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EFFECTS OF SUCCESSION PLANNING ON ORGANIZATIONAL PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

Whether public or private, the organization’s survival is based on its ability to bring on board and sustain high quality workforce over a period of time. Many organisations are currently facing mounting pressures to ensure their sustainability, flexibility, and responsiveness to the increasing uncertainty and limitations in the economic world. Ultimately, increased turbulence in the employment environment, characterized by organizational restructuring, funding uncertainties and increasing program complexities have substantial effects on the ways organisations respond to workforce replacement (Odhiambo, 2014). At a global level, succession planning in the recent past has received more attention not only as a concern for the management of human resources, but also as institutional strategic management component for ensuring performance and growth. In a survey by Rothwell (2010), top corporate companies revealed that the main reasons for having succession planning programmes are attributed to the challenge to maintain a pool of potential successors.

The rate of employee turnover in the changing and highly competitive business environment is on the increase in most organizations in the world today (Sullivancited in Stephen et al., 2013). This phenomenon has led to changes in workforce demographics, global competition, mergers, acquisition volumes, and technology that call for the act of developing a pool of talent to take up leadership responsibilities and push the businesses to the next level. Although some managers feel that the problem of high attrition rate is insignificant because of the high rate of unemployment, it is however threatening to add another impediment to the growth and survival of many firms (Pattanayak, 2005).

In Nigeria firms that undergo shrinking or close up do so because of lack of competent managers that are able to motivate employees to stay longer (Adewale, 2011). On the contrary, employee turnover can be quite expensive. Beside recruitment and selection expenses, the cost associated with creating new employee records in the human resource department, establishing payroll records in the accounting section and the provision of safety equipment are costs incurred when employees leave hence the need to manage succession planning properly (Woods, 1997). Succession planning represents a deliberate and systematic effort to ensure leadership continuity in key positions, retain and develop intellectual and knowledge capital within key employees for the future, encourage individual advancement, ensure the stability or “bench strength” of key personnel, provide an overarching approach to continue effective performance of the organization, and organize concerted programmes for the development, replacement, and leveraging of key people to ensure a deep talent pipeline (Schoonover, 2011).

1.2       Statement of the Problem

Every organization needs a process of anticipating and making provisions for the movement of people into, within and out of the organization. Organizations constantly face challenges which are not only associated with the perpetual evolving social, political and economic environment, but also with respect to rapid changing demographics of their workforce.  Today’s environments are changing rapidly that organizations are facing serious unpredictability and uncertainty, which sometimes causes instability in the business operations. In this unstable environment, organizations need to rely on the most important assets: their people. Organizations need to strategize on how to motivate and connect their employees in order to create competitive advantage that would ultimately lead to higher productivity. Organizations may consider methods like succession planning and management to promote their employees’knowledge, skills, talents, and capabilities to tackle problems created by the challenging environments.

In today’s dynamic world where competition is high, work is fluid, environment is unpredictable, organizations are flatter, and the organizational configuration frequently changes, the old view of succession planning by defining specific people for the specific job does not work. Nowadays, organizations need a group of high potential people at all levels of their organizations. Developing general competencies, creating flexibility and creating the leadership potential at all organizational levels is a wisely action in today’s organizations. It has been usually agreed that the purpose of researching is to identify a problem and provide adequate solution to such particular problem confronting the organization. This research therefore is expected to probe the likely problem associated with succession planning and organizational performance with a special reference to Flour Mills Nigeria Plc.

1.3   Objectives of the Study

The study will be conducted with the following objectives;

a. To investigate the effect of succession planning on organisational performance.

b. To explore the relationship between corporate leadership planning and organizational growth.

c. To examine if succession planning allows an organization to prepare for the absence of an individual.

d. To highlight the current challenges hindering corporate succession planning in Flour Mills Nigeria Plc.

1.4    Research Questions

The undertaking of this study will be guided by the following research questions:

1. Is succession planning a significant predictor of organisational performance?

2. What is the relationship between corporate leadership planning and organizational growth?

3.   Does succession planning allow an organization to prepare for the absence of an individual?

4.  What are the current challenges hindering corporate succession planning in Flour Mills Nigeria Plc? 

1.5   Research Hypotheses

The following hypotheses will be tested in the course of this study:

Hypothesis 1:

Ho: Succession planning is not a significant predictor of organisational      performance.

HI:Succession planning is a significant predictor of organisationl performance.

Hypothesis 2:

Ho: There is no significant relationship betweencorporate leadership planning and organizational growth

HI:There is a significant relationship betweencorporate leadership planning and organizational growth

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