IMPACT OF MANAGEMENT SUCCESSION ON ORGANIZATIONAL PERFORMANCE (A STUDY OF SELECTED MANUFACTURING FIRMS IN DELTA STATE)

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ABSTRACT

The study determined the impact of management succession on organizational performance (A study of selected manufacturing firms in Delta State). study sought to identify the impact of leadership development on organizational effectiveness of the selected firms in Delta State. analyze the impact of succession plan on organizational profitability of the selected firms in Delta State, evaluate the impact of exist strategies on the productivity of the selected firms in Delta State, determine the impact of contingency plan on the performance of the selected firms in Delta State and assess the challenges of management succession on the performance of the selected manufacturing firms in Delta State. This study adopted survey design. The study make used of both primary and secondary data source. The total population hereby comprised of 371 staff of manufacturing firms.  The sample size is 193. A stratified sampling method was adopted and it gave the staff an equal chance of being selected. Simple regression model and Multiple regression model was employed to test the hypotheses of the study. The findings of the study stated that Leadership development has significant impact on organizational effectiveness of Coleman Wireless and Cable and Wichtech Industries Limited in Delta State. Succession plan has significant impact on organizational profitability of Coleman Wireless and Cable and Wichtech Industries Limited in Delta State. Exist strategy has significant impact on the productivity of the Coleman Wireless and Cable and Wichtech Industries Limited in Delta State. Contingency plan has significant impact on the performance of the Coleman Wireless and Cable and Wichtech Industries Limited in Delta State. Supremacy, political unrest, conflict of interest, leadership abuse, wrong policy formulation and implementation, lack of understanding, poor leadership development and trust issues have significant impact on Coleman Wireless and Cable and Wichtech Industries Limited in Delta State. The study recommended that There is need for the management of the studied firms to apply adequate succession planning since it will enable them achieve their aim as at when due. This in the long run will bring growth and development to the organization






TABLE OF CONTENTS


Cover Page                                                                                                                 i

Title Page                                                                                                                    ii

Declaration                                                                                                                 iii

Certification                                                                                                               iv

Dedication                                                                                                                  v

Acknowledgements                                                                                                    vi

Table of Contents                                                                                                       vii

List of Tables                                                                                                              viii

Abstract                                                                                                                      ix


CHAPTER 1: INTRODUCTION

1.1       Background of the Study                                                                                1

1.2       Statement of the Problem                                                                               3

1.3       Objectives of the Study                                                                                  4

1.4       Research Questions                                                                                        4

1.5       Research Hypotheses                                                                                      5

1.6       Significance of the Study                                                                               5

1.7       Scope of the Study                                                                                          6

1.8       Limitations of the Study                                                                                 6

1.9       Brief Profile of the Organization Under Study                                              7

1.10    Operational Definition of Terms                                                                     8


CHAPTER 2: REVIEW OF RELATED LITERATURE

2.1       Conceptual Framework                                                                                  10

2.1.1 Management succession                                                                                                                10

2.1.2 Succession planning                                                                                          11

2.1.3 Types of managerial succession strategies Huang (2004) identifies                         12

the following types of succession strategies

2.1.4 Dimensions of management succession                                                                        13

2.1.5 Contribution of management succession practices to employee retention          26

2.1.6 Current trend of management succession in organizations                               27

2.1.7 Organizational performance                                                                              28

2.1.8 Organizational performance indicators (measures)                                           29

2.2       Theoretical Framework                                                                                  30

2.2.1 Talent DNA model                                                                                            30

2.2.2. Trait and factor theory                                                                                      30

2.2.3. Acquired needs theory                                                                                      31

2.2.4. Relay succession planning model                                                                    31

2.2.5 Scharmer’s theory U model                                                                               32

2.3       Empirical Review                                                                                           32

2.4       Gap in Literature                                                                                            35

2.5       Summary of Reviewed Related Literature                                                     35


CHAPTER 3: METHODOLOGY

3.1       Research Design                                                                                             36

3.2       Sources of Data                                                                                               36

3.3       Population of the Study                                                                                  36

3.4       Sample Size Determination                                                                            37

3.5       Sampling Technique                                                                                       37

3.6       Description of the Research Instrument                                                         38

3.7       Validity of the Research Instrument                                                               38

3.8       Reliability of the Research Instrument                                                           38

3.9       Method of Data Analysis                                                                                38

3.9.1    Model Specifications                                                                                      39


CHAPTER 4: DATA PRESENTATION AND ANALYSIS

4.1       Return of Questionnaire                                                                                 41

4.2       Data Presentation                                                                                            42

4.3       Test of Hypotheses                                                                                         49

4.4       Discussion of Results                                                                                     54


CHAPTER 5: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1       Summary of Findings                                                                                     56

5.2       Conclusion                                                                                                      56

5.3       Recommendations                                                                                          57

5.4       Areas of Further Studies                                                                                 57

References                                                                                                     

Questionnaire

Appendices

 

 

 


 

 

 

 

 

 

 

LIST OF TABLES


Table                                                                                Page

Table 3.1: Population table                                                                                        36

Table 3.2 Breakdown of the sample size                                                                    38

Table 4.1: Rate of return questionnaire                                                                      41

Table 4.2: Distribution of the respondents according to their socio economic        42

Table 4.3: What is the impact of leadership development on organizational             44

effectiveness of the selected firms in Delta State.     

Table 4.4: What is the impact of succession plan on organizational                         45

profitability the selected firms in Delta State?                      

Table 4.5: What is the impact of exist strategies on the productivity of                  46

the selected firms in Delta State?      

Table 4.6: What is the impact of contingency plan on the performance of                         47

the selected firms in Delta State?      

Table 4.7: What are the challenges of management succession on                            48

the performance the selected firms in Delta State?   

Table 4.8: For hypothesis 1, we specify regression                                                   49

Table 4.9: For hypothesis 2, we specify regression                                                   50

Table 4.10: For hypothesis 2, we specify regression                                                 51

Table 4.11: For hypothesis 4, we specify regression                                                 52

Table 4.12: For hypothesis 5, we specify regression                                                 53

 

 

 

 

 

 

 

CHAPTER 1

INTRODUCTION


1.1  BACKGROUND OF THE STUDY

The business environment of today has provides and produce various competitions; one good way of maintaining balance between an outgoing manager and an incoming manager is through succession. This therefore means that management succession is paramount and therefore vital to the growth and continuity of any organization, be it locally made firm or foreign establishment. Today is quite true and proper to state that management succession has become a strategic focus mechanism for the 21st century firms because its allows and encourages leadership spiritism, provides proper and adequate guidelines for idea generation, adequate training and regular follow up strategy which in turn can leads to business growth and continuity in the long run (Thompson & Strickland, 2010).

Consequently, management succession has become an important talent management initiative at companies around the world are finding suitable ways to identify and train there successor to cultivate the habits of responsiveness and diligent. Since management success appears to be a strategic process that minimizes leadership gaps for critical positions and provides opportunities for top talent to develop the skills necessary for future roles. Also, management succession is a constant struggle, viewed as an administrative exercise rather than as a competitive advantage. In strong economic times, it is easier to ignore deficiencies in the succession management process but in the current economic downturn, the need to identify and develop top talent for critical roles has never been more important. In recent times the application and adoption of effective succession management enables companies/firms and even industries to react quickly to change and endure difficult times at its best. Succession management allows a company to seamlessly merge its employees’ capabilities and career aspirations with the company’s business strategy and talent needs (Gamson & Scott, 2007).

Perry (2009) opine that that management succession simply means “war of talent” implying that organizations, particularly government agencies and private establishment become more effective in attracting, retaining and motivating employees who possess the zeal and willingness to lead an organization towards a greater tomorrow. Management succession simply means talent attraction which denotes the capability of an organization to entice employees to the organization by enacting policies and procedures that allow for employee choice and both selection and retention in the organization (Zhu, Chew, & Spangler, 2005).

In addition, management succession today is becoming a top priority for any organization that wants to stay in business and remain relevant in the 21st century (Margerison, 2012). Newell (2002) states that organizations can no longer afford to waste ‘people talent’ if they are to remain competitive into the next century. Through succession planning the active and positive support of people can be gained and dully rewarded (Parsloe, & Anderson, 2007). The primary aim of a  manager is to have the ability to develop his or her employees to be responsible by possessing the ability and willingness to assume any available position irrespective its challenges set aside. (McCarter & Schreyer, 2010).

Furthermore, the fact that a worker will certainly at a particular time retire, get promoted, retrenched or even die emphasizes the fact that these are quite inevitable; therefore management succession strategy must be integrated into the process of corporate planning so that business plan or organization might achieve their result. Gamson and Scott (2007), opines that management succession strategy is a function of quality development programmes available in an organization. It can also be rightly said that training of employees can provide organization effective success and improved productivity and efficiency as well healthy climate characterized by unity of purpose and the desire to improve and increase staff performance. Succession planning in an organization has the capacity to reduce the need to bring in new talent and therefore reduces the expense of recruiting from the outside world. Today firms need to be able to find people with the right skills to fill key and top management position at any time required through having in place an effective succession plan in place (Rollins, 2003).

Moreover, one important aspect of management succession is that it’s ensure continuity of the organizations performance and it’s very survival. This could only imply that the application of succession helps to facilitate a smooth leadership transition by providing better and comfortable ways to finding the right employee to fill up leadership gap. More so, another most important use of management succession is that its help organization formulate a valuable insight about it work force by gathering information of background expertise, performance and carrier aspirations, thereby aiding the process of recruitment by finding the right people for the right jobs in case of expected or unexpected changes in the organization (Armstrong, 2010).

Sequentially, it would be appropriate to state that in today’s business environment characterized by various competitions and dynamic changes in both governmental policies and customers’ needs or behaviour the significant of the right management succession today brings about fast pace in the growth of an establishment. It equally helps to audit the talent pool of the organization which helps in the allocation of responsibilities and development strategies to fill the identified gaps; Implementing succession plan will helps to ensure organization bench strength, solidify the viability of cooperation beyond certain charismatic executive and may inform future acquisition (Graham, 2012). It is against this background the study seek to investigate the impact of management succession on organizational performance.


1.2  STATEMENT OF THE PROBLEM

The principle of succession is as old as the history of man or the world itself. Every human endeavor is characterized by tests, competition, survival and succession in the course of time, because somewhere and sometime people have been able to take up from their predecessors in other to ensure that continuity is guaranteed.

Recently, it has also been discovered that owners of businesses today often delay succession planning until their later years because of distrust, fear, disloyalty and even lack of commitment or possibly because of inability to find the most appropriate and suitable hands to lead the organization and this in both the long and short run still constitutes the reasons will management succession continue to be a pivotal issue in industries today. Given the fact that inadequate timing and lack of understanding still forms what may cause delay in developing or training a successor to succeed a manager in today’s organizations.

In recent times, challenges confronting manufacturing firms are enormous and very unpredictable, it is even worrisome to see that managers occupying key positions may be transferred, promoted or may even be lost to death thus creating a gap which might be difficult to fill because of poor leadership development, wrong exist strategy, no proper talent search and contingency plan; this however may still forms what contribute to poor growth performance,  unstable management policies which in turn may lead to reduce market share and low customer base in the organization in the long run. Furthermore, experience have shown that management in organizations today do not put in place a contingency plan against their retirement and dismissal, because of their personal desire and motives, this as such could still forms what may affects management succession in the future.

More so, the issue of supremacy, conflict of interest, political unrest, leadership abuse, wrong policy formulation and implementation and lack of understanding between the incoming and outgoing management is yet another challenges affecting the growth and development of manufacturing firms in delta state. Thus, history has shown that these challenges aforementioned often reoccur because it’s forms what makes up competitions within staff in their organizations such that if not properly and adequately managed and it can cost a great disarm and discomfort in such organizations.

Today’s challenge in organization is lack of staff interest towards responsibilities and commitment; history has it that except an individual indicate interest or shows passion and commitment to serve its easier to trained and development such a staff to succeed another staff in an organization but this is not the case because even the experienced, willed and qualified are down casted and fears to assume some vital and sensitive position because of its threat to life and even if accepted the responsibilities and challenges that present its self still forms what might prevent such an individual from achieving the firms aims and objectives. This is still another vital challenge confronting the successors to assume and accept responsibilities from the predecessor in manufacturing firms in delta Delta State.

In addition, another most vital challenge confronting manufacturing firms in recent times is poor succession planning by management of such organizations. Although most manufacturing firms run by experts who are experience and understands the ways and manners things are done in their organization, but there is no denying the fact that poor succession plan is yet a trending setback affecting the growth, profitability and market share of the organization. The lack of proper and adequate succession plan in manufacturing firms might have the direct effect of causing the collapse of business especially when key players leave the business upon retirement, transfer or in pursuit of other options or career. The exit or exodus of key stakeholders can make a business vulnerable and diminish its worth within a split second if not properly managed. It is against this backdrop that the study investigates the impact of management succession on organizational performance.

1.3 OBJECTIVES OF THE STUDY

The broad objective of the study is to determine the impact of management succession on organizational performance (A study of selected manufacturing firms in Delta State). The specific objectives were to;

      i.         identify the impact of leadership development on organizational effectiveness of the selected firms in Delta State.

     ii.         analyze the impact of succession plan on organizational profitability of the selected firms in Delta State.

   iii.         evaluate the impact of exist strategies on the productivity of the selected firms in Delta State.

   iv.         determine the impact of contingency plan on the performance of the selected firms in Delta State.

     v.         assess the challenges of management succession on the performance of the selected manufacturing firms in Delta State


1.4  RESEARCH QUESTIONS

      i.         What is the impact of leadership development on organizational effectiveness of the selected firms in Delta State?

     ii.         What is the impact of succession plan on organizational profitability the selected firms in Delta State?

   iii.         What is the impact of exist strategies on the productivity of the selected firms in Delta State?

   vi.         What is the impact of contingency plan on the performance of the selected firms in Delta State?

  vii.         What are the challenges of management succession on the performance of the selected firms in Delta State?


1.5  RESEARCH HYPOTHESES 

  H01: Leadership development has no significant impact on organizational effectiveness   of         the selected firms in Delta State.

H02: Succession plan has no significant on organizational profitability of the selected   firms in Delta State.

  H03: Exist strategy has no significant on the productivity of the selected firms in Delta State.

  H04: Contingency plan has no significant on the performance of the selected firms in          Delta State.

  H05: Supremacy, Political Unrest, Conflict of interest, Leadership abuse, wrong policy   formulation and implementation, Lack of understanding, poor leadership           development and trust issues have no significant impact on the selected firms in           Delta State.


1.6 SIGNIFICANCE OF THE STUDY

The study focused on the effect of impact of management succession on organizational performance (A study of Coleman Wireless and Cable and Wichtech Industries Limited manufacturing firms in Delta State). This study will be of great benefits to the following group of persons; the studied organizations, the successors, policy maker, economic planners and researchers.

To the study firms; the study will stand as guild towards making sure that organizational management and those in position of authority find suitable and better ways to make the selection process through talents hunt and search for a good and better successor in an organization. Also, through succession plan firms will be able to avert all negative and future unforeseen occurrence that might serve as a threat towards developing and training successor that might affect the firms from achieving its aim as at when due.

To successor; The study will help management of business to mentor and train their successor to carryout task and be will and capable of taking up responsibilities.

To policy marker and economic planners; The study will help policy makers and economic planners formulate policy that will guild management and owners of businesses to carry out their responsibilities

To researcher; The study will serve as a useful conceptual guide to making sure that students in school will appreciate the work and used it as a guide for further studies. 


1.7 SCOPE OF THE STUDY

This research work focused on the impact of management succession on organizational performance (A study of Coleman Wireless and Cable and Wichtech Industries Limited manufacturing firms in Delta State).

Content scope: The content scope of the study was to; identify the impact of leadership development on organizational effectiveness of the selected firms in Delta State, analyze the impact of succession plan on organizational profitability of the selected firms in Delta State, evaluate the effect of exist strategies on the productivity of the selected firms in Delta State, determine the impact of contingency plan on the performance of the selected firms in Delta State and assess the challenges of management succession on the performance of the selected manufacturing firms in Delta State

Unit scope: The questionnaire will be distributed to the staff of the selected manufacturing firms in Delta State.

Time scope: The study will cover a period of one year.

Geographical scope: The geographical scope of the study will be Delta State,

Methodology constraint: The study is predicated that the researcher adopted descriptive survey research design with the aid of a questionnaire in generating data for the study


1.8 LIMITATIONS OF THE STUDY

The research work is limited because of the inability to produce and reproduce the available materials and as well print a comprehensive research work/material which will appear in a presentable manner.

Finally, financial challenges, photocopying and printing relevant materials, departmental specification and accessories, distribution and gathering of data with regard to cost of material and other accessorily cost is also a limitation of the study.

1.9 PROFILE OF THE ORGANIZATION

Coleman wireless and cable manufacturing firm

Coleman Technical Industries Limited {"Coleman") was incorporated on the 1st of July 1975 and started production in 1996 with the principal operation of manufacturing of electircal wires and cables that meet international standards for Oil Industries, Commercial and Residential. The Company was founded on the principles of developing local industries that would in turn create jobs through the production of good quality products.

Coleman commenced cabled production in 1996 at its Ikotun, lagos Factory. It has since metamorphosed to the first ranking cable manufacturing company in West Africa with the tow ultra-modern cable factories of 200,000 square meters both Arepo and Sagamu factories have an installed production capacity of process 60,000 metric tons of Copper and 40,000 metric tons of Aluminuim per annum which put Coleman at over 80% of installed capacity in the country. The Sagamu Plant, an architectural masterpiece, is Pioneer Factory commissioned in December 2014 to produce Medium - high Voltage XLPE cables. It is the First of its kind in the West African Sub region and places Nigeria as the sixth country in Africa with such production capacity.

Coleman Technical Industries Limited is an indigenously owned with a capital base of over 20billion naira in Plant, Machinery, Raw Materials and Stocks.

The firm has its location in Shop No 5, Powa Plaza, A Division, Nnebisi Road, Asaba Delta Nigeria. Coleman Technical Industries Limited (Coleman Wires & Cables) is into manufacturing of high voltage electrical wires and cables that meet international standards for oil industries, commercial and residential.


Wichtech industries limited

Wichtech Industries is the best known company in the group and has a large footprint of 120 offices throughout Nigeria. As a manufacturer and supplier of roofing, plumbing and paint products, the name Wichtech has built its reputation on the quality of its product and service. Supported by national billboard advertising, local TV commercials and backed up by advertising on CNN international, the Wichtech brand has become a household name in middle and upper income circles. Over a period of 10 years, Wichtech has grown to become an outstanding international partner of stone coated metal roofing supplied by New Zealand’s AHI Roofing Ltd. (gerard-roofs.com), who supply products in over 120 countries worldwide. AHI form part of Fletcher Building Ltd (fletcherbuilding.com), New Zealand’s biggest listed company. Wichtech also provides distribution for AHI in Ghana, Benin and Cameroon.

Other brands supplied exclusively by Wichtech in Nigeria are IPS pipes from Argentina, Polyfit Plumbing Systems from the UK, and PVC rainwater and drainage systems from Britain’s Hunter Plastics.

Something else that sets Wichtech apart is their investment in people. All of Wichtech Offices receive annual training, both from suppliers and also from leading industry experts in the fields of Professional Management, Leadership and Customer Service. From the technical side, Wichtech employs a full-time British Training Manager who coordinates training for installers throughout Nigeria. To date over 6,000 plumbing and roofing installers have received training and in 2014 dedicated training colleges will be opened in Lagos and Asaba. These initiatives have generated outstanding recognition for the company.

The firm has its location in Shop 3 Dennis Osadebay Road, By Traffic Light Junction, Asaba, Delta Nigeria. Wichtech Industries Limited is one of the leading manufacturers of quality stone coated metal roofing sheets in Nigeria with range of other products in plumbing systems, drainage systems and more. The organization has its website (info@wichtech.com).


1.10 OPERATIONAL DEFINITION OF TERMS

Management succession

Management succession simply means talent attraction which denotes the capability of an organization to entice employees to the organization by enacting policies and procedures that allow for employee choice and both selection and retention in the organization

Leadership development

Leadership development simply means identifying potential leadership talent, developing both the externally observable skills and internally nourished personal character of that talent, and providing an appropriately challenging outlet for individual development within the leadership ranks of the organization.

Exit strategy 

An exit strategy is a means of leaving one's current situation, either after a predetermined objective has been achieved, justifying premises or decision makers for any given operational planning changed substantially, or as a strategy to mitigate imminent or possible failure. 

Contingency plan 

A contingency plan is a plan devised for an outcome other than in the usual (expected) plan. It is often used for risk management for an exceptional risk that, though unlikely, would have catastrophic consequences. Contingency plans are often devised by governments or businesses.

Succession plan

Succession plan enables continuity in the organisation should the current leadership/management leave the organisation for various reasons. Succession planning also ensures smooth handover of power, creation, sharing and retention of knowledge if experts leave the organization

Managerial succession planning

Managerial succession planning as the process of identifying and developing internal people with the potential key to fill leadership positions in the company.

Organizational performance

Organizational performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives).

 

 

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