IMPACT OF MANAGEMENT CONTROL ON ORGANIZATIONAL PERFORMANCE (A CASE STUDY OF ROYAL SALT NIGERIA LIMITED RIVERS STATE

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

There exist in literature several managerial action and function that are targeted at ensuring organizational success. In fact it accounts for the many theoretical conceptualization and expositions that makes it imperative for all mans action. The functions therein (management) are notably planning, organizing, directing, staffing and control. These functions have their various distinct  characterization that permits the attainment of business goals.

Essentially, the action function has attracted a wide range of scholastic input (Fubara, 1998; Billara, 2002; Phil, 2006). This is in the light of the fact that organizational action or activities must be guided and accessed including the human resource to ensure that the desire goals are met. Put differently, the control function ensures that actual meet expected and this is achieved though management action that steers the process towards achieving goals.

In today’s work organization there is ensuring debate over the management control function as business failure are largely attributable to managerial failures in ensuring control mechanisms and framework that compels commitment of all organizational members (Robinson, 2000; Bunazel, 2004; Kendibia, 2005).

Kazmir (2002), has observed strategy implementation in most organizations as experienced setbacks due to management inability to establish control parameters that would ensure compliance and definite actions. Of course it has results to low capacity utilization since there are no checks to detect problems even before they occur and act proactively. In same vein there is gross low level productivity in today’s organization and this according to Benala; (2005), is as a result of inability of management of firms to raise questions relating to objectives and overall performance. The thinking here is that the accelerated rate of change in organizational environment requires that control should attract priority attention in firms.

Importantly, the performance of firms especially in public work organization is a source of concern considering the complex organizational environment laced with political dynamics that often times erode management control efforts. Eboh (2006), noted that this is the bane of public organizations. In the light of this thinking, this study is aimed at investigating the influence of management control on organization.

1.2   STATEMENT OF THE PROBLEM

In the evaluation of management controls on organizational performance some problems have been observed. In times often than not, management  do not set control measures to serve as a means of evaluating plans that have been made at the various levels of management. This problem often causes or makes room for deviation in the management process.

Some of the specific problems in Royal Salt Nigeria Limited are:

1. Shortage of raw materials due to lack of finance in the firm.
2. Low productivity due to shortage of workers.

Furthermore, the profitability of the organization would be threatened because of the production level in Royal Salt Nigeria Limited Port Harcourt plant. In other words, the employee’s performance would be opened and adequate appraised would be lacking. Thus the researcher intends to carry out an exploratory, across-sectional survey of Royal Salt Nigeria Limited Port Harcourt to ascertain the impact of management controls on organizational performance (productivity, capacity utilization, profitability and workers morale).

Finally, the profit and managerial efficiency would be a subsidiary issue thus; the researcher wants carry out a painstaking investigation to know the impacts of management controls on organizational performance.

1.3   OBJECTIVES OF THE STUDY

In view of the above identified problems in Royal Salt Nigeria Limited, the objectives of this study are as follows:

1. To ascertain the extent to which increased productivity depends on the adoption of management controls in Royal Salt Nigeria Limited.
2. To find out the extent to which increased capacity utilization depends on the adoption of management controls in Royal Salt Nigeria Limited.

iii. To ascertain the extent to which increased profitability depends on the adoption of management controls in Royal Salt Nigeria Limited.

1. To find out the extent to which increased workers morale depends on the adoption of management controls in Royal Salt Nigeria Limited.
2. To ascertain any short comings/impediments of the present management controls in Royal Salt Nigeria Limited and make some recommendations.

1.4   RESEARCH QUESTIONS

The following questions are raised to guide the study;

v To what research extent does management control helps in increasing productivity in the organization?

v To what extent does management control helps in increasing capacity utilization in the organization?

v To what extent does management control helps in improving the profitability of the organization?

v To what extent does management control helps in improving employee morale in the organization?

1.5 SIGNIFICANCE OF THE STUDY

There are fundamental truths and findings as regards to management controls and organizational performance in establishments. These tenets are expected to be evaluated and exposed at the end of this empirical investigation. Thus, this study will be useful to other researchers especially students who want to know more about managerial controls organizational performance. For the management of Royal Salt Nigeria Limited Port Harcourt plant, the tenet of control.

And performance would be adopted for decision-making at the co-operate level. The government of public sector could use effective managerial control methods to regulate the ailing public sector. Other managers and workers in general could fall back upon this work as a guide for better organizational performance.

1.6 SCOPE OF THE STUDY

The study focuses on the impacts of management controls on organizational performance in Royal Salt Nigeria Limited Port Harcourt plant. It is a descriptive analysis of the impacts of management controls on organizational performance in terms of productivity, capacity utilization, workers morale and profitability of the company. The study covered the activities of all departments: such as account, production, finance, marketing and sales departments of the company. It focused on managers, supervisors and workmen, the researcher also took cognizance of those that are directly involved in production activities; hence manager’s supervisors and other staff of Royal Salt Limited all auxiliary staff was excluded from the scope of all research.

1.7 LIMITATION OF THE STUDY

Time was indeed a major constraint of the researcher in the course of carrying out the study; this is because of the tight schedule of the research in combining this research with other competing academic work.

Lack of Fund: Another constraint experienced by the research in the course of the study. The researcher on many occasions ran out of cash in transporting himself to Port Harcourt in the course.

1.8 DEFINITION OF TERMS

Control: Is the ability to drive and keep your environment in a healthy state-where application performance is assured while maximizing resource utilization the “desired state”.

Impact: Is the measure of the tangible and intangible effects (consequences) on one thing’s or entity’s action or influence upon another. Is a forceful striking of one body called impactor (for example a Neo), against another body called target body (such as a moon or planet).

Management: Management consists of the interlocking functions of creating corporate policy and organizing, planning, controlling and directing an organization’s resources in order to achieve the objectives of that policy.

Organizational: Is a combination of people or individuals efforts working together in purse of common goals. They are made of people, purpose, structure; they utilize technology, common values systems operate in the context of internal and external environment, leadership styles.

Performance: Is an act of performing carrying into executive or action, achievement accomplishment representation by action.