the growth strategies of small and medium scale enterprises in Calabar Municipal L.G.A C.R.S written by Jerome Etim

CHAPTER ONE: INTRODUCTION

1.1      Background of study.

When developing strategies to create business growth, perhaps you are on the brink of launching a new range of services, rolling out a new brand of product, or perhaps you just need to make more profit. However, the type of strategy you adopt will depend on the type of business your into, who your target audiences are, and what resources and skills you have at your disposal. The proper co-ordination of human resources, labour and capital will result in a firm’s growth (Chibundu, 2006).

Managing growth of SMEs is a major strategic issue for any growing firm (Arbaugh, and Camp, 2002). However, this research work explores the growth strategies of small and medium scale enterprises in Calabar Municipality using the following firms as a case study; Tun 7 Nigeria Limited and Mornirose Bakery Ventures.

Thompson (2001:563-565) presented four growth strategies necessitated for small and medium scale enterprises (SMEs) growth as “(1) organic growth i.e. been efficiently organised; (2) acquisitions i.e. skills development; (3) strategic alliance i.e. association of groups with common aims, and (4) joint venture i.e. jointly undertake business enterprises with firms of common interest”. This strategy gives an entrepreneurs edge in his market niche, and help them grow steadily.

Moreso, proper planning is another vital strategy that also helps SMEs growth. Inyang (2004:27) noted “planning is an attempt by most organisations to predict the future by as much as possible reducing the future uncertainty. It includes establishing the organisation’s objectives and formulating strategies, programmes, policies, and standards which are needed to accomplish the set objectives.” It is fundamental for SMEs to embark on planning. Becham (2011:39) stated that “small and medium scale enterprises are often too busy dealing with day-to-day issues to have time to worry about the future”. The lack of planning culture has been the major hindrance to SMEs growth in Calabar municipality. Sauser (2005:4) noted “starting a business is a risky venture, and the chances of SMEs owners making it past the five year mark are very slim. They should develop both long-term and short-term strategies to guard against failure”. Moreso, SMEs firms would experience immense growth if the entrepreneurs nest strategies that best suit their firm’s goals and objectives and imbibe a planning culture.

The problems affecting SMEs growth in Calabar municipality as identified by respondents, researchers and scholars ranges from low capital, lack of managerial and entrepreneurial skills, governmental restrictions and regulations, and internal factors etc. The research work hopes to identify strategies that would help SMEs in Calabar municipality overcome these challenges, and attain steady growth rate.

1.2      Statement of problem

Most SMEs have folded up or crumbled today because of lack of growth strategies for long-term actualisation of their goals and objectives. Some small and medium scale business enterprises formulate wrong or short-term goals or strategies without taking into consideration the long-term benefit and future of the firm. Lack of creative and innovative business ideas, underdeveloped entrepreneurship culture and limited understanding to modern production technologies, marketing and business techniques makes their strategies to failure.

The reason why some small and medium scale enterprises loose their customers or remain stagnated is because there is no sound strategy laid down for good customer relationship and firm’s image. Some business enterprises have sound strategies but do not know how they can be effectively applied.

Administrative problems was also identified has the major causes of SMEs growth strategies failure. Researchers identified poor recordkeeping, inexperience in the field of business owners, particularly a lack of technical knowledge, lack of planning culture, and lack of market research (Kazooba, 2006; Mambula, 2002; Eeden et al., 2004).

Objectives of the study.

The objectives of this study are as follows:

 i. To analyse some growth strategies for the Small and Medium scale enterprises in Calabar Municipality.

ii. To bring to limelight or to the awareness of general public, and small and medium scale business owners how growth strategies can lead to the growth and development of their businesses.

iii. To make case or show how valuable growth strategies are to the stability and long-term future of any firm.

 iv. To compare some growth strategies adopted by some small and medium scale enterprises with one another.

v. To choose and analyse goal oriented strategies for small and medium scale enterprises.

1.4 Research question.

i.             How has growth strategies helped in the growth of small and medium scale enterprises in Calabar Municipality?

ii.           To what extent has growth strategies contribute to the attainment of goals and objectives of small and medium scale enterprises in Calabar Municipality?

iii.         To what extend will the analysis of growth strategies for small and medium scale enterprises increase the output and income of SMEs in Calabar Municipality?

1.5      Research hypothesis.

The hypotheses for this study are stated as follows:

i)

H0: There is no significant relationship between growth strategies and the growth of small and medium scale enterprises in Calabar Municipality.

H1: There is a significant relationship between growth strategies and the growth of small and medium scale enterprises in Calabar Municipality.

ii)

H0: There is no significant association between growth strategies and the attainment of goals and objectives of small and medium scale enterprises in Calabar Municipality.

H1: There is no significant association between growth strategies and the attainment of goals and objectives of small and medium scale enterprises in Calabar Municipality.

1.6      Scope and limitations of study.

The scope of this study was restricted to studying the growth strategies of selected small and medium scale enterprises in Calabar municipality. Tun 7 Nigeria Limited and Mornirose Bakery Ventures are the SME firms used in the research work.

The researcher envisaged some constraints that affected the success of the study. These included: time constraints, which affected the adequate attention needed for academic activities. Also, the attitude of the respondents in giving the required and sincere responses to the questions asked. They thought that revealing or answering such question would expose their managerial inefficiencies. Another constraint was finance, due to its relative scarcity; it reduced the pace of the study.

1.7      Significance of the study.

The study is significant in the following ways:

i.             It will guide on investigation of the effect or analysis of growth strategies for small and medium scale enterprise.

ii.           The study will also create awareness among businessmen and women or small and medium scale business enterprises on the best strategies available for them to make their business grow.

iii.         It will also provide small and medium scale enterprises with the strategies of dealing with their customers and attract them to their business environment.

iv.         The study will also arouse feelings of concern for business owners, those interested in business establishment etc.

v.           This study would be of immense help to future researchers who are interested in the subject matter.

1.8      Historical background of the companies studied.

Tuns 7 Nigeria Limited.

Preamble: the organisation was established in 2000, by Mr. Tunde Osisanya, with the major scope of dealing on furniture item and electronics. Now a section of the firm is devoted to clothing.

Business location: the business is located at Ibom layout Marian Calabar, Calabar municipality local government area, where its resources are easily transported to the firm because of good roads. The location of the firm was influence by the choice of the model of business which needed to be constantly seen by customers who drive or walk pass to stimulate the desire to buy.

Staff strength: The firm boost of staff strength of forty (40) workers employed to carry out their daily operation of furniture or electronic delivery, manager, sales representative, marketing agent, security and cleaner.

Product delivery: The firm’s products are sold to its customers on small or large quantity. In the case of small-scale are usually for personal use, while, large-quantity are for organisation or government contracts. The distribution department ensures that the truck or vans are used to deliver the goods at the customer’s location on request.

Sales and profitability: Sales are done on either the basis of cash and carry or cash on delivery. The profit ratio of the firm has been unstable as a result of governmental regulations and restriction. According to the manager the unstable Government policies on ban and unban furniture goods at short intervals is a major problem for his business. This makes profit margin unstable and growth rate of the firm slow. This also cause in consistency in the firms market strategies and long-term policies.

Mornirose bakery ventures.

Preamble: The business organisation was established in 1995, with the major aim of manufacturing and distributing all kinds of bakery products such as cake, bread, all assorted snacks, and bakery made confectioneries.

Business location: The business is located in Calabar Municipality local government area, where it can source its raw materials and other valuable resources (such as human capital) to enhance its production.

Products: The organisation’s product ranges from Duke Bread, Mornirose bread, Supreme gift bread, Royal bread, meat-pie, roasted meat, egg and meat roll, etc.

Staff strength: The organisation’s workforce is made up of forty-five (45) workers, distributed across all the functional areas of their operations. These workforces articulates their various skills into making sure that their assigned duties are carried out daily in the most efficient and effective way.

Distribution strategy: The organisation’s products are distributed within and outside the local government area. The organisation institutes an inclusive distribution strategy, which ensures that the prices of their products are affordable and commensurate with the value of the product whenever they need them. Their price ranges from between 30-60 Naira, depending on the product to be purchased by the customer. The prices are fixed at an affordable way so as to facilitate increased patronage by customers.

Management: The management of the business operates an open door policy, where other members are allowed to contribute their own quota into the affairs of the business. They create a clearly defined communication system, such that the employees easily understand the policy and strategy of the business.

1.9      Definition of terms

The keywords used in this research are defined as follows:

Enterprises: Microsoft Encarta dictionary (2009) defines enterprise as an organised business activities aim specifically at growth and profit.

Management: Aluko, et al. (2007:122), defines it as “the direction of an enterprise through planning, organising, coordinating and controlling of its human and material resources towards the achievement of a predetermined objective”.

Small and medium scale enterprises (SMEs): Hallbery (2006:1) defines SMEs as “statistically, SMEs is usually based on the number of employees or the value of assets. The lower limit for small-scale enterprises is usually set at 5 to 10 workers and the upper limit at 50 to 100 workers. The upper limit for medium scale enterprises is usually set between 100 and 250 employees”.

Strategies: Johnson (2010:218) defines strategies as “the scope and direction of an organisation over the long-term; which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations”.

Business growth: Slywotzky (1998:8) defines business growth as “when a business grows by stretching its business designs to serve customers that the business designs were not intended to serve”.

Entrepreneur: Aluko. et. al. (2004:201) defines entrepreneur as “a person that combines the factors of production (land, labour and capital) to create products, services and job opportunities”.

References

Aluko, M., Odugbesan, O., Gbadamosi, G and Osuagwu, L.,       (2007). Business policy and strategy. (3^rd Ed.). Ikeja: Longman Nigeria Plc.

Arbaugh, J. & Camp, M. (2002). Managing growth transition: theoretical perspective and research directions, in handbook of entrepreneurship, Sexton, D. and Landstrom (ed.), Oxford: Blackwell.

Becham, T. (2011). Strategic, administrative, and operating problems: The impact of outsiders on small firm performance. Entrepreneurship Theory and Praxis, 3(1): 18-23

Chibundu, E. (2006). Strategies for Nigeria SMEs to grow economy. Vanguard Nigeria via Thomson dialog newsedge. Retrieved 21/04/2011 from http://www.vanguardnigeria.com/

Eeden, V.S., Viviers, S., & Venter, D. (2004). An exploratory study of selected problems encountered by small businesses in a South African context. Journal of African Business, 5(1): 45-72.

Hallbery, K. (2006). A market-oriented strategy for small        and medium scale enterprises: part 3. Retrieved 18/04/11 from http://www.books.google.co.uk/

Inyang, J. B. (2004). Management theory: principles and practice. (2^nd ed.). Calabar: Merb publishers.

Johnson, M., & Scholes, K., (2010). Exploring corporate strategy. London: Dell publishing.

Kangasharju, A. (2000). Growth strategies for small firms: principles and case studies. International Small Business Journal 5(2), 17-25.

Kazooba, T.C. (2006). Causes of small business failure in Uganda: A Case Study from Bushenyi and Mbarara Towns. African Studies Quarterly, 8(4). 04/05/2011 Retrieved from http://web.africa.ufl.edu]asq/v8/v8i4a3.htm

Mambula, C. (2002). Perceptions of SME growth constraints in Nigeria. Journal of Small Business Management, 40(1): 58-65.   

Microsoft Encarta dictionary (2009).

Sauser, W. I. (2005). Starting your own business? Prepare for success. Sam Management in Practice, 3(1), 1-4.

Slywotzky, A. J. & Morrison, D. J. (1998). The profit zone. New York: Three River Press.

Thompson, P. (2001). Strategic management. (4^th ed.). London: Thomson Learning.

HOW MANAGEMENT COULD ADOPT ADVERTISEMENT AND ADVOCACY IN HANDLING CRISIS WITH REGARDS TO ORGANISATION PRODUCTS OR SERVICES

The question above is broad with different dynamics and scope but in a bid to break it down to its understandable point with minimum write ups I’m going to define the following terms:

Ø Management

Ø Advertisement

Ø Advocacy

Ø Crisis with regards to organisation products or services

This would give us a clearer picture in understanding the proposed question above.

Management: according to Jaja and Obipi (2005:3), “management can be defined as either used to stand for or refer to people.

Advertisement: A respected advertisement scholar views advertisement as “a dynamic forum in which business interests, creativity, consumer needs, and government regulations meet.”(Wells, et al (1989:31), Advertisement can also be defined as a generally accepted paid form of publicity by an identifiable sponsor whose aims are to inform and or persuade prospect. Advertisement has a greater ability to reach a large number of people simultaneously than advocacy but it has less ability to prompt an immediate change in behaviour.

Advocacy: can also be called marketing as it’s the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy the perceived needs, wants and objectives of the consumers and the organisation. Advocacy isn’t paid for by the identified sponsor but is also aim to inform and persuade the consumers. In cases of immediate change in behaviour of consumers advocacy can adjust to change immediately.

Crisis with regards to org. Products and services: there is no greater test for organisation than how it deals with a crisis. The key is to be prepared by anticipating the possibility of crisis and establishing a mechanism for dealing with the bad news. Crisis in relation to its products can either be propaganda or real. It’s the duty of the organisation’s management team to seek and address these issues in time in order to restore confidence back to his consumers.

Furthermore, with the definitions above the subject matter as become clearer as I beginning to illustrate steps in which an organisation can use advertisement to solve its product and service crisis.

1.   Planning on possible scenarios.

2.   Training of his staff to be able to handle crisis.

3.   Situation control.

For effective crisis management, organisations must have a plan based on thoughtful analysis of all possible scenarios in which a crisis might occur. A plan outlines who does what: who contacts the various stakeholder, who might be affected, who speaks to the press, and who sets up and runs an on-site disaster management centre. Companies also should conduct unannounced crisis training during which staff are forced to drop everything and deal with a stimulated crisis as it unfolds. Therefore, in crisis corporate advertising which is designed to promote a corporate image or viewpoint should be done. There should be no attempt to sell any particular product rather this type of advertisement should take the form of public statements directed at the public to correct the wrong impression or perception the products and services. Also, point of view messages also known as advocacy should be delivered at numerous events, gathering and institutions. This act will give the public a chance to ask questions and when the proper answers are given it will help correct and eradicate the crisis. Advertisement can also be done through in house publications, speakers, photographs and films, displays, exhibits and staged events, the news release, press conference, online communication etc.

Before management makes effort to promote the image of the organisation outside, it is expected to strength the internal environment of the organisation.

      Before I begin to draw my discussion logically in order to embrace the question above I will like to define management as this would dissect the managerial role in the organisation and show us the pivotal responsibility of management both internal and external of the organisation. According to Koontz and O’Donnell (1978:321) argued that “managing is an operational process initially best dissected by analyzing the managerial functions and these essential managerial functions are: planning, organising, staffing, directing and controlling. The importance of management to the successful running of man’s affairs dates back to the primitive and medieval periods, and today the place of management, as an essential ingredient to the success of an enterprise are even more evident.

        While, Etuk (1985:1), views business environment as “both the internal and external factors that surround and potentially affect the activities and behaviour of a particular business organisation”. Although these factors or forces necessarily control the actions of businesses they are more or less accepted as givens by organisations in the sense that they are beyond the immediate and direct control of these organisations through the action of their managers. Therefore, the internal environment which is making up of the employees, policies, machines and memorandum can be x-ray daily by the management in order to sanitise its internal values.

Bacal (2010), identified strategic communication as an effective tool used by organisations in strengthening its internal environment. Management primary task is planning. Many organizations understand the importance of developing strategic plans to guide both their short/longer term decision-making. The thinking is that without knowing where we want to be and how we are going to get there, we can't coordinate organizational resources so that we get to where we want to go. Frequently, communication methodologies for communicating with customers and the public are included in strategic planning. 

However, few organizations address INTERNAL communication in the same way. Determining what should be communicated to staff, when it should be communicated, and how it should be communicated is often left up to the decisions of individuals made when there seems to be a need. In other words internal communication strategies are developed, reactively, when there is a crisis or major event that clearly requires addressing communication issues. Where communication is planned out, it is often around upheavals like major corporate or organization change, layoffs and downsizing, and technological change. However, once the initiating focus has been eliminated communication tends to go back to an unorganized incoherent process. 

It's a bit of a mystery why this occurs, but there is no question that strategic internal communication planning can be a proactive approach to building a better, more directed and efficient workforce.

But Dr. Kenneth D. Mackenzie in his article titled “The Practitioner's Guide to Organizing Organizations” argued that organisational problem solving goes beyond merely making a decision. It also includes finding and formulating the problem, implementing the decision, and an audit and review of the results produced. Deciding what to do when improving an organization is like the offense players reaching the line of scrimmage in football. To make any progress and to score one must go farther.

The process of organizational problem solving can take a long time. Given that each stage depends upon the prior stages, it should be obvious that by spending relatively more effort on the earlier stages, time and money should be saved on the later stages. Unfortunately, busy executives often spend too little effort on the problem finding and formulation stages in their generally commendable but often misguided belief in the benefits of acting quickly and decisively. For example, the response to a drop in sales might yield the decision to develop an elaborate incentive system for the sales force. The real problem might be caused by the poor pricing strategy or by administrative problems which create excessive delays in fulfilling an order.

Therefore, organisation must ensure that they constantly run it’s internal environment through these five main stages in the organizational problem solving process:

1.   Finding the Problem

2.   Formulating the Problem

3.   Making the Choice of the Solution

4.   Implementation of the Solution

5.   Audit & Review of Results of the Implementation.

Conclusively, one of the primary functions of management and leadership is to solve organizational problems. An organizational problem occurs whenever the work practices and processes of those tasked with producing specific results do not actually produce those results. How can a management solve such problems in an efficient and effective manner so that your organization remains on track for profitability and success?

1.   Identify the core source of internal conflict and constantly address them through effective communication.

2.   Formal organisational chart must be drawn to show level and privileges of every employee in the organisation’s organogram.

3.   Motivation and training of employees constantly is advised on a regular basis as this helps the organization move toward the most appropriate solution in the least amount of time.

4.   One of the proper sources for optimal organizational growth is continual management/ownership encouragement of collective problem sharing and solving behaviours throughout the workforce. This is an essential ingredient for success. If you're having difficulties dealing with problems in your business, ask yourself: "Am I regularly encouraging my employees to play in problem solving?

With the harnessing of integrated collective environment of both employer and employees decision/problem solving mechanism, management can now reach out and take the outside environment.

REFERENCES

Ø Etuk, E.J (1985). The Nigerian Business Environment. London: Macmillan.

Ø Jaja, S.A and Obipi, I (2005), “Management: Elements and Theories”. Port-Harcourt: Pearl publishers.

Ø Koontz and O’Donnell, C. (1978), Essential of Management. Second edition. New York: McGraw-Hill Book Company.

Ø Mackenzie, K.D. in his article titled “The Practitioner's Guide to Organizing Organizations”. (2010). Organisational Management Journal, Vol. 1, no.3 (2010). Pp. 33-34.

Ø Robert B. In article titled “Internal Communication Strategies”. www.robertbacal.org

Ø Wells William et al (1989) “Advertising: principles and practice.” fifth edition. New Jersey: Prentice hall.

FELLOWERSHIP IS A TOOL OF NATIONAL TRANSFORMATION.

Abraham Lincoln defined Democracy as government of the people by the people and for the people. This is in recognition of the role and power of the people in nation building.

Follower-ship can be defined as a company of people that shares the same interest or aim.

Leadership position in Nigeria is every weak because it’s either wrong person in the right position or right person in the wrong position.For example; a medical doctor is made the minister of works when he doesn’t have any background knowledge on building or construction work therefore, making himself a liability in such office instead of an asset. Or we have people who won election by snatching ballot boxes in the case of Ondo, Ekiti state and the rest of them. This are clear woes on the leadership of our country. While, the big question always is if the root is rotten what will happen to its branches?

  Or the fact that we are in Nov. 2010 and they are still discussing the budget of 2010. Under the leadership of finance minister Olusegun Aganga. Where only 40% of the capital budget has been implemented that is a budget that is made to bring dividends of democracy to the Nigerian people and elevate them of poverty, diseases and lack of infrastructure.

       But let me quickly bring you up to speed with national transformation as a result of follower-ship. Our constitution is just 10years but it is been amended because the Nigerian people feels that some section of that constitution as hindered our democratic process.This act is the first of his kind in the world amending a constitution that is just 10years old. What a huge impact of followers on National Transformation.

In America the democrat as lost over 60% of his congress sit to the republicans. This shows that the power of national transformation lays in the hands of the followers not the leaders on account of Distrust, and discontent with the Obama Administration.

June 12 1993 will always remain fresh in her memory as a day in the Nigerian history where election was conducted free and fair and M.K.O Abiola won fair and square but our then military head of state annulled that election and the people stood up forcing him to step down, this also showed no one is bigger than the people

lastly, There is no doubt that almost all Nigerians want change, and the mood for change is evident from small villages to big cities where poverty, disease, lack of social infrastructure and most significantly lack of hope is an everyday reality for millions of Nigerians. 2011 we will register, vote and guard our vote because the suffering of the people from unemployment, lack of basic amenities, insecurity and low GDP must all become a thing of the past.

But the question I have for my everyone reading this article and our Nigerian leaders today is; how can Nigerian people in which they claim to serve be struggling to earn 18,000naira while, our leadership in government earns over a million times that amount?

Thank you.

JEROME ETIM.

NIGERIA'S ECONOMY CHALLENGES

NBS in there just released statistic on global Economy survey ranking Nigeria’s economy 127, out of 130. Citing the following facts as the bases for the rating.
ð  The strength of our balance sheet which isn’t that strong.
ð  Our external and internal debt ratio whereby 85% of these is loan is external & concessionary.
ð  We are just in the process of citing a sovereign world fund
ð  Depletion in our excess crude oil account
ð  The external resources as fallen.
ð  Capital budget implementation problem.
ð  High unemployment rate in the country where over 60% of the eligible workers are unemployed.
But SMP also released there rating which shows that Nigeria is a stable outlook citing the following facts which if clinically analysis its positive for our nations development.
ð  In the last ten (10) years Nigeria has made the highest growth rating among developing countries.
ð  We have a good dealing on infrastructure which our government have taken it upon itself to develops our economy e.g. Transport, Power, Health & Primary Care, Education etc.
ð  The fact that we are willing to make changes is a stamp & credibility of the government to get it right and empower the Nigerian people e.g. electoral reform, judicial independence and war on corruption etc.
ð  Nigeria as a strong economic growth which is job creation driven.
ð  Removing barriers to credit which is to enable lending, investment and small/medium scale enterprise.
I believe in the current presidency of Dr. Goodluck Ebele Jonathan that after a successful eight(8) years in office Nigeria’s economy will & its overall External Index will rise by over 50%.

The Manager

The manager is a workaholic, efficient employee of a company or organization whose major goal is to strive for the profitability of the organization. working day and night, endless appoints, conferences, schedules and meeting because for a manager everyone is a market, a potential buyer of his services.
His topmost satisfaction is the return of earning and declare of defidence for shareholder.
A manager is a team player, dedicated staff and a goal driven individual...
Managers work with people, either small, medium or large, or specialist, adviser or technocrats, its the utmost duty of the manager to work effectively by unifying these different human resources for the optimal goal of the organization.
Be goal driven, Be dedicated, Be inspired, Be a purposeful Manager.