry set up by government reveals degree of inefficiency, waste and down right fraudulent practices perpetrated in public enterprises. Many of the enterprises are not sufficiently responsive to the rapidly changing requirements of a dynamic economy like ours. For instance the Nigeria Railway corporation’s whose system is twenty years out of date lacks the rolling stock to service even its existing system and which has become totally unreliable as a means of transport either for passenger or goods.
Some of the problems facing public enterprises are: Problems arising from incoherent and ambiguous defunction of objectives; inappropriate organizational structure and procedures; political interference, out model personnel practices, lack of delegation, deficiencies in investment planning and accounting and budgetary systems.
“Over the last three decades, public enterprises have become an increasing tool of public intervention in the development process. Their primary purpose is to stimulate and accelerate national economic development under conditions of capital scarcity and structural defects in private business organization. There are also basic considerations arising from the danger of leaving vital sectors of the national economy to the whelms of the private sector often under the direct and remote control of foreign large scale industrial combines. Public enterprises are thus crucial in Nigeria’s Quest for true national economic development and self-reliance.
In the late twenties and the early part of the eighties the phrase “Government sick babies” was used to describe such public enterprises as N.E.P.A. now Power Holding Company, Nigeria Railways, Nigeria Airways, and then PXT now part of NITEL. This derogatory phrase, no doubt was coined to describe the inefficiency, ineffectiveness, poor performance etc that have characterized such enterprises.
The problems are now described below:
(1) PROBLEM OF AMBIGIOUSS OBJECTIVES
Quite often the objective for which public enterprise are established creates ambiguity. It is left with the managing boards and the management of the enterprises to interpret the objectives in the way they will understand them often with devastating consequences both enterprises and the national economy as a whole.
A good case in this point is the creation of urban development authorities in many of our state capitals to undertake responsibility within the national jurisdiction of local government activities. It creates confusion in the minds of the ordinary people and perpetrate jurisdictional fraction between different arms of the same government.
(2) INAPPROPRIATE ORGANIZATIONAL STRUCTURE
The creation of new public enterprises is usually determined by the government as a political solution to a perceived economic problem. Some evolve from the status of a government department while others are created from the scratch. In all cases the traditions in Nigeria is for civil servants within the supervising ministry to transfer themselves as the founding members of staff of the new organization, instead of permitting the board of the enterprise to advertise, select and appoint its own staff. As a result, most new public enterprises start off on a wrong footing.
Example is when N.E.P.A was created from the merger of Electric Corporation of Nigeria (ECN) and Kainji Dam Authority, it was the staff of these organizations that formed management of the new N.E.P.A. Similarly when the NNPC was established, instead of recruiting personnel experienced in that industry, most of the management staff were drawn from the ministry of mines and powers whilst such persons may be technically qualified. Their lack of experience in modern business management makes them less suitable.
This problem of inexperienced staff may have affected the Ezzamgo building materials as well.
(3) POLITICAL INTERFERENCE
A problem common to most public enterprises in Nigeria is their use of “Employment agencies”, and this is whether it is military or civilian administration. In a civilian setting, board members are drawn from the ranks of political parties stalwarts who were either election casualties or simply party faithful. Even where the appointee is suitably qualified the appointment is made in such circumstances as to leave no doubt in the minds about the relative merits of his political acceptability and qualification. Top executives are appointed more because of their demonstrated loyalty to a political party rather than their qualification or experience and they in turn use their influence to direct appointments and promotions below them to reflect their political sensitiveness.
(4) OUTDATED PERSONNEL PRACTICE
This is a practice which contributes to over staffing. Just as much political interference, and the nepotic actions of top executives, recruitment and promotion in most enterprises are made on consideration other than merit and the following evidence of a witness at a tribunal of inquiry into the operations of the public enterprises in Nigeria is equally true and applicable to most public enterprises in the country (Nigeria management review 1986).
Where one man has all the powers and others must necessarily be powerless and when one man can alone confer wealth and honor, the other can only gain it pleasing him. His pleasure, there become the only test to achieve all vigor and all independence of life and thought are necessarily abandoned (Nigeria Management Review June 1986).
Other personnel problems are shortage of trained and educated people at all levels and attitude of workers towards work in the public sector. It is the cumulative effect of these factors that accounts for the inefficiency of our public enterprises of which the Ezzamgbo building material is not exempted.
(5) LACK OF DELIGATION
Most management centralize all power in themselves. Many enterprises particularly the large utility undertakings are reluctant to delegate authority resulting in over centralization and consequent inefficiency. The size and complexities of such entities such as the Ezzambgo building material operating on a country-wide basis over a vast land area and in the face of inadequate communication facilities make for remoteness between management and others, thereby creating inefficiencies.
DEFICIENT PRE-INVESTMENT STUDIES AND WRONG LOCATION OF INDUSRIAL PLANTS
The history of the Nigeria’s public enterprise is replete with cases of poor pre-investment and feasibility studies couple with wrong decisions on the location of industrial plants. The number of projects that have failed either because of inadequate feasibility study or wrong location or at times both are uncountable. In many cases the failure of an enterprise is due to lack of competent and detailed pre-investment study. At times the only study undertaken is that performed by an interested foreign machine pedlar whose primary interest is to sell the equipment he has to put up such prospect for the enterprise, which deliberately ignore some vital considerations such as availability of raw material, market for products to be manufactured etc.
There are countless still born public-enterprise where operating equipments have been acquired and paid for but remained stored up in crates either because the factory-building are yet to be completed or because project was wrongly conceived and inadequately funded. Any established project that has no chance of viability will continue to consume resources without returns.
DEFECTIVE ACCOUNTING AND BUDGETING SYSTEM
The accounting system in Nigeria public enterprise vary in quality and sophistication, but generally, there is a tendency towards a mixture of government and private enterprises acting with emphasis on expenditure control.
There is usually a complicated system of checks and counter checks which tend to hamper the efficiency, and timeless of action. Some public enterprises have not rendered published accounts for over five years. Top management become involved in vast and totally unnecessary routine paper work without improving the efficiency, financial control or accountability, resulting in financial and business decisions being taken without facts.
The main problem is that scarce attention is paid to generating revenue, and in some cases, the little that is collected is pilfered.
Over-staffing is a serious problem which public enterprise must deal with as a matter of urgency if they are to become as cost effective as they should be. Over-staffing has a demoralizing effect on the underemployed persons. It breeds indolence which lowers the general tone of efficiency of an organization.
It also imposes on the organization a crippling wage bill whose size is totally act of proportion with productivity.
The problem facing Nigeria’s public enterprises are endless. We have only attempted to highlight the most obvious ones. There are for examples, problems of widespread financial dishonesty and corruption practice with almost total impunity by practically all levels of personnel in some organizations. There are problems of the quality of goods and services produced and or distributed by these entities, discourtesy and customers and general lack of discipline.
The basic problem of organizations especially the one under study “Ezzagbo building material, is obsolete equipment. Because the facilities have grown old and due to the financial problem or inadequate funding of the organization from the government being experienced by the corporation and the apparent government insensitivity, such obsolete equipment cannot be replaced but instead managed like that. The economic recession helped to aggravate the problems generated by insufficient fund or capital base.
The other problem is the poor management of available resources. Opinion has it that the management is short sighted, it lacks vision, initiative and managerial competence to manage effectively and efficiently the affairs of the corporation. The management lack direction, cohesion and cohesiveness to carry the staff along. It does not set its priorities right and aggravates the worsening state of affairs in the corporation. There is unproven mismanagement of available resources including funds. Problems of basic working facilities and materials which the management can easily solve with revenue generated internally remained unsolved. Such problems include lack of operational vehicles, replacement of minor faulty equipment, provision of stationary for day to day administration and operation, lack of fund for vehicles and standby generators.
Also there are no motivations and incentives to staff as it is indifferent to making available working materials and finance needed for the execution of routine assignments. This affect the performance of staff generally and the quality of programmes and productions of the Ezzamgbo building material industry.
From the management point of view, one of the problems is the non-performance of staff in their assigned responsibility. Since the staff cannot work to perform, it makes it absolutely difficult for management to perform. The unwillingness of staff to co-operate with management creates more problems and make some problems unsolved in the shortest period.
Finally, it is clear, though unfortunate, that at high levels of authority, apparently the corporate, and even in the running of the affairs of the staff to which the corporate belongs, there is no more objective but rather interest serving exercise.
2.8 PROSPECTS FOR A BETTER MANAGEMENT
The myriad of problems not withstanding, with the management taking the lead in discipline itself and taking the bull by the horn by adopting and applying new effective management skills, strategies and methods, other than whatever method it is now using, the corporation optimistically would regain public confidence. Management if it reasons again, and it goes back to set its priorities right adopt some progressive management techniques, including the practice of management by objectives (MBO), It will achieve much using management by objectives.
“If it want to achieve excellent performance, it is logical that it should become increasingly aware or concerned with the issue of what they could be realized. This is more so in view of the fact that by now has become clear that annual government financial-outlay on the corporation is limited. If it were to generate the bulk of its funds through advertisement, the extent of patronage it receives is bound to be dependent on the kind of services it provides to the public
Seminars and trainings have to be organized for staff to enable them understand the concept of MBO, both staff and management would chart a new course of path.
An effective means of controlling and monitoring deviations from the new path would be devised for prompt identification and effective correction.
Management would then know the need to provide staff with working materials and then motivate staff adequately by giving them incentives and training them for optimum performance.
With adequate motivation, participative management, performance monitoring and supportive followship, other internal problems of the organization would go underground and the corporation would prosper.
The achievement of workers optimum performance rests with the management.
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This article was extracted from a Project Research Work/Material Topic “
MANAGING PUBLIC ENTERPRISES IN NIGERIA; ISSUES, PROBLEMS AND PROSPECTS”, A CASE STUDY OF EZAMGBO BUILDING MATERIAL INDUSTRY ABAKALIKI.”
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