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AN ASSESSMENT OF THE MANAGEMENT PERFORMANCE OF PUBLIC ENTERPRISES IN NIGERIA

CHAPTER ONE

1.1   THE GENERAL BACKGROUND OF THE STUDY

The survival of any economy be it a developed or underdeveloped countries require the direct involvement of the government (state or federal) in production of some goods and services. Unlike the situation in some developed countries the world where public enterprises play normal role in economic development, the public in Nigeria forms the major part of the national economy, Nigeria, which is a developing country, has a greater co-operation of her labour force in agriculture. In our knowledge of development, it is believed that for a country to strive to develop, the greater proportion of the labour force must be engaged in the modern sector. This has necessitated the government to set up some vital companies such as manufacturing, construction, financial institution; transportation services among others, to moblize the idea of industrialization. These companies set up by government are known as public enterprises or government owned companies. According to the main report to public services review commission 1974 (the Udoji report). Public enterprises include all corporations, authorities, boards council and any limited liability companies in which the government has full or majority interest.

Within this context, four types of organization are identified, namely – public utilities, financial institutions, commercial and industrial companies and regulatory or service bodies. In pursuance of this nationalization policy government also used the weapon of nationalization to acquire some private owned companies more especially foreign owned companies. However, many people have adduced the reason the constant interference in the day to day operations of the company, the appointment of unqualified personnel, corrupt management and practice poor attitude to work and power struggle between management and the board of directors as contributing factors to the failure of public enterprises.

The need for management in both private and public organisations cannot be over looked. With out effect and effective management, the goals and objectives of organisations cannot be achieved. To appreciate the performance and problems of management, it is necessary to understand what management is all about. Management is not easily defined. This is because different authors defined management in different ways. According to Udeze (1993) management is getting things done through other people so as to include to management as well as the lower strata of management. The government companies under study are ventures which must operate under management. Therefore, governments at various levels of authority advanced their reasons for participating in business of owing companies and parastatals

According to Ejiofor (1985) some of the reasons for government

Ownership of business includes:-

Raising of revenue (profit motive)

Provision of social welfare services.

Ensuring adequate supply as essential scares and consequently expensive leadership.

A demonstration of economic leadership.

Avenue for investment of surplus funds.

Provision of employment opportunities.

In the light of the above the Enugu state government established a number of companies which includes. Enugu state transport company Limited Entraco). Therefore, in the study of management in the company, the following areas are collered administration. Finance and financial management, control and accountability, political interference, attitude to work etc. all these will help the researchers to asses the performance of this company.  According to Ofora (1977) the experience and stories with the functions of the government companies have shown much indue influence or disagreement relationship particularly between the board of directors and management  (in particular between the chainman of the board and the general manager). The business of the company therefore, suffers because of this disagreement relationship. This amount of conflicts of duties and personnel interest in the utilization of the company’s property which led to making secret profits or achievement of other unnecessary benefits.

According to Enugu state report (1992) cases of financial mismanagement embezzlement. Nepotism and indiscipline have continued to affect government attention to set panel of inquiry into Enugu state owned companies.  At the end of such investigation and recommendations, government reactions have included dissolution or re-appointment of Boards and management functionaries.  According to Ajuluchukwu (1992) the effect of this kind of government reaction could only create another problem of non-continuity of policy and style. In recognition of the continued existence of these problems, the Enugu state Transport company limited decided to improve on their effectiveness and efficiency. They have therefore encouraged cordial relationship between Board and management and avoided serious industrial action by their staff.

The management practically applied Odaju’s Human Relation model, which defined efficiency as a function of motivation and ability. This was done by providing the staff with incentives and extra allowance to raise their income. These efforts did not achieve the desired result of effectiveness and efficiency in the management of government owned companies as well as indicated by the frequent dissolution or reappointment of Board and management functionaries in 1990s.  In spite of the government efforts, the performance of government owned companies parasists while their private counterparts continued to service, grow and make profits.

1.2   PROBLEMS ASSOCIATED WITH THE SUBJECT MATTER

In recent times, government owned countries in Enugu state have been encountering a lot of problems in their activities. Among the Manifested problems are:- Some of these companies have continued to make steady loses since their establishment. According to Ibie (1988), the poor performance of management was as a result of the fact that supervising ministries of government owned companied have not been able to allow enough freedom of action to these companies. Another problem of management in government companies is the in jection of the concept of ethnicity. The chief Executive and principle functionaries of government companies are appointed not because of their potentialities to deliver effective results, but simply for reasons of nepotism.

This also undermined the hiring and firing equator in the management companies. The result is that the mangers of government owned companies become complacent and could not perform. For the same reason the Board members of government owned companies fail to accord the emphasis to economic considerations in the decision making process. Besides, top management personnel and Board management members became birds of passage only to be changed or removed by successive governments theirs losing the valuable factor of continuity in style and policy of management. The problem of management in state owned business manifests in form of political interference. According to Ibie (1988) from recent experience, government participation in bisiness provides a fertile ground for political meddlesomeness and wholesome corruption in management decisions, recruitment, promotion, retention of redundant staff, prostitution of disciplinary procedures by ethnocentric consideration award of inflation of frivolous contracts, appointment of board members and employees lacking in relevant knowledge and experience. These are all factors, which erode the efficiency, effectiveness and productivity of government owned companies.

Appointment to Boards are made to repay political debts to provide sanctuaries for defeated politicians and disgruntled colleagues, the care of old cronies, build intra- political support or achieve a host of non- business all of which place serious stram on management. Another great problem that hinders management in government owned companies in finance. According to Bedford (1984) the government subvention to state owned companies is not enough to meeting with these companies projected pans.  There is shortage of work facilities and requirement in these companies caused by in adequate capital. The in ability to meet up with the financial obligations creates management problems since it makes management incapacitated.

The attitude to work in government owned companies creates management problems. Work is supposed to mean a total dedication and devotion to one’s occupation and should not be regarded as a burden and undesirable undertaking. Ibie (1983) noted that in much government companied work is viewed to the extent that it is the means of earning a living. Interest in the work in frail since the only motivation is cash reward. The employees pretend to work hard in the presence of their boss while relaxing when they turn back. The after effect is confrontational and unhealthy organisational relationship which results into management problems. According to Epundu (1989), there are also frequent wrangling and power tussles among the Board members, top management and other employees of parastestals and government Owned enterprises referred to as triangle of power. In spite of state government effort to revitalize the companies, Enugu state transport company (ENTRACO), has continued to face management problem resulting from arreas of huge debts litter unserviceable vehicle and how capacity utilization. After considering these problems it became necessary to identify the management problems and their cause with a view to recommend policy solutions.

1.3    PROBLEM(s) THAT THE STUDY WILL BE CONCERNED WITH

In Nigeria as well as other developing nations organisations, business enterprises especially those owned by government fail to meet up or perform up to standard owing to a lot of reasons. These reasons could be due to inadequate planning, finance and manpower requirements and sometimes operating environment in the form of competition. Also political control and mismanagement contribute in their own way towards poor performance. Enugu State Transport Company therefore has its management problems. The poor management and the unwitting painlessness compounding the managerial incompetence of the company have consequently led to the high mortality rate of the company. The poor performance of ENTRACO has reported over the years. The appointment of members of the Board of Directors is no longer based on experience, discipline and qualification, but on party membership. Such members sacrifice the profit motive of such companies for the wishes of the political statutes

The ENTRACO’S poor performance can be attributed to finance. In fact no organization can function effectively without adequate and well resourceful financial base to meet up with the say to day running of its operation and activities. Enugu state transport company has not performed owing to lack of enough funds to buy all the necessary equipment and the acquisition of more fleets of buses so as to meet up with the demands of its customers and compete favourably with others in the same business line. The essence of this write up is to assess the management performance of Enugu State Transport Company (ENTRACO). It is hope that the findings and suggestions would usher in a purposeful management that will bring viable and profit oriented ideas of the company.

1.4     THE IMPORTANCE OF STUDYING THE AREA.

The studying of management performances in Enugu state transport would be of importance in various ways:- The study would enable the management discover a dependable way or strengthen inter personal relationship. Provide a good organization climate of trust and devotion to set goals and elimination of weak appraisal methods. The company studied will enjoy induced managerial effectiveness as well as central value facilitates co- ordinate effort and objective rewarded criteria. The study would further help management to identify advanced political development need of personnel and to facilities changes. Again the study would also help to expose the company and its management to new and concerted ideas for efficient and effective performance.

The importance of management performance in ENTRACO will help to identify the problems created by over government influence in the company which has constantly contributed to lack of initiative of members of staff and inability to perform. It will help to direct government on how dangerous it is to appoint Board members based on political patronage rather than on merit. This aspect is very important because it usually render government owned companies to useless and as times leads to closure of the companies. The study of management in ENTRACO, Enugu would be of importance to management scholars for in-depth further research. Finally, the management problems in ENTRACO limited appear to be a national issue among other public enterprises. Thus the great importance of this study cannot be over-emphasized because human resources marketing production financial and other problems of moral notes have left so many government companies decline to the point of near collapse and yet these are companies that are expected to achieve certain intended objectives for the good of all.

1.5     DEFINITION OF IMPORTANT TERMS

ENTRACO:-  Enugu State Transport company Limited.

MANAGEMENT:-  A group of persons controlling / directing a business.

ADMINISTRATION:-Looking after government, carrying on the business of a company.

COMPANY :- A group of persons united for purpose of business.

GOVERNMENT OWNED COMPANY:- Here used to refer to the company in which government of Enugu State has interest and controls majority equity share.

PROBLEMS:- This refers to the constraints pitfalls lapses and short falls.

POLITICAL INTERFERENCE:- Government or politics preventing a person from carrying out his plans.

ACCOUNTABILITY:-  Where one is expected to  explain or be responsible for something and be blamed perhaps for its happenings.

PRODUCTION:- This is the creation of goods and services or creation of utilities.

REMUNERATION:- This means when there is payment for work done or payment received after work well done.

1.6     REFERENCE

Ejiofor  O.(1985)  ‘Problems of Management

Government Companies. Some Empirical findings in managing government Owned companies” Aba Educational Publishers  Page 15.

 Ibie C.O. (1988) The poor performance of Management in business or Organizations, Business Concord, March 30th p.3.                     

 Odeju A. (1991) Human Relations model: Business Concord; September 3oth p.4.

 Ibie N. C. (1983) Business Concord, March 30th P.5.

Epundu J.O. (1989) Problems of managing Government owned Business  Findings in managing Government enterprises.  Lagos Educational publishers P.12.

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