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THE APPLICATION OF PRODUCTION SKILLS IN THE MANAGEMENT OF BUSINESS ORGANIZATION TO GAIN COMPETITIVE ADVANTAGE

CHAPTER ONE

INTRODUCTION

 1.1 Background of the Study

In today’s dynamic and competitive business environment, firms are exposed to challenges with meeting the increasing market demands and expectation, handling sophisticated requirements, and technological obsolescence. Thus, innovation is seen as a means of gaining sustaining performance and growth. It has been an area of intense research (Fartash & Davoudi, 2012). Abbing (2010) posits that innovation strategies are that part of strategy that deals specifically with the growth of an organization through the development of new products, services, processes or business models. An innovation strategy then becomes a plan of how to use the development of new products, services, processes or business models to achieve certain objectives. Consequently, to create growth, sustain performance and develop performance in a dynamic and changing environment, innovation becomes the way (Cottam, Ensor & Band, 2001). Also, innovation is an important tool that provides opportunities to new inventions and building of new markets, when the entrepreneurs are sure about the market, they will hold longer (Kuhn & Marisck, 2010, cited in Ori and Theuri, 2016).On this note, managing innovation depends on interrelated basic objectives of competitiveness: improving product quality and the firm’s entire technological quality (Pratali, 2003).However, organisations need to differentiate themselves from other players in the market. Usually, leading companies continuously use innovative strategies to create an edge over their competitors (Goksoy, Vayvay & Ergeneli, 2013). The concern for every manager has been to achieve a sustainable competitive advantage that ensures long- term survival. Because innovation is a key driver of sustained competitive advantage and sustained business growth, the management of innovation is a central concern for these firms (Igartual, Garrigos & Hevas- Oliver, 2010). Innovation is understood in the sense of new products, new technologies, new equipment acquisitions, improved management or financial methods, the improved performance of the labour force, and the improved information system. Implementing innovation ensures competitive advantage (Lucia, 2012).

Successful companies understand that to stay in the business and achieve profitability, they need to always innovate. Organisations can successfully create new products and services that delight customers and exceed market expectations if they develop functional innovation strategy that provides organizations with the framework for success. Absence of innovation increases customers’ dissatisfaction as customers will patronize the organizations that have improved products and services. Advances in information and communication technology provide substantial strategic opportunities for organizations to use innovation to gain competitive advantage which involves creating a new means of producing, selling, and/ or distributing an existing product or service. Administrative innovation refers to creation of organization design that supports production, and delivery of products and services (Hellriegel, Jackson and Slocum, 1999). The major concern for managers is how to achieve a sustained competitive advantage that ensures long- term survival. Since innovation is a key driver of sustained competitive advantage and sustainable business growth, the management of innovation becomes a central concern for all firms (Igartual et al, 2010). Innovation provides a firm with the capability to capture a substantial level of market share and create an entirely new market opportunity that enables a firm to reap supernormal profits. The slow reaction of competitors to innovation strategies of a firm will yield competitive advantage to the firm (Lim, 2010). Prestwood & Schumann (2002) posit that innovation is the means by which enterprises create values and wealth. Enterprises that can apply innovation strategy and then utilize that process of innovation will gain a competitive advantage and leverage the enterprises’ creation of wealth. Thus, in a highly competitive business world, it is vital for companies to operate efficiently. It involves reducing costs in every area of business. Key areas where organizations can minimize costs are time, space, effort, and energy (Goksoy, Vayvay & Ergeneli, 2013).

Innovation strategies can be proactive and/ or passive (Dodgson& Salter, 2008). Proactive innovation strategies are applied by firms that have strong research orientation, frontline advantage, and a technology market leadership. Their knowledge access came from various sources and take high profile risks. Radical redesign of business process that change the nature of products & services and incremental, the constant technological or process changes that lead to improved performance of products and services are the types of technological innovation used in proactive innovation strategy. The techniques required to promote organizational innovation should therefore, be situational determined. This paper assesses and describes a select group of management innovation techniques that affect enterprise competitiveness in developing West Africa economies which include reengineering, bench marking, and corporate partnering.

1.2 Statement of the Problem

Capitalist and mixed economies have always provided opportunities for firms to be innovative in order to survive the terrain of competition. These are largely market-driven economies that allow firms as well as individuals to compete, be innovative in order to have certain advantages over others and reap from their initiatives. Innovation has ideally resulted in competitive advantage. In the advanced developed countries, manufacturing organizations have more to grapple with innovation in order to have competitive advantage. This is because ideally, the congenial environment to do business is largely provided: ease-of-doing business, friendly policies are in place; adequacy of infrastructural provision such as good roads, quality water supply, un-interrupted electricity supply and other means of energy provision, adequate communication infrastructure, macroeconomic stability, etc. In most West Africa developing countries like Nigeria, Liberia, Togo, Sierra Leone, etc., the operating environments are mostly not business friendly, imbued with inadequate infrastructural facilities such as power (electricity) and roads, etc. Some studies on the Nigerian manufacturing reveals that some of the firms that failed was due to their inability to align technology with productivity, promotional strategies with sales growth, creativity with access to patent right, and product redesign with brand royalty. Firms are finding it difficult to procure relevant raw materials, equipment and technology due to high exchange rates. The situation with manufacturing in developing nations need to improve, otherwise, more manufacturing concerns are bound to fail. The consequences of not addressing the highlighted problems are enormous. These will have negative implications on outputs and services, employment and the general price level of the economies concerned. Some firms that failed at different times due to inability to adopt innovative strategies in Nigeria include Den’s Cook, Tempo Flour plc, Nigerian Telecommunication Limited, etc. It has become increasingly clear that manufacturing firms should embrace innovation in order to have competitive advantage in the market place for their goods. However, the study focuses on innovation strategies and enterprise competitiveness in developing West Africa economies.

1.3 Objectives of the Study

The main objective of this study is to determine the effect of compensation management on employee performance. Specific objectives include;

i. To evaluate the impact of production skills to gain competitive advantage.

ii.  To determine management strategies to sustain competitive advantage.

iii. To find out innovative strategies for developing new products.

1.4  Research Questions

i.  What is the impact of production skills on business competitiveness

ii.  What is the impact of management strategies to competitive advantage sustainability?

iii. What is the role of innovation in business management to ensure competitiveness?

1.5  Research Hypotheses

Hypothesis I

H0: There is no significant impact of production skills on competitive advantage.

Hi: There is significant impact of production skills on competitive advantage.

Hypothesis II

H0: There is no significant impact of management strategies to competitive advantage sustainability.

Hi: There is significant impact of management strategies to competitive advantage sustainability.

Hypothesis III

H0: There is no significant impact of the role of innovation in business management to ensure competitiveness.

Hi: There is significant impact of the role of innovation in business management to ensure competitiveness.

1.6  Significance of the Study

This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

1.7  Scope of the Study

This study is on the application of management strategies to ensure competitive advantage using efficient productions skills. The study will examine businesses in Abuja metropolis, Nigeria

1.8  Limitations of the study

The demanding schedule of respondents made it very difficult getting the respondents to participate in the survey. As a result, retrieving copies of questionnaires in timely fashion was very challenging. Also, the researcher is a student and therefore has limited time as well as resources in covering extensive literature available in conducting this research. Information provided by the researcher may not hold true for all research under this study but is restricted to the selected respondents used as a study in this research especially in the locality where this study is being conducted. Finally, the researcher is restricted only to the evidence provided by the participants in the research and therefore cannot determine the reliability and accuracy of the information provided. Other limitations include:

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.