ABSTRACT
The study appraises information technology and the
productivity of micro business enterprise in Nigeria: A study of selected organization in Amuwo-Odofin. The
main objectives of the study are to examine the effect of information
technology on the profitability of small business operations; and to appraise
the contribution of information technology on revenue generation in small
business enterprises. The population for this study comprise of (the entire) one
hundred and sixty members of staff of Sunny Tech Investment and Star Faces
Production Enterprises. Out of which a sample size of seventy
five was selected for the study using simple random technique. In analyzing the
data collected for this study, frequency tables and simple percentages were
used to present and analyze data according to the research questions, while the
stated hypotheses were tested using Chi-Square technique. The study affirmed
that information technology significantly affects the profitability of micro
business enterprise. The study also revealed that information technology has
contributed immensely to the revenue generation of micro businesses. The study commended that the management
of small businesses should endeavor to be information technology compliant to
give their business a leverage. The study also recommends that operators of
small businesses should take advantage of the internet and social media to give
their businesses a wide reach and unrestricted business exposure.
TABLE OF CONTENT
Pages
Title Page
i
Certification
ii
Dedication iii
Acknowledgement iv
Abstract v
Table of Contents vi
CHAPTER
ONE: INTRODUCTION
1.1
Background to the Study 1
1.2
Statement of the Problem 3
1.3
Aim and objectives of the Study 5
1.4
Research Questions 5
1.5
Relevant Research Hypotheses
6
1.6 Significance of the Study
6
1.7 Scope of the Study
7
1.8 Limitation of study 7
1.9 Definition of Terms 8
References 9
CHAPTER
TWO: LITERATURE REVIEW
2.1 Preamble 12
2.2 Theoretical Framework of the Study 12
2.3. Empirical Framework of the Study 16
References 31
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Preamble 39
3.2 Research Design 39
3.3 Population of the
Study 39
3.4 Sample, procedure and
Sample Size 39
3.5 Data Collection
Instrument and Validity 40
3.6 Method of Data
Analysis 40
3.7 Limitation of
Methodology 41
Reference 42
CHAPTER
FOUR: DATA ANALYSIS AND PRESENTATION
4.1 Preamble 43
4.2 Presentation and Analysis of Data 43
4.3 Test of Hypotheses 52
4.4 Discussion of Findings 55
CHAPTER
FIVE: SUMMARY, CONCLUSION AND RECCOMMENDATION
5.1 Summary of Findings 57
5.2 Conclusions 58
5.3 Recommendations 58
Bibliography
60
Appendix:
Copy of Questionnaire
72
CHAPTER
ONE
INTRODUCTION
1.1 Background to the Study
It
is widely recognised that micro enterprises are
very important for economic growth and job creation in both developed and
developing countries (Aris, 2006). Researchers argue that micro businesses play
a major role in poverty alleviation in developing countries and also stimulate
domestic and regional economic growth in national and regional economies
(Berisha-Namani, 2009). They help to diversify economic activity and are
flexible to changing market demands (Ongori, 2009). There have been many
discussions over the importance of this sector to the economy although there is
evidence to ’suggest that small firms do play a major role in the world
economy’ (Timmons, 1994) and that they constitute the bulk of enterprises in
all world economies (Storey, 1994).
In
Nigeria, micro business enterprises also play a significant role in terms of
economic development as they provide the cornerstones on which Nigeria’s
economic growth and stability rests (Ojukwu, 2006). The Federal Office of
Statistics reveals that about 97% of the entire enterprises in Nigeria belong
to the micro and small scale businesses and they employ an average of 50% of
the working population as well as contributing up to 50% to the country’s
industrial output (cited in Ihua, 2009). Micro business enterprises are therefore
integral sources of revenue, employment and product innovation for the economic
growth of a country (Kropp, Fredric and Zolin, 2008). Small and micro businesses are generally
characterised by a smaller workforce and lower turnover. Information and Communication
Technologies can help micro businesses enterprise create business opportunities
and combat pressures from competition (Levy and Powell, 2005). Small businesses
generally have weak capital base since majority of them are either sole
proprietorship or partnerships with slim opportunity to get finance from the
financial institutions like big companies (Kotelnikov, 2007).
Information
Technology (IT) is defined as any technology that facilitates communication and
assists in capturing, processing and transmitting information electronically (Hazbo,
2008). Some commonly used ITs in many developing countries include: computer,
radio, television and print media (Adegoke, 2006). Modern ITs have become
available to many countries worldwide in recent years. However, the most rapid
growth are in computer and mobile phone usage (ibid). The adoption of IT is
crucial to micro and businesses Enterprises as it has become a major catalyst
and enabler of organizational change (Hazbo, 2008). IT increases richness and
reach (Evans and Wurster, 1997). Fayomi, (2007) argue that micro and businesses
enterprises have the opportunity to achieve a competitive advantage from
advances in IT through innovation, marketing, efficiency gains, better quality
and customer responsiveness. Also, (Levy, 2002) found some evidence to indicate
that the adoption of IT would change the way businesses operate in this era of
globalization by changing business structures and increasing competition,
creating competitive advantage for businesses and by changing business
operations. Hence, for Micro and Small Scale Businesses Enterprises to grow and
become successful, they have to be connected to the digital marketplace.
The
identification of the link between information technology and the productivity
of micro and businesses enterprise is receiving due attention in the Nigerian
literature in recent times due to the giant stride made the information
technology sector (Levy, 2002). Within the
last decade, the use of the Internet in Nigeria has grown so rapidly with the explosion of Internet Service Providers (ISPs),
Internet cyber cafés and access points (Kotelnikov, 2007). This had
several positive impacts on the social and economic sectors in the country as many Nigerians has keyed into the
dynamic economic potentials inherent in information technology dissemination
(Adegoke, 2012).
Some recent studies of relationship between investment in
information technology and Micro and Small Scale Businesses) productivity
(Kozak, 2005; Abassi, 2007) have reported positive and significant effects of
such investments. Experiences from practices of businesses over the world, as
observed by Oladejo and Yinus, (2013), suggest that taking advantage of
information technology diffusion is possible for business organization and
adoption of information technology can provide organization with valuable
information, improved productivity, improve relationships with customers and
suppliers, increase efficiency and reduce cost of production among others.
According to World Development Report (1999), for leading
countries in the world economy, the balance
between knowledge and resources has shifted so far towards the former that knowledge has now become
perhaps the most important factor determining the standard of living more than
land, tools, and labor. Today’s most technologically advanced economies are
truly knowledge based. Countries are now moving from an industrial economy to a
knowledge economy in which economic growth is dependent on a country’s ability
to create, accumulate and disseminate knowledge. Computers and the internet
catalyzed the growth of the knowledge economy by enabling people to put
knowledge into a digital form easily transmitted to anywhere around the world (Ojo,2004 ).The purpose of this study however is to
appraise the benefit of information technology (IT) and its relevance to
productivity of Micro and Small Scale Business Enterprises in Lagos State.
1.2 Statement of the
Problem
In
developed countries, information
technology (IT) has been used to change the way businesses are conducted in
order to have a strategic advantage in their various operations. However, the
investment returns of information
technology in developing countries have fallen short of its potential.
Researchers have attributed this problem to organizational factors,
environmental factors and lack of technical skills, among others (Muhammad,
2008).
The
recent increase in technological advancement has strong impact on micro business
enterprises in other parts of the
world including China and Brazil (James Manyinka et al, 2011). Emphasis on
impact of information technology on
productivity and performance on Small
and Micro enterprises can be considered as an issue of much apprehension
to Entrepreneurs, scholars and practitioners in developing economy like
Nigeria. In a global world, the use of information technology to increase
productivity and performance is one of the challenges being faced by Small and Micro Enterprises presently in
developing country due to the lack of knowledge on the benefit of IT in their
businesses (Akande, 2013).
Also,
all over the world, globalization has created the need for all kinds of
business organizations to continuously upgrade their functions, processes, and
be productive in business not only for innovativeness but for survival.
However, in Nigeria today only large organizations seems to have enough
resources to adopt information technology to enhance their business operations
while on the other hand Small Enterprises have limited financial and
human resources to adopt information
technology and this has ripple down negative effect on their productivity level
(Kropp, Fredric and Zolin, Roxanne, 2008).
Some
other problems that affect developing countries from adopting information
technology in enhancing Small enterprises
operations are: economic constraints, systems, and infrastructure and
application problems. Of all these problems however, lack of skilled human
resources and lack of finance has been described as principal barriers blocking
the diffusion and effective exploration of information technology by Small enterprises in developing countries
(Abbasi, 2007).
1.3
Aim and Objectives of the Study
The
broad aim of this study is to appraise information
technology and the productivity of micro business enterprise in Nigeria: A
study of selected organization in Amuwo-Odofin
Other
specific objectives of the study are to:
Examine
the effect of information technology on the profitability of small business operations
Appraise
the contribution of information
technology on revenue generation in small business enterprises
Examine
the challenges in adopting information technology for organizational
productivity
Determine
the relationship between information technology and product
innovation of micro business enterprise.
1.4
Relevant Research Questions
To
what extent does information technology affect the profitability of micro
business enterprise in Lagos State?
What
is the contribution of information technology on revenue generation of micro businesses?
What
are the challenges in adopting information technology for organizational
productivity?
What
is the relationship between information
technology and product innovation of micro businesses?
1.5 Relevant Research Hypotheses
In
order to answer the research questions and achieve the objectives of the study,
the following hypotheses are advanced and will be tested in the course of this
study.
Hypothesis
I
There
is no significant relationship between information technology and the profitability
of micro business enterprises
Hypothesis
II
Information
technology does not contribute significantly to revenue generation in micro
business enterprises
1.6 Significance of the Study
This
study is of significance to the following stakeholders:
Policy
Makers/Government:
Government
and policy makers stand to benefit from this study because it will give them
insight into the role technology plays in enhancing the performance and
productivity of small and micro business enterprises. Finding of the study will
sensitize policy makers on the need to equip micro and small scale businesses
with necessary technological facilities that will give their business leverage.
Local
Entrepreneurs
Small
business operators will educate operators of small businesses operating in
Amuwo Odofin on the importance of employing technology to improve and enable
their business operations. This is important because technology is the language
of business in the 21st century.
Researchers
This
study will contribute to the body of knowledge and be useful as a reference
material for further studies in the research domain. The study is also
important because it is a requirement in partial fulfillment of the award of
bachelor degree by this great citadel of knowledge (University of Lagos, Akoka.),
1.7 Scope of the Study
The
coverage of this study is restricted to appraising the contribution, challenges, and prospects of information
technology on the productivity of small scale enterprise in Nigeria with focus on selected micro and small scale
businesses in Amuwo Odofin, Lagos State.
The research will also investigate the management issues involved in
organizational productivity in Sanny-Tech Investment and Star Faces Product
Nigeria Limited, Amuwo Odofin, Lagos State. The study emphasize on information
technology, productivity, contribution of IT to revenue generation, challenges
militating against IT deployment to small firms etc.
1.8 Limitation of Study
The
main limitation of the study is the reliance on information supplied by micro
business operators who may not be or want to make a full disclosure of their
businesses to an unknown person. There is also the constrain and delinking
micro businesses as small businesses
Factors
such as economic environment, political instability and government policy on
micro business are other constraints that can inhibit the richness of this
study, apart from time and limited resources available to the researcher.
However, these limitation were overcome by the continuity the researcher, who
is a director in a micro-business enterprise.
1.9 Definition of Term
Information
Technology: This term generally involves the harnessing of electronic
technology for the information need of the business at all level.
Productivity:
is concerned with the job activities of a worker and how well those activities
were well executed. It is the efficiency of the productive factors, translated
in the output from input of material and resources.
Micro
Enterprise: Micro-Enterprise in the Nigerian context are business venture whose
staff strength is not more than ten (10), and whose capital outlay do not exceed
five hundred thousand.
Innovation:
The process of translating an idea into a good or service
that creates
value
or for which customers
will pay.
Profitability: profitability is the state or condition
of yielding a financial
profit
or gain
Revenue
generation: Revenue generation is the process
by which a business organization markets
and sells
a product
or service
to produce
income.
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