ABSTRACT
The study analyzed the impact of planning and forecasting on organizational performance in SPAR Nigeria Limited. The study was carried out in Port Harcourt, Rivers State. The study analyzed the processes of planning and forecasting in SPAR Nigeria limited, it investigated the perception of the respondents on whether SPAR Nigeria limited carries out planning and forecasting on their activities. The study ascertained the perception of the respondents on the extent of the impact of planning and forecasting on the performance of the organization and ascertained the perception of the respondents on the performance of the organization. A sample size of one hundred and forty-nine (149) was sampled but one hundred and thirty eight (138) questionnaires was properly filled and returned which was used for the analysis. The study made use of both descriptive and inferential methods of analyses. The study revealed that mean age of employees was 32.4 years, mean household size was 5.6 persons and the mean household income was N42, 532.339. The result revealed that male literate staffs who have gained some level of business experience dominate in the study. Goal of planning and forecasting in the organization was geared towards enhancing the performance of the organization, that planning and forecasting was limited to the management alone, planning and forecasting was frequently carried, the organization carry out planning and forecasting before execution. The respondents showed positive perception on planning and forecasting towards the performance of the organization. Therefore since planning and forecasting is a major determinant for optimum performance of SPAR Nigeria Limited, it is therefore recommended that organizations should strive to improve upon its performance through planning and forecasting of their activities, this is a holistic approach involving all the arms of the organizations both managerial and non-managerial as this will ensure full participation of all the staff in pursuing the broad objective of the organization
Keywords: Planning, Forecasting, Organizational Performance, Retail Industry.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Table of Contents vi
List of Tables ix
Abstracts x
CHAPTER 1
1.0 INTRODUCTION 1
1.1 Background of the Study 1
1.2
Statement of the Problems 4
1.3 Research Objectives 5
1.4
Research Questions: 5
1.5
Research Hypotheses: 6
1
.6 Significance of the Study 6
1.7
Scope of Study 7
1.8 Limitations of the Study 7
1.9 Definition of Terms 7
CHAPTER 2
2.0 LITERATURE REVIEW 9
2.1 Conceptual Framework 9
2.1.1 Concept of planning 9
2.1.1 Concept of forecasting 9
2.1.3
Concept of planning and forecasting in business organization 10
2.1.4
Concept of organizational performance 11
2.1.5
Historical background on Nigerian retail industry 11
2.1.6
Description of the strategic planning
and forecasting
process for
organizational performance 13
2.1.6.1
Generate alternative strategies 15
2.6.1.2
Evaluate alternative strategies 16
2.1.6.3 Monitor results 17
2.1.6.4
Seek commitment 19
2.1.7
The forecasting methods 19
2.1.8
Evaluation of organizational
performance 21
2.1.8.1 Productivity 23
2.1.8.2
Profitability 24
2.1.6.3
Motivation 24
2.1.8.4
Organizational
environment 26
2.1.8.5
Managerial
expertise 27
2.2.
Theoretical Literature 27
2.2.1
Contingency theory 27
2.2.2 Sequence or time-lag theory 28
2.2.3 Economic rhythm theory 28
2.2.4 Contingency theory 28
2.2.5 Goal setting theory 29
2.3 Empirical Studies On Planning And
Forecasting On Organizational Performance 29
CHAPTER 3
3.0
RESEARCH METHODS 32
3.1
Study Area 32
3.2 Population of the Study 32
3.3 Sample and Sampling Technique 33
3.4
Sample Size Determination 33
3.5 Instrument for Data Collection 33
3.6 Methods of Data Collections 34
3.7 Instrument Validity
and Reliability 34
3.8 Method of Data Analysis 34
3.9
Presentation of Data 35
CHAPTER 4
4.0 DATA PRESENTATION, ANALYSES AND DISCUSSION 37
4.1 Gender of Respondents 37
4.1.2
Age of respondent 38
4.1.3 Marital status 39
4.1.4 Level of education 40
4.1.5
Household size 41
4.1.6 Years of experience 42
4.1.7
Level of income 43
4.2 Analysis of Processes of Planning and Forecasting Involved In
Spar Nigeria Limited 44
4.3 Perception on Whether Spar Nigeria
Limited Carryout Planning And
Forecasting On Their Activities before Execution 45
4.4 Perceived Extent Of The Impact Of Planning And
Forecasting On
The Performance Of The
Organization 48
4.5 Perception Of The Respondents On
The Performance Of The Organization 50
4.6
Hypothesis Testing 51
4.6.1 Hypothesis one 51
4.6.2 Hypothesis two: 52
4.6.3 Hypothesis three 54
4.6.4
Hypothesis four 56
CHAPTER 5
5.0 SUMMARY, CONCLUSION AND RECOMMENDATION 58
5.1
Summary 58
5.2
Conclusion 60
5.3
Recommendation 60
Reference 62
Appendices 66
LIST
OF
TABLES
3.1;
Questionnaire distribution and return rate a SPAR Nigeria Limited 36
4.1 Distribution of staffs based on gender 37
4.2 Distribution of respondent based on their age 38
4.3 Distribution of respondent based on
marital status 39
4.4:
Distribution of respondent based on level of education 40
4.5: Distribution of respondent based on
household size 41
4.6: Distribution of respondent based
on their years of experience 42
4.7:
Distribution of respondents based on their level of income 43
4.8: Distribution of respondent based on processes of planning and
forecasting 44
4.9: distribution of respondents based on their perception on whether SPAR Nigeria limited carry out planning and
forecasting on their activities before execution 45
4.10: Distribution of respondents based on their perceived extent of the impact of planning and forecasting on the
performance of the organization 48
4.11:
Distribution of respondents based on the perception of the respondents on the performance of the organization 50
4.12:
Mean score perception of staff on the processes of planning and forecasting in SPAR Nigeria Limited. 51
4.13:
One tail-test of the significance in the statement that management of SPAR Nigeria Limited does not carry out planning
and forecasting of their activities 52
4.14: Impact of
planning and forecasting on performance 54
4.15:
One tail-test result of the statement that Staff of SPAR Nigeria Limited has no positive perception concerning
the performance of the organization. 56
CHAPTER 1
1.0 INTRODUCTION
1.1 BACKGROUND OF
THE STUDY
The
most single significant influence on organizational policy and strategy is the
environment outside and inside the organization (Duncan, 1972 and Grant, 1999).
Organizations are institutions deliberately designed to achieve and accomplish
certain goals. The activities in these organizations are affected by both the
situations within the organization and the situations within the larger society
or environment in which the organization operates. Currently, business
environment is perceived to have been rarely exceeded in complexity, turbulence
and rapid in change. All Nigerian organizations (large or small) must pay
greater attention than to their environments when formulating and implementing
policies and strategies in order to survive and grow (Otokiti & Awodun,
2003). Considering that performance is a crucial objective in an organization,
it is generally accepted that the structure and decision making in the
organization is influenced by environmental complexity and volatility (Miles
& Snow, 1978; May et al., 2000). Furthermore, it is argued that the
alignment of organizations with the requirements of their environment
outperform organizations that fail to achieve such alignment (Chaganti et al.,
1989, Venkatraman & Prescott, 1990; Beal, 2000). The major cause of
variation in economic and business time series in terms of performance, either monthly or quarterly is mainly due to
seasonal changes (Fildes and Armstrong, S., 2006). Seasonal adjusted methods
can cause serious data distortion to the extent that the cycles of business and
non-linearity are also affected. Series of time seasonality is made up of two
models which are root unit seasonality and periodic models (Fildes and
Armstrong, 2006).
The
typical performance management system involves planning, targets, and resources
that are negotiated, and fixed. Such systems were designed for stable trading
environments in which organizations and firms could invest and plan with
confidence. But not only has the retail industry sector shrunk dramatically as
a proportion of economic activity, the business environment is far less
predictable. Organizations must now simultaneously compete and co-operate with
each other. Entry-level costs into the markets of the information economy are
low, and new competitors can spring from anywhere at any time with new business
models that take incumbents by surprise. The steady, continuous change of the
industrial age is giving way to the unpredictable, discontinuous change of the
information age. The future outlook is increasingly unpredictable, employees
are more demanding, the pace of innovation is quickening, prices are falling,
customers now rule suppliers, and shareholder loyalty can no longer be taken
for granted. To cope with these changes, management needs to implement systems
that provide managers at every level with the capability to make fast and
well-informed decisions. They need to replace annual planning cycles with more
regular business reviews supported by rolling forecasts that enable managers to
see trends, patterns, and “breaks in the curve” long before their competitors,
and thus make better informed decisions regarding products and markets. In
particular, the retail industries need to manage through continuous planning
cycles, make rolling forecasts the primary management tool, and report
performances daily and weekly.
Organizational performance
comprises the actual output or results of an organization as measured against
its intended outputs (or goals and objectives).According to Richard et al. (2009)
organizational performance encompasses three specific areas of firm outcomes:
(a) financial performance (profits, return on assets, return on investment,
etc.); (b) product market performance (sales, market share, etc.); and (c)
shareholder return (total shareholder return, economic value added, etc.).
Specialists in many fields are concerned with organizational performance
including strategic planners, forecasting, operations, finance, legal, and the
organization’s structure.
Short term demand
estimation uses survey method while statistical methods are more appropriate
for planning and forecasting in the long run. Any of the two methods can be
used to plan forecast for an existing product; but for a new product that lack
historical data, only survey methods will be appropriate. Survey methods
involve proper investigation about the intentions of the consumers, experts’
opinions, managerial plans survey, and the markets. Forecast for demands are
made by the data collected for analysis. SPAR Nigeria Limited, which started
operations in 2009, is a major player in the retail Industry in Nigeria that
performs in a very competent industry. With the help of the talented,
resourceful and experienced persons, the organization ensures that all of the
planning and performance is dedicated to deliver only the best. For an
instance, the organization collects the people that are knowledgeable in
standard hardware and network support, eager and have the ability to learn,
apply and retain new skills, has focus on the potentials in the market, have
standardized procedures, and have professional and effective communication
skills (with technical and non-technical Skills) that make the organization
responsible for their own work. As a major player within the retail industry,
the organization serves over 5 million customers annually within the six
branches spread across the country with a staff population of over 1000.
SPAR Nigeria Limited is committed to staying at the
competitive forefront. The organization display challenges as an example of the
ways in which the organizational generates the ongoing support of valuable
partners of its supply chain (Rose, 2007).SPAR Nigeria Limited, has stocks and
wide spread of products, ranging from Grocery, Bakery, Butchery, Fruits &
Vegetables, Hot Meals, Wine & Spirits, Fast Moving Consumer Goods, Small
Home Appliances, Consumer Electronics, Mobile Phones, Laptops & Tablets,
Perfumes, Watches and Jewelry. (Kunle, 2015). The product assortment of over
5,200 items was hand-picked by SPAR Nigeria Limited to meet the various needs
of all consumers. SPAR Nigeria Limited has also added new items to its product
offering like: ready-to-drink Tea, Coffee and Chocolate, as well as Hot
Beverages, Pop Corn and Fresh Juice to cater for the people on the move. The wide
range of ready-to-eat Nigerian cuisine will also cater to the taste buds of
people all across Nigeria. SPAR Nigeria Limited as a hypermarket brand takes
cognizance of the various kinds of Nigeria missions and adapts its products and
services in respect of Choice, Quality, Service and Value to translate the
entire Nigeria experience in to a World Class One. SPAR Nigeria Limited is the
only retail chain in Nigeria with Shopper Loyalty Program called SPAR Reward
Card. The members of the Reward Card program enjoy Reward Points on every
shopping. Shoppers accumulate the Reward points, which can then be redeemed on
purchase of any item from the organization. Reward Cards can be used in any
SPAR store across Nigeria to earn and redeem Reward Points. SPAR Nigeria Limited
plans to take the program to a whole new level by introducing Exclusive offers
for Reward Card Program members. The customers in Murtala Mohammed Airport2 can
enroll for the Reward Card program from day one and start enjoying the
exclusive benefits”, Alhaji Kamzat,(2015) .
One of the advantages of planning and forecasting is that it enables
us to improve the inventory management of an organization. Decreasing inventory
is an important component of cost control in management. There are many ways to
minimize inventory, and one of the major ways is forecasting demand which is
the process of obtaining correct picture of how the future demand will look
like (Skyler Greene Hub pages, 2012).
1.2 STATEMENT OF THE PROBLEMS
In
contemporary Nigerian business environment, performance of Nigerian
organizations are predicated on factors such as low-sales, high cost of
production, low capital utilization, lack of foreign exchange to source needed
inputs, poor power supply, and low quality of goods and services, among others.
These issues have led to lack of proper integration and coordination of various
corporate subsystems in Nigerian organizations, resulting in the failure to
achieve the stated goals and objectives. Organizations are subsumed in the
environment with which they interact by importing inputs and exporting outputs.
Thus, the extremities of the environment affect the fortunes of organizations (Kennelly
and Nelly, 2003).
The modern business
management operates in a more dynamic environment. The change in the environment
has been rapid and unpredictable. Economic variables have been complex both in
form and impact on the practice of businesses in Nigeria, consumers and clients
have been showing complex behaviors both in local and international markets. The
most dramatic change has been that exhibited by competitive pressures.
Competitors have been applying one strategy or the other to adapt to the
dynamic and unpredictable nature of the business environment.
Planning and Forecasting is critical to an organization’s production
or operation department. Adequate materials must be obtained at the lowest
possible price; adequate production facilities must be provided at the lowest
possible cost; adequate labor must be hired and trained at the lowest possible
cost; and adequate logistics services must be used to avoid bottlenecks in
moving products from producers to consumers. (Skyler Greene Hub pages, 2012).
None of these fundamental business functions can be performed effectively
without accurate planning and sales forecasts. Some companies have expressed
reluctance to "manage different numbers," suggesting that when the
forecast and the goals differ, it creates confusion and lack of focus. The
reaction to such perceived confusion is to develop inaccurate forecasts that
can affect performance throughout the company. We believe that sales forecast
and sales goal must be distinct, because the behaviors they are meant to
influence can conflict each other. The problems planning and forecasting
encounter in an organization affects its productivity. Over the years,
organizations have tried a lot to eradicate these problems that sometime engulf
managerial progress. Therefore the basis for this research is to evaluate the
impact of planning and forecasting on performance of the SPAR Nigeria Limited.
1.3 RESEARCH OBJECTIVES:
The broad objective of the study will be to examine the impact of
planning and forecasting on the performance of SPAR Nigeria Limited.
The specific
objectives will therefore include;
1. Analyze the processes of planning
and forecasting in SPAR Nigeria Limited is perceived by its staff has been well
defined in the organization.
2. Investigate the management of SPAR
Nigeria Limited pattern of carrying out planning and forecasting on their
activities.
3. Ascertain if planning and
forecasting has any significant impact on the performance of the organization.
4. Ascertain the perception of the
respondents on the performance of the organization,
1.4 RESEARCH QUESTIONS:
The
following research questions were formulated to guide this study.
1.
Are the processes of planning and forecasting in SPAR Nigeria Limited
perceived by its staff as being well
defined in the organization?
2. Does the management of SPAR
Nigeria Limited carryout planning and forecasting on their activities?
3. Does planning and forecasting has
any significant impact on the performance of the organization?
4. What are the perceptions of the respondents
on the performance of the organization?
1.5
RESEARCH HYPOTHESES:
The null hypotheses that will guide
this study are :
Ho1;
Processes of planning and forecasting in SPAR Nigeria Limited
was perceived by its staff as not being well defined in the organization.
Ho2;
the management of SPAR Nigeria Limited does not carry out planning and
forecasting of their activities.
Ho3: Planning
and forecasting has no significant impact on the performance of the
organization
Ho4: Staff of SPAR Nigeria
Limited has no positive perception concerning the performance of the
organization
1
.6 SIGNIFICANCE OF THE STUDY
This study will provide retail operators, policy
makers and professionals with a new approach to developing a better
organizational planning and forecasting techniques for improved performance.
They need to be conscious about span of control,
culture, division of labor and specialization, authority and delegation is so
important to the organization and as such its importance in the growth of the
organization is vital at these times when the Nigerian retail sector is under
the spot light as a result of brand diversification and demands. The study will also be of help to the organizations in
repositioning themselves for improved performance especially as it concerns the
relationship between the organizations employer and the employees. It will thus
assist SPAR Nigeria Limited to be aware of the importance of effective
organizational planning and forecasting in ensuring sales improvement and customer’s
satisfaction, at relatively no cost. The study will serve as a pivot point to
other students that wish to make further research in this field. The researcher
will also benefit, because it is in partial fulfillment of the requirements for
the award of the certificate in Post graduate study (PGD).
1.7 SCOPE OF STUDY
The study on
the impact of planning and forecasting on organizational performance will be
conducted through a random survey on the management and staffs of SPAR Nigeria
Limited in Port-Harcourt, the specific objectives that will be considered,
including the socioeconomic characteristics of the workers, importance of
planning and forecasting, impact of planning on performance of the
organization, impact of forecasting on performance of the organization,
ways of
carrying out planning and forecasting and factors that influence the
implementation of planning and forecasting in the organization.
1.8 LIMITATIONS OF
THE STUDY
In
carrying out this research, some challenges could pose treat to the successful
completion of this research work. These challenges will be identified as the
research work progresses.
1.9 DEFINITION OF TERMS
Management: - This is the application of
human and material resources in achieving the objective of an organization
effectively and efficiently through planning and forecasting.
Manager: – This is a person that
makes use of the material and human resources of an organization in achieving
their objectives.
Planning: - It is the act or process of making plan. Planning is a major
component of the management process, which is concerned with defining ends, means
and conduct at every level of organizational life.
Forecasting: - To say what one think will
happen in the future based on information that he has now.
Organization: - It is a system of behavior designed
to enable humans and their machines accomplished goals. Organization is also
defined as the sum total of the ways in which it divides the labor distinct
takes and then achieves co-ordination between them.
Business: - This is any economic activity
oriented towards producing goods and services at a profit for the satisfaction
of mankind.
Performance:
- Performance is defined as behaviors or activities that are performed towards
achieving the organization’s goals and objectives (Motowidlo, Borman, &Schmitt,
1999)
Subsumed:
- To
consider an occurrence as part of a principle or rule.
Predicate:
- To suppose, assume or infer.
Bottlenecks:
- Part of a process that is too slow or cumbersome.
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