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THE IMPACT OF ENVIRONMENTAL FACTORS ON ORGANIZATIONAL PERFORMANCE

ABSTRACT

It has been argued that the success and effectiveness of an organization are not determined solely by the abilities and competencies of the employees and management alone, the environment also has profound effect on company operations. Based on these facts therefore, this research work was undertaken to analyze the impact of environmental factors on organizational performance using ABC Transport Company as the case study. In carrying out this work, 154 copies of the questionnaires were distributed to the company understudy, and to test the validity of the assumption, an hypothesis was formulated for this study. The chi-square (X2) statistical tool was used the major finding of this work can be summarized as follows; organizational performance and organizational structure influences corporate performance of ABC Transport company. After the analysis, it was discoursed that the x2 test statistics is greater than the critical value leading to the rejection of Ho. In other, the alternative was accepted and it was concluded that “environmental factors has significant impact on organizational performance. Finally, it was recommended that the management of the company could perform their task effectively, by having a good and clear understanding of the environment variables, this will inturn increase productivity, thereby achieving its set objectives.    

CHPATER ONE

1.1  BACKGROUND TO THE STUDY

The environment is a major source of uncertainty to a business manager and as such, it influences the design of any organization and the configuration of organizational structure (Akanwa, 2011). Environment could also be regarded as a combination  natural  object ( living and non living things) made  by human  and the inter-relationship  between  them and various  circumstance  that surround  people  on earth (Ohazurikke  2013) Business exists in an environment that consist of factors and forces that are external to the firm. In pursuance of its objective, an organization cannot achieve its objectives without interacting with other members of the environment. An organization and its environment are inter-dependent; the organization depends on its environment for the source and opportunities necessary for the sources and opportunity necessary for its existence. Furthermore the environment determines the limits of the organization activities for example, the passing of a new law by government may make certain business in Nigeria either fold-up or join another line of business (Alugbo 2012). The environment sources of growth may therefore be internal or external. Both have impact on the organization.

A business can therefore be regard as an open adaptive system with its environment acting as a sepias system; such business must change volumes, material or energy within the environment, this the principal task of the manager is to design an internal environment for performance, he necessary do so within the strength of the enterprise, externals environments whether economic, technological, social political or either all Nigeria context (Awuto 2017): it is positive when the outcome of the influence is favorable but become negative when the outcome of the influence is unfavorable (Ohazurike 2013). However, the aim of this research is to find out the impact of environment factors on organizational performance how and to what extent can an environment influence the objective and goal of corporate organization, this study will at this point advise management to be efficiently informed and manage its environment in order to adapt to the changing climate so as to accomplish its set of objectives and goals.

HISTORICAL BACKGROUND OF THE STUDY

Brief history of ABC transport Plc Associated Bus Company limited, operators of ABC transport commenced operations on Road passenger transportation on February 13, 1993 as an OFF-Shoot of ropido Venture with a view of running a modern road transport system in Nigeria.In March 2003, capital Alliance private Equity (CAPE) acquired 30% shares of ABC transport with the acquisition; capital allowance (Nigeria) became stakeholder in ABC transport, a partnership that repositioned the company for greater performance. ABC transport operates Luxurious and mini bus services according to accepted international standard of road transportation, its services are specially designed for distinguished travelers who would other wise use services.

The operator within Nigeria is carried out in ultra modern terminal with comfortable luggage’s in various cities like Lagos (Jibawn and festac),Aba, Owerri, Port-Harcourt, Abuja, Enugu, Warri, Onitsha and Umuahia. ABC buses are dubbed with the company’s trademark the “Reindeer. The choice of the reindeer as the company’s symbol was made after a careful study of the peculiarities of the animal which is strong, fast and moves in herbs. For the company’s remarkable achievement in transportation ABC transport was given the following awards.

1) Comm. Service awards 1997-1998 rotary clubs.

2) Development excellence award 2005 in transport

3) Award for excellence as best Luxury bus operator for the year 200, 2003.

4) Best security friendly/conscious land transport company award 2006/2007.

5) West African transport services award 2007 by quality management development institute

6) Transport of the year 2004 award by Lagos aviation and LogisticsCollege.

1.2  STATEMENT OF THE PROBLEM

With the dynamic changes in the society many organizations have in one way or the other been affected due to poor planning, perhaps not having good management team. Organization has to adapt to certain changes in the loess environment but still it will not avail. Corporate organization who have failed to analysis and diagnose its external environment have suffered great losses that is in term of poor return on investment, poor patronage from customer, poor quality of product or service etc. therefore, due to the volatile nature of today’s business environment and the rapidity with which changes occurs, it comes imperative that for every organization to be successful. It has to monitor all the forces influencing its operating environment.It is on tight of this that this study following problems associated with ABC. Government regulations influence organizational objectives.

1)  Lack of skilled labour does lead to poor environment scanning result.

2) The company was able to render services that meet the need of customers and their services are in conformity with customer need, but customers do react negatively to sudden increases in the price of their service are in conformity with customer need, but customers do react negatively to sudden in creases in the price of their service. Political interference (instability) affects few level of patronage from customers.  

3) Competition from other firms (company) affects the company from increasing its market shares.  

1.3  OBJECTIVE OF THE STUDY

The purpose of this study is to examine the following:

1. The impact of environmental factor on the effectiveness of business organization.

2. The level of competition so as to know whether the environment is favorable or not.

3. The degree of environmental hostility, the decision of strategic i.e finance, marketing, purchasing, production personnel department etc.

4. The goal formulation as responsibility of managers’ procedure for its attainment.

5. Whether culture is significant to its corporate success or inhibits its performance.

6. If the company has a good relationship with customers and what impact it has on business.

1.4  SIGNIFICANCE OF THE STUDY

According to Anyanwu (2010) significance means the conveyance of meaning to specific people and groves. It is important to know that organization operates within an environment which directly or indirectly affects its result; the importance of business environment to organizational performance cannot be over stated. Organization irrespective of how proper their program is articulated, they have to take cognizance of their environment. It is on this perspective that the significance of this work cannot be understand, hence it will be of benefit to the researcher, public.

The case study organization and management scholars in the following ways. This work will serve as a guide and reference purpose to the public and other researcher writhing on this topic.The case study organization stands to get more benefit from researcher. This is because the research will be based directly on its activities and also help them especially the managers to know how to employ and manage the business environment effectively.This study will also be useful to the academic development with business environment influences organizational performance and for this reason, will be very useful to the management scholars.

1.5  SCOPE OF THE STUDY

Anyanwu (2010) says that the scope of the study or its definitions is concerned with establishing of boundaries of the research. In other words, the scope tries to tell the reader where the study begins and where it ends.The scope of the study covers the impact of environmental factors an organizational performance, there is no significant relationship between the company’s policy as part of internal factor of business environment in relation to its organization performance on ABC transport limited in Imo state.

1.6  RESEARCH QUESTIONS

The research question used in this work is as follows:                      

Do changes in the environment have favorable effect on corporate goal accomplishment?

c) Can management successfully control the business environment under hostile conditions?

c) Does government legislation influences corporate objectives.

d) What are the major environment factors that affect organizational performance?

1.7  RESEARCH HYPOTHES

Ho: Environment factor has no significant impact on organization performance.

1.8  LIMITATIONS OF THE STUDY

Fundamental problem were encountered in the course of this research, the researcher being very unwilling/restive in their response to the question and in most cases determines explanation before giving the answers.The time period, with which this research was carried out, it is impossible to collect all the adequate data.  The study was handicapped by inadequate fund, this therefore showed down the pace of the work.

1.9  DEFINITION OF TERMS 

· Businessenvironment: This refers to all elements both internal and external that impinges or which influences organization performance.

· Effectiveness: This is the ability of business organization in achieving its target.

· Environment scanning: These refer to the process of studying the environment in which the organization exists to pinpoint opportunities and threats.

· Organization: These refers to a system in which two or more people work together in a structural way to achieve specified objective.

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