ABSTRACT
The study investigated the effect of
financial management techniques on the financial performance of manufacturing
companies. The major objectives of study are:to determine the effect of
financial management on operational performance of firms in Nigeria and to
ascertain the effect of financial management techniques profitability of firms
in Nigeria. To achieve the objectives of the study, survey research design was
adopted. The researcher adopted primary data in getting the required
information. A total of 50 respondents constitute the population size of the
study. In testing the hypothesis, regression analysis was used. The findings
further revealed that financial management techniques has a significant effect
on the operational performance of the firms, financial management techniques
has a significant effect on the organizational profitability.The researcher
also recommends that manufacturing companies should adopt financial management
techniques for enhancement of organizational performance. The study further
recommends that policy and practice for project performance should be carefully
evaluated and the results of evaluation fed back into improved approaches. It
is important that the evaluation considers the full range of costs and
benefits.
CHAPTER
ONE
INTRODUCTION
1.1 Background to the study
In
today’s world, there is rapid change in the business environment such that the
product-market competition is ever increasing among industries, information
technology improving in various industries as the day goes by in a way that
firms use internet facilities and social network to advertise and market their
products and services. To compete successfully in this present competitive
business environment, firms continually need to make some strategies and take
some actions by improving product quality and productivity, reducing product
cost, promoting product and process innovations, and improving product speed to
the market and customers’ goodwill. Firms therefore need to strive to be at par
with the global change, achieving competitive advantage position and enhancing
performance relative to their competitors (Muogbo, 2013). Strategy is a
detailed plan for a business in achieving success. Since business is a
high-stakes game, a poorly planned and executed strategic move could result in
loss of millions of dollars, thousands of jobs, or even bankruptcy of business
(Dauda, 2010). This calls for strategic management in order to develop an
effective strategy. Thus, strategic management comprises the set of decisions
and actions that result in the formulation and implementation of plans designed
to achieve a firm’s objectives.
Strategic
management is the process of making decision, planning, coordinating and taking
some actions by the top managers of a company in order to achieve set goals and
objectives. Decisions are of little use unless they are acted upon. Firms must
take the necessary actions to implement their strategies. This requires top
managers to allocate the necessary resources and to design the organization to
bring the intended strategies to reality (Dess, 2005). Because it involves
long-term, future-oriented, complex decision making and requires considerable
resources, top-management participation is crucial.
(Wheelen
and Hunger, 2007) articulated that initially strategic management was of most
use to large firms operating in multiple industries. Increasing risks of error,
costly mistakes, and even economic ruin now forced today’s professional
managers in all organisations to take strategic management seriously in order
to keep their firms competitive in an increasingly volatile environment.
How
well an organization implements its policies and programs and accomplishes its
strategic intent in terms of its mission and vision is of paramount concern. Managers
in both private and public organizations are becoming increasingly aware that a
critical source of competitive advantage often come from indigenous product and
services, best public relations strategy state-of-the-art technology and having
an appropriate system of attracting and managing the organizations human
resources. From the foregoing, and looking at today’s trend, it is evident that
the space of change in our business environment presents fresh challenges
daily. Therefore, a panacea must be found for the manufacturing subsector, if
it must adequately meet its challenges. Various firms, therefore, need to come
up with the applications of innovative ideas to create unique brands,
customers-friendly products/services that will bring about competitive
advantages in terms of brand preference and customer confidence.Although
manufacturing is usually a small sector in African economies, in terms of share
of total output or employment, growth of this sector has long been considered
crucial for economic development. This special interest in manufacturing stems
from the belief that the sector is a potential engine of modernisation, a
creator of skilled jobs, and a generator of positive spill over effects
(Tybout, 2000).
Despite
these, no research work has targeted to investigate the impact of the broad
subject of strategic management on organizational growth and development in
Nigeria. Of these studies in Nigeria, none accessed the impact of strategic
management of planning on manufacturing sub-sector of the economy. Nigeria in
particular this study attempts to empirically analyse how strategic management
can be used by manufacturing firms in effective derive plans for growth and
development.
1.2 Statement of problem
A
financial management system has the following characteristics: Physical
Control, Authorisation and Approval control, Personnel Control, Segregation of
Duties, Supervision Control, Arithmetical or Accounting Control, Management
Control, Organisational Control. The study of financial management techniques
has drawn so much attention among business practitioners and academic
researchers into limelight. As more industries become global, strategic
management now becomes an increasingly important tool to keep track of
international development and position of the firm for long term competitive
advantage. In develop countries as well as developing ones, much has been
written on strategic management in forms of books. However, Nigeria in
particular, there are few empirical studies conducted to investigate the
relationship between strategic management and firm performance.
1.3 Objectives of the study
The
main objective of the study is to examine the effect of financial management
techniques on the performance of manufacturing firms.
The specific objectives include;
1. To
determine the effect of financial management on operational performance of
firms in Nigeria.
2. To
ascertain the effect of financial management techniques on profitability of
firms in Nigeria.
1.4 Research questions
i.
What is the effect of financial management on operational performance of firms
in Nigeria.?
ii.
What is the effect of financial management techniques on profitability of firms
in Nigeria?
1.5 Research
Hypotheses
In order to achieve the objectives designed
for this study, the following research hypotheses were tested in their null
form based on the revelations in the review of literature concerning financial
management techniques and financial performance in of manufacturing companies.
Ho1: Financial management
techniques have no significant effect on operational performance of firms in
Nigeria.
Ho2:
Financial
management techniques have no significant effect on profitability of firms in Nigeria.
1.6 Significance
of study
It
is therefore hoped that the evidence from this study would serve as important
quantitative information into the calculation of business policy and also add
to the existing body of empirical literature from a developing nation like
Nigeria.
1.7 Scope
of the study
The scope of the study the ‘effect of
financial management techniques on the financial performance of manufacturing companies’,
reviews strategic planning, budgeting banking and expenditure checks and also
organizational challenges regarding budgeting in project management. Pressure
to follow through with only the project that are going to be successful and
carry less risk in mounting. In investigating the ‘effect of financial
management techniques on the financial performance of manufacturing companies,
study would be carried out in Abia state, Aba using Nigeria Breweries for the
data generation.
1.8 Limitations of the
Study
The limitations of this study include some
of unavoidable constraints and problems encountered in the process. They are as
follows:
Finance:
The problem of finance is not left out in the course of research to this study.
This type of study required adequate money and time to enable the researcher
visit the necessary places for collection of data. Insufficient fund will
hinder an in-depth study of this research since it is finance from pocket money
of the researcher. Although the researcher, as a student, is not financially
dependent, he is poised to making the best use of the available monetary
resources to get the job properly done.
Non-availability
of records: This is one of the most important
limiting factors in the course of the study. This includes the problems of
easily getting the appropriate data due to bureaucracy which hinders the
information flow in the country.
Time: Since this study is one of the many courses
offered by the researcher, the researcher will be constrained by time to carry
out an indent research on the study.
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